Realtor.com Suffers Double-Digit Drop In Revenue, Traffic in Earnings

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Realtor.com parent company Move Inc. saw its fiscal first-quarter revenue decline 16 percent yearly to $142 million, according to an earnings release issued late Thursday.

News Corp — which owns Move Inc. — said higher mortgage rates, home prices and other macroeconomic headwinds slashed Move’s real estate revenues 20 percent annually from $145 million in Q1 2023 to $116 million in Q1 2024. The share of revenue generated from Realtor.com’s referral model and the traditional lead generation products also declined, moving from 84 percent in Q1 2023 to 80 percent in Q1 2024.

Realtor.com’s traffic also suffered during the first quarter, with average monthly unique users for Realtor.com’s web and mobile sites declining 12 percent annually to 76 million.

Overall, News Corp’s digital real estate services segment stabilized from the previous quarter, when revenues and segment EBITDA (earnings before interest, taxes, depreciation and amortization) both declined by the double digits. In Q1 2024, revenues declined 4 percent to $403 million. Meanwhile, the segment EBITDA increased 3 percent annually to $122 million due to higher revenues at Australia-based REA Group and cost-savings initiatives at Move.

Unlike most U.S.-based companies, Australia-based News Corp uses a reporting method that ends the year on June 30. The company’s “fiscal year” consequently just concluded, and what most companies call their third quarter is referred to at News Corp as the first quarter.

In a prepared statement before the company’s earnings call, News Corp CEO Robert Thomson said the company had a “sterling start” to the new fiscal year, which brought a one percent revenue increase to $2.50 billion. The company maintained its profitability with a net income of $58 million.

“We had a sterling start to the new Fiscal Year, with rising revenues and increased profitability despite difficult economic conditions in some of our markets,” he said. “Our first quarter revenues were slightly higher at $2.5 billion, while our profitability rose 4 percent, marking the second consecutive quarter of profit growth.”

“Our positive performance in the quarter follows the three most profitable years since the creation of the new News Corp,” he added. “In our view, these results certainly highlight the disparity between the value of our company and our share price, which we believe does not reflect our present profitability, let alone the potential of our incomparable, growing businesses.”

Realtor.com has had an action-packed first quarter, as CEO Damian Eales begins to execute his bold vision to reclaim the portal crown and reverse years of struggles with falling user counts and shrinking revenues as the real estate industry navigates a swift market shift. Realtor.com and CoStar Group’s rivalry also heated up during the quarter, as both companies battled over traffic data released before the third-quarter earnings rush.

“One word: Grow,” Eales said during ICLV in August. “And I think that if you go one level beneath that, how you grow a business like Realtor.com is you grow audience in the first instance; and then secondly, you do a better job to serve your customers. And that’s what we’re entirely focused on.”

During his live earnings call remarks, Thomson echoed Eales’ bullishness about Realtor.com’s long-term value.

“The industry at large was affected by the unusually high interest rates which do appear to have plateaued and are expected to ease over the coming year,” he said. “But these short-term conditions do not change our long-term optimism for Realtor[.com] to capitalize on the increasing digitization of the world’s largest property market.”

The CEO also made a quick jab at CoStar by highlighting competitors that buy “transient traffic.”

“It is easy to buy transient traffic in the short term, but that is merely a sugar high that leads to digital diabetes,” he said. “We have a long-term commitment to all Americans who are buying and selling a home and to real estate professionals.”

“We also have the ability to leverage our unique media platforms from WSJ.com to the New York Post among many others, who had a combined monthly audience of over 200 million uniques in September,” he added. “These are verified authenticated numbers, not a concocted cocktail of cockamamie.”

Thomson went on to praise Eales’ performance during his first 90 days at the helm, saying the leader has the skills to bring Realtor.com back to the forefront.

“Damien yields energetic, decisive leadership,” he said. “Realtor.com is building on the gains of its predecessors and focusing on developing core markets, core clients and core profitability. The Realtor.com team is working evermore closely with REA executives in ways that are benefiting both businesses with the sharing of software marketing mechanics and AI insights.”

Email Marian McPherson