How Zillow Is Staying Flexible in a Brittle Housing Market — Barrons.com

What happened

Zillow, a housing technology company known for home listings, is due to report earnings after Wednesday’s market close. Analysts expect 16 cents per share on $753.6 million in revenue for the quarter ended Sept. 30, up from four cents and $676 million a year earlier. Zillow’s newer model charges agents after a home sale closes.

Confirmed

Global impact / market context

The shift from charging agents upfront to collecting payment after a sale closes ties Zillow’s revenue more closely to completed transactions. In a market where high home prices and mortgage rates have sidelined buyers and sellers, fewer closings could delay or reduce payments, even if revenue per buyer connection is higher.

Analyst inference

Zillow’s residential segment generated $465 million, more than 60% of total revenue, in the second quarter. Its new payment model reportedly contributed to lower-than-expected third-quarter guidance, so the coming results may show whether transaction-linked payments and other housing services can support revenue during a weak market.

Analyst inference

What to watch

1. Check reported revenue and earnings against analysts’ expectations of $753.6 million and 16 cents per share for the quarter ended Sept. 30. Confirmed
2. Look for an update on the Zillow Preferred model, including whether the company reports more revenue per buyer connection under payments made after a home sale closes. Proposed
3. Watch residential-segment results for signs that fewer home transactions are delaying agent payments and weighing on revenue, since this segment supplied most second-quarter sales. Analyst inference

Evidence

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