Shares of Zillow Group Inc. ZG 0.33% rose 9% in after-hours trading as the company said its home-flipping business is expected to generate as much as $1.25 billion this year.
The Seattle-based company said Thursday that the homes segment, which includes results from homes that are directly sold to and bought from Zillow, added $384.6 million in revenue in the September quarter.
Including the expected $1.25 billion from the flipping business, Zillow expects revenue to total $2.59 billion to $2.62 billion for the year, ahead of analysts’ expected $2.53 billion.
In 2018, Zillow reported $1.33 billion in revenue.
The business’s rapid growth underpins Zillow’s strategic shift, stepping not just into house flipping but also the mortgage business. The company’s efforts to expand continue to drag on Zillow’s financial performance as expenses pile up.
Analysts don’t foresee a profit soon. According to FactSet, the company isn’t expected to report an annual profit until 2024.
On Thursday, Zillow reported its net loss for the September quarter widened to $64.6 million from about $492,000 a year earlier, while revenue more than doubled to $745.2 million, driven by the homes segment.
The results easily beat analysts’ expectations, including a projected loss of $90.3 million and $717.5 million in revenue, according to FactSet.
Zillow said it had bought 2,291 homes and sold 1,211 during the quarter through its Zillow Offers house-flipping program, ending the period with 2,822 homes in its books.
The program is now available in 21 domestic markets and is slated to launch this quarter in the Los Angeles metropolitan area, the second largest U.S. housing market.
Write to Maria Armental at [email protected]
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