Zillow Group, Inc. (NASDAQ:ZG) (Z) topped consensus revenue estimates when it reported third-quarter earnings after the close on Wednesday.
The real estate marketplace reported Q3 revenue of $496 million, up 3% compared to the same period last year and well above the consensus estimate of $481.06 million.
The company said residential revenue of $362 million outperformed the high end of the company's expectations, although it decreased by 3% year over year. The business noted the outperformance was primarily driven by connections growth to Premier Agent partners, which grew faster than the overall industry.
Furthermore, its rentals revenue of $99 million increased 34% year over year, driven by its multifamily revenue, which grew 42% year over year, while mortgage revenue of $24 million decreased 8% year over year due to higher interest rates impacting demand for Zillow's mortgage marketplace.
Zillow reported a net loss of $28 million in Q3, while adjusted EBITDA was $107 million, $30 million above the midpoint of the company's outlook range.
"Despite a residential real estate industry that is down 14% from last year, Zillow is reporting positive growth: 3% in our total revenue, 34% in our rentals revenue, and 88% in our purchase mortgage origination business," said Zillow co-founder and CEO Rich Barton.
At the time of writing, Zillow shares are down over 1% ahead of Thursday's open. Following the earnings release, analysts at Evercore ISI, DA Davidson, Piper Sandler and JPMorgan lowered their price targets on Zillow shares.