Ian Lee - Head, Investor Relations Pete Flint - Chief Executive Officer Sean Aggarwal - Chief Financial Officer.

Lloyd Walmsley - Deutsche Bank Rohit Kulkarni - RBC Capital Markets Deb Schwartz - Goldman Sachs Ralph Schackart - William Blair Kerry Rice - Needham James Cakmak - Telsey Group Chris Merwin - Barclays Neil Doshi - CRT Capital.

Good day, ladies and gentlemen, and thank you for standing by. Welcome to Trulia’s First Quarter 2014 Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded.

I would now like to hand the call over to Mr. Ian Lee, Trulia’s Head of Investor Relations..

Thank you, Operator. Good afternoon. And welcome to Trulia’s first quarter 2014 earnings call. Joining me today are Pete Flint, Trulia’s Chief Executive Officer; and Sean Aggarwal, our Chief Financial Officer.

Before we start this call, I want to remind all of you that this presentation includes forward-looking statements within the meaning of the Federal Securities Laws. Forward-looking statements generally relate to future events or our future financial or operating performance.

Forward-looking statements in this presentation include, but are not limited to, statements related to our business and financial performance and expectations for future periods, our expectations regarding our integration of Market Leader and the growth of the combined business, our expectations regarding the continued use of our products by consumers and real estate professionals, our expectations regarding macro trends in the market, our expectations regarding our national marketing campaign and our expectations for our products.

Our expectations and beliefs regarding these matters may not materialize and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected.

These risks include those set forth in the press release that we issued earlier today, as well as those more fully described in our filings with the Securities and Exchange Commission.

The forward-looking statements in this presentation are based on information available to us as of the date hereof and we disclaim any obligation to update any forward-looking statements except as required by law. We also remind you that this call includes a discussion of GAAP and non-GAAP financial measures.

The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP.

A discussion of why we present non-GAAP financial measures and reconciliation of the non-GAAP financial measures discussed in this call to the most directly comparable GAAP financial measures are included in our earnings press release that is available on our website.

Please note that our discussion of financial and operating metrics today includes -- primarily focus on consolidated data for Trulia and Market Leader. The conference call is also being webcast and is available through the Investor Relations section of Trulia’s website. And now, I’ll turn the call over to Pete..

Thank you, Ian. Welcome and thank you for joining our first quarter 2014 earnings call. We had an outstanding start to 2014.

We achieved record revenue of $54.5 million and record subscriber base, adding over 7,000 subscribers to our customer base in Q1 and we're seeing positive initial results from our marketing campaign with our consumer audience in April planning to reach nearly 50 million unique visitors.

Performance demonstrates the power and scale of the Trulia platform, and their dedication to attracting and serving serious homebuyers* and sellers. The subscriber growth reinforces the fact that in the real estate category, agents want to use their marketing dollars* to reach most qualified consumers where they receive high quality leads.

Our strategy is working as demonstrated by record new subscriber additions. I'm excited by the progress in the early stages of 2014 and yet, we have so much runway ahead of us, because we are operating in a market that is immense by any measure. There are about 5.5 million existing and new home sales in the U.S.

last year, about 1 million real estate agents were active in the market and they collectively generated about $60 billion in commission. The total estimated marketing spend by agents or brokers was about $12 billion and that's just in our core business. Not only is that the market huge but its undergoing significant change.

Trulia is at the center of this change and the beneficiary of this industry transformation. The U.S. market unlike many developed overseas market is still in its infancy with no single predominant source of home listings for consumers.

Consumers have navigated this market by relying increasingly on online means of finding homes and real estate professionals, especially by mobile devices.

Real estate agents are gradually also been transitioning more from marketing spend to online* platforms where they can fast reach consumers and achieve the most attractive returns on their marketing dollars. We also see an opportunity to use software to transform the way the agents work and improve their marketing ROI and our share of wallet.

We had established a leadership position of real estate software to provide the most comprehensive offering for agents. We are capitalizing on this opportunity for our dedication to creating the leading two-sided marketplace in our industry.

On one side of consumers, our consumer strategy is focused on attracting serious home movers with great products, complemented this year by strategic marketing campaign.

A long-term objective is to go deeper into the consumer home search process, working with consumers who transform the experience from a complicated and difficult one to one that is simpler, more targeted and ultimately more satisfying. On the other side of the marketplace are real estate professionals.

We connect real estate agents with our large and growing audience of transaction ready consumers, generating a large number of quality leads for them. In the same way we're laying the foundation to go deeper into the consumer side of the transaction, we are going deep into the transaction for agents.

Last year, we established a leadership position in this critical area by acquiring Market Leader. We can now not only send leads* to agents but also provide them with a comprehensive, end-to-end integrated platform or as we like to say, real estate operating system.

This also* improves the overall consumer experience and helps agents to convert their connections via consumers into meaningful business, by giving them a greater opportunity to turn leads into closed transactions thus improving the ROI of our products.

We couldn't be more excited about Trulia having opportunity and it’s been almost two years since we’ve bought (indiscernible) for IPO.

Our annual revenue has grown from $68 million in 2012 to annual outlook of approximately $250 million in 2014 and our subscriber base is more than doubled since the end of 2012, with this and key milestones, but we are just getting started. Let me now move to a recap of our business in the first quarter of 2014.

As I mentioned earlier in Q1, we achieved record revenue of $54.5 million and added over 7,000 subscribers. This tremendous performance continuously built on the back of our three core strategies.

These are, one, delivering a killer experience to consumers especially via mobile devices, two, growing agent base and building the leading platform for the industry, and three, extending our marketplace into adjacent markets. For consumers, we continued our focus on creating an amazing user experience.

In 2013, we made significant investments in developing a pipeline of amazing consumer tools to simplify the home search process. This past quarter was the busiest in Trulia's history in terms of new product releases and updates, including completely new versions of iOS and Android apps, and a completely updated mobile web experience.

These were all strategically launched before the kick-off of our marketing campaign in the last two weeks of March. We're delighted with our consumer products and we’re pressing our lead here. The primary goal of the mobile app redesign was to make it easier to search and safe open homes for consumers on the go.

In addition to large beautiful pictures and easy to navigate photo galleries, embarking quickly identify local amenities and important and important and unique neighborhood info like crime, score and average sale price for nearby homes, as well as safe listings.

If this isn't a great places for our consumers as we approach the busy spring season when home movers and sellers and real estate agents are at the most active. As we announce on our last earnings call for the first time, Trulia is now complementing its product leadership with a strategic marketing campaign.

With the addition of marketing, we are ensuring that more of the right kinds of consumers get to know and use our products. Our marketing campaign is principally focused on these transaction ready consumers and designed with two goals in mind.

One, to make Trulia, the primary and preferred app in the category, and two, to drive awareness of Trulia in most active home users. Put another way, the goal of the first results to our focus and direct response especially mobile acquisition, and second, to build a trusted brand.

The campaign coincides with the beginning of the house hunting season and targets women, aged 25 to 44. A great reflect our mobile phone strategy, highlight the images to smartphones and tablets, as well as a co-direction to download our mobile app.

This is a multi-channel campaign that will appear across TV, radio, outdoor, online and mobile with a goal of engaging serious homebuyers and sellers, and driving them to download the Trulia mobile app.

We launched our first creative in March, and we are rolling out additional creatives and marketing initiatives throughout the year to continue our early momentum. As marketing strategies focused on transaction ready consumers, the metrics we will be using to gauge the success of the campaign affiliate accordingly.

The four metrics are, one, attracting more transaction ready users, two, generating more leads from those users, three, attracting more agent subscribers who are drawn to our serious consumer audience and four, growing revenue and profits, driven by the growth in our subscriber base. While it's early in the campaign, the results are positive.

Let me share, some of the data in three areas, search volume, paid marketing and April traffic. First, we've seen positive trends in search volume. In regard to our TV marketing efforts, we’re the only leading indicator results is a level of consuming interest in Trulia, gauged by search volume for the Trulia brand on the leading search engine.

We have the interest in the Trulia brand pre and post-launch of the marketing campaign. We are now sure that interest in the Trulia brand grew at a rate significantly faster than the overall category. Second, our paid marketing efforts are scored well from our initial test.

On our Investor and Analyst Day we noted that our paid marketing test led to consumers generating two times the leads and three times the registrations compared with organic traffic.

As we have scaled the paid marketing, we have seen our initiative to achieve results that are on par with or better than the initial test results with regard to leads and registrations. And third, we are counting attractive reached nearly 50 million unique visitors in April.

This will be the first time in Trulia history that our transaction ready audience has made this level. Overall, we are pleased with initial results of our national marketing campaign. The campaign now is in the high gear as we approach the busiest part of the real estate moving season.

We will keep you updated on our progress as we continue with the campaign during the rest of the year. Moving to our second strategy and the other half of our two-sided marketplace. We are growing our agent base and building the leading platform for the industry.

Our execution on the agent side of our business in addition to our larger audience of serious home movers drove traffic performance in growing our subscriber base by record of over 7,000 subscribers in Q1. A key contributor to the subscriber growth was our inventory expansion program.

The inventory expansion has enabled us to take advantage of pent-up demand from agents in many of our high demand zip codes across the country over the past year. After completing the implementation of a second agent placement late in 2013, we began rolling out our third agent placement in the first quarter of 2014.

The second phase of our inventory expansion has been more received by real estate agents and we would -- and we will continue to expand the rollout in the coming quarters. Product innovation was a feature of the first quarter highlighted by the launch of our Trulia Seller Ads product.

This new service generates and delivers quality leads for motivated sellers to agents and was specifically created to help agents win more listings and bring more inventory to the market. Trulia Seller Ads give agents sell the lease by targeting consumers thinking about selling their homes.

This is especially important today as low inventory made a challenge in many markets around the U.S. Our inside sales team has been selling Trulia Seller Ads in March and not still early we've been encouraged by the positive results -- positive response from agents.

The growth of our agent business was also enhanced by the power of the combined Trulia and market leader platform, with market leader now an integral part of the Trulia family, we possess one of the industries industry's most comprehensive end-to-end platforms for real estate professionals.

In addition to Trulia's lead generation capabilities, Market Leaders real estate operating system already assist over 160,000 agents and manages 40 million customer leads for those agents. A combined platform will deliver unprecedented solutions for agents, as well as even higher lead quality.

For Trulia this combination has increased the breadth and depth of solutions we offer, increased customer thickness and the life time value of agents. We are leading the transformation in the industry. Our product leadership will not just be on the desk, but more important by mobile.

Market Leader posses one of the industries leaving open CRM platforms. We’ll be bringing this together with Trulia's pioneering mobile solutions for agents, including one of the industries first dedicated agent mobile apps.

You'll see a lot more of us -- a lot more from us on this front in 2014 as we bring together Market Leader CRM and Trulia's mobile leadership in a series of renovations that leverage each of our DNA. We believe a future real estate operating system is in mobile.

Product integration will ensure continued product leadership and overtime provide us with incremental revenue opportunities. In the near-term one of our primary areas of focus has been learning our inside sales teams and customer platforms to facilitate the cross-selling of products to our respective customer bases.

There is significant opportunity for cross-sell, given that the overlap between Trulia and Market Leader subscribers is limited. Cross-selling efforts were recently initiated by our inside sales team in Q1. It’s our expectation as fully integration efforts come together our cross-selling efforts will pick up speed.

The third part of our strategy is to expand our business and grow into adjacent markets. In rentals, we are continuing to build a rapidly growing and highly engaged consumer audience. Mobile business doubled year-over-year and rentals leads generated from mobile devices grew to similar rates.

Our playbook for adjacent businesses is to create the best product, both scale and then monetize. For rentals, we are making great progress on scaling the business. In Q1, consumer center rental leads by Trulia everyone in a half seconds.

In fact, in many cities such as Manning, New York, Chicago, Los Angeles, San Diego and Philadelphia, we start to achieve critical mass with renters. Many upon the communities in the cities are now receiving more than five leads per day from Trulia.

At our Investor and Analyst Day we also announced that we recently launched a dedicated business focused on newer construction. Still very early days for us -- for this product but we are tremendous excited about the growth potential of the newest vertical within our adjacent businesses.

As we noted at the Investor Day we believe this could be $100 million to $200 million annual revenue opportunity over the next five years. In summary, we are off to a fantastic start in 2014. We are going deeper on both the consumer and the agent side of our marketplace and executing on the immense opportunity ahead of us.

The first quarter was notable -- was a notable one for Trulia as it marked the first time that we complemented our product and engineering DNA, with a strategic marketing campaign. It's had a great kickoff and we look forward to updating you on its progress. With that, I will pass the call to Sean..

Thanks, Pete. We experienced strong growth across our business in the first quarter. Our focus on building the best products in our industry enabled us to grow a highly engaged consumer audience while achieving strong financial results.

As I have mentioned in the prior two earnings calls, starting this quarter, we will report consolidated Trulia and market leader numbers.

This is driven by the fact that as the sales forces of the two companies have started to cross-sell each others' products and we have begun the integration of our products, the lines between Trulia and market leader are fading and will continue to become less visible.

My prepared remarks are accompanied by a presentation which is viewable on this webcast and also available on Trulia's Investor Relations website. I'll now turn to first quarter results. Today I will cover three items, an overview of key metrics, a review of first quarter results, and guidance. I'll start with key metrics.

I’ll first cover our three key consumer metrics; total visitors, mobile visitors, and user-generated content. Traffic totaled nearly 45 million monthly unique visitors, an increase of 42% year-over-year. As Pete noted earlier, our April traffic is trending to reach nearly 50 million unique visitors.

With regards to user-generated content during the quarter, our users made approximately 1.3 million new contributions to our site, a 26% increase over the first quarter of 2013. We finished the quarter with accumulative total of over 13 million user-generated contributions in our database.

On the agent side of our marketplace, we focus on two key metrics, number of subscribers and average revenue per user or ARPU. We added over 7000 new subscribers in the quarter, ending the quarter with approximately 66,700 subscribers. This is the largest number of subscribers we have ever added in a single quarter.

As we highlighted at our Investor Day in March, the Trulia platform attracts a highly transaction ready set of consumers. And based on the data available to us, we believe these transaction ready consumers generate more leads for our real estate agents than our closest competitor.

Real estate agents understand this and are signing up for the Trulia platform in record numbers. The strong growth in subscribers is also validation of the value real estate agency in the end-to-end platform that Trulia and Market Leader have created. ARPU was at $196 in Q1, up $4 versus the prior quarter.

The sequential increase in ARPU was driven by ongoing price increases, maturation of existing subscribers, the introduction of the new Trulia seller ads product, and continued penetration of our mobile subscription product. As I’ve discussed previously, we estimate that there is a 20% overlap between Trulia and Market Leader subscribers.

The consolidated ARPU and subscriber numbers are based on this 20% overlap assumptions. Over the course of Q2 as we complete the integration of the billing system of the two companies, we expect that the eventual overlap may be lower than our 20% assumption. Having covered key metrics, I’ll turn next to our review of first quarter financial results.

First quarter revenue was $54.5 million, exceeding the top end of our guidance range by $1 million. Year-over-year growth was 127%.

Total revenue further breaks down into two categories, marketplace revenue, which is comprised primarily of revenue from subscription products sold to real estate professionals, including Market Leader was 45.8 million for the quarter to 155% year-over-year increase.

Media, which includes sales of display ads to national advertisers also performed strongly with revenue of $8.7 million, up 45% year-over-year. Our Media business continues to be driven by solid execution and pricing leverage as we become a must buy in the category.

I will next discuss earnings and then walk down the P&L, commenting briefly on each P&L line item. Our discussion of operating expense items excludes compensation paid in stock. For details on operating expenses including compensation paid-in stock, please refer to the appendix of the earnings presentation accompanying this call.

First quarter, adjusted EBITDA was $2.8 million or 5% of revenue exceeding the top end of our guidance range by $1.2 million. Gross margin for the quarter was $44.8 million or 82% of revenue, consistent with the 82% gross margin in the prior quarter.

Sales and marketing expenses were $29.7 million or 54% of revenue compared with 45% of revenue in the prior quarter. The increase in sales and marketing was driven primarily by the investment in our marketing campaign. Technology costs were $10.8 million or 20% of revenue in line with the 20% of revenue in the prior quarter.

Our continued investment in engineering headcount was offset by revenue leverage. G&A expenses were $7.9 million or 14% of revenue consistent with the 14% of revenue we recorded in the prior quarter. Having covered the P&L, let me briefly touch on the balance sheet.

We finished the quarter with $221 million of cash and equivalents and $230 million of convertible debt. I will now close by covering guidance for Q2 in 2014. We expect the strong momentum in our business to continue into the second quarter of 2014. We expect Q2 revenue to be in the range of $61.5 million to $62.5 million.

Marketplace is expected to represent 80% to 85% of total revenue. We expect adjusted EBITDA to be in the range of $2.3 million to $2.8 million or 4% of revenue at the mid point. For full year 2014, based on the strong start to the year and the early positive results from the marketing campaign, we are increasing revenue guidance.

We now expect 2014 revenue to be in the range of $250 million to $253 million, an increase of $5 million versus the guidance we issued in February. Marketplace is expected to represent 80% to 85% of total revenue. We expect adjusted EBITDA to be in the range of $18 million to $22 million or 8% of revenue at the midpoint.

For the year, we expect depreciation and amortization to be in the range of $27 to $30 million, compensation paid in stock to be in the range of $42 million to $46 million and CapEx to be in the range of $30 million to $40 million.

CapEx is higher than our previous outlook primarily due to new office leases we have entered into -- for our San Francisco and Denver offices. At the end of 2014, we expect basic and diluted share counts to be approximately $38.5 and $53 million shares outstanding respectively. I'll close by recapping the highlights from today's discussion.

First, we launched our national marketing campaign in Q1 and are seeing positive initial results. We are on pace to reach nearly 50 million unique visitors in April. Second, we added over 7,000 subscribers in the quarter, the largest ever in our history. And third, the team continues to execute well.

In Q1, we exceeded the top end of our guidance range for both revenue and adjusted EBITDA and we are increasing full year revenue guidance. I'll now pass the call back to the operator for Q&A..

(Operator Instructions) Our first question comes from Lloyd Walmsley with Deutsche Bank..

Thanks, guys. One, if you can just talk a bit about the drivers of sub growth.

The approximate contribution from core Trulia versus the software side of maybe a little bit of color on whether or not NRT has kicked in and has started to contribute on the software side, any color you can give there? And then secondly if I may, it looked like the unique user number that you talked about in April of 50 million points to slightly acceleration versus 2Q, 2013.

Do you see that number trending up even from that April number in May and June? And then can you kind of talk about the traffic contribution from Market Leader, so we can look at an organic number on the visitor growth?.

Great. Okay. Thanks, Lloyd, I’ve got -- I think, I’ve got all those and I’ll -- I’m sure when I will tag team it.

So firstly on the subscriber growth, so -- we are just delighted with the 7,000 net adds in Q1 and just to give you a bit of color behind that, the primary driver there was inventory expansion, which we rolled out at first slot at the beginning of the year. The second driver was with the marketing campaign.

While the marketing campaign is principally focused on consumers, driving quality consumer leads to our real estate agents subscribers. That’s been a contributor, but there's also just a Halo effect of starting this marketing campaign has been well received by agent customers as you might imagine. So that's been the key driver on the record sub ads.

Just to give you kind of how that breaks down, we’ve started selling the products as Sean described it's hard to attribute them between one between Trulia versus Market Leader. But to give you some directional color within that, broadly on the Trulia side this was the best performance we've ever had on the Trulia side of the business.

And then on the Market Leader side, it's the best performance in approximately 18 months on the market leader side. So both teams really hit out of the park and have just had incredible performance on both sides. I’ll take the unique numbers and then pass over to Sean to talk through the MLT and any of the other traffic breakdown.

So the unique saw nearly 50 million in UVs but not giving sort of guidance for the rest of the quarter but we are seeing sizable reacceleration on the mobile side of our business. So mobile as you know, we really launched a whole host of mobile features and product updates in Q1 and our marketing has been principally focused on mobile.

So we’re seeing a reacceleration towards the end of the quarter in mobile. That's being the key driver. I think we don't give guidance on UVs but we see that the April number is at a growth rate greater than the 42% that we saw in Q1. So we see on a like-for-like basis about 50 million would be around 46% year-over-year growth in April.

And I will pass it to Sean to talk through the other points..

Lead, I'll comment on the NRT deal. So, as you know, back in January, we announced that market leader had signed a multiyear agreement with NRT. And just for context for everyone, NRT is the country's largest residential real estate brokerage company with over 40,000 real estate agents that work for NRT.

And NRT essentially operates reality’s, company-owned brokerage offices under the brand names that we all know well like Coldwell Banker, ERA, Sotheby's and the Cochrane Group and under this agreement that market leader signed with NRT, market leader will provide NRT with a private label version of their software platform.

We are on track to launch that partnership and had to go live in the second half of this year. And once it’s live and we have some metrics under our belt, we'll look forward to sharing those with you..

Thanks, guys. Nice quarter..

Our next question comes from Mark Mahaney with RBC Capital Markets..

Hi. This is Rohit Kulkarni. I am filling in for Mark.

Just a quick one on your 2014 EBITDA guide versus the raise in revenue -- as in any additional color on any incremental or marginal spend that you may be doing versus what you talked about in the Analyst Day or whether you are seeing greater spend in technology or marketing in any particular areas? And secondly, how are you thinking about the broader three kind of core strategies that you talked about in terms of management focus our technology spend.

And then as far as the adjacencies are concerned as in at what point do you actually go completely full in or put additional dollars in the adjacencies versus focusing more on the marketplace as such?.

Rohit, its Sean. I’ll take the fist question and I know Pete want to comment on your second one. So with regard to guidance for 2014, we are obviously seeing strong strength in our business based upon, which we feel confident in raising revenue guidance for the year as you heard from us we’re taking that up by 5 million for the year.

And the top line strength that we’re seeing is coming from the record subscribers that we added, the inventory expansion program, the cross-sell from Market Leader, and then tailwind we are starting to see from the marketing campaign. With regards to EBITDA, we are not changing the EBITDA number for the year.

And the first thing I'll say is, there is no change to our estimate of the marketing spend for the year as we previously said we are targeting about a $45 million investment in our marketing campaign this year and no change. We don't expect to really increase that. We are very ROI driven and data driven in this regard.

And we don't see in ROI for spent about $45 million. So we’re instead taking the revenue upside that we are seeing for our guidance. And we are going to invest that upside back into the business primarily in engineering and product headcount, so that we can continue to maintain and further our lead in the core business in building fantastic products.

And additionally, we are also adding engineering and product headcount in our adjacent areas, so we can go even faster particularly in rentals. So that's the color on guidance..

And just to give you a little bit more color on investment levels and adjacent, I think one of the -- it has been -- perhaps something we haven't talked about too much in the past but we’ve been investing quite heavily in our product and engineering teams in our adjacent over the last several years and achieved quite considerable successes as we shared in the Analyst Day.

We exit the year at $20 million over in mortgage. In rentals, we’ve built a very significant scale, organically through product and engineered focus. And as we look out in the rest of 2014, we will likely continue as Sean said product and engineering focus on these adjacencies, rentals being the main investment areas but also mortgage and builders.

So products and engineering this year and then likely into 2015 are more of a focus on sales and marketing in terms of investments in those areas..

Okay. Great. Thanks Sean. Thanks Pete..

Our next question comes from Douglas Anmuth with J.P. Morgan..

Hi. This is [Jaong Kim] (ph) in for Doug. Thanks for taking the question. Can you provide a little bit more color on the product integration, how that’s going between the market leader in Trulia, and what kind of initial uptick you are guys are seeing in the cross-selling and up-selling between the two of your subscriber base.

And then secondly, little bit more of a housekeeping technical question, when you guy say 20% overlap, do you assume that 20% of the subscriber base by both Trulia and Market Leader products? Thanks..

So, I'll take the first part of Market Leader and Sean will take the overlap question. So there is two tile of cracks where we are executing on an integration. The first is sales and marketing and the second is product development.

On the sales and marketing side, the cross-sell started in Q1 and it was a contributor to the record subscriber number, I'd say inventory expansion and marketing were the principal drivers. But also cross-selling was a contributor to the record performance by both teams and we continue that execution as Sean said in the final section.

We are working through billing system integration, which will lead ease cross-sell integrations, that work is ongoing. So we're happy with that performance.

On the other side is the product development track and as we shared, the principal focus is to leverage Trulia's leadership in providing easy to use mobile applications for real estate professionals with the huge suite and scale that Market Leader has in their (indiscernible) and productivity suites.

So we are working through that integration right now and we see just a tremendous opportunity to change and improve the way the real estate agents work, ultimately with the goal of driving increased engagement from real estate professionals and improving the ROI on the marketing spend and the products they provide with us.

So that is a big focus of 2014 and we'll be, as we've said at the beginning of the year, we will be rolling out products in the second half of the year..

And then on the question around overlap what you said is correct and I’ll amplify a little bit here. And I'll go back maybe to just when we acquired Market Leader, and if you looked at the Q3 subscriber numbers, Trulia's standalone at that time had 36,000 subscribers, Market Leader standalone upon acquisition had approximately 25,000 subscribers.

So both adding goes together would have been 61,000 subscribers. Of the 25,000 Market Leader subscribers, our initial analysis showed about 20% of 5000 5,000 were all the subscribers of Trulia. So we take the gross subscriber number, the 36 plus 25,000, the 61,000 and subtract out the 5,000 that are overlapping.

And therefore, a net subscriber number upon acquisition is approximately 56,000 subscribers. So, that’s how we should think about that 20% overlap between the two companies..

Got it. Thank you very much..

Our next question comes from Deb Schwartz with Goldman Sachs..

Hey. Great. Thanks. The question on the marketing campaign, I know when you launched the marketing campaign you had indicated that you were looking for a transaction ready consumers.

When we think about the acceleration in consumers that you are seeing, how should we think about it in terms of other metrics like repeat, visits and leads?.

So, thanks Deb. So the campaign -- we're about six weeks into the campaign and the way that we are thinking about the success and our measured success is four key areas.

So one, is UVs, two is leads to real estate professionals, three is subscribers, the more leads to generate more, it makes us attract to retain real estate agents and then four is revenue. And clearly on UVs as we’ve show, we've seen a -- particularly reacceleration mobile and overall acceleration in our audience numbers. We feel great about that.

On the -- what we're seeing on engagement we are seeing that our visit numbers are growing at roughly double our UV numbers. So not only we’re growing the top of the funnel, we are able to engage that audience much more effectively than just acquiring new users for the top of the funnel.

And then we are seeing as we shared in the Analyst Day, that we can generate about 1.1 million leads per month, which is a huge number within this category and we're seeing marketing initiatives are driving performance of those leads, driving additional leads to those real estate professionals.

The marketing initiatives that we are performing typically perform at roughly double the rate of that visit to lead ratio than organic means. So we’re seeing really solid performance on engagement, as well as lead volume through the marketing initiatives..

All right. Thanks.

And then just also curious, as it relates to the strength that you are seeing in mobile usage, is it possible to breakout even just looking at March from before versus after the campaign launch? How should we think about the mobile usage as it relates to seasonality and product development versus the impact of the marketing campaign?.

Deb, it is Sean. I think the simplest way to think about what's going on with mobile and seasonality and so on is year-on-year growth rate which largely corrects for seasonality. And we are seeing a reacceleration in the year-on-year growth rate as mobile traffic and we saw that going into April.

And so we're just very, very pleased about that because obviously the future of this category is all about mobile. Additionally, we have just completed as Pete mentioned in his remarks a major refresh of our mobile products and they are -- we think the very best in the category at this point, just an excellent experience in our mobile apps.

And then third, much of the focus of our marketing campaign if you look at the creative and the channels in which we are investing our dollars is all centered around mobile and we are starting to see the needle move. As I said, mobile year-on-year growth is a reaccelerating in the month of April.

So its early days and we are early in the campaign, but we are very pleased by the results that we were starting to see..

Great. Thank you..

Our next question comes from Ralph Schackart with William Blair..

Good afternoon. Couple of questions on the inventory expansion program. First can you provide some color on how many of the second slots have been sold out to-date? And then, just in terms of the third slot.

I know it’s really early, but maybe some color in terms of how the rollout is going in terms of how penetrated are you today, and then any initial reads if the third slots are getting sold out particularly in high demand zips?.

Ralph, it is Sean. Just on the second slot, the second slot is largely sold out. So as you know, we started with inventory expansion program early in 2013. It was largely concentrated in our high demand zip codes, the 4,000 or so zip codes where we have tremendous consumer appeal, traffic, brand awareness, agents had bought out all of our inventory.

And we had this wonderful situation, where we had almost 10,000 agent sitting on a waitlist in these high demand zip codes saying, hey, if something opens up, give me a call.

And so we started the rollout of the second slot early in 2013 and by the time we got to the end of 2013, we found that we were pretty much sold out, virtually sold out entirely of our second slot, which is why we've been embarked on further expansion and have started rolling out the third slot starting in this year.

So, that’s a little bit around where we are with the second slot and I know Pete will want to add a little bit more color I imagine here under third slot..

Yes, so we've started rolling out in the first part of this year. We rolled out the second slot over the full year 2012. It’s feasible but unlikely that we’ll rollout a little bit faster in 2014 and we've seen early reception to be very positive.

We monitor closely the consumer experience and the agent experience and looking at the ROI, that agents are getting, and we have seen very consistent ROI that we have see in the past.

So we’ve been managing the marketplace with inventory expansion, price increase, monitoring quality of the search of item and we built a good amount of headroom in our ability to dial-up these metrics over the coming quarters. .

Great.

One more if I could, could you just remind us where you're on your mobile price increase and if you're continuing to think that you may roll that out in 2014?.

Roughly, as you know, from the beginning, we have priced our mobile subscription product at a premium for the desktop product and historically that premium for the mobile product has been in the 15 to 20% range versus the desktop product and in Q1, we maintained that premium and so the Trulia mobile product was 15% to 20% pricing premium to desktop in Q1 as well.

And obviously what that implies is over the course of the last 18 to 24 months that this product has been in market, we have increased the price of the desktop product quite a bit and we have also therefore increased the price of the mobile product in line so that we can maintain this 15% to 20% premium.

And as we look out over the course of 2014, we expect at minimum to maintain that pricing premium..

Okay. Great. Thank you..

Our next question comes from Kerry Rice with Needham..

Thanks. Couple of questions. One, in Q1 and here in Q2, you guys have signed a couple direct data license with regional MLS's and I was curious if you could talk a little bit about maybe your strategy there. I know previously you guys have relied on aggregators.

Are you thinking about shifting more towards building your own MLS and not relying on third parties for that data? And then the second question is, you guys are making more investments in the adjacent market, rentals and mortgages.

When do we think about those beginning to contribute more material revenue there on both of those mortgages and rentals? And then just housekeeping, Sean, can you give us an update on TMA subs?.

Yes. So, on your question around data licensing, so we've been agnostic around the data sources for -- since inception. We have -- we really appreciate and value our relationship with aggregators, direct relationships with brokers and franchises also, direct relationships with them directly. So, we are very much agnostic about this.

The benefit for us of building direct relationship and to some extent the benefit of the relationship with from the MLS perspective is that, we are now a significant source of marketing for real estate agents and talk to home sellers to get their homes out into the respective home buyers.

And so they take this syndication very importantly and very strategically. And then two of these, the Arizona and Florida deals we announced recently, they are two of the top six MLS in the country.

So, this is, we’re tracking these about direct relationships and overall increases that data quality coverage and comprehensiveness of the platform, but we are -- I think no shift in strategy. We maintain a very agnostic and multi-source strategy to this. So, that’s been the approach there.

And if Sean wants to touch on the questions on adjacencies and TMA?.

Yeah. So, on adjacencies and monetization, our strategy, as you know, we've talked about that the adjacencies is to get the experience just right first, and we are well on our way in rentals and mortgage, and now with the launch of the builder product line as well.

We’re focused on the consumer experience, getting at absolute best-in-lass and then driving the right users to that platform. And 2015 is the year that we expect to turn on monetization in these businesses, likely rentals is the one that goes first that you will see a start to monetize in 2015.

Then, on TMA subscribers, now that we've consolidated the subscriber bases for Trulia and Market Leader, this one is a little bit more difficult to parse out, but I'll directionally give you an answer, so that we can bridge you from the historical TMA attach rates we have been talking about.

So directionally in Q1 about 36% of the subscribers had also signed up for a mobile subscription, up from the 33% attach rate at the end of Q4..

Thank you..

Our next question comes from the James Cakmak with Telsey Group..

Hi, thanks. Can you provide some more detail around where you are seeing the successes with your marketing spend, is it working the best in the higher demand zips on or penetrated audience markets, just kind of some more detail around where it seems to be working the past.

And then I guess on top of that, what channels you seem to be seeing the biggest lift from TV and so forth? And then, I guess, second to that, how is your sales efforts evolving in the markets that you are doing marketing, how are they basically -- is their sales efforts evolving in a sense that they have a different strategy in going after agents to communicate the fact that the audience is going up or changes and how they're approaching the cross-selling because the audiences are going up in those markets.

So if you could just talk about that, that would be great? Thanks..

So on the campaign, so we have been live for about six weeks and we went into this with a lot of data. So we did test over the last six or nine months principally on the issued channels mostly test they start optimize this, but obviously we scouted up over the last six weeks significantly.

And there is enormous amount of data that we developed out of this and we’ve used that to optimize the campaign, optimize the creative, optimize the channel, optimize the geo of pretty significantly. And I think it would be hard for me for competitive reasons to get too much of the insights that we gathered from this.

But we've made a good adjustment to drive down the key KPIs within the campaign that we've been looking at just cost per in-store, cost per visit, cost per leave, cost per registration and using the portfolio of channels and portfolio of creators, we've optimized that down in a very encouraging way over the last six weeks.

So we feel it’s been -- a fair amount of changes, but the channels are in place, but we've been optimizing the spend and they created accordingly.

On the sales and how we impact that on a geo basis, I think on a -- at this stage we are -- we feel very fortunate that we have -- we're not too inventory constrained at this point given the size of our audience and given the inventory expansion program.

So we've not been constrained by inventory such as we grow inventory ourselves that exchange, but we -- so we haven't had to change ourselves perhaps significantly, because we are not inventory constrained.

But as we expand and we focus on certain regions, particularly the high demand zip codes, then we are exploring new ideas to create and increase prices and increase inventory in those areas. So we see some opportunity over the coming quarters to look at that. So that would be, I guess that would be the response there.

What we shared historically and what we shared at the Analyst Day, we’ve seen a significant improvements in our productivity, sales force productivity over the last couple of years, and that’s a -- there’s a whole stream of things that are going on there, but one of the key streams there has been significant investment in our inside sales rep/dashboard and information systems.

So we've been able to target the right message to the right agent and the right zip code with the right product.

And we now -- this is a science, this is really efficient science that we've been able to match the inventory and the product with the right agent in a geo, and that’s delivered a lot of productivity gains, and so that that infrastructure we feel great about, we continue to invest in and that will reap benefits and productivity to the sales force..

Our next question comes from Chris Merwin with Barclays..

Great, thanks. Sean just wanted to clarify your comments and now the overlap between Market Leader and Trulia subs might drop below, like you said* 20% in 2Q as you integrate the billing system.

So could you please talk a little bit more about why that is? And then also with your 2014 guidance, what does that assume for the overlap between Market Leader and Trulia subs at the end of the year? And then secondly, as it relates to rentals in terms of monetizing that business, are there sort of any initial thoughts there about what you might be targeting? Is it going to be multifamily buildings owned by property managers, or would you potentially consider trying to monetize the single family home market as well? Thanks..

Chris, on your first question around subscriber overlap between Trulia and Market Leader, so we had a third party come in at the time of the acquisition and run an analysis for us to estimate the overlap and they had estimated about 20%. So that’s the assumption we have been working with.

As we are integrating the sales team, as I mentioned, we are starting to integrate the backend customer databases and the billing systems and that will yield more precise data and it's possible that the ultimate overlap ends up being some number different than 20% and if so my guess is that it will -- if anything, it will be modestly lower than the 20%.

The guidance for the year and our projections and so on for the year assume the 20% overlap because that's the only number we have for sure at this point and that's what we’re using to build and base our guidance on. .

So on rentals monetization, so it’s such an exciting opportunity here. The market opportunity is two to three billion dollars a year.

I think the standard playbook in the category is to monetize the multifamily communities which kind of historically have paid the Internet listing services and that's a sort of -- that’s the sort of fairly well-trodden* path in terms of monetization.

The other monetization path are monetizing the single family space so we constantly have received inquiries from single-family either represented by small landlords or individuals that want to kind of get premium promotion and we’ve focused our engineering efforts on driving audience not kind of monetization that but that clearly represents an option for us which we are evaluating.

And the other option is to monetizing the open market, so we rolled up some tests earlier this year on monetizing in open markets and these are in clearly the test phase right now. So we would -- that’s enabling us to monetize in markets such as Manhattan working with brokers.

So there is a couple of different options where we are evaluating right now, I think it’s a little bit early for us to give you out -- to publicly give our [foresee] at this point. But we see it is just $2 billon to $3 billion market and we got just significant -- something like significant scale amongst renters that is growing fast..

Thanks..

(Operator Instructions) Our next question comes from Neil Doshi with CRT Capital..

Thanks for taking my question. I had a couple of questions. I wondered if you could talk a little bit about the cost for mobile app and install that you are seeing as you scale the marketing program.

I think at that Analyst Day you mentioned that the cost per install was around 30% to 40% lower than the category and we were wondering if you are still seeing a substantial out performance at you scale the marketing campaign?.

Yes, Neil, the answer is yes. So we did a number of tests and against the large publisher we work with. We benchmarked our performance against other options in the marketplace and as we've scaled the volume we've seen similar performance or better performance across the key KPIs that the marketing team is working across..

And then Pete on the rental side, as you kind of push forward on that, any more details you can provide in terms of number of listings or how we should think about scale and when you feel that you've reached kind of a scale where you can start to push the monetization button? What are some of the key metrics that you guys are going to be focused on driving over the next few quarters as can build out the macrosite?.

So this is again a two-sided marketplace where we've got consumer audience that generate leads, and on one side of the market, and then the other side is unique number of listings, and this is -- I would avoid giving a single number in terms of inventory, because this is a very metropolitan and urban experience.

So it's really about urban density and geographic density rather than a kind of single number across national coverage, but in our benchmarking, we are delighted with our coverage in terms of listing coverage vis-à-vis the competitor. So we’re confident that we have a leading comprehensive set of listings in the U.S.

and that number is -- the number of listings continue to grow. And certainly like we've said in the prepared remarks, in many communities and key metros, we are not just incremental lead source but becoming a significant driver of new leases in those markets.

And I think the opportunity here is that as the incumbent, which is Craigslist* is now executing on small fronts.

And we are able to leverage our unique content, our product and engineering resources to focus on the mobile experience for these users and we've decided to take the decision of not investing and building ad products, but investing in building scale.

And that's the focus that we’ve -- the decision we've made at this point and we expect as Sean said to focus on continue to building scale but also continue to build our products in 2015. .

That concludes our question-and-answer session. And that also concludes our conference. Thank you for your participation. Ladies and gentlemen, you may now disconnect. Have a great day..