Zillow Group, Inc., which is transforming how people buy, sell, rent, and finance homes, has announced its consolidated financial results for the three months, ending on March 31, 2019. Complete financial results can be found in the investor relations section of Zillow Group’s website and in its quarterly letter to shareholders here.
“We delivered strong first quarter results that met or exceeded our own expectations in all segments as our plan to streamline the real estate transaction comes together,” said Rich Barton, Co-Founder and CEO of Zillow Group, Inc. “Zillow Offers’ incredible consumer demand and rapid growth gives us confidence we’re in the early stages of something important. I’m quite pleased with our whole team’s execution and overall consumer and industry response to the investments we’re making in Premier Agent, Zillow Offers, and now Zillow Home Loans. The Zillow Group portfolio is more than just the sum of our business segments. We are aligning our entire portfolio to deliver a seamless, integrated transaction experience to help today’s on-demand consumers buy, sell, rent and finance homes faster and easier than ever before.”
Recent highlights include:
- Consolidated Q1 2019 revenue increased 51% year over year to $454.1 million, exceeding the company’s outlook, primarily driven by outperformance in the Homes segment due to strong demand for Zillow Offers™.
- Zillow sold 414 homes in Q1, an increase of nearly 200% over Q4, contributing to $128.5 million in Homes segment revenue. The company purchased 898 homes, up 80% sequentially.
- Accelerating Zillow Offers market expansion with 6 new planned markets, announced separately today, bringing the total planned markets to 20 by the end of the first quarter of 2020.
- Internet, Media & Technology segment reported $298.3 million in revenue in Q1, up 6% year over year, as the Premier Agent® marketplace is stabilizing and churn is returning to historical levels.
- Q1 Mortgages segment revenue of $27.4 million was up 44% year over year.
- Launched Zillow Home Loans, a critical step toward integrating a digital payments platform for mortgage financing to Zillow Offers consumers and other borrowers.
- Reached more than 181 million average monthly unique users and a record 2 billion visits across Zillow Group’s mobile apps and websites during Q1.
First Quarter 2019 Financial Highlights
The following table sets forth Zillow Group’s financial highlights for the periods presented (in thousands, unaudited):
|Three Months Ended|
|March 31,||2018 to 2019|
|Total IMT segment revenue||298,272||280,856||6||%|
|Other Financial Data:|
|Segment loss before income taxes:|
|Adjusted EBITDA (2):|
|Total Adjusted EBITDA||$||23,922||$||46,310|
|Percentage of Revenue:|
|Segment loss before income taxes:|
|Total Adjusted EBITDA||5%||15%|
|(1) Other revenue primarily includes revenue generated by new construction and display, as well as revenue from the sale of various other marketing and business products and services to real estate professionals.|
|(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 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 loss on a consolidated basis and loss before income taxes for each segment, for each of the periods presented.|
Business Outlook – Second Quarter and Full Year 2019
Zillow Group’s Q2 2019 consolidated revenue guidance range implies approximately 79% growth year over year at the mid point, driven primarily by the strong performance of the Homes segment.
In Q2, we expect Homes segment revenue to be $230 to $245 million, reflecting anticipated sequential quarter-over-quarter growth of 85% at the mid point. For Q2, we expect Homes segment Adjusted EBITDA to be a loss of $49 to $55 million as we continue to invest in scaling the business.* We are not providing full year Homes segment revenue and Adjusted EBITDA outlook since we are in the early stages of Zillow Offers and quickly scaling the business, which make longer term forecasts challenging.
We are raising the low end of our IMT and Premier Agent full year 2019 revenue guidance ranges to reflect our confidence in the anticipated continued stabilization of the Premier Agent marketplace. We raised our full year IMT segment Adjusted EBITDA guidance range to $280 to $300 million from $241 to $266 million to reflect updates to the expected timing of recognition of certain headcount-related expenses and a reduction in our estimated legal liabilities.*
We are maintaining our full-year 2019 Mortgages segment revenue and Adjusted EBITDA outlook as we are in the early stages of transitioning our mortgage loan origination business.
The following table presents Zillow Group’s business outlook for the periods presented (in millions, unaudited):
|Zillow Group Outlook as of May 9, 2019||Three Months Ending
June 30, 2019
December 31, 2019
|Total IMT segment revenue||$314.0||to||$322.0||$1,253.0||to||$1,281.0|
|Total Adjusted EBITDA||$(5.0)||to||$11.0||***|
|Weighted average shares outstanding — basic||205.0||to||207.0||205.5||to||207.5|
|Weighted average shares outstanding — diluted||208.5||to||210.5||209.0||to||211.0|
|*** Outlook not provided|
* Zillow Group has not provided a quantitative reconciliation of forecasted GAAP net loss to forecasted total Adjusted EBITDA or of forecasted GAAP segment loss before income taxes to forecasted segment Adjusted EBITDA within this earnings release because the company is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. These items include, but are not limited to: income taxes which are directly impacted by unpredictable fluctuations in the market price of the company’s capital stock; depreciation and amortization expense from new acquisitions; impairments of assets; and acquisition-related costs. These items, which could materially affect the computation of forward-looking GAAP net loss and segment loss before income taxes, are inherently uncertain and depend on various factors, many of which are outside of Zillow Group’s control. For more information regarding the non-GAAP financial measure discussed in this release, please see “Use of Non-GAAP Financial Measure” below.
SOURCE Zillow Group