Zillow Group Inc. is continuing to build out its business of buying and selling houses and offering mortgage services, pushing its losses higher while also boosting revenue.
Zillow Z, -1.66% on Thursday afternoon reported first-quarter losses of $67.5 million, or 33 cents a share, wider than last year’s loss of 10 cents a share. Revenue increased to $454.1 million, up from $325.2 million a year ago and ahead of analysts’ average estimates. Analysts on average expected a loss of 34 cents a share on sales of $432.1 million, according to FactSet. Shares jumped almost 19% in after-hours trading following the announcements.
The biggest change in Zillow’s business in the past year has been a big push into purchasing and selling houses. The online real-estate company said Thursday that it bought 898 homes in the quarter, up 80% from the fourth quarter, and sold 414 homes, triple the number from the previous quarter.
Zillow hopes to rapidly ramp the business, and announced separately that it will expand into six new markets, including Los Angeles and two other cities in California. The company said the Zillow Offers service is already available in nine markets, and the company had previously announced an expansion into five others, so it expects to be operating in 20 markets within a year. Rival Redfin Corp. RDFN, -15.37% is also building up new capabilities in the area.
For more: New Redfin program will enable home purchases with no agent
“We delivered strong first-quarter results that met or exceeded our own expectations in all segments as our plan to streamline the real estate transaction comes together,” Rich Barton, who was named chief executive of Zillow earlier this year, said in a statement. “Zillow Offers’ incredible consumer demand and rapid growth gives us confidence we’re in the early stages of something important.”
The segment of Zillow’s business that buys and sells homes reported an operating loss of $45.2 million on revenue of $128.5 million. It was the second-biggest revenue generator for the company, behind its core “Premier Agent” business, which generated sales of $217.7 million. The company is also pushing into mortgages, which produced an operating loss of $9.6 million on revenue of $27.4 million.
Zillow stock closed with a 1.7% decline at $34.27, then popped higher than $40.50 in the extended session. Shares have declined 38.8% in the past year, as the S&P 500 index SPX, -0.30% has gained 6.7%.
