Zillow Group Inc.

08/07/2024 | Press release | Distributed by Public on 08/07/2024 14:56

Second Quarter 2024 Supplemental Financial Tables

Financial Highlights

Zillow Group, Inc.
Financial Highlights
(in millions, except percentages, unaudited)
Three Months Ended June 30, 2023 to 2024 % Change Six Months Ended June 30, 2023 to 2024 % Change
2024 2023 2024 2023
Revenue:
Residential $ 409 $ 380 8 % $ 802 $ 741 8 %
Rentals 117 91 29 % 214 165 30 %
Mortgages 34 24 42 % 65 50 30 %
Other 12 11 9 % 20 19 5 %
Total revenue $ 572 $ 506 13 % $ 1,101 $ 975 13 %
Other Financial Data:
Gross profit $ 442 $ 402 $ 848 $ 779
Net loss $ (17) $ (35) $ (40) $ (57)
Adjusted EBITDA (1) $ 134 $ 111 $ 259 $ 215
Percentage of Revenue:
Gross profit 77 % 79 % 77 % 80 %
Net loss (3)% (7)% (4)% (6)%
Adjusted EBITDA (1) 23 % 22 % 24 % 22 %
(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 Exhibit 99.1 to our Form 8-K filed on August 7, 2024 for more information regarding our presentation of Adjusted EBITDA, including a reconciliation of Adjusted EBITDA to net loss for each of the periods presented.

Adjusted EBITDA

Zillow Group, Inc.
Reconciliation of Adjusted EBITDA
(in millions, unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Reconciliation of Adjusted EBITDA to Net Loss:
Net loss $ (17) $ (35) $ (40) $ (57)
Income taxes 2 1 4 1
Other income, net (34) (42) (67) (74)
Depreciation and amortization 59 45 115 85
Share-based compensation 113 130 221 233
Impairment and restructuring costs - 2 6 8
Acquisition-related costs - 1 - 1
Loss on extinguishment of debt 1 - 1 -
Interest expense 10 9 19 18
Adjusted EBITDA $ 134 $ 111 $ 259 $ 215

Balance Sheets

ZILLOW GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
June 30, 2024 December 31, 2023
Assets
Current assets:
Cash and cash equivalents $ 1,181 $ 1,492
Short-term investments 1,447 1,318
Accounts receivable, net 115 96
Mortgage loans held for sale 195 100
Prepaid expenses and other current assets 189 140
Restricted cash 2 3
Total current assets 3,129 3,149
Contract cost assets 23 23
Property and equipment, net 356 328
Right of use assets 63 73
Goodwill 2,818 2,817
Intangible assets, net 222 241
Other assets 17 21
Total assets $ 6,628 $ 6,652
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 39 $ 28
Accrued expenses and other current liabilities 111 107
Accrued compensation and benefits 46 47
Borrowings under credit facilities 182 93
Deferred revenue 59 52
Lease liabilities, current portion 16 37
Convertible senior notes, current portion 1,025 607
Total current liabilities 1,478 971
Lease liabilities, net of current portion 89 95
Convertible senior notes, net of current portion 497 1,000
Other long-term liabilities 63 60
Total liabilities 2,127 2,126
Shareholders' equity:
Class A common stock - -
Class B common stock - -
Class C capital stock - -
Additional paid-in capital 6,322 6,301
Accumulated other comprehensive loss (11) (5)
Accumulated deficit (1,810) (1,770)
Total shareholders' equity 4,501 4,526
Total liabilities and shareholders' equity $ 6,628 $ 6,652

Statements of Operations

ZILLOW GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share data which are presented in thousands, and per share data)
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Revenue
Residential $ 409 $ 380 $ 802 $ 741
Rentals 117 91 214 165
Mortgages 34 24 65 50
Other 12 11 20 19
Total revenue 572 506 1,101 975
Cost of revenue (1) 130 104 253 196
Gross profit 442 402 848 779
Operating expenses:
Sales and marketing (1) 205 173 371 329
Technology and development (1) 144 140 291 277
General and administrative (1) 131 153 263 276
Impairment and restructuring costs - 2 6 8
Acquisition-related costs - 1 - 1
Total operating expenses 480 469 931 891
Loss from operations (38) (67) (83) (112)
Loss on extinguishment of debt (1) - (1) -
Other income, net 34 42 67 74
Interest expense (10) (9) (19) (18)
Loss before income taxes (15) (34) (36) (56)
Income tax expense (2) (1) (4) (1)
Net loss $ (17) $ (35) $ (40) $ (57)
Net loss per share - basic and diluted $ (0.07) $ (0.15) $ (0.17) $ (0.24)
Weighted-average shares outstanding - basic and diluted 233,453 233,629 234,074 234,023
(1) Includes share-based compensation expense as follows:
Cost of revenue $ 4 $ 4 $ 8 $ 8
Sales and marketing 20 19 38 35
Technology and development 42 42 84 81
General and administrative 47 65 91 109
Total share-based compensation $ 113 $ 130 $ 221 $ 233
Adjusted EBITDA (2) $ 134 $ 111 $ 259 $ 215
(2) 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 Exhibit 99.1 to our Form 8-K filed on August 7, 2024 for more information regarding our presentation of Adjusted EBITDA and for a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, for each of the periods presented.

Statement of Cash Flows

ZILLOW GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
Six Months Ended June 30,
2024 2023
Operating activities
Net loss $ (40) $ (57)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 115 85
Share-based compensation 221 233
Amortization of right of use assets 6 12
Amortization of contract cost assets 9 11
Amortization of debt issuance costs 3 3
Impairment costs 6 6
Accretion of bond discount (17) (20)
Other adjustments to reconcile net loss to net cash provided by operating activities 8 (5)
Changes in operating assets and liabilities:
Accounts receivable (19) (19)
Mortgage loans held for sale (95) (32)
Prepaid expenses and other assets (49) (30)
Contract cost assets (9) (11)
Lease liabilities (27) (15)
Accounts payable 11 -
Accrued expenses and other current liabilities 6 27
Accrued compensation and benefits (1) 2
Deferred revenue 7 5
Other long-term liabilities - (2)
Net cash provided by operating activities 135 193
Investing activities
Proceeds from maturities of investments 474 806
Purchases of investments (591) (638)
Purchases of property and equipment (76) (66)
Purchases of intangible assets (14) (18)
Net cash provided by (used in) investing activities (207) 84
Financing activities
Net borrowings on warehouse line of credit and repurchase agreements 89 29
Repurchases of Class A common stock and Class C capital stock (301) (236)
Settlement of long-term debt (89) -
Proceeds from exercise of stock options 61 30
Net cash used in financing activities (240) (177)
Net increase (decrease) in cash, cash equivalents and restricted cash during period (312) 100
Cash, cash equivalents and restricted cash at beginning of period 1,495 1,468
Cash, cash equivalents and restricted cash at end of period $ 1,183 $ 1,568
Supplemental disclosures of cash flow information
Noncash transactions:
Capitalized share-based compensation $ 40 $ 38
Write-off of fully depreciated property and equipment 20 16

Non-GAAP EPS

Zillow Group, Inc.
Non-GAAP Net Income per Share
(in millions, except share data which are presented in thousands, and per share data)
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Net loss, as reported $ (17) $ (35) $ (40) $ (57)
Share-based compensation 113 130 221 233
Impairment and restructuring costs - 2 6 8
Acquisition-related costs - 1 - 1
Loss on extinguishment of debt 1 - 1 -
Income taxes 2 1 4 1
Net income, adjusted $ 99 $ 99 $ 192 $ 186
Non-GAAP net income per share:
Basic $ 0.42 $ 0.42 $ 0.82 $ 0.80
Diluted $ 0.39 $ 0.39 $ 0.75 $ 0.74
Weighted-average shares outstanding:
Basic 233,453 233,629 234,074 234,023
Diluted 261,365 263,455 263,891 262,786
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Denominator for basic calculation 233,453 233,629 234,074 234,023
Effect of dilutive securities:
Option awards 1,356 1,774 2,286 1,516
Unvested restricted stock units 1,110 2,606 2,085 1,801
Convertible senior notes due in 2024 and 2026 25,446 25,446 25,446 25,446
Denominator for dilutive calculation 261,365 263,455 263,891 262,786

Key Metrics

Zillow Group, Inc.
Key Metrics
(in millions, except percentages, unaudited)
The following table presents our visits and average monthly unique users for each of the periods presented:
Three Months Ended June 30, 2023 to 2024 % Change Six Months Ended June 30, 2023 to 2024 % Change
2024 2023 2024 2023
Visits (1) 2,495 2,391 4 % 4,811 4,629 4 %
Average monthly unique users (2) 231 232 - % 224 225 - %
(1) Visits includes groups of interactions by users with the Zillow, Trulia and StreetEasy mobile apps and websites. Zillow measures visits with an internal measurement tool, StreetEasy measures visits with Google Analytics and Trulia measures visits with Adobe Analytics.
(2) Zillow measures unique users with an internal measurement tool, StreetEasy and HotPads measure unique users with Google Analytics and Trulia measures unique users with Adobe Analytics.
The following table presents loan origination volume by purpose and in total for Zillow Home Loans for the periods presented:
Three Months Ended June 30, 2023 to 2024 % Change Six Months Ended June 30, 2023 to 2024 % Change
2024 2023 2024 2023
Purchase loan origination volume $ 756 $ 336 125 % $ 1,357 $ 595 128 %
Refinance loan origination volume 3 4 (25)% 8 7 14 %
Total loan origination volume $ 759 $ 340 123 % $ 1,365 $ 602 127 %