Try our mobile app

Published: 2022-05-05 00:00:00 ET
<<<  go to Z company page
HTTP/1.1 200 OK HTTP/1.1 200 OK X-Crawlera-Slave: 107.172.75.62:3128 X-Crawlera-Version: 1.60.1 accept-ranges: bytes content-type: text/html last-modified: Sat, 07 May 2022 00:25:58 GMT server: AmazonS3 x-amz-id-2: euw1qTUOQPOFvI5gVbkTUT6e7Ww+iFNp/mWTdLP0KW5xEx03VkJ9AKESof+Rf0ynCwUyuZdqcMk= x-amz-meta-mode: 33188 x-amz-meta-s3cmd-attrs: uid:504/gname:fitrprnt/uname:fitrprnt/gid:504/mode:33184/mtime:1651883139/atime:1651883139/md5:3f9c8bf81d88475c25593fe6896684e6/ctime:1651883148 x-amz-replication-status: COMPLETED x-amz-request-id: 9VRSRNWNM04VPPJ4 x-amz-version-id: WG61H7mdX.ctP6NnRrbiDWlcrU7IMUyv x-content-type-options: nosniff x-frame-options: SAMEORIGIN x-xss-protection: 1; mode=block x-akamai-transformed: 9 11946 0 pmb=mTOE,2 expires: Thu, 06 Apr 2023 09:14:13 GMT cache-control: max-age=0, no-cache, no-store pragma: no-cache date: Thu, 06 Apr 2023 09:14:13 GMT vary: Accept-Encoding akamai-x-true-ttl: -1 strict-transport-security: max-age=31536000 ; includeSubDomains ; preload set-cookie: ak_bmsc=AF7E41683D9FAEBE6E5349269B850E5A~000000000000000000000000000000~YAAQUoIsFw/Q4k+HAQAAkVPYVRNXde4c2+8EMgHQqeUjn7sqiMkQl4OfGPLQ6pI7CN1tQIW9Nwnghcjmp1rl37kiR5Rc6HaaDUdbVx1E7ZTWybgMY1xsxkefQmPldizVBZhlEZ0FVLYVE4V33fnKPLa1C2y1rx/xwLLD/urzWJqVT0ivvcaTjwKP0bG+M4s4YO5DUn13EAu8ZNHxr6BN/bK1RUlycFjPD9UIvZENkrRbzSc3xW2cxGV1JBZA1B0lswcXDMLW8o9IlojLfiIkF1sTU/Z//lJjpyj8kLhRVvHagJMutY96jjGeb5sdCpZ1oSIKOaS9UrBLIKeaoAMDoHyWH/ZKiG5bZ4cCGExbhS9xrGwKLbBxy05c0i17Dzxo5n5W8tJPyQ==; Domain=.sec.gov; Path=/; Expires=Thu, 06 Apr 2023 11:14:13 GMT; Max-Age=7200; HttpOnly set-cookie: bm_mi=C341F3E400EF70DF736F33C038290C77~YAAQUoIsFxDQ4k+HAQAAkVPYVRMSvOLCgXnXjVV2fuHJWwG9p5Bpco36pyN0cddyrLwxrBKUiycQKJjPYDwVBnKFDfFg/wDSrCIFO4dzYb9h09ynjdxQPPUjMle4HHWIbO2FRNmACjfV181aYey0utlWc2zvXwLayOuFTNJBX2YKSArKQAgXo/i0eY7uOyDyOwG5C2RS4GHc1OMZX6ig7un1FIUNcS9MBGo8ZNMuv3gazL+h262TEsatZ6RUkQCrAVPPECE2MwFyno2p24A3laOH/LF74FZDj/CaoVZ8BQ4AXTNxpJBZU7uSEtRdTOs4u9FbLzuD9qa7YNavk3wngUn9QkornH0v5G/+3+E4rJ5UvE4yzWi/wqWjI+K7tVNK3OnXKpdKEw==~1; Domain=.sec.gov; Path=/; Expires=Thu, 06 Apr 2023 09:14:13 GMT; Max-Age=0; Secure Transfer-Encoding: chunked Proxy-Connection: close Connection: close EX-99.2 3 q12022992.htm EX-99.2 Document

Exhibit 99.2


Reported Consolidated Results

ZILLOW GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
March 31, 2022December 31, 2021
Assets
Current assets:
Cash and cash equivalents$2,594 $2,611 
Short-term investments1,032 514 
Accounts receivable, net
99 155 
Mortgage loans held for sale93 107 
Inventory494 3,913 
Prepaid expenses and other current assets386 153 
Restricted cash92 227 
Total current assets4,790 7,680 
Contract cost assets31 35 
Property and equipment, net234 215 
Right of use assets140 130 
Goodwill2,374 2,374 
Intangible assets, net165 180 
Other assets86 81 
Total assets$7,820 $10,695 
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable$24 $17 
Accrued expenses and other current liabilities119 161 
Accrued compensation and benefits102 108 
Borrowings under credit facilities88 2,312 
Deferred revenue56 51 
Lease liabilities, current portion23 24 
Securitization term loans790 1,209 
Total current liabilities1,202 3,882 
Lease liabilities, net of current portion156 148 
Convertible senior notes1,656 1,319 
Other long-term liabilities4 5 
Total liabilities3,018 5,354 
Shareholders’ equity:
Class A common stock
— — 
Class B common stock
— — 
Class C capital stock
— — 
Additional paid-in capital6,298 7,001 
Accumulated other comprehensive income (loss)(1)7 
Accumulated deficit(1,495)(1,667)
Total shareholders’ equity4,802 5,341 
Total liabilities and shareholders’ equity$7,820 $10,695 



ZILLOW GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share data which are presented in thousands, and per share data)
 Three Months Ended
March 31,
 20222021
Revenue:
Homes$3,721 $704 
IMT490 446 
Mortgages46 68 
Total revenue4,257 1,218 
Cost of revenue (1):
Homes3,537 645 
IMT65 47 
Mortgages20 19 
Total cost of revenue3,622 711 
Gross profit635 507 
Operating expenses:
Sales and marketing (1)
307 197 
Technology and development (1)
114 120 
General and administrative (1)
119 101 
Restructuring costs (1)
38 — 
Acquisition-related costs— 1 
Total operating expenses578 419 
Income from operations57 88 
Loss on extinguishment of debt(14)(1)
Other income8 2 
Interest expense(44)(40)
Income before income taxes7 49 
Income tax benefit9 3 
Net income$16 $52 
Net income per share:
Basic$0.06 $0.21 
Diluted$0.06 $0.20 
Weighted-average shares outstanding:
Basic248,542 243,234 
Diluted251,963 259,346 
(1) Includes share-based compensation expense as follows:
Cost of revenue$3 $3 
Sales and marketing12 10 
Technology and development29 26 
General and administrative38 25 
Restructuring costs9 — 
Total$91 $64 
Other Financial Data:
Income (loss) before income taxes:
Homes segment$(68)$(58)
IMT segment108 143 
Mortgages segment(27)(2)
Corporate items (2)(6)(34)
Total income before income taxes$7 $49 
Adjusted EBITDA (3):
Homes segment$23 $(33)
IMT segment209 209 
Mortgages segment(12)6 
Total Adjusted EBITDA$220 $182 
(2) Certain corporate items are not directly attributable to any of our segments, including the 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.
(3) 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 for more information regarding our presentation of Adjusted EBITDA and for a reconciliation of Adjusted EBITDA to net income on a consolidated basis and income (loss) before income taxes for each segment, the most directly comparable GAAP financial measures, for each of the periods presented.


ZILLOW GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
 Three Months Ended
March 31,
 20222021
Operating activities
Net income$16 $52 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization43 29 
Share-based compensation91 64 
Amortization of right of use assets6 7 
Amortization of contract cost assets8 10 
Amortization of debt discount and debt issuance costs23 25 
Loss on extinguishment of debt14 1 
Inventory valuation adjustment5 — 
Deferred income taxes— (3)
Other adjustments to reconcile net income to cash provided by operating activities (3)9 
Changes in operating assets and liabilities:
Accounts receivable56 (13)
Mortgage loans held for sale14 57 
Inventory3,414 19 
Prepaid expenses and other assets(247)(29)
Contract cost assets(4)(10)
Lease liabilities(9)(7)
Accounts payable6 (2)
Accrued expenses and other current liabilities(43)25 
Accrued compensation and benefits(6)2 
Deferred revenue5 5 
Other long-term liabilities3 — 
Net cash provided by operating activities3,392 241 
Investing activities
Proceeds from maturities of investments— 920 
Purchases of investments(525)— 
Purchases of property and equipment(33)(12)
Purchases of intangible assets(5)(4)
Net cash provided by (used in) investing activities(563)904 
Financing activities
Proceeds from issuance of Class C capital stock, net of issuance costs— 545 
Proceeds from borrowings on credit facilities— 126 
Repayments of borrowings on credit facilities(2,205)(88)
Net repayments on warehouse line of credit and repurchase agreements(25)(46)
Repurchases of Class A common stock and Class C capital stock(348)— 
Settlement of long term debt(439)— 
Proceeds from exercise of stock options36 61 
Net cash provided by (used in) financing activities(2,981)598 
Net increase (decrease) in cash, cash equivalents and restricted cash during period(152)1,743 
Cash, cash equivalents and restricted cash at beginning of period2,838 1,779 
Cash, cash equivalents and restricted cash at end of period$2,686 $3,522 
Supplemental disclosures of cash flow information
Cash paid for interest$25 $14 
Noncash transactions:
Write-off of fully amortized intangible assets$168 $1 
Write-off of fully depreciated property and equipment18 12 
Recognition of operating right of use assets and lease liabilities16 — 
Capitalized share-based compensation10 4 
Property and equipment purchased on account11 



Non-GAAP Net Income per Share
Our presentation of non-GAAP net income per share excludes the impact of share-based compensation, restructuring costs, acquisition-related costs, the loss on extinguishment of debt and income taxes. This measure is not a key metric used by our management and board of directors to measure operating performance or otherwise manage the business. However, we provide non-GAAP net income per share as supplemental information to investors, as we believe the exclusion of share-based compensation, restructuring costs, acquisition-related costs, the loss on extinguishment of debt and income taxes facilitates investors’ operating performance comparisons on a period-to-period basis. You should not consider non-GAAP net income per share in isolation or as a substitute for analysis of our results as reported under GAAP.

The following table sets forth a reconciliation of non-GAAP net income, adjusted, to net income, as reported on a GAAP basis, and the calculation of non-GAAP net income per share - basic and diluted, for each of the periods presented (in millions, except share data which are presented in thousands, and per share data, unaudited):
Three Months Ended
March 31,
 20222021
Net income, as reported
$16 $52 
Share-based compensation82 64 
Restructuring costs38 — 
Acquisition-related costs— 1 
Loss on extinguishment of debt14 1 
Income taxes(9)(3)
Net income, adjusted$141 $115 
Non-GAAP net income (loss) per share:
Basic$0.56 $0.48 
Diluted$0.49 $0.44 
Weighted-average shares outstanding:
Basic248,542 243,234 
Diluted285,818 259,346 
Diluted non-GAAP net income per share for the periods presented is calculated using diluted weighted-average shares outstanding, which includes potential shares of Class A common stock and Class C capital stock for the periods in which their effect would have been dilutive. The potential shares of Class A common stock and Class C capital stock were excluded from the calculation of non-GAAP net income per share for certain periods presented if their effect would have been antidilutive. The following table reconciles the denominators used in the basic and diluted non-GAAP net income per share calculations (in thousands, unaudited):
Three Months Ended
March 31,
 20222021
Denominator for basic calculation248,542 243,234 
Effect of dilutive securities:
     Option awards2,558 12,437 
     Unvested restricted stock units863 3,675 
Convertible senior notes due in 2026, 2025 and 202433,855 — 
          Denominator for dilutive calculation285,818 259,346 




Segment Results of Operations
The following tables present our segment results for the periods presented (in millions, unaudited):
 Three Months Ended
March 31, 2022		Three Months Ended
March 31, 2021
HomesIMTMortgagesHomesIMTMortgages
Revenue$3,721 $490 $46 $704 $446 $68 
Cost of revenue3,537 65 20 645 47 19 
Gross profit184 425 26 59 399 49 
Operating expenses:
Sales and marketing142 142 23 55 117 25 
Technology and development12 92 10 33 79 8 
General and administrative24 77 18 25 59 17 
Restructuring costs30 6 2 — — — 
Acquisition-related costs— — — — 1 — 
Total operating expenses208 317 53 113 256 50 
Income (loss) from operations(24)108 (27)(54)143 (1)
Segment other income6 — 1 — — 1 
Segment interest expense (36)— (1)(4)— (2)
Loss on extinguishment of debt(14)— — — — $— 
Income (loss) before income taxes (1)
$(68)$108 $(27)$(58)$143 $(2)
(1) The following table presents the reconciliation of total segment income (loss) before income taxes to consolidated income before income taxes for the periods presented (in millions):
Three Months Ended
March 31,
20222021
Total segment income before income taxes$13 $83 
Corporate interest expense(7)(34)
Corporate other income1 1 
Loss on extinguishment of debt— (1)
Consolidated income before income taxes$7 $49 
Certain corporate items are not directly attributable to any of our segments, including the 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.

Key Metrics
The following table presents our visits and average monthly unique users for each of the periods presented (in millions):
 Three Months Ended
March 31,		2021 to 2022
% Change
 20222021
Visits (1)2,627 2,511 5 %
Average monthly unique users (2)211 221 (5)%
(1) Visits includes visits to the Zillow, Trulia and StreetEasy mobile apps and websites. We measure Zillow and StreetEasy visits with Google Analytics and Trulia visits with Adobe Analytics.
(2) Zillow, StreetEasy and HotPads measure unique users with Google Analytics, and Trulia measures unique users with Adobe Analytics.



The following table presents loan origination volume by purpose and in total for Zillow Home Loans for the periods presented (in millions):
Three Months Ended
March 31,		2021 to 2022
% Change
20222021
Purchase loan origination volume$123 $115 7 %
Refinance loan origination volume578 1,052 (45)%
Total loan origination volume$701 $1,167 (40)%

Selected Historical Data

Beginning with the three months ended March 31, 2022, we present rentals revenue as a separate revenue category. The following tables set forth selected historical IMT revenue by revenue category for each of the periods presented (in millions, unaudited):

 Three Months Ended
 December 31, 2021September 30, 2021June 30, 2021March 31, 2021
Premier Agent$354 $359 $349 $334 
Rentals60 67 73 64 
Other69 55 54 48 
Total IMT revenue$483 $481 $476 $446 

 Three Months Ended
 December 31, 2020September 30, 2020June 30, 2020March 31, 2020
Premier Agent$314 $299 $192 $242 
Rentals60 67 51 44 
Other50 49 37 45 
Total IMT revenue$424 $415 $280 $331