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