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HOUSE PARTY

Grab some Claws and head to the conference room, because Zillow is throwing a party after it crushed earnings in Q4. The online real estate platform grew revenue in its core business (selling your personal information to real estate agents) and saw higher than expected growth in its new home-flipping business.

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Zillow Offers was a big surprise this quarter as the segment topped $603M in revenue, crushing estimates of $463M to $590M. It bought 1.7k houses and sold 1.9k in the quarter, after buying 499 and selling 141 during the previous quarter. How do you like them apples, Tarek and Christina? Within two to four years, the house hawker is looking to buy upwards of 5k per month.

Home sales weren’t the only boon for Zillow. Premier Agent, which markets and sells leads to real estate agents, boosted the top line as well. The segment brought in $233M, up 6% from the prior year.

Between the two segments, Zillow pulled in $943.9M for the quarter, up from $343M last quarter. The flipper posted an adjusted (not community adjusted) EBITDA loss of $3.2M, beating expectations. Shares rose 15% in after-hours trading.

The bottom line ...

Surely Zillow’s management is excited to prove wrong all the haters who doubted its ability to transition into the home-flipping biz. Of course, Big Z isn't there quite yet ...

The company is still losing money on each transaction which stands in stark contrast to Zillow's wildly profitable ad biz. Oh, and did we mention the financial risk associated with potentially purchasing 5k houses per month?

Don't be surprised if some investors start saying "I didn't sign up for this sh*t."

Zillow announces better than expected growth [Bloomberg]

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