SEATTLE, Aug. 5, 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 June 30, 2021.
Complete financial results for the second quarter and outlook
for the third quarter of 2021 can be found in the company's
shareholder letter in the Investor Relations section of Zillow
Group's website at
https://investors.zillowgroup.com/investors/financials/quarterly-results/default.aspx.
"Zillow is making rapid and significant progress toward building
a seamless, integrated real estate experience for our customers and
partners. Our strong second-quarter results show how well we're
executing on the three- to five-year growth objectives we announced
in 2019," said Zillow Group co-founder and CEO Rich Barton. "Of particular note, our iBuying
business, Zillow Offers, continues to accelerate as we offer more
customers a fast, fair, flexible and convenient way to move. Zillow
Offers is proving attractive to sellers even in this sizzling-hot
seller's market. Finally, we expect millennial-buyers, low interest
rates, and the increasing adoption of location-flexible work
policies, to fuel interest in moving for many years to come. And
these movers will increasingly demand e-commerce-like solutions
where Zillow excels."
Recent highlights include:
- Consolidated second-quarter revenue of $1.3 billion and revenue for the IMT and Homes
segments exceeded the high end of the company's second-quarter
outlook.
- Consolidated second-quarter gross profit was $538 million, up 92% year over year.
- Consolidated net income was $10
million for the second quarter. Segment income (loss) before
income taxes was $134 million,
$(59) million and $(18) million for the IMT, Homes and Mortgages
segments, respectively, for the second quarter.
- Second-quarter Adjusted EBITDA of $183
million and Adjusted EBITDA for the IMT and Homes segments
exceeded the high end of the company's second-quarter outlook.
Adjusted EBITDA by segment was $218
million, $(29) million and
$(6) million for the IMT, Homes and
Mortgages segments, respectively, for the second quarter.
- Traffic to Zillow Group's mobile apps and websites in the
second quarter reached 229 million average monthly unique users, an
increase of 5% year over year, driving 2.8 billion visits during
the quarter, up 10% year over year.
- The company ended the second quarter of 2021 with cash and
investments of $4.6 billion.
Second Quarter 2021 Financial Highlights
The following table sets forth Zillow Group's financial
highlights for the periods presented (in thousands, unaudited):
|
Three Months
Ended
June 30,
|
|
2020 to 2021
% Change
|
|
Six Months
Ended
June 30,
|
|
2020 to 2021
% Change
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Homes
segment:
|
|
|
|
|
|
|
|
|
|
|
|
Zillow
Offers
|
$
772,030
|
|
$
453,816
|
|
70 %
|
|
$
1,473,004
|
|
$
1,222,928
|
|
20 %
|
Other (1)
|
5,115
|
|
436
|
|
1,073 %
|
|
8,293
|
|
1,197
|
|
593 %
|
Total Homes segment
revenue
|
777,145
|
|
454,252
|
|
71 %
|
|
1,481,297
|
|
1,224,125
|
|
21 %
|
IMT
segment:
|
|
|
|
|
|
|
|
|
|
|
|
Premier
Agent
|
348,754
|
|
191,962
|
|
82 %
|
|
683,072
|
|
434,068
|
|
57 %
|
Other (2)
|
127,336
|
|
88,377
|
|
44 %
|
|
239,346
|
|
176,937
|
|
35 %
|
Total IMT segment
revenue
|
476,090
|
|
280,339
|
|
70 %
|
|
922,418
|
|
611,005
|
|
51 %
|
Mortgages
segment
|
56,745
|
|
33,761
|
|
68 %
|
|
124,705
|
|
59,043
|
|
111 %
|
Total
revenue
|
$
1,309,980
|
|
$
768,352
|
|
70 %
|
|
$
2,528,420
|
|
$
1,894,173
|
|
33 %
|
Other Financial
Data:
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
$
538,395
|
|
$
280,869
|
|
|
|
$
1,045,515
|
|
$
614,292
|
|
|
Income (loss) before
income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
Homes
segment
|
$
(59,346)
|
|
$
(80,058)
|
|
|
|
$
(117,820)
|
|
$
(178,016)
|
|
|
IMT
segment
|
133,573
|
|
19,166
|
|
|
|
277,148
|
|
(22,341)
|
|
|
Mortgages
segment
|
(17,685)
|
|
(240)
|
|
|
|
(19,505)
|
|
(13,385)
|
|
|
Corporate items
(3)
|
(33,591)
|
|
(22,637)
|
|
|
|
(67,798)
|
|
(42,528)
|
|
|
Total income (loss)
before income taxes
|
$
22,951
|
|
$
(83,769)
|
|
|
|
$
72,025
|
|
$
(256,270)
|
|
|
Net income
(loss)
|
$
9,641
|
|
$
(84,448)
|
|
|
|
$
61,605
|
|
$
(247,721)
|
|
|
Adjusted EBITDA
(4):
|
|
|
|
|
|
|
|
|
|
|
|
Homes
segment
|
$
(29,092)
|
|
$
(60,908)
|
|
|
|
$
(63,040)
|
|
$
(135,903)
|
|
|
IMT
segment
|
217,763
|
|
71,862
|
|
|
|
426,346
|
|
157,579
|
|
|
Mortgages
segment
|
(5,897)
|
|
4,885
|
|
|
|
450
|
|
(718)
|
|
|
Total Adjusted
EBITDA
|
$
182,774
|
|
$
15,839
|
|
|
|
$
363,756
|
|
$
20,958
|
|
|
Percentage of
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
41 %
|
|
37 %
|
|
|
|
41 %
|
|
32 %
|
|
|
Income (loss) before
income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
Homes
segment
|
(8)%
|
|
(18)%
|
|
|
|
(8)%
|
|
(15)%
|
|
|
IMT
segment
|
28 %
|
|
7 %
|
|
|
|
30 %
|
|
(4)%
|
|
|
Mortgages
segment
|
(31)%
|
|
(1)%
|
|
|
|
(16)%
|
|
(23)%
|
|
|
Corporate items
(3)
|
N/A
|
|
N/A
|
|
|
|
N/A
|
|
N/A
|
|
|
Total income (loss)
before income taxes
|
2 %
|
|
(11)%
|
|
|
|
3 %
|
|
(14)%
|
|
|
Net income
(loss)
|
1 %
|
|
(11)%
|
|
|
|
2 %
|
|
(13)%
|
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
Homes
segment
|
(4)%
|
|
(13)%
|
|
|
|
(4)%
|
|
(11)%
|
|
|
IMT
segment
|
46 %
|
|
26 %
|
|
|
|
46 %
|
|
26 %
|
|
|
Mortgages
segment
|
(10)%
|
|
14 %
|
|
|
|
- %
|
|
(1)%
|
|
|
Total Adjusted
EBITDA
|
14 %
|
|
2 %
|
|
|
|
14 %
|
|
1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 gain (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 Exhibit 99.1 to our Form 8-K filed on August 5, 2021 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 Standard Time
(5 p.m. Eastern Standard Time). A
shareholder letter 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://dpregister.com/sreg/10157707/e9c2f07193 to receive
emailed instructions. This preregistration 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
August 5, 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 (including
variants) 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 any applicable waiting
period under the Hart-Scott-Rodino Act or Zillow Group's timing
agreement with ShowingTime.com, Inc. and the U.S. Federal Trade
Commission; 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 gain (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
June 30, 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
|
|
$
9,641
|
Income
taxes
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
13,310
|
Income (loss) before
income taxes
|
|
$
(59,346)
|
|
$
133,573
|
|
$
(17,685)
|
|
$
(33,591)
|
|
$
22,951
|
Other
income
|
|
-
|
|
-
|
|
(1,006)
|
|
(581)
|
|
(1,587)
|
Depreciation and
amortization
|
|
4,733
|
|
22,157
|
|
2,093
|
|
-
|
|
28,983
|
Share-based
compensation
|
|
20,495
|
|
58,362
|
|
9,538
|
|
-
|
|
88,395
|
Acquisition-related
costs
|
|
-
|
|
3,671
|
|
-
|
|
-
|
|
3,671
|
Loss on
extinguishment of debt
|
|
-
|
|
-
|
|
-
|
|
931
|
|
931
|
Interest
expense
|
|
5,026
|
|
-
|
|
1,163
|
|
33,241
|
|
39,430
|
Adjusted
EBITDA
|
|
$
(29,092)
|
|
$
217,763
|
|
$
(5,897)
|
|
$
-
|
|
$
182,774
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30, 2020
|
|
|
Homes
|
|
IMT
|
|
Mortgages
|
|
Corporate
Items
(2)
|
|
Consolidated
|
Reconciliation of
Adjusted EBITDA to
Net Loss and
Income (Loss) Before
Income Taxes:
|
|
|
|
|
|
|
|
|
|
|
Net loss
(1)
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
$
(84,448)
|
Income
taxes
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
679
|
Income (loss) before
income taxes
|
|
$
(80,058)
|
|
$
19,166
|
|
$
(240)
|
|
$
(22,637)
|
|
$
(83,769)
|
Other
income
|
|
-
|
|
(5,300)
|
|
(385)
|
|
(4,430)
|
|
(10,115)
|
Depreciation and
amortization
|
|
2,597
|
|
22,038
|
|
1,538
|
|
-
|
|
26,173
|
Share-based
compensation
|
|
12,728
|
|
35,958
|
|
3,665
|
|
-
|
|
52,351
|
Gain on
extinguishment of debt
|
|
-
|
|
-
|
|
-
|
|
(6,391)
|
|
(6,391)
|
Interest
expense
|
|
3,825
|
|
-
|
|
307
|
|
33,458
|
|
37,590
|
Adjusted
EBITDA
|
|
$
(60,908)
|
|
$
71,862
|
|
$
4,885
|
|
$
-
|
|
$
15,839
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
June 30, 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
|
|
$
61,605
|
Income
taxes
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
10,420
|
Income (loss) before
income taxes
|
|
$
(117,820)
|
|
$
277,148
|
|
$
(19,505)
|
|
$
(67,798)
|
|
$
72,025
|
Other
income
|
|
-
|
|
-
|
|
(2,738)
|
|
(1,288)
|
|
(4,026)
|
Depreciation and
amortization
|
|
9,026
|
|
44,956
|
|
3,900
|
|
-
|
|
57,882
|
Share-based
compensation
|
|
36,416
|
|
99,754
|
|
15,898
|
|
-
|
|
152,068
|
Acquisition-related
costs
|
|
-
|
|
4,488
|
|
-
|
|
-
|
|
4,488
|
Loss on
extinguishment of debt
|
|
-
|
|
-
|
|
-
|
|
2,334
|
|
2,334
|
Interest
expense
|
|
9,338
|
|
-
|
|
2,895
|
|
66,752
|
|
78,985
|
Adjusted
EBITDA
|
|
$
(63,040)
|
|
$
426,346
|
|
$
450
|
|
$
-
|
|
$
363,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
June 30, 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
|
|
$
(247,721)
|
Income
taxes
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
(8,549)
|
Loss before income
taxes
|
|
$
(178,016)
|
|
$
(22,341)
|
|
$
(13,385)
|
|
$
(42,528)
|
|
$
(256,270)
|
Other
income
|
|
-
|
|
(5,300)
|
|
(587)
|
|
(13,821)
|
|
(19,708)
|
Depreciation and
amortization
|
|
6,172
|
|
45,815
|
|
3,212
|
|
-
|
|
55,199
|
Share-based
compensation
|
|
24,032
|
|
65,505
|
|
6,609
|
|
-
|
|
96,146
|
Gain on
extinguishment of debt
|
|
-
|
|
-
|
|
-
|
|
(6,391)
|
|
(6,391)
|
Impairment
costs
|
|
-
|
|
73,900
|
|
2,900
|
|
-
|
|
76,800
|
Interest
expense
|
|
11,909
|
|
-
|
|
533
|
|
62,740
|
|
75,182
|
Adjusted
EBITDA
|
|
$
(135,903)
|
|
$
157,579
|
|
$
(718)
|
|
$
-
|
|
$
20,958
|
|
|
|
|
|
|
|
|
|
|
|
(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 (expense) 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 gain (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