ZipRealty, Inc. (Nasdaq: ZIPR) today announced financial results for its second quarter ended June 30, 2008. For the quarter, net revenues were $30.4 million, a 2.7% decrease from the $31.3 million reported in the second quarter of 2007. The Company’s net loss for the period was $1.7 million, or $0.08 per share compared with a net loss of $1.0 million or $0.05 per share in the year ago period. The pro forma loss per share, excluding the effect of stock-based compensation, was $0.04 for the second quarter compared with $0.01 net income per share for the same period a year ago.

Pat Lashinsky, President and CEO of ZipRealty, commented, “Our second quarter results were in-line with our expectations, and we are pleased to reiterate our full year 2008 guidance in such a challenging market. To that point, although we're still facing industry headwinds, we're certainly pleased that our transactional volume increased 17.4% year over year and that the ZipRealty website was the most visited residential real estate brokerage site in the nation in June.”

ZipRealty announced the following operating metrics for the second quarter of 2008:

• At June 30, 2008, there were 2,559 ZipAgents employed, up from 2,070 agents at the end of the second quarter 2007. On a sequential quarterly basis, agent count increased by 274 from March 31, 2008.
• The total value of real estate transactions closed decreased to approximately $1.32 billion in the second quarter of 2008 versus $1.41 billion for the same period in 2007.
• The total number of transactions closed increased approximately 17.4% to 4,681, compared to 3,988 in the second quarter last year.
• Average net revenue per transaction decreased approximately 16.6% to $6,381 from $7,649 in the second quarter of 2007.

Balance Sheet & Liquidity

As of June 30, 2008, the Company had approximately $55.1 million of cash, cash equivalents and short-term investments, with no long-term debt. As reported in early April 2008, the Company repurchased all of the shares of its common stock held by Pyramid Technology Ventures in a privately negotiated transaction for approximately $17.4 million, which reduced its cash balance accordingly.

Use of Non-GAAP Financial Measures

To supplement its financial statements presented in accordance with Generally Accepted Accounting Principles (“GAAP”), ZipRealty uses a non-GAAP measure of net income (loss) it refers to as “pro forma net income (loss)” that excludes certain items including stock-based compensation, non-cash income taxes, and certain one-time items, if any. A reconciliation of this non-GAAP measure to GAAP is provided in the attached tables. These non-GAAP adjustments are provided to enhance the user's overall understanding of ZipRealty’s current financial performance and its prospects for the future. ZipRealty believes these non-GAAP results provide useful information to both management and investors by excluding certain items it believes are not indicative of its core operating results and thus presents a more meaningful basis for comparison between periods. Further, this non-GAAP method involves key information management uses for planning and forecasting its future operations. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.

Financial Guidance

The Company’s expectations for the business are consistent with guidance communicated in May 2008. In 2008, the Company plans to limit expansion to two to four new markets, including Long Island, New York opened in the first quarter and Hartford, Connecticut opened in July, as it focuses resources on optimizing the return on investment in all of its markets. Based on this plan and management’s current outlook, the Company reiterates the following guidance from May 2008:

• Revenues for the full year are expected to range from $114.0 to $118.0 million.
• The Company expects to report a full year GAAP net loss of between $8.9 and $10.4 million, or $0.42 to $0.50 per basic and diluted share, based on 20.9 million shares outstanding. The range of the pro forma net loss is expected to be between $4.9 and $6.4 million, or $0.23 to $0.30 per basic and diluted share.

Conference Call Details

A conference call to discuss second quarter results will be webcast live on Thursday, August 7, 2008 at 5:00 p.m. Eastern Time on the investor relations section of ZipRealty’s website, www.ziprealty.com. Listeners may also access the call by dialing 888-220-8746. A replay of the conference call will be available through August 14, 2008 by dialing 888-203-1112, password 2642723.

About ZipRealty, Inc.

ZipRealty is a full-service residential real estate brokerage firm. The Company utilizes its user-friendly website and employee real estate agents to provide homebuyers and sellers with high-quality service and value. ZipRealty’s website provides users with access to comprehensive local Multiple Listing Services home listings data, as well as other relevant market and neighborhood information. The Company’s proprietary business management system and technology platform help to reduce costs, allowing the Company to pass on significant savings to consumers. Founded in 1999, the company operates in 35 major markets in 20 states and the District of Columbia. For more information on ZipRealty, visit www.ziprealty.com or call 1-800-CALL-ZIP.

Cautionary Language

This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the federal securities laws, including, without limitation, statements about reiterating our full year 2008 guidance, plans to limit expansion to two to four new markets, including the Long Island, New York market opened in the first quarter and the Hartford, Connecticut market opened in July, and the Company’s anticipated revenues and GAAP and pro forma net losses for 2008 included under the heading “Financial Guidance.” Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. The risks and uncertainties include but are not limited to the Company’s limited operating history and limited profitability, the Company’s access to MLS listings and leads from third parties that it does not control, a continuing decline and volatility in the residential real estate market, including a decline in the number and/or sales prices of homes, economic events or trends in housing prices, interest rates, the newness and scalability of the Company’s business model, the Company’s ability to hire, retain and train qualified agents and key personnel, legal challenges to the Company’s compensation plans, including expense policies, under federal and state wage and hour laws, the Company’s ability to manage growth in terms of personnel, expansion into new markets, information and control systems and legal restrictions, the Company’s ability to comply with often complex federal and state laws and regulations concerning real estate brokerage, other core services such as insurance, internet content, privacy and other matters as well as rules of real estate industry organizations, competition, management transitions, use by Internet service providers and personal computer users of more restrictive email filters, seasonality, geographic concentration, and other risk factors set forth in the Company's Form 10-K for fiscal year 2007, and other filings with the SEC including our quarterly Form 10-Qs and periodic Form 8-Ks. The forward-looking statements included in this release are made as of today’s date and, except as otherwise required by law, ZipRealty does not intend to update these forward-looking statements to reflect events or circumstances after the date hereof.

For ZipRealty
Investor Relations:
Tom Ryan/Kathryn Harmon
866-947-4663
or
Media:
Marcus Gamo/Aimee Grove
415-277-4925
ziprealty@allisonpr.com