Online real estate company Zillow said on Wednesday it lost more money in the second quarter than it lost last year as it spent heavily to boost its home segments business, sending shares down 17% in extended trading.
Zillow spent $240.7 million at its home segment business in the quarter to earn revenue of $248.9 million as it expands its Zillow Offers, which marked a shift to become a buyer and seller of homes from just being an online platform to buy and sell homes.
Zillow bought 1,535 homes in the quarter, while it sold just 786. Its purchase was 71% more than the prior quarter, while its sales doubled.
The real estate market is heating up with Amazon partnering with residential real estate brokerage Realogy for TurnKey that connects buyers with brokers and provides Alexa-enabled smart homes with furniture.
Separately, Opendoor, whose platform helps home buyers bypass brokers, joined hands last month with real estate brokerage Redfin to make cash offers for houses.
Zillow Offers, which is currently available in 15 cities in the United States, is looking to launch in the high-value and dense markets of Los Angeles and Miami apart from four other cities.
The Seattle-based company, famous for Zestimates that gives the market value of a house based on their property data, said more than 69,000 homeowners requested an offer for homes from its platform in the second quarter, up 94% from the first quarter.
Net loss widened to $71.9 million, or 35 cents per share, for the second quarter ended June 30, from $3.1 million, or 2 cents, a year earlier. In 2018, the company had recorded a loss of $1.2 million. The online home solution platform forecast its third quarter revenue to be between $694 million and $727 million, above analysts' estimates of $665.8 million, according to IBES data from Refinitiv.
Zillow's revenue jumped 84% to $599.6 million, beating the average analyst estimate of $584.9 million.