In This Article:
Online real estate marketplace Zillow (NASDAQ:ZG) reported Q1 CY2025 results topping the market’s revenue expectations , with sales up 13% year on year to $598 million. Its GAAP profit of $0.03 per share was significantly above analysts’ consensus estimates.
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Zillow (ZG) Q1 CY2025 Highlights:
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Revenue: $598 million vs analyst estimates of $589.9 million (13% year-on-year growth, 1.4% beat)
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EPS (GAAP): $0.03 vs analyst estimates of -$0.02 (significant beat)
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Adjusted EBITDA: $153 million vs analyst estimates of $138.5 million (25.6% margin, 10.5% beat)
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Operating Margin: -1.5%, up from -8.5% in the same quarter last year
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Free Cash Flow Margin: 11.4%, up from 7.8% in the same quarter last year
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Market Capitalization: $16.15 billion
Company Overview
Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ:ZG) is the leading U.S. online real estate marketplace.
Sales Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Zillow’s demand was weak and its revenue declined by 7.6% per year. This was below our standards and suggests it’s a lower quality business.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Zillow’s annualized revenue growth of 10.4% over the last two years is above its five-year trend, but we were still disappointed by the results.
This quarter, Zillow reported year-on-year revenue growth of 13%, and its $598 million of revenue exceeded Wall Street’s estimates by 1.4%.
Looking ahead, sell-side analysts expect revenue to grow 14.4% over the next 12 months, an improvement versus the last two years. This projection is above average for the sector and suggests its newer products and services will spur better top-line performance.
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Operating Margin
Zillow’s operating margin has been trending up over the last 12 months, but it still averaged negative 10% over the last two years. This is due to its large expense base and inefficient cost structure.