) reported third-quarter 2013 net loss of 11 cents per share,
narrower than the Zacks Consensus Estimate of a loss of 18 cents
per share. However, results were highly unfavorable when compared
to year-ago net earnings of 7 cents per share.
Substantial increase in expenses mainly led to the downside.
However, share price moved up 1.3% to close at $82.31 yesterday
given that the company reported a lower-than-expected loss.
Including a one-time tax benefit of $4.3 million related to
StreetEasy acquisition, net loss came in at 3 cents per share,
comparing unfavorably with 7 cents earned in the year-ago
Quarterly Operational Update
The top line emerged with a higher-than-expected improvement in
the quarter. Total revenues increased 67% year over year to $53.3
million. This was driven by solid improvement in marketplace
revenues (up 73%) and display revenues (up 50%). Total revenues
also surpassed the Zacks Consensus Estimate of $52 million.
Total expenses surged 99% year over year to $58.8 million due to
higher cost of revenue, sales and marketing expenses, technology
and development and general and administrative expenses.
The higher expenses more than offset the increase in total
revenues, thus inducing operating loss in the quarter.
Average unique monthly users increased 69% year over year to 61.1
million. Premier Agent subscribers also increased 68% year over
year to 44.7 million as on Sep 30, 2013. Average monthly revenue
per subscriber was $264, fueled by record subscriber growth.
Earnings before interest tax, depreciation and amortization
(EBITDA) of $4.1 million in the reported quarter dropped 46% year
over year. The decline was largely attributable to previously
announced investments in advertising.
As of Sep 30, 2013, Zillow had cash and cash equivalents of
$318.9 million, up substantially from $150 million as of Dec 31,
As of Sep 30, 2013, total assets of the company were $591.7
million, increasing from $304.2 million as of Dec 31, 2012.
Shareholders' equity of Zillow as of Sep 30, 2013 was $557
million, up from $280.3 million as of Dec 31, 2012.
Net cash flow from operating activities in the first nine months
of 2013 was $12.5 million, down from $22.5 million in the
Zillow closed the acquisition of StreetEasy in August in an
all-cash transaction of $50 million. The acquisition provides a
competitive edge to Zillow in the largest and most important real
In September, Zillow completely redesigned the Zillow Real Estate
App for iPhone(R) and iPad(R) to launch them alongside Apple's
new operating system, iOS7.
In October, Zillow launched the Zillow Digs(TM) App for iPhone.
Performance of Other Online Services Companies
) posted net income of 46 cents per share in the third quarter,
beating the Zacks Consensus Estimate of 25 cents and year-ago
earnings of 21 cents.
) reported a loss of 1 cent per share in the third quarter of
2013, narrower than the Zacks Consensus Estimate of a loss of 11
cents and year-ago loss of 11 cents.
) reported adjusted third-quarter 2013 earnings of 39 cents per
share, a penny lower than the Zacks Consensus Estimate and 3
cents down from the year-ago figure.
Zillow currently carries a Zacks Rank #3 (Hold).
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