(Bloomberg) -- Zillow Group Inc. posted better-than-expected results for the second quarter, with the company’s websites and apps drawing a flood of prospective homebuyers in the hot U.S. housing market.

  • The company had adjusted earnings before interest, taxes, depreciation and amortization of $183 million, according to a statement Thursday. That beat the average analyst estimate of $133 million.

Key Insights

  • Zillow has been riding the U.S. obsession with real estate since the earliest Covid-19 lockdowns eased last year. It registered an average of 229 million unique users per month in the quarter, driving a $218 million profit for its core business of selling ads to real estate agents.
  • The company ramped up acquisitions in its Zillow Offers business, buying 3,805 homes. That was more than twice the number it bought in the first quarter. The company recently priced its first bond offering backed by collateral from the business, which functions like a data-driven approach to flipping homes.
  • The Zillow Offers segment lost $29 million in the quarter, a slight improvement from the first three months of the year. The company lowered renovation costs and benefited from home price appreciation in the time between when it buys homes and resells them. It sold nearly 2,100 properties in the three months through June 30.
  • The growth of Zillow Offers is “a nod to how dreadful, frightful and feared the selling process is,” Chief Executive Officer Rich Barton said in an interview. “The further we get into it, the more blue ocean I see.”

Market Reaction

  • Zillow shares had fallen 19% this year through Thursday’s close, after nearly tripling in 2020.

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