Seeking Alpha

Zillow raises guidance, investors sell on the news

  • Zillow (Z) guides on its Q2 CC for Q3 revenue of $49.5M-$50.5M, above a $48.6M consensus.
  • 2013 guidance is for revenue of $186M-$188M, above prior guidance of $178M-$182M and a consensus of $183.3M. 2013 adjusted EBITDA guidance is unchanged at $20M.
  • Shares -9% AH following a 224% YTD gain and a 23% gain just since Trulia (TRLA - shares -2.7% AH) reported last week.
  • Zillow's aggressive spending is responsible for the Q2 EPS miss and unchanged adjusted EBITDA guidance. Sales/marketing spend +172% Y/Y to $32.9M and up to 70% of revenue. R&D +91% to $11.1M.
  • Marketplace revenue (78% of total) +86% Y/Y in Q2 vs. +87% in Q1. Display revenue (ads) +29% vs. +27%. Within Marketplace, real estate revenue +80% to $30.6M, mortgage revenue +126% to $5.8M.
  • 61M monthly unique users in July, +66% Y/Y vs. +63% in April. Mobile visits up nearly 2x Y/Y, 321M homes viewed on mobile vs. 241M in Q1. 60% of Zillow visits on mobile vs. 55% in Q1.
  • Premier Agent subs rose by 4,777 in Q2 to 38,807 (+14% Q/Q and +71% Y/Y). Average revenue/sub of $266 vs. $263 in Q1 and $259 a year ago.
  • Q2 results, PR
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