SEATTLE, May 4, 2021 /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, 2021.
Complete financial results, and outlook for the second quarter
of 2021, can be found in the company's 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 first-quarter results exceeded expectations and showed
our momentum toward delivering a seamless, end-to-end real estate
transaction," said Zillow Group co-founder and CEO Rich Barton. "Across the country, Millennials
are moving up, Baby Boomers are downsizing, and in between, people
of all generations are rethinking their lives in a cultural
phenomenon we have termed the Great Reshuffling. Millions come to
Zillow to surf and dream, and when they are ready to transact, they
can get a mortgage from Zillow Home Loans, connect to a Zillow
Premier Agent, and may even find an initial offer from Zillow
Offers to buy their home for their Zestimate."
Recent highlights include:
- Consolidated first-quarter revenue of $1.2 billion and revenue for each segment
exceeded the high end of the company's outlook for the first
quarter.
- Consolidated net income was $52
million for the first quarter. Segment income (loss) before
income taxes was $144 million,
$(58) million and $(2) million for the IMT, Homes and Mortgages
segments, respectively, for the first quarter.
- First-quarter Adjusted EBITDA exceeded the high end of the
company's outlook for all three segments, resulting in consolidated
Adjusted EBITDA of $181 million.
- Traffic to Zillow Group's mobile apps and websites in the first
quarter reached 221 million average monthly unique users, an
increase of 15% year over year, driving 2.5 billion visits during
the quarter, up 19% year over year.
- The company ended the first quarter of 2021 with cash and
investments of $4.7 billion.
First Quarter 2021 Financial Highlights
The following table sets forth Zillow Group's financial
highlights for the periods presented (in thousands, unaudited):
|
Three Months
Ended
March
31,
|
|
2020 to
2021
%
Change
|
|
2021
|
|
2020
|
|
Revenue:
|
|
|
|
|
|
Homes
segment:
|
|
|
|
|
|
Zillow Offers
|
$
|
700,974
|
|
|
$
|
769,112
|
|
|
(9)%
|
Other (1)
|
3,178
|
|
|
761
|
|
|
318%
|
Total Homes segment
revenue
|
704,152
|
|
|
769,873
|
|
|
(9)%
|
IMT
segment:
|
|
|
|
|
|
Premier Agent
|
334,318
|
|
|
242,106
|
|
|
38%
|
Other (2)
|
112,010
|
|
|
88,560
|
|
|
26%
|
Total IMT segment
revenue
|
446,328
|
|
|
330,666
|
|
|
35%
|
Mortgages
segment
|
67,960
|
|
|
25,282
|
|
|
169%
|
Total
revenue
|
$
|
1,218,440
|
|
|
$
|
1,125,821
|
|
|
8%
|
Other Financial
Data:
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes:
|
|
|
|
|
|
|
|
|
|
Homes segment
|
$
|
(58,474)
|
|
|
$
|
(97,958)
|
|
|
|
IMT segment
|
143,575
|
|
|
(41,507)
|
|
|
|
Mortgages segment
|
(1,820)
|
|
|
(13,145)
|
|
|
|
Corporate items
(3)
|
(34,207)
|
|
|
(19,891)
|
|
|
|
Total income (loss)
before
|
|
|
|
|
|
|
|
|
|
income
taxes
|
$
|
49,074
|
|
|
$
|
(172,501)
|
Net income
(loss)
|
$
|
51,964
|
|
|
$
|
(163,273)
|
|
|
|
Adjusted EBITDA
(4):
|
|
|
|
|
|
|
|
|
|
Homes segment
|
$
|
(33,948)
|
|
|
$
|
(74,995)
|
|
|
|
IMT segment
|
208,583
|
|
|
85,717
|
|
|
|
Mortgages segment
|
6,347
|
|
|
(5,603)
|
|
|
|
Total Adjusted
EBITDA
|
$
|
180,982
|
|
|
$
|
5,119
|
|
|
|
Percentage of
Revenue:
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes:
|
|
|
|
|
|
|
|
|
|
Homes segment
|
(8)%
|
|
|
(13)%
|
|
|
|
IMT segment
|
32%
|
|
|
(13)%
|
|
|
|
Mortgages segment
|
(3)%
|
|
|
(52)%
|
|
|
|
Corporate items
(3)
|
N/A
|
|
|
N/A
|
|
|
|
Total income (loss)
before income taxes
|
4%
|
|
|
(15)%
|
|
|
|
Net income
(loss)
|
4%
|
|
|
(15)%
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
Homes segment
|
(5)%
|
|
|
(10)%
|
|
|
|
IMT segment
|
47%
|
|
|
26%
|
|
|
|
Mortgages segment
|
9%
|
|
|
(22)%
|
|
|
|
Total Adjusted
EBITDA
|
15%
|
|
|
—%
|
|
|
|
|
(1) Other Homes
segment revenue relates to revenue associated with the title and
escrow services provided through Zillow Closing
Services.
|
(2) Other IMT segment
revenue includes revenue generated by rentals, new construction and
display advertising, as well as revenue from the sale of various
other advertising and business technology solutions for real estate
professionals, including dotloop.
|
(3) Certain corporate
items are not directly attributable to any of our segments,
including the loss on extinguishment of debt, interest income
earned on our short-term investments included in other income and
interest costs on our convertible senior notes included in interest
expense.
|
(4) 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 income (loss) on a consolidated basis and income (loss) before
income taxes for each segment, for each of the periods
presented.
|
Conference Call and Webcast Information
Zillow Group co-founder and CEO Rich
Barton and CFO Allen Parker
will host a live conference call to discuss the results today at
2 p.m. Pacific Time (5 p.m. Eastern Time). A shareholder letter and
link to both the live webcast and recorded replay of the call may
be accessed on the Quarterly Results section of Zillow Group's
Investor Relations website. Participants must register for the live
call in advance at: https://dpregister.com/sreg/10155301/e727098685
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 and
the current and future health and stability of the residential
housing market and economy and our expectations regarding future
shifts in behavior by consumers and employees. Statements
containing words such as "may," "believe," "anticipate," "expect,"
"intend," "plan," "project," "predict," "will," "projections,"
"continue," "estimate," "outlook," "guidance," "would," "could," or
similar expressions constitute forward-looking statements.
Forward-looking statements are made based on assumptions as of
May 4, 2021, 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 impact of the COVID-19 pandemic or other public
health crises and any associated economic downturn on Zillow
Group's future financial position, operations and financial
performance; the magnitude, duration and severity of the COVID-19
pandemic and the availability and widespread distribution and use
of effective vaccines; the impact of actions taken by governments,
businesses and individuals in response to the COVID-19 pandemic,
including changes in laws or regulations that limit our ability to
operate; the current and future health and stability of the
economy, financial conditions and residential housing market,
including any extended slowdown in the real estate markets as a
result of the COVID-19 pandemic, changes in laws or regulations
applicable to our business, employees, products or services,
including current and future laws, regulations and orders that
limit Zillow Group's ability to operate in light of the COVID-19
pandemic; the satisfaction of conditions precedent to the closing
of Zillow Group's proposed acquisition of ShowingTime.com, Inc.,
including expiration or termination of the applicable waiting
period under the Hart-Scott-Rodino Act; changes in general economic
and financial conditions that reduce demand for our products and
services, lower our profitability or reduce Zillow Group's access
to credit; actual or anticipated fluctuations in our financial
condition and results of operations; changes in projected
operational and financial results; addition or loss of significant
customers; actual or anticipated changes in Zillow Group's growth
rate relative to that of our competitors; acquisitions, strategic
partnerships, joint ventures, capital-raising activities or other
corporate transactions or commitments by us or our competitors;
actual or anticipated changes in technology, products, markets or
services by us or our competitors; ability to obtain or maintain
licenses and permits to support Zillow Group's current and future
businesses; ability to comply with MLS rules and requirements to
access and use listing data, and to maintain or establish
relationships with listings and data providers; ability to operate
Zillow Group's mortgage originations business, including the
ability to obtain sufficient financing; fluctuations in the
valuation of companies perceived by investors to be comparable to
Zillow Group; the impact of natural disasters and other
catastrophic events; the impact of pending or future litigation;
and the issuance of new or updated research or reports by
securities analysts.
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 Annual
Report on Form 10-K for the year ended December 31, 2020.
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.
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding our
financial results, this press release includes references to
Adjusted EBITDA in total and for each segment, each a non-GAAP
financial measure. We have provided a reconciliation below of
Adjusted EBITDA in total to net income (loss) and Adjusted EBITDA
by segment to income (loss) before income taxes for each segment,
the most directly comparable GAAP financial measures.
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 in total and for each segment has
limitations as an analytical tool, and you should not consider
these measures 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 our cash expenditures or
future requirements for capital expenditures or contractual
commitments;
- 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
expenditure requirements;
- Adjusted EBITDA does not reflect impairment costs;
- Adjusted EBITDA does not reflect acquisition-related
costs;
- Adjusted EBITDA does not reflect the loss on extinguishment of
debt;
- Adjusted EBITDA does not reflect interest expense or other
income;
- Adjusted EBITDA does not reflect income taxes; and
- Other companies, including companies in our own industry, may
calculate Adjusted EBITDA differently than we do, limiting its
usefulness as a comparative measure.
Because of these limitations, you should consider Adjusted
EBITDA in total and for each segment alongside other financial
performance measures, including various cash flow metrics, net
income (loss), income (loss) before income taxes for each segment
and our other GAAP results.
About Zillow Group, Inc.
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate
to make it easier to unlock life's next chapter.
As the most-visited real estate website in the United States, Zillow® and its affiliates
offer customers an on-demand experience for selling, buying,
renting or financing with transparency and nearly seamless
end-to-end service. Zillow Offers® buys and sells homes directly in
dozens of markets across the country, allowing sellers control over
their timeline. Zillow Home Loans™, our affiliate lender, provides
our customers with an easy option to get pre-approved and secure
financing for their next home purchase. Zillow recently
launched Zillow Homes, Inc., a licensed brokerage entity, to
streamline Zillow Offers transactions.
Zillow Group's brands, affiliates and subsidiaries include
Zillow®; Zillow Offers®; Zillow Premier Agent®; Zillow Home Loans™;
Zillow Closing Services™; Zillow Homes, Inc.; Trulia®; Out East®;
StreetEasy® and HotPads®. Zillow Home Loans, LLC is an Equal
Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org).
Please visit http://investors.zillowgroup.com,
www.zillowgroup.com/ir-blog, 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
http://zillowgroup.mediaroom.com/logos-photos.
(ZFIN)
Adjusted EBITDA
The following tables present a reconciliation of Adjusted EBITDA
to the most directly comparable GAAP financial measure, which is
net income (loss) on a consolidated basis and income (loss) before
income taxes for each segment, for each of the periods presented
(in thousands, unaudited):
|
Three Months
Ended
March 31,
2021
|
|
Homes
|
|
IMT
|
|
Mortgages
|
|
Corporate
Items
(2)
|
|
Consolidated
|
Reconciliation of
Adjusted EBITDA to Net Income and Income (Loss) Before Income
Taxes:
|
|
|
|
|
|
|
|
|
|
Net income
(1)
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
$
51,964
|
Income tax
benefit
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
(2,890)
|
Income (loss) before
income taxes
|
$
(58,474)
|
|
$
143,575
|
|
$
(1,820)
|
|
$
(34,207)
|
|
$
49,074
|
Other
income
|
—
|
|
—
|
|
(1,732)
|
|
(707)
|
|
(2,439)
|
Depreciation and
amortization expense
|
4,293
|
|
22,799
|
|
1,807
|
|
—
|
|
28,899
|
Share-based
compensation expense
|
15,921
|
|
41,392
|
|
6,360
|
|
—
|
|
63,673
|
Acquisition-related
costs
|
—
|
|
817
|
|
—
|
|
—
|
|
817
|
Loss on
extinguishment of debt
|
—
|
|
—
|
|
—
|
|
1,403
|
|
1,403
|
Interest
expense
|
4,312
|
|
—
|
|
1,732
|
|
33,511
|
|
39,555
|
Adjusted
EBITDA
|
$
(33,948)
|
|
$
208,583
|
|
$
6,347
|
|
$
—
|
|
$
180,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
2020
|
|
Homes
|
|
IMT
|
|
Mortgages
|
|
Corporate
Items
(2)
|
|
Consolidated
|
Reconciliation of
Adjusted EBITDA to Net Loss and Loss Before Income
Taxes:
|
|
|
|
|
|
|
|
|
|
Net loss
(1)
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
$
(163,273)
|
Income tax
benefit
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
(9,228)
|
Loss before income
taxes
|
$
(97,958)
|
|
$
(41,507)
|
|
$
(13,145)
|
|
$
(19,891)
|
|
$
(172,501)
|
Other
income
|
—
|
|
—
|
|
(202)
|
|
(9,391)
|
|
(9,593)
|
Depreciation and
amortization expense
|
3,575
|
|
23,777
|
|
1,674
|
|
—
|
|
29,026
|
Share-based
compensation expense
|
11,304
|
|
29,547
|
|
2,944
|
|
—
|
|
43,795
|
Impairment
costs
|
—
|
|
73,900
|
|
2,900
|
|
—
|
|
76,800
|
Interest
expense
|
8,084
|
|
—
|
|
226
|
|
29,282
|
|
37,592
|
Adjusted
EBITDA
|
$
(74,995)
|
|
$
85,717
|
|
$
(5,603)
|
|
$
—
|
|
$
5,119
|
|
(1) We use income
(loss) before income taxes as our profitability measure in making
operating decisions and assessing the performance of our segments,
therefore, net income (loss) and income tax benefit are calculated
and presented only on a consolidated basis within our financial
statements.
|
(2) Certain corporate
items are not directly attributable to any of our segments,
including the loss on extinguishment of debt, interest income
earned on our short-term investments included in other income and
interest costs on our convertible senior notes included in interest
expense.
|
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SOURCE Zillow Group