SEATTLE, Feb. 10, 2022 /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 ended and year ended
Dec. 31, 2021.
Complete financial results and outlook for the first quarter of
2022 can be found in the company's shareholder letter on the
Investor Relations section of Zillow Group's website at
https://investors.zillowgroup.com/investors/financials/quarterly-results/default.aspx.
"Zillow has a rock-solid financial foundation and a core IMT
business in which we are reporting record profits today. More
interestingly, we have major untapped business potential due to our
leading audience, brand, partner network, and R&D leadership,"
said Zillow co-founder and CEO Rich
Barton. "In 2021, we estimate that nearly one-quarter
of all buyers in the U.S. reached out to connect with Zillow
during their shopping process, yet we only generated revenue on an
estimated 3% of total customer transactions. We're investing
aggressively in innovations that help both buyers and sellers by
delivering an integrated set of tech-enabled solutions on our
'housing super app' along with our excellent partners. We know
millions of movers today start with Zillow, and in the future,
we plan to be with them every step of their journey."
Recent highlights include:
- Zillow Group's Q4 results met or exceeded the company's outlook
at a consolidated level and for all three reportable
segments.
- Consolidated Q4 revenue was $3.9
billion, and full-year 2021 revenue was $8.1 billion.
-
- IMT segment revenue grew 14% year over year to $483 million for Q4, above the $481 million midpoint of the company's outlook
range. Premier Agent revenue grew 13% year over year to
$354 million for Q4, as the company
continued to execute on making connections between high-intent
customers and high-performing agents.
- Homes segment revenue of $3.3
billion for Q4 well exceeded the company's outlook as the
wind-down of iBuying operations progressed faster than
anticipated.
- Mortgages segment revenue was $51
million for Q4, at the high-end of the company's outlook
range.
- Consolidated GAAP net loss was $261
million for Q4 and net loss was $528
million for full year 2021. Segment income (loss) before
income taxes was $137 million,
$(342) million and $(27) million for the IMT, Homes and Mortgages
segments, for Q4, and $545 million,
$(881) million and $(52) million, for full year 2021,
respectively.
- Consolidated Adjusted EBITDA was a loss of $0.4 million for Q4 and a gain of $195 million for full year 2021. Adjusted EBITDA
(loss) by segment was: $220 million,
$(206) million, and $(14) million for the IMT, Homes, and Mortgages
segments in Q4, and $853 million,
$(650) million, and $(9) million for the full year 2021,
respectively. Q4 consolidated results were driven by
higher-than-anticipated margins in our IMT segment and
lower-than-expected inventory losses in our Homes segment.
Full-year results were driven primarily by IMT segment Adjusted
EBITDA margin expanding to 45% from 38% in 2020.
- Traffic to Zillow Group's mobile apps and websites in Q4 was
198 million average monthly unique users, roughly flat year over
year, which drove 2.3 billion visits during the same period, up 2%
year over year. Full year 2021 visits were 10.2 billion, up 6% from
the previous year.
- The company exited 2021 with cash and investments of
$3.1 billion, down slightly from
$3.2 billion at the end of Q3,
reflecting the impact of $302 million
in share repurchases in December under the current $750 million share repurchase authorization,
largely offset by positive cash flow from the IMT
segment.
Fourth-Quarter and Full-Year 2021 Financial
Highlights
The following table sets forth Zillow Group's financial
highlights for the periods presented (in thousands, unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
2020 to 2021
% Change
|
|
Year Ended
December 31,
|
|
2020 to 2021
% Change
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Homes
segment:
|
|
|
|
|
|
|
|
|
|
|
|
Zillow
Offers
|
$
3,336,660
|
|
$
301,703
|
|
1,006 %
|
|
$
5,982,357
|
|
$
1,710,535
|
|
250 %
|
Other (1)
|
11,663
|
|
2,442
|
|
378 %
|
|
33,421
|
|
4,840
|
|
591 %
|
Total Homes segment
revenue
|
3,348,323
|
|
304,145
|
|
1,001 %
|
|
6,015,778
|
|
1,715,375
|
|
251 %
|
IMT
segment:
|
|
|
|
|
|
|
|
|
|
|
|
Premier
Agent
|
353,799
|
|
314,213
|
|
13 %
|
|
1,395,723
|
|
1,046,954
|
|
33 %
|
Other (2)
|
129,370
|
|
109,625
|
|
18 %
|
|
490,059
|
|
403,278
|
|
22 %
|
Total IMT segment
revenue
|
483,169
|
|
423,838
|
|
14 %
|
|
1,885,782
|
|
1,450,232
|
|
30 %
|
Mortgages
segment
|
50,821
|
|
60,969
|
|
(17)%
|
|
245,816
|
|
174,210
|
|
41 %
|
Total
revenue
|
$
3,882,313
|
|
$
788,952
|
|
392 %
|
|
$
8,147,376
|
|
$
3,339,817
|
|
144 %
|
Other Financial
Data:
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
$
467,101
|
|
$
446,214
|
|
|
|
$
1,753,199
|
|
$
1,473,425
|
|
|
Income (loss) before
income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
Homes
segment
|
$
(342,040)
|
|
$
(66,621)
|
|
|
|
$
(881,464)
|
|
$
(320,254)
|
|
|
IMT
segment
|
137,291
|
|
145,369
|
|
|
|
544,590
|
|
262,984
|
|
|
Mortgages
segment
|
(26,675)
|
|
7,305
|
|
|
|
(51,823)
|
|
4,514
|
|
|
Corporate items
(3)
|
(27,930)
|
|
(39,416)
|
|
|
|
(137,817)
|
|
(116,882)
|
|
|
Total income (loss)
before income taxes
|
$
(259,354)
|
|
$
46,637
|
|
|
|
$
(526,514)
|
|
$
(169,638)
|
|
|
Net income
(loss)
|
$
(261,208)
|
|
$
46,036
|
|
|
|
$
(527,777)
|
|
$
(162,115)
|
|
|
Adjusted EBITDA
(4):
|
|
|
|
|
|
|
|
|
|
|
|
Homes
segment
|
$
(206,171)
|
|
$
(46,890)
|
|
|
|
$
(649,994)
|
|
$
(241,969)
|
|
|
IMT
segment
|
220,010
|
|
203,093
|
|
|
|
853,226
|
|
556,137
|
|
|
Mortgages
segment
|
(14,273)
|
|
13,648
|
|
|
|
(8,651)
|
|
28,825
|
|
|
Total Adjusted
EBITDA
|
$
(434)
|
|
$
169,851
|
|
|
|
$
194,581
|
|
$
342,993
|
|
|
Percentage of
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
12 %
|
|
57 %
|
|
|
|
22 %
|
|
44 %
|
|
|
Income (loss) before
income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
Homes
segment
|
(10)%
|
|
(22)%
|
|
|
|
(15)%
|
|
(19)%
|
|
|
IMT
segment
|
28 %
|
|
34 %
|
|
|
|
29 %
|
|
18 %
|
|
|
Mortgages
segment
|
(52)%
|
|
12 %
|
|
|
|
(21)%
|
|
3 %
|
|
|
Corporate items
(3)
|
N/A
|
|
N/A
|
|
|
|
N/A
|
|
N/A
|
|
|
Total income (loss)
before income taxes
|
(7)%
|
|
6 %
|
|
|
|
(6)%
|
|
(5)%
|
|
|
Net income
(loss)
|
(7)%
|
|
6 %
|
|
|
|
(6)%
|
|
(5)%
|
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
Homes
segment
|
(6)%
|
|
(15)%
|
|
|
|
(11)%
|
|
(14)%
|
|
|
IMT
segment
|
46 %
|
|
48 %
|
|
|
|
45 %
|
|
38 %
|
|
|
Mortgages
segment
|
(28)%
|
|
22 %
|
|
|
|
(4)%
|
|
17 %
|
|
|
Total Adjusted
EBITDA
|
— %
|
|
22 %
|
|
|
|
2 %
|
|
10 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conference Call and Webcast Information
Zillow Group co-founder and CEO Rich
Barton and CFO Allen Parker
will host a live conference call to discuss the results today at
2 p.m. Pacific Time (5 p.m. Eastern Time). A shareholder letter,
investor presentation, and link to both the live webcast and
recorded replay of the call may be accessed in the Quarterly
Results section of Zillow Group's investor relations website.
Participants must register for the live call in advance at:
https://www.incommglobalevents.com/registration/q4inc/9561/zillow-group-fourth-quarter-2021-earnings-call/
to receive emailed instructions. This preregistration process is
designed to reduce delays due to operator congestion when accessing
the live call.
Forward-Looking Statements
This press release 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 the future performance and operation of our business, the
expected amount and timing of charges, write-downs and cash
expenditures and expected wind-down plans of the Zillow Offers
operations, the current and future health and stability of the
residential housing market and economy and our expectations
regarding future shifts in behavior by consumers and employees.
Statements containing words such as "may," "believe," "anticipate,"
"expect," "intend," "plan," "project," "predict," "will,"
"projections," "continue," "estimate," "outlook," "guidance,"
"would," "could," or similar expressions constitute forward-looking
statements. Forward-looking statements are made based on
assumptions as of Feb. 10, 2022, and
although we believe the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
these results. Differences in Zillow Group's actual results from
those described in these forward-looking statements may result from
actions taken by Zillow Group as well as from risks and
uncertainties beyond Zillow Group's control.
Factors that may contribute to such differences include, but are
not limited to, disruptions in operations (including in our ability
to complete the disposition of homes in inventory), and
relationships with customers, suppliers, vendors, broker partners,
contractors, employees, lenders and customers given our decision to
wind down Zillow Offers operations; unanticipated developments that
may prevent, delay or increase the costs associated with our wind
down activities; our access to and the availability of financing on
terms acceptable to us to finance the purchase of homes through
Zillow Offers during the wind down of Zillow Offers operations; the
impact of the COVID-19 pandemic (including variants) or other
public health crises and any associated economic downturn on our
future financial position, operations and financial performance;
the magnitude, duration and severity of the COVID-19 pandemic
(including variants) and the availability, widespread distribution,
use and efficacy of vaccines; the impact of actions taken by
governments, businesses and individuals in response to the COVID-19
pandemic (including variants), including changes in laws or
regulations that limit our ability to operate; the current and
future health and stability of the economy, financial conditions
and residential housing market, including any extended slowdown in
the real estate markets as a result of the COVID-19 pandemic
(including variants); changes in laws or regulations applicable to
our business, employees, products or services, including current
and future laws, regulations and orders that limit our ability to
operate in light of the COVID-19 pandemic (including variants);
changes in general economic and financial conditions that reduce
demand for our products and services, lower our profitability or
reduce our access to credit; actual or anticipated fluctuations in
our financial condition and results of operations; changes in
projected operational and financial results; addition or loss of
significant customers; actual or anticipated changes in our rates
of growth and innovation relative to that of our competitors;
acquisitions, strategic partnerships, joint ventures,
capital-raising activities or other corporate transactions or
commitments by us or our competitors; actual or anticipated changes
in technology, products, markets or services by us or our
competitors; ability to protect the information and privacy of our
customers and other third parties; ability to protect our brand and
intellectual property; ability to obtain or maintain licenses and
permits to support our current and future businesses; ability to
comply with MLS rules and requirements to access and use listing
data, and to maintain or establish relationships with listings and
data providers; ability to operate our mortgage origination
business, including the ability to obtain sufficient financing;
fluctuations in the valuation of companies perceived by investors
to be comparable to Zillow Group; the impact of natural disasters
and other catastrophic events; the impact of pending or future
litigation or regulatory actions; and the issuance of new or
updated research or reports by securities analysts.
The foregoing list of risks and uncertainties is illustrative
but not exhaustive. For more information about potential factors
that could affect Zillow Group's business and financial results,
please review the "Risk Factors" described in Zillow Group's Annual
Report on Form 10-K for the year ended Dec.
31, 2021 filed with the SEC and in Zillow Group's other
filings with the SEC. Except as may be required by law, Zillow
Group does not intend and undertakes no duty to update this
information to reflect future events or circumstances.
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding our
financial results, this press release includes references to
Adjusted EBITDA in total and for each segment, each a non-GAAP
financial measure. We have provided a reconciliation below of
Adjusted EBITDA in total to net income (loss) and Adjusted EBITDA
by segment to income (loss) before income taxes for each segment,
the most directly comparable GAAP financial measures.
Adjusted EBITDA is a key metric used by our management and board
of directors to measure operating performance and trends and to
prepare and approve our annual budget. In particular, the exclusion
of certain expenses in calculating Adjusted EBITDA facilitates
operating performance comparisons on a period-to-period basis.
Our use of Adjusted EBITDA in total and for each segment has
limitations as an analytical tool, and you should not consider
these measures in isolation or as a substitute for analysis of our
results as reported under GAAP. Some of these limitations are:
- Adjusted EBITDA does not reflect our cash expenditures or
future requirements for capital expenditures or contractual
commitments;
- Adjusted EBITDA does not reflect changes in, or cash
requirements for, our working capital needs;
- Adjusted EBITDA does not consider the potentially dilutive
impact of share-based compensation;
- Although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future, and Adjusted EBITDA does not reflect cash capital
expenditure requirements for such replacements or for new capital
expenditure requirements;
- Adjusted EBITDA does not reflect impairment and restructuring
costs;
- Adjusted EBITDA does not reflect acquisition-related
costs;
- Adjusted EBITDA does not reflect the gain (loss) on
extinguishment of debt;
- Adjusted EBITDA does not reflect interest expense or other
income;
- Adjusted EBITDA does not reflect income taxes; and
- Other companies, including companies in our own industry, may
calculate Adjusted EBITDA differently than we do, limiting its
usefulness as a comparative measure.
Because of these limitations, you should consider Adjusted
EBITDA in total and for each segment alongside other financial
performance measures, including various cash flow metrics, net
income (loss), income (loss) before income taxes for each segment
and our other GAAP results.
About Zillow Group, Inc.
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate
to make it easier to unlock life's next chapter. As the most
visited real estate website in the United
States, Zillow® and its affiliates help high-intent movers
find and win their home through digital solutions, first class
partners and easier buying, selling, financing and renting
experiences. We help customers find and win their home with
referrals to trusted Zillow Premier Agent and Premier Broker
partners and our portfolio of Zillow-branded and affiliated
transaction-oriented services. Zillow Offers has purchased and sold
homes directly in markets across the country. Beginning in the
fourth quarter of 2021, Zillow Offers operations are being wound
down with expected completion in the second half of 2022. Zillow
Home Loans, our affiliate lender, provides our customers with an
easy option to get pre-approved and secure financing for their next
home purchase.
Zillow Group's brands, affiliates and subsidiaries include
Zillow®, Zillow Offers®, Zillow Premier Agent®, Zillow Home Loans™,
Zillow Closing Services™, Zillow Homes, Inc., Trulia®, Out East®,
ShowingTime®, Bridge Interactive®, dotloop®, StreetEasy® and
HotPads®. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS
#10287 (www.nmlsconsumeraccess.org).
Please visit https://investors.zillowgroup.com,
www.zillowgroup.com/news, and www.twitter.com/zillowgroup, where
Zillow Group discloses information about the company, its financial
information, and its business that may be deemed material.
The Zillow Group logo is available at
https://zillowgroup.mediaroom.com/logos-photos.
(ZFIN)
Adjusted EBITDA
The following tables present a reconciliation of Adjusted EBITDA
to the most directly comparable GAAP financial measure, which is
net income (loss) on a consolidated basis and income (loss) before
income taxes for each segment, for each of the periods presented
(in thousands, unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31, 2021
|
|
|
Homes
|
|
IMT
|
|
Mortgages
|
|
Corporate
Items
(2)
|
|
Consolidated
|
Reconciliation of
Adjusted EBITDA to Net Loss and Income (Loss) Before Income
Taxes:
|
|
|
|
|
|
|
|
|
|
|
Net loss
(1)
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
$
(261,208)
|
Income
taxes
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
1,854
|
Income (loss) before
income taxes
|
|
$
(342,040)
|
|
$
137,291
|
|
$
(26,675)
|
|
$
(27,930)
|
|
$
(259,354)
|
Other
income
|
|
(2,604)
|
|
—
|
|
(1,185)
|
|
(409)
|
|
(4,198)
|
Depreciation and
amortization
|
|
8,010
|
|
31,323
|
|
2,319
|
|
—
|
|
41,652
|
Share-based
compensation
|
|
20,454
|
|
50,472
|
|
9,287
|
|
—
|
|
80,213
|
Acquisition-related
costs
|
|
—
|
|
892
|
|
—
|
|
—
|
|
892
|
Impairment and
restructuring costs
|
|
71,247
|
|
—
|
|
926
|
|
—
|
|
72,173
|
Interest
expense
|
|
38,762
|
|
32
|
|
1,055
|
|
28,339
|
|
68,188
|
Adjusted
EBITDA
|
|
$
(206,171)
|
|
$
220,010
|
|
$
(14,273)
|
|
$
—
|
|
$
(434)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31, 2020
|
|
|
Homes
|
|
IMT
|
|
Mortgages
|
|
Corporate
Items
(2)
|
|
Consolidated
|
Reconciliation of
Adjusted EBITDA to Net Income and Income (Loss) Before Income
Taxes:
|
|
|
|
|
|
|
|
|
|
|
Net income
(1)
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
$
46,036
|
Income
taxes
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
601
|
Income (loss) before
income taxes
|
|
$
(66,621)
|
|
$
145,369
|
|
$
7,305
|
|
$
(39,416)
|
|
$
46,637
|
Other
income
|
|
—
|
|
—
|
|
(1,146)
|
|
(1,657)
|
|
(2,803)
|
Depreciation and
amortization
|
|
4,114
|
|
21,973
|
|
1,967
|
|
—
|
|
28,054
|
Share-based
compensation
|
|
12,319
|
|
35,751
|
|
4,375
|
|
—
|
|
52,445
|
Loss on
extinguishment of debt
|
|
—
|
|
—
|
|
—
|
|
4,943
|
|
4,943
|
Interest
expense
|
|
3,298
|
|
—
|
|
1,147
|
|
36,130
|
|
40,575
|
Adjusted
EBITDA
|
|
$
(46,890)
|
|
$
203,093
|
|
$
13,648
|
|
$
—
|
|
$
169,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2021
|
|
|
Homes
|
|
IMT
|
|
Mortgages
|
|
Corporate
Items
(2)
|
|
Consolidated
|
Reconciliation of
Adjusted EBITDA to Net Loss and Income (Loss) Before Income
Taxes:
|
|
|
|
|
|
|
|
|
|
|
Net loss
(1)
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
$
(527,777)
|
Income
taxes
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
1,263
|
Income (loss) before
income taxes
|
|
$
(881,464)
|
|
$
544,590
|
|
$
(51,823)
|
|
$
(137,817)
|
|
$
(526,514)
|
Other
income
|
|
(2,878)
|
|
—
|
|
(5,019)
|
|
(2,291)
|
|
(10,188)
|
Depreciation and
amortization
|
|
22,393
|
|
99,026
|
|
8,361
|
|
—
|
|
129,780
|
Share-based
compensation
|
|
76,879
|
|
200,963
|
|
33,844
|
|
—
|
|
311,686
|
Acquisition-related
costs
|
|
—
|
|
8,615
|
|
—
|
|
—
|
|
8,615
|
Loss on
extinguishment of debt
|
|
—
|
|
—
|
|
—
|
|
17,119
|
|
17,119
|
Impairment and
restructuring costs
|
|
71,247
|
|
—
|
|
926
|
|
—
|
|
72,173
|
Interest
expense
|
|
63,829
|
|
32
|
|
5,060
|
|
122,989
|
|
191,910
|
Adjusted
EBITDA
|
|
$
(649,994)
|
|
$
853,226
|
|
$
(8,651)
|
|
$
—
|
|
$
194,581
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2020
|
|
|
Homes
|
|
IMT
|
|
Mortgages
|
|
Corporate
Items
(2)
|
|
Consolidated
|
Reconciliation of
Adjusted EBITDA to Net Loss and Income (Loss) Before Income
Taxes:
|
|
|
|
|
|
|
|
|
|
|
Net loss
(1)
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
$
(162,115)
|
Income
taxes
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
(7,523)
|
Income (loss) before
income taxes
|
|
$
(320,254)
|
|
$
262,984
|
|
$
4,514
|
|
$
(116,882)
|
|
$
(169,638)
|
Other
income
|
|
—
|
|
(5,300)
|
|
(2,369)
|
|
(17,860)
|
|
(25,529)
|
Depreciation and
amortization
|
|
13,315
|
|
89,862
|
|
6,854
|
|
—
|
|
110,031
|
Share-based
compensation
|
|
48,166
|
|
134,691
|
|
14,693
|
|
—
|
|
197,550
|
Gain on
extinguishment of debt
|
|
—
|
|
—
|
|
—
|
|
(1,448)
|
|
(1,448)
|
Impairment and
restructuring costs
|
|
—
|
|
73,900
|
|
2,900
|
|
—
|
|
76,800
|
Interest
expense
|
|
16,804
|
|
—
|
|
2,233
|
|
136,190
|
|
155,227
|
Adjusted
EBITDA
|
|
$
(241,969)
|
|
$
556,137
|
|
$
28,825
|
|
$
—
|
|
$
342,993
|
|
|
|
|
|
|
|
|
|
|
|
(1) We use income
(loss) before income taxes as our profitability measure in making
operating decisions and assessing the performance of our segments,
therefore, net income (loss) and income tax benefit (expense) are
calculated and presented only on a consolidated basis within our
financial statements.
|
(2) Certain corporate
items are not directly attributable to any of our segments,
including the gain (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.
|
|
|
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SOURCE Zillow Group, Inc.