Z - Zillow, Inc. - Q2 2013 Earnings Call Transcript

    Company Name:Zillow, Inc.
    Event Title:Q2 2013 Earnings Call Transcript
    Event Date:06-Aug-2013
    Event Time:05:00 PM ET



    Good day, ladies and gentlemen and thank you for standing by. And welcome to the Zillow's Second Quarter 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions]. As a reminder, today's conference maybe recorded. It's now my pleasure to turn the floor over to R.J. Jones, Investor Relations Officer. Please go ahead.

    Raymond Jones

    Investor Relations Officer
    Thank you. Good afternoon and welcome to Zillow's second quarter 2013 earnings conference call. Joining me today to talk about our results are Spencer Rascoff, Chief Executive Officer; and Chad Cohen, Chief Financial Officer. Before we get started, as a reminder, during the course of this call, we will make forward-looking statements regarding the future events and the future financial performance of the company.

    We caution you to consider the important risk factors that could cause actual results to differ materially from those in the forward-looking statements made in the press release and on this conference call. These risk factors are described in our press release and are more fully detailed under the caption risk factors in our annual report on Form 10-K for the year ended December 31, 2012 and in our other filings with the SEC.

    In addition, please note that the date of this conference call is August 6, 2013 and any forward-looking statements that we make today are based on the assumptions as of this date. We undertake no obligation to update these statements as a result of new information or future events.

    During this call, we will present both GAAP and non- GAAP financial measures. A reconciliation of GAAP to non- GAAP measures is included in today's earnings press release. In our remarks, the non- GAAP financial measure adjusted EBITDA will be referred to simply as EBITDA , which excludes share-based compensation. This call is being broadcast on the Internet, and is available on the Investor Relations section of the Zillow website at investors.zillow.com.

    A recording of this call will be available after 8 p.m. Eastern Time today. Please note that the earnings press release is available on our website and after the call, a copy of today's prepared remarks and historical exhibits of our business metrics will also be available on our website. After management's remarks, we will host a live question- and-answers session.

    During the Q&A, we will entertain questions asked via Twitter and Facebook. In addition to questions from those dialed into the call.
    Individuals may submit questions by tweeting to the Zillow handle, using the #ZEarnings hashtag or to the official Zillow Facebook page. I will now turn the call over to Spencer.

    Spencer Rascoff

    Chief Executive Officer
    Thank you for joining us to discuss Zillow's second quarter performance. Today I will start with highlights from our results in the quarter and then give a mid-year update on our 2013 strategic priorities of growing our audience, growing our Premier Agent business and growing our emerging Marketplaces.

    I will then turn the call over to Chad to discuss our financials and our outlook in more detail. And we'll, of course, open up the call for questions from dialed-in participants and our social media audience on Twitter and Facebook.

    Zillow had a tremendous second quarter, achieving record revenue , which led to an EBITDA result that exceeded our plans. Our total revenue for the quarter was almost $47 million, up 69% year-over-year, driven by strong performance across the board in our Marketplace and Display revenue categories. In our Marketplace category, both our real estate and mortgage businesses saw their positive momentum continue. We added almost 4,800 Premier Agents during the quarter, which was an all-time high for quarterly net-adds.

    In our Mortgage business, revenue neared $6 million as we continued to gain traction on both the consumer and professional sides of the marketplace . Our Q2 run rate for total Marketplace revenue was about 157 million, which is nearly double this time last year.

    Meanwhile, our Display revenue category showed excellent growth of almost 30% year-over-year, despite macro challenges in the Display advertising industry stemming from the proliferation of programmatic ad exchanges. Much credit goes to our Display sales team, adding new advertisers as well as increasing spend levels from our existing advertisers.

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