Zillow Group, Inc. (NASDAQ:Z) Q4 2024 Earnings Conference Call February 11, 2025 5:00 PM ET Company Participants Bradley Berning - Investor Relations Jeremy Wacksman - Chief Executive Officer Jeremy Hofmann - Chief Financial Officer Conference Call Participants Ronald Josey - Citigroup Ryan McKeveny - Zelman & Associates Bradley Erickson - RBC Capital Markets Mark Mahaney - Evercore ISI Nicholas Jones - Citizens JMP John Colantuoni - Jefferies Thomas Champion - Piper Sandler Jay McCanless - Wedbush Securiti ...

Company Performance - Zillow reported quarterly earnings of $0.27 per share, missing the Zacks Consensus Estimate of $0.29 per share, but showing an increase from $0.20 per share a year ago, resulting in an earnings surprise of -6.90% [1] - The company posted revenues of $554 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 2.41%, compared to year-ago revenues of $474 million [2] - Over the last four quarters, Zillow has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Performance - Zillow shares have increased approximately 18.8% since the beginning of the year, significantly outperforming the S&P 500's gain of 3.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.50 on revenues of $605.44 million, and for the current fiscal year, it is $2.15 on revenues of $2.58 billion [7] Industry Outlook - The Real Estate - Operations industry, to which Zillow belongs, is currently ranked in the bottom 18% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Zillow's stock may be influenced by the overall outlook for the industry, as research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8]

February 2025 Zillow Investor Presentation Legal Disclosure This presentation 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 our future targets, the future performance and operation of our business, our business strategies and ability to translate such strategies into financial performance, the current and future ...

Financial Performance - Total revenue for 2024 was $2,236 million, an increase of 14.9% compared to $1,945 million in 2023[378]. - Residential revenue reached $1,594 million in 2024, up from $1,452 million in 2023, reflecting a growth of 9.8%[378]. - Gross profit for 2024 was $1,709 million, compared to $1,524 million in 2023, marking a 12.1% increase[378]. - Operating expenses totaled $1,906 million in 2024, an increase of 6.2% from $1,794 million in 2023[378]. - Net loss from continuing operations for 2024 was $112 million, an improvement from a net loss of $158 million in 2023[378]. - The company reported a comprehensive loss of $110 million for 2024, compared to a comprehensive loss of $148 million in 2023, indicating an improvement[381]. - Net cash provided by operating activities increased to $428 million in 2024, compared to $354 million in 2023[386]. - Cash and cash equivalents decreased to $1,082 million in 2024 from $1,492 million in 2023, a decline of 27.5%[377]. - Total assets decreased to $5,829 million in 2024 from $6,652 million in 2023, a reduction of 12.3%[377]. - Total liabilities decreased significantly to $981 million in 2024 from $2,126 million in 2023, a decrease of 53.8%[377]. - Shareholders' equity increased to $4,848 million in 2024 from $4,526 million in 2023, reflecting a growth of 7.1%[377]. Debt and Financing - As of December 31, 2024, the company had approximately $419 million in aggregate principal amount of convertible senior notes outstanding, maturing in May 2025[356]. - The company reported outstanding borrowings on master repurchase agreements of $145 million and $93 million as of December 31, 2024 and 2023, respectively[357]. - The company has a fixed rate of interest on its 2025 Notes, mitigating financial statement risk associated with changes in interest rates[356]. - The company is exposed to market risks primarily from fluctuations in interest rates, which may affect the yield on investments and fair value[354]. - As of December 31, 2024, total debt for Zillow Group was $563 million, down from $1.7 billion in 2023[510]. - The company repurchased $88 million of the 2025 Notes for $89 million in cash during the year ended December 31, 2024, resulting in a loss on extinguishment of debt of $1 million[520]. - During the year ended December 31, 2024, Zillow settled conversions of the 2024 Notes with cash payments totaling $610 million, including $608 million in principal repayments[518]. - The 2026 Notes had an aggregate principal amount of $499 million, with $498 million converted prior to the redemption date, resulting in the issuance of 4.5 million shares of Class C capital stock[521]. Market and Operational Risks - The company experienced inflationary pressures impacting costs, particularly in labor, marketing, and hosting, which may not be fully offset by price increases[360]. - The company anticipates continued impacts from high mortgage interest rates on transaction volumes and demand for its services, adversely affecting revenue[359]. - The company is navigating industry changes, including potential impacts from lawsuits and government investigations, which may affect operations[22]. - The company has implemented forward sales of mortgage-backed securities to manage interest rate risk associated with mortgage loan origination[357]. - Zillow Offers operations were wound down due to home pricing unpredictability and operational challenges, with the wind down completed in Q3 2022[474][475]. Acquisitions and Investments - Zillow Group acquired Follow Up Boss for $399 million in cash, with contingent consideration of up to $100 million based on performance metrics[483]. - The total purchase price for Follow Up Boss was allocated as follows: cash $403 million, contingent consideration $81 million, with goodwill recorded at $402 million[494]. - Zillow Group also acquired Aryeo for approximately $35 million and Spruce for approximately $19 million, with total consideration for both acquisitions being $54 million[496]. - The estimated fair value of identifiable intangible assets acquired from Follow Up Boss was $86 million, with developed technology valued at $50 million[495]. Revenue Recognition and Accounting Policies - Revenue is recognized when performance obligations are satisfied, reflecting the consideration expected in exchange for products or services[436]. - Revenue is disaggregated into categories: Residential, Rentals, Mortgages, and Other, with "For Sale revenue" including Residential and Mortgages categories[439]. - Premier Agent program revenue includes marketing and technology products, with revenue recognized on a straight-line basis during the monthly billing period[444]. - Revenue from ShowingTime+ includes multiple products, with revenue recognized ratably over the contract period, aligning with performance obligations[446]. - Rentals revenue includes advertising sold to rental professionals, recognized as leads, clicks, and impressions are provided, with a total advertising expense of $175 million for 2024[460]. - Mortgages revenue primarily comes from Zillow Home Loans and marketing products, with revenue recognized upon the completion of purchase or refinance transactions[451][452]. Taxation - The company recorded income tax expenses of $5 million, $4 million, and $3 million for the years ended December 31, 2024, 2023, and 2022, respectively[523]. - Total income tax expense for 2024 increased to $5 million from $4 million in 2023 and $3 million in 2022[524]. - The effective tax rate for 2024 was 4.0%, up from 2.8% in 2023 and 2.6% in 2022[524]. - Federal net operating losses amounted to approximately $1.3 billion in 2024, down from $1.4 billion in 2023[526]. - The valuation allowance against deferred tax assets increased by $49 million in 2024 and $22 million in 2023[525]. - Unrecognized tax benefits rose to $115 million by December 31, 2024, from $95 million in 2023[528]. Stock Repurchase and Equity - The company repurchased 1,100 thousand shares of Class A common stock at an average price of $42.26 per share in 2024[535]. - Total purchase price for stock repurchases in 2024 was $46 million for Class A and $255 million for Class C capital stock[535]. - The company has authorized up to $2.5 billion for stock repurchases, with $381 million remaining available as of December 31, 2024[534]. - The 2020 Incentive Plan allows for the issuance of up to 12 million shares of Class C capital stock, with awards typically vesting over four years[536].

| | | | Three Months Ended | | | | Year Ended | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | December 31, | | | | December 31, | | | | | 2024 | | 2023 | | 2024 | | 2023 | | Revenue | $ | 554 | $ | 474 | $ | 2,236 | $ | 1,945 | | Cost of revenue (1) | | 134 | | 115 | | 527 | | 421 | | Gross profit | | 420 | | 359 | | 1,709 | | 1,524 | | Operating expenses: | | | | | | | | | | Sales and marketing (1) | | 202 | | 165 | | 790 | | 658 | | Technology and development (1) | | 149 | | 141 | | 58 ...

SEATTLE, Feb. 11, 2025 /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 and year ended December 31, 2024.Complete financial results, and outlook for the first quarter of 2025, 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.asp ...

Group 1 - Match Group announced Spencer Rascoff, co-founder of Zillow, as the new CEO, replacing Bernard Kim [1] - Chairman Tom McInerney expressed confidence in Rascoff's strategic perspective and ability to drive innovation and growth [2] - Match Group reported better-than-expected fourth-quarter results with earnings per share of 59 cents on $860 million in revenue, surpassing analyst expectations [2] Group 2 - Despite strong fourth-quarter results, Match Group issued disappointing revenue guidance for the first quarter, forecasting sales of $820 million to $830 million, below the $853 million estimate [3] - Following the report, Match Group's shares fell 7% in extended trading [3] - Since being spun out from IAC Group in 2020, Match Group's market cap has decreased from approximately $30 billion to below $10 billion, indicating a significant slowdown in revenue growth [4]

Wall Street expects a year-over-year increase in earnings on higher revenues when Zillow (Z) reports results for the quarter ended December 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on February 11, 2025, might help the stock move higher if these key numbers are better than expecta ...

It costs about $350 more each month to rent a single-family home  Rents for single-family homes are up 41% over pre-pandemic norms; multifamily rents have risen 26% in that time.  Concessions are being offered on two out of every five rental properties on Zillow, another record.  For-sale inventory continues to recover, but is still 25% below pre-pandemic norms.  SEATTLE, Jan. 22, 2025 /PRNewswire/ -- Rented single-family homes are the housing market's big standout right now, with costs 20% higher than th ...

Conference call to be webcast live at 2 p.m. PT / 5 p.m. ETSEATTLE, Jan. 21, 2025 /PRNewswire/ -- Zillow Group, Inc. (Nasdaq: Z and ZG) today announced it will release fourth-quarter and full-year 2024 financial results after market close on Tuesday, Feb. 11, 2025. The company will host a webcast and conference call to discuss its results that afternoon at 2 p.m. PT / 5 p.m. ET. Information about Zillow Group's financial results, including a link to the live webcast and recorded replay, will be available on ...