Zillow Group(US:Z)2024-11-06 21:35Financial Performance - Revenue for the three months ended September 30, 2024, was $581 million, an increase of 17.1% compared to $496 million for the same period in 2023[16]. - Gross profit for the three months ended September 30, 2024, was $441 million, up 14.3% from $386 million in the prior year[16]. - Total operating expenses for the three months ended September 30, 2024, were $486 million, a rise of 10.7% from $439 million in the same quarter of 2023[16]. - Net loss for the three months ended September 30, 2024, was $20 million, compared to a net loss of $28 million for the same period in 2023, reflecting a 28.6% improvement[16]. - Comprehensive loss for the nine months ended September 30, 2024, was $51 million, compared to a loss of $91 million for the same period in 2023[18]. - Adjusted EBITDA for the three months ended September 30, 2024, was $127 million, a 19% increase from $107 million in the same period of 2023[149]. - Net loss for the nine months ended September 30, 2024, was $(60) million, compared to $(85) million for the same period in 2023, reflecting a 29% improvement[149]. Cash and Assets - Cash and cash equivalents decreased to $1,072 million as of September 30, 2024, from $1,492 million at the end of 2023, a decline of 28.1%[15]. - Total assets as of September 30, 2024, were $6,159 million, down from $6,652 million at the end of 2023, representing a decrease of 7.4%[15]. - Total liabilities decreased to $1,503 million as of September 30, 2024, from $2,126 million at the end of 2023, a reduction of 29.3%[15]. - Total shareholders' equity increased to $4,656 million as of September 30, 2024, up from $4,529 million at the end of September 2023[21]. - Cash, cash equivalents, and restricted cash at the end of the period were $1,075 million, down from $1,849 million at the end of the previous year[27]. - As of September 30, 2024, total assets measured at fair value amounted to $2,172 million, a decrease from $2,818 million in December 2023[52]. Debt and Financing - As of September 30, 2024, total debt for Zillow Group was $1,063 million, down from $1,700 million on December 31, 2023, representing a decrease of approximately 37.4%[71]. - The carrying value of convertible senior notes decreased from $1,607 million on December 31, 2023, to $915 million as of September 30, 2024, indicating a reduction of approximately 43%[71]. - The company repurchased $88 million in aggregate principal amount of the 2025 Notes for $89 million in cash during the nine months ended September 30, 2024, resulting in a loss on extinguishment of debt of $1 million[80]. - The company has authorized the repurchase of up to $2.5 billion of Class A common stock and Class C capital stock, with $381 million remaining available for future repurchases as of September 30, 2024[85][86]. - The company expects to redeem the remaining $499 million in aggregate principal amount of the 2026 Notes on December 18, 2024[81]. Revenue Breakdown - Residential revenue increased by $43 million, or 12%, to $405 million, driven by higher residential revenue per visit and an increase in the number of visits[122]. - Rentals revenue increased by $24 million, or 24%, to $123 million, driven by a 20% increase in average monthly rentals unique visitors to 36 million[143]. - Mortgages revenue increased by $15 million, or 63%, to $39 million, attributed to an increase in mortgage originations revenue[143]. - Total loan origination volume increased by 79% to $819 million for the three months ended September 30, 2024, compared to $457 million in the same period in 2023[138]. Operational Highlights - The company continues to focus on innovation and market expansion, aiming to enhance customer engagement and partnerships in the real estate sector[8]. - Zillow Group's mortgage origination business, Zillow Home Loans, is a key focus for growth and requires sufficient financing to operate effectively[32]. - The company is committed to enhancing its marketing software and technology solutions for the real estate industry[31]. - The health of the housing market is influenced by low inventory, mortgage interest rate volatility, and inflationary conditions[114]. Employee and Market Metrics - Zillow Group had 6,835 employees as of September 30, 2024, compared to 6,263 employees as of December 31, 2023[113]. - Average monthly unique users increased by 1% to 233 million for the three months ended September 30, 2024, from 230 million in the same period in 2023[136]. - The number of visits to mobile applications and websites increased by 3% to 2,440 million for the three months ended September 30, 2024, from 2,366 million in the same period in 2023[130]. Acquisitions - Zillow Group acquired Follow Up Boss for $399 million in cash, with contingent consideration of up to $100 million based on performance metrics[43]. - The total preliminary purchase price for Follow Up Boss was allocated as follows: $4 million in cash, $402 million in goodwill, and $86 million in intangible assets[59]. - The total preliminary purchase price for the acquisition of Aryeo was $35 million, including cash and stock[63]. Legal and Regulatory Matters - The company is involved in ongoing legal proceedings, including a patent infringement case filed by IBM, with no material accruals recorded as of September 30, 2024[96]. - The company is subject to various risks, including economic conditions, interest rates, and regulatory changes, which may impact future performance[32].