SEATTLE, May 1, 2024
/PRNewswire/ -- Zillow Group, Inc. (NASDAQ: Z and ZG), which is
transforming the way people buy, sell, rent and finance homes,
today announced its consolidated financial results for the three
months ended March 31, 2024.
Complete financial results for the first quarter and outlook for
the second quarter of 2024 can be found in our shareholder letter
on the Investor Relations section of Zillow Group's website at
https://investors.zillowgroup.com/investors/financials/quarterly-results/default.aspx.
"Zillow's strong revenue numbers across the business helped us
once again meaningfully outperform the residential real estate
industry as we continue to execute on our growth strategy and
expand the breadth and depth of market coverage for the housing
super app experience in 2024," said Zillow co-founder and CEO
Rich Barton. "We've organically
amassed and maintained a large, engaged audience and strong brand,
and we've been investing heavily in software to digitize and
integrate the end-to-end moving transaction for consumers, their
agents, and their loan officers."
Recent highlights include:
- Zillow Group's first-quarter results exceeded the company's
outlook for revenue and Adjusted EBITDA.
- Q1 revenue was $529 million, up
13% year over year and above the midpoint of the company's outlook
range by $26 million.
- Residential revenue was up 9% year over year in Q1 to
$393 million, outperforming both the
residential real estate industry total transaction
value1 growth of 4% and the company's outlook.
- Rentals revenue of $97 million
increased 31% year over year, primarily driven by multifamily
revenue growing 46% year over year in Q1.
- Mortgages revenue of $31 million
increased 19% year over year, due primarily to a more than 130%
year-over-year increase in purchase loan origination volume to
$601 million in Q1. The increase was
partially offset by a decrease in mortgage marketplace revenue.
- On a GAAP basis, net loss was $23
million, or 4% of total revenue, in Q1, compared with
$22 million, or 5% of total revenue,
in Q1 2023.
- Q1 Adjusted EBITDA was $125
million, or 24% of total revenue, $25
million above the midpoint of the company's outlook range,
driven primarily by higher-than-expected Residential revenue.
- Cash and investments at the end of Q1 were $2.9 billion, up from $2.8
billion at the end of Q4 2023.
- Traffic to Zillow Group's mobile apps and sites in Q1 was 217
million average monthly unique users, flat year over year. Visits
during Q1 were 2.3 billion, up 3% year over year.
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1 National
Association of REALTORS® existing homes sold during Q1 2024
multiplied by the average selling price per home for Q1 2024,
compared with the same period in 2023.
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First Quarter 2024 Financial
Highlights
The following table sets forth Zillow Group's financial
highlights for the periods presented (in millions, except
percentages, unaudited):
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Three Months Ended
March 31,
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2023 to 2024
% Change
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2024
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2023
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Revenue:
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Residential
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$
393
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$
361
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9 %
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Rentals
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97
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74
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31 %
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Mortgages
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31
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26
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19 %
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Other
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8
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8
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— %
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Total
revenue
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$
529
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$
469
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13 %
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Other Financial Data:
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Gross profit
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$
406
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$
377
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Net loss
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$
(23)
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$
(22)
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Adjusted EBITDA
(1)
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$
125
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$
104
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Percentage of Revenue:
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Gross profit
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77 %
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80 %
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Net loss
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(4) %
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(5) %
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Adjusted EBITDA
(1)
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24 %
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22 %
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(1) Adjusted EBITDA is
a non-GAAP financial measure; it is not calculated or presented in
accordance with U.S. generally accepted
accounting principles,
or GAAP. See below for more information regarding our presentation
of Adjusted EBITDA, including a
reconciliation of
Adjusted EBITDA to the most directly comparable GAAP financial
measure, which is net loss, for each of the
periods
presented.
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Conference Call and Webcast Information
The company will host a live conference call to discuss these
results today at 2 p.m. Pacific Time
(5 p.m. Eastern Time). A shareholder
letter, investor presentation on Rentals, and link to both the live
webcast and recorded replay of the call may be accessed in the
Quarterly Results section of Zillow Group's Investor Relations
website. Participants must register for the live call in advance at
https://www.netroadshow.com/events/login?show=e49378e8&confId=63534
to receive emailed instructions. This pre-registration process is
designed to reduce delays due to operator congestion when accessing
the live call.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 that involve
risks and uncertainties, including, without limitation, statements
regarding the future performance and operation of our business, our
business strategies and ability to translate such strategies into
financial performance, the current and future health and stability
of the residential housing market and economy, volatility of
mortgage interest rates, and our expectations regarding future
shifts in behavior by consumers. Statements containing words such
as "may," "believe," "anticipate," "expect," "intend," "plan,"
"project," "predict," "will," "projections," "continue,"
"estimate," "outlook," "guidance," "would," "could," "strive," or
similar expressions constitute forward-looking statements.
Forward-looking statements are made based on assumptions as of
May 1, 2024, and although we believe
the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee these results. Differences in
Zillow Group's actual results from those described in these
forward-looking statements may result from actions taken by Zillow
Group as well as from risks and uncertainties beyond Zillow Group's
control.
Factors that may contribute to such differences include, but are
not limited to: the current and future health and stability of the
economy and United States
residential real estate industry, including changes in inflationary
conditions, interest rates, housing availability and affordability,
labor shortages and supply chain issues; our ability to manage
advertising and product inventory and pricing and maintain
relationships with our real estate partners; our ability to
establish or maintain relationships with listing and data
providers, which affects traffic to our mobile applications and
websites; our ability to comply with current and future rules and
requirements promulgated by the National Association of REALTORS®,
multiple listing services, or other real estate industry groups or
governing bodies; our ability to navigate industry changes,
including as a result of certain or future class action lawsuits or
government investigations, which may include lawsuits or
investigations in which we are not a named party; our ability to
continue to innovate and compete to attract customers and real
estate partners; our ability to effectively invest resources to
pursue new strategies, develop new products and services and expand
existing products and services into new markets; our ability to
operate and grow Zillow Home Loans, our mortgage origination
business, including the ability to obtain or maintain sufficient
financing to fund its origination of mortgages, meet customers'
financing needs with its product offerings, continue to grow the
origination business and resell originated mortgages on the
secondary market; the duration and impact of natural disasters,
geopolitical events, and other catastrophic events (including
public health crises) on our ability to operate, demand for our
products or services, or general economic conditions; our ability
to maintain adequate security measures or technology systems, or
those of third parties on which we rely, to protect data integrity
and the information and privacy of our customers and other third
parties; the impact of pending or future litigation and other
disputes or enforcement actions, which may include lawsuits or
investigations to which we are not a party; our ability to attract,
engage, and retain a highly skilled, remote workforce;
acquisitions, investments, strategic partnerships, capital-raising
activities, or other corporate transactions or commitments by us or
our competitors; our ability to continue relying on third-party
services to support critical functions of our business; our ability
to protect and continue using our intellectual property and prevent
others from copying, infringing upon, or developing similar
intellectual property, including as a result of generative
artificial intelligence; our ability to comply with domestic and
international laws, regulations, rules, contractual obligations,
policies and other obligations, or to obtain or maintain required
licenses to support our business and operations; our ability to pay
debt, settle conversions of our convertible senior notes, or
repurchase our convertible senior notes upon a fundamental change;
our ability to raise additional capital or refinance on acceptable
terms, or at all; actual or anticipated fluctuations in quarterly
and annual results of operations and financial position; the
assumptions, estimates and internal or third-party data that we use
to calculate business, performance and operating metrics; and
volatility of our Class A common stock and Class C capital stock
prices.
The foregoing list of risks and uncertainties is illustrative
but not exhaustive. For more information about potential factors
that could affect Zillow Group's business and financial results,
please review the "Risk Factors" described in Zillow Group's
publicly available filings with the SEC. Except as may be required
by law, Zillow Group does not intend and undertakes no duty to
update this information to reflect future events or
circumstances.
About Zillow Group, Inc.
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate
to make home a reality for more and more people. As the most
visited real estate website in the United
States, Zillow and its affiliates help people find and get
the home they want by connecting them with digital solutions,
dedicated partners and agents, and easier buying, selling,
financing and renting experiences.
Zillow Group's affiliates, subsidiaries and brands include
Zillow®; Zillow Premier Agent®; Zillow
Rentals®, Zillow Home Loans℠; Trulia®; Out
East®; StreetEasy®; HotPads®;
ShowingTime+SM; Spruce® and Follow Up
Boss®.
All marks herein are owned by MFTB Holdco, Inc., a Zillow
affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS
#10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a
Zillow affiliate.
Please visit
https://investors.zillowgroup.com, www.zillowgroup.com/news,
and www.twitter.com/zillowgroup, where Zillow Group discloses
information about the company, its financial information and its
business that may be deemed material.
The Zillow Group logo is available at
https://zillowgroup.mediaroom.com/logos-photos.
(ZFIN)
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding our
financial results, this press release includes references to
Adjusted EBITDA, a non-GAAP financial measure. We have provided a
reconciliation below of Adjusted EBITDA to net loss, the most
directly comparable U.S. generally accepted accounting principles
(GAAP) financial measure.
Adjusted EBITDA is a key metric used by our management and board
of directors to measure operating performance and trends and to
prepare and approve our annual budget. In particular, the exclusion
of certain expenses in calculating Adjusted EBITDA facilitates
operating performance comparisons on a period-to-period basis.
Our use of Adjusted EBITDA has limitations as an analytical
tool, and you should not consider this measure in isolation or as a
substitute for analysis of our results as reported under GAAP. Some
of these limitations are:
- Adjusted EBITDA does not reflect changes in, or cash
requirements for, our working capital needs;
- Adjusted EBITDA does not consider the potentially dilutive
impact of share-based compensation;
- Although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future, and Adjusted EBITDA does not reflect cash capital
expenditure requirements for such replacements or for new capital
expenditures or contractual commitments;
- Adjusted EBITDA does not reflect impairment costs;
- Adjusted EBITDA does not reflect interest expense or other
income, net;
- Adjusted EBITDA does not reflect income taxes; and
- Other companies, including companies in our own industry, may
calculate Adjusted EBITDA differently from the way we do, limiting
its usefulness as a comparative measure.
Because of these limitations, you should consider Adjusted
EBITDA alongside other financial performance measures, including
various cash-flow metrics, net loss and our other GAAP results.
Adjusted EBITDA
The following table presents a reconciliation of Adjusted EBITDA
to the most directly comparable GAAP financial measure, which is
net loss, for each of the periods presented (in millions,
unaudited):
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Three Months Ended
March 31,
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2024
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2023
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Reconciliation of Adjusted EBITDA to Net
Loss:
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Net loss
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$
(23)
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$
(22)
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Income taxes
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2
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Other income,
net
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(33)
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(32)
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Depreciation and
amortization
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56
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40
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Share-based
compensation
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108
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103
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Impairment
costs
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6
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6
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Interest
expense
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9
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9
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Adjusted
EBITDA
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$
125
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$
104
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SOURCE Zillow Group, Inc.