Zillow Posts Q2 Loss Wider Than Estimates, But Lifts 2014 Revenue Outlook

(RTTNews) - Shares of Zillow, Inc. (Z) declined more than 2 percent in extended trades Tuesday after the real estate information website's loss for the second quarter came in wider than analysts' estimates.

However, revenues beat Street expectations. Looking ahead, the company forecast revenue for the third quarter above analysts' estimates and raised its fiscal 2014 revenue outlook.

Spencer Rascoff, CEO of Zillow, said, "We had our strongest quarter yet with record consumer traffic and record revenue and bookings by Premier Agent advertisers. Our deliberate focus on high-performing agents and their teams drove the significant increase in orders, and has prompted us to increase our full-year outlook."

Seattle, Washington-based Zillow reported net loss for the second quarter of $10.48 million or $0.26 per share, compared to net loss of 10.23 million or $0.30 per share in the same period last year.

The company noted that the wider loss for the quarter was mainly due to higher-than-expected sales commissions. As a result of the record-high Premier Agent bookings during the quarter, which were driven by an increase in impressions available to sell, sales commissions were $0.9 million higher than projected by the company.

Excluding items, adjusted net loss for the quarter was $2.07 million or $0.05 per share, compared to adjusted net income of $235 thousand or $0.01 per share in the prior-year quarter.

On average, 18 analysts polled by Thomson Reuters expected the company to report loss of $0.04 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter surged 68 percent to $78.68 million from $46.92 million in the year-ago period and beat analysts' consensus estimate of $76.52 million.

Marketplace revenue for the quarter soared 72 percent to $62.62 million and accounted for about 80 percent of total revenue for the quarter. Total costs and expenses rose 56 percent from the year-ago period to $89.44 million.

Zillow's traffic hit a record of nearly 89 million monthly unique users on mobile and Web in July 2014, up 45 percent year-over-year. Average monthly unique users during the quarter were a record 81.11 million, up 49 percent year-over-year.

Premier Agent subscriber count grew 456 percent, adding 3,850 quarterly subscribers for a total of 56,818 subscribers at the end of the quarter. Average monthly revenue per subscriber was a record $320, representing an increase of 20 percent over the year-ago period.

Looking ahead to the third quarter, Zillow forecast revenue in a range of $87.0 million to $88.0 million.

For fiscal 2014, Zillow raised its revenue outlook to a range of $321 million to $323 million from the prior range of $304 million to $308 million.

AAnalysts currently expect the company to post revenue of $82.56 million for the third quarter and $310.79 million for the full year 2014.

Z closed Wednesday's regular trading session at $141.06, down $3.75 or 2.59 percent on a volume of 2.00 million shares. In after-hours, the stock further declined $3.06 or 2.17percent to $138.00.