Results reflect expanded margins in Zillow Group's IMT segment and sharp focus on Zillow Offers execution
Zillow Group, Inc., which is transforming the way people buy, sell, rent, and finance homes, today announced its consolidated financial results for the three months ended Sept. 30, 2019. The company's consolidated quarterly revenue more than doubled year over year, driven by strong results in Zillow Group's Homes segment and solid performance in the Premier Agent business.
"Our third quarter results were strong, demonstrating that Zillow Group's business model expansion to mechanize real estate transactions is gaining traction as consumer demand reveals people want a better, simpler way to buy, sell, rent and finance homes. Our core Premier Agent business is strong, with record revenue that exceeded our outlook. The profitability of our Premier Agent business is foundational to Zillow's success and is the reason we are able to expand Zillow Offers with such confidence and speed. This quarter's results illuminate how Zillow Group is in the most favorable position to lead Real Estate 2.0."
— Zillow Co-Founder and CEO Rich Barton
Recent highlights include:
- Total third quarter consolidated revenue grew 117% year over year to $745.2 million, driven primarily by significant growth in the Homes segment.
- Our Premier Agent business drove third quarter IMT revenue to $335.3 million, a year-over-year increase of 7%. IMT segment margin improved year over year, reflecting focused cost control and continued operating leverage from our scale and leadership.
- Consumer awareness and demand for Zillow Offers is growing rapidly. More than 80,000 homeowners requested an offer from Zillow in the third quarter.
- Zillow Offers opened eight new markets in the third quarter: Portland, Ore.; Nashville, Tenn.; Miami; San Diego; San Antonio; Austin, Texas; and Fort Collins and Colorado Springs, Colo.
- The company expects to be in 26 markets by mid-2020, including Los Angeles — the second-largest housing market in the country — by the end of 2019.
- Traffic to Zillow Group's mobile apps and websites reached an all-time high in the third quarter with average monthly unique users up 5% year over year to 195.6 million. Visits exceeded 2.1 billion, up 11% year over year.
Third Quarter 2019 Financial Highlights
The following table sets forth Zillow Group's financial highlights for the periods presented (in thousands, unaudited):
|
Three Months Ended |
2018 to 2019 % Change |
Nine Months Ended |
2018 to 2019 % Change |
||||||||||||||||
|
2019 |
2018 |
2019 |
2018 |
||||||||||||||||
|
Revenue: |
|||||||||||||||||||
|
Homes segment |
$ |
384,626 |
$ |
11,018 |
3,391% |
$ |
762,022 |
$ |
11,018 |
6,816% |
|||||||||
|
IMT segment: |
|||||||||||||||||||
|
Premier Agent |
240,698 |
232,703 |
3% |
690,394 |
677,320 |
2% |
|||||||||||||
|
Rentals |
44,430 |
37,319 |
19% |
124,938 |
99,670 |
25% |
|||||||||||||
|
Other (1) |
50,162 |
43,616 |
15% |
141,899 |
123,445 |
15% |
|||||||||||||
|
Total IMT segment revenue |
335,290 |
313,638 |
7% |
957,231 |
900,435 |
6% |
|||||||||||||
|
Mortgages segment |
25,292 |
18,438 |
37% |
79,637 |
56,766 |
40% |
|||||||||||||
|
Total revenue |
$ |
745,208 |
$ |
343,094 |
117% |
$ |
1,798,890 |
$ |
968,219 |
86% |
|||||||||
|
Other Financial Data: |
|||||||||||||||||||
|
Segment income (loss) before income taxes: |
|||||||||||||||||||
|
Homes segment |
$ |
(87,870) |
$ |
(16,428) |
$ |
(204,197) |
$ |
(30,879) |
|||||||||||
|
IMT segment |
$ |
42,053 |
$ |
6,322 |
$ |
43,839 |
$ |
(184) |
|||||||||||
|
Mortgages segment |
$ |
(12,254) |
$ |
(623) |
$ |
(32,308) |
$ |
(625) |
|||||||||||
|
Net loss |
$ |
(64,649) |
$ |
(492) |
$ |
(204,151) |
$ |
(22,176) |
|||||||||||
|
Adjusted EBITDA (2): |
|||||||||||||||||||
|
Homes segment |
$ |
(67,825) |
$ |
(13,409) |
$ |
(158,801) |
$ |
(25,274) |
|||||||||||
|
IMT segment |
91,102 |
75,363 |
216,204 |
181,764 |
|||||||||||||||
|
Mortgages segment |
(7,435) |
4,211 |
(15,342) |
11,985 |
|||||||||||||||
|
Total Adjusted EBITDA |
$ |
15,842 |
$ |
66,165 |
$ |
42,061 |
$ |
168,475 |
|||||||||||
|
Percentage of Revenue: |
|||||||||||||||||||
|
Segment income (loss) before income taxes: |
|||||||||||||||||||
|
Homes segment |
(23) |
% |
(149) |
% |
(27)% |
(280) |
% |
||||||||||||
|
IMT segment |
13 |
% |
2 |
% |
5% |
— |
% |
||||||||||||
|
Mortgages segment |
(48) |
% |
(3) |
% |
(41)% |
(1) |
% |
||||||||||||
|
Net loss |
(9) |
% |
— |
% |
(11)% |
(2) |
% |
||||||||||||
|
Adjusted EBITDA: |
|||||||||||||||||||
|
Homes segment |
(18) |
% |
(122) |
% |
(21)% |
(229) |
% |
||||||||||||
|
IMT segment |
27 |
% |
24 |
% |
23% |
20 |
% |
||||||||||||
|
Mortgages segment |
(29) |
% |
23 |
% |
(19)% |
21 |
% |
||||||||||||
|
Total Adjusted EBITDA |
2 |
% |
19 |
% |
2% |
17 |
% |
||||||||||||
|
(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 income (loss) before income taxes for each segment, for each of the periods presented. |
SOURCE Zillow Group, Inc.
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