Zillow reported an 18% year-over-year increase in revenue to $772 million in the second quarter, beating analysts’ expectations. This positive momentum came a day after the company announced the layoffs of about 500 employees.
The company’s stock price still fell in after-hours trading, dropping about 7.5%. Zillow’s stock has not performed well over the past year, with its share price down about 47% year-over-year.
Zillow outperformed the broader housing market, which grew by 6% in Q2, according to CEO Jeremy Wacksman. The company delivered strong results and consistent execution, with for-sale revenue up 14% year-over-year to $549 million.
Rentals revenue grew 31% to $209 million, while mortgage revenue jumped 75% to $84 million. Net losses were up, however, at $4 million for the quarter.
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Traffic to the company’s mobile apps and websites fell 2% year-over-year, which is less than the decline in traffic to residential real estate sites overall amid the slow housing market, according to Comscore.
Wacksman attributed the company’s positive performance to the results of its strategy playing out. The recent layoffs were a result of a structural reorganization and were about having a disciplined cost structure and making sure they can move more quickly towards the future, he added.
Zillow has been investing in new technologies, including its Zillow AI mode, which has enabled consumers to share more about their needs than they could using traditional search queries. AI mode users spend nearly three times as long on Zillow than other consumers, view more than twice as many homes, and run nearly three times as many searches.
The company has also seen significant growth in its other products, with Zillow Home Loans now a top 25 purchase lender in the country. Zillow Preview has amassed over 100 brokerage partnerships since launching in March.
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Zillow’s ability to adapt to changing market conditions and invest in new technologies has been key to its success. The company’s focus on consumer needs and its ability to measure engagement have also been important factors.
Revenue was $772 million, up 18% year-over-year. Cash and investments were $682 million, down from $788 million at the end of Q1. Net income was a loss of $4 million, compared with a gain of $2 million a year ago.
Adjusted net income was $118 million, and adjusted EBITDA was $176 million, up from $155 million one year ago. Traffic and visits included 239 million average monthly unique users across all Zillow Group websites and apps, down 2% year-over-year.
They are moving forward with their strategy.