Growing Home Flipping Business Not Very Profitable for Zillow

Despite a hot real estate market and an 84 percent increase in year-over-revenue to $599.6 million, Zillow Group’s earnings before interest, taxes, depreciation and amortization (EBITDA) plunged by 96%, to $2.3 million, according to a company press release. Zillow also generated a $72 million net loss, compared to a loss of only $3.1 million in the prior-year period.

Zillow Offers
Zillow reported that its home flipping business, known as Zillow Offers, earned $248.9 million, about 41.5% of its total revenue, in the three months ending June 30. Zillow purchased 1,535 houses and sold 786 in the second quarter,¬†representing a quarterly growth of 71% and 90%, respectively.¬† More than 69,000 homeowners requested an offer from Zillow to purchase their home during the second quarter. That represents growth of 94% from the first quarter.¬†“The demand signal for Zillow Offers is incredibly impressive as seen in the annualized revenue run rate going from zero to $1 billion in just a year,” co-founder and CEO Rich Barton said in a press release.

Zillow Home Loans
Zillow’s mortgage business also grew rapidly. The company’s mortgage business revenue increased by 40% year over year to $27 million.

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Revenue from Zillow’s rental business rose 28% year over year to $42.7 million. The increase was driven by property managers who advertise on the company’s websites and mobile apps.¬†