Mykie, great post and great questions. Here are my notes on Zillow’s results for the first quarter of this year. I got then probably from a mixture of the quarterly report and takes from the Z board. As you’ll see, it’s a litany of up 70%, up 62%, up 56%, etc for every metric you can think of.
May 2014 Announced Mar quarter earnings.
Record Revenue of $66.2 million, up 70%.
Record quarterly and all-time traffic, and April 2014 hit another record of nearly 79 million monthly unique users on mobile and Web (up 50% year-over-year).
They added an impressive 4,654 net new Premier Agent subscribers during the quarter and now have about 53k subscribers, up 56% from last year, and their average revenue per subscriber hit a record high of $286.
Their traffic to the site is incredible. Average monthly unique visitors were up 51% to 71 million. They generate about 47% of the industry’s traffic on desktop and mobile. They thus have a huge lead on any competitor, which attracts real estate agents looking for the largest audience for their advertising dollars.
• Revenue grew 70% to $66 million. This was their 14th consecutive quarter of growth over 67%!!! Just think of it!!!
• Marketplace revenue grew 72% to $53 million. The real-estate sub-category (the other being mortgages) grew 77% to $46 million.
• Display revenue grew 62% to $13 million. Display revenue is a not core growth driver, but importantly adds a layer of high-margin revenue for reinvestment purposes.
• Mortgage marketplace revenue grew 45% to $7 million.
??• EBITDA grew 71% to $8.7 million. This nearly doubled their guidance of $4.5 million.
• I use adjusted EBITDA (which they provide) and I figure a tax of 35%. With that, they made 13 cents in adjusted EBITDA per share, but, as I have said, they are spending a bunch to get control of the industry.
• They have $447 million in cash and zero debt.
• Premier Agent subs grew 56% to 52,968 with an impressive 4,654 net new adds.
• Average monthly unique visitors (traffic) grew 51% to 71 million.
?• Loan requests for Zillow Mortgage Marketplace grew 29% to 5.8 million.
• Their rental marketplace had 14.5 million monthly unique users . They are just starting up monetization of this program.
Revenue growth from the Premier Agent biz is accelerating with 76% growth this quarter compared to 68% last quarter and 65% the quarter before.
I mean, really, what’s not to like? (And there are lots more statistics in the report).
I’m willing to accept a high P/E or P/S ratio with metrics like this. I guess I don’t have any fixed signal telling me when it’s time to leave. It’s more intuition. It’s easy with stocks like WPRT which was losing gobs of money, with falling revenue and closing down factories and laying off workers. They may pull out of it and do fine, but that’s not where I want to put my money. Or INVN or ELLI, each as I remember it, with three successive quarters of declining earnings. MTZ, on the other hand, had been doing well but sounded as if they had been blind-sided by their biggest customer and were in catch-up mode. It made me realize how cyclical they really were. This is just ramblings but I hope it’s helpful.
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