Zillow Group, Inc. (NASDAQ:Z) (NASDAQ:ZG), which houses a portfolio
of the largest and most vibrant real estate and home-related brands
on mobile and the web, today announced its consolidated financial
results for the quarter and full year ended December 31, 2017.
“Zillow Group had another fantastic year of record
results in 2017 and exceeded $1 billion in revenue for the first
time,” said Zillow Group CEO Spencer Rascoff. “We successfully
transitioned advertisers to an auction-based pricing model,
launched RealEstate.com, and continued to grow our emerging
marketplaces, including two strategic acquisitions. We believe the
next phase of our company’s evolution will make Zillow Group an
even more meaningful part of the home-shopping experience. In 2018,
we plan to deliver better experiences for consumers buying, selling
or renting a home, and strengthen our partnerships with real estate
professionals by aligning our growth with their success.”
Fourth Quarter 2017 Financial
Highlights
• Revenue increased 24% to a record $282.3
million from $227.6 million in the fourth quarter of 2016.
- Marketplace Revenue increased 26% to $265.6 million from $210.6
million in the fourth quarter of 2016.• Premier Agent
Revenue increased 21% to $199.5 million from $164.3 million in the
fourth quarter of 2016.• Other Real Estate Revenue1
increased 60% to $47.6 million from $29.8 million in the fourth
quarter of 2016.• Mortgages Revenue increased 12% to
$18.5 million from $16.5 million in the fourth quarter of
2016.
- Display Revenue decreased 1% to $16.7 million from $17.0
million in the fourth quarter of 2016, consistent with the
company’s strategy to deemphasize display advertising in the user
experience and instead focus on growth in marketplace revenue.
• GAAP net loss was $77.2 million in the
fourth quarter of 2017, or (27)% of Revenue, which includes the
impact of a $174.0 million non-cash impairment charge recorded in
connection with Trulia’s trade names and trademarks
indefinite-lived intangible asset, compared to GAAP net loss of
$23.5 million in the fourth quarter of 2016, or (10)% of
Revenue.
• Adjusted EBITDA was $70.9 million in the
fourth quarter of 2017, or 25% of Revenue, which was an increase
from $54.7 million in the fourth quarter of 2016, or 24% of
Revenue.
1 Other Real Estate Revenue primarily includes
revenue generated by Zillow Group Rentals and New Construction, as
well as revenue from the sale of various other advertising and
business software solutions.
Full Year 2017 Financial
Highlights
• Revenue increased 27% to a record
$1,076.8 million from $846.6 million in 2016.
- Marketplace Revenue increased 29% to $1,007.2 million from
$778.1 million in 2016.• Premier Agent Revenue increased
26% to $761.6 million from $604.3 million in
2016.• Other Real Estate Revenue increased 61% to $165.0
million from $102.6 million in 2016.• Mortgages Revenue
increased 13% to $80.6 million from $71.1 million in 2016.
- Display Revenue increased 2% to $69.6 million from $68.5
million in 2016.
• GAAP net loss was $94.4 million, or (9)% of
Revenue, which includes the impact of the $174.0 million non-cash
impairment charge, compared to GAAP net loss of $220.4 million in
2016, or (26)% of Revenue, which includes the impact of a
$130.0 million litigation settlement.
• Adjusted EBITDA was $236.3 million, or 22%
of Revenue, which was an increase from $14.8 million in 2016, or 2%
of Revenue.
Fourth Quarter 2017 Operating and
Business Highlights
• More than 151 million average monthly
unique users visited Zillow Group brands’ mobile apps and websites
during the fourth quarter of 2017, an increase of 8%
year-over-year.
• Visits to Zillow Group brands’ mobile apps
and websites Zillow®, Trulia®, StreetEasy® (included as of March
2017) and RealEstate.com (included as of June 2017) increased 21%
year-over-year to more than 1.4 billion during the fourth quarter
of 2017. Premier Agent revenue per visit increased 1% to $0.139
from $0.138 in the same period last year.
• The number of Premier Agent® advertisers,
including brokerages and other teams, spending more than $5,000 per
month grew by 70% year-over-year and increased 64% on a total
dollar basis during the fourth quarter of 2017.
• Total sales to Premier Agent advertisers
who have been customers for more than one year increased 41%
year-over-year during the fourth quarter of 2017.
• Sales to existing Premier Agent advertisers
accounted for 63% of total bookings during the fourth quarter of
2017.
Business Outlook - First Quarter and Full Year
2018
The following table presents Zillow Group’s business outlook for
the periods presented:
|
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|
|
|
|
|
|
|
Three Months Ending |
|
Year Ending |
|
Zillow Group Outlook as of February 8, 2018 |
|
March 31, 2018 |
|
December 31, 2018 |
|
(in
millions) |
|
|
|
|
|
|
|
|
|
Revenue
|
|
$291 |
to |
$296 |
|
$1,302 |
to |
$1,317 |
|
Premier Agent
revenue |
|
$206 |
to |
$208 |
|
$900 |
to |
$910 |
|
Mortgages revenue |
|
$21 |
to |
$22 |
|
$95 |
to |
$96 |
|
Rentals revenue
(1) |
|
$30 |
to |
$31 |
|
$144 |
to |
$146 |
|
Other revenue (1) |
|
$34 |
to |
$35 |
|
$163 |
to |
$165 |
|
Operating expenses |
|
$302 |
to |
$307 |
|
$1,240 |
to |
$1,255 |
|
Net income (loss) |
|
$(18.3) |
to |
$(13.3) |
|
$38 |
to |
$53 |
|
Adjusted EBITDA
(2) |
|
$42 |
to |
$47 |
|
$300 |
to |
$315 |
|
Depreciation and
amortization |
|
$27 |
to |
$29 |
|
$118 |
to |
$123 |
|
Share-based
compensation expense |
|
$26 |
to |
$28 |
|
$122 |
to |
$127 |
|
Capital
expenditures |
|
|
*** |
|
|
$93 |
to |
$98 |
|
Weighted average shares
outstanding — basic |
|
190.0 |
to |
192.0 |
|
193.0 |
to |
195.0 |
|
Weighted average shares
outstanding — diluted |
|
197.5 |
to |
199.5 |
|
200.5 |
to |
202.5 |
|
|
|
|
|
|
|
|
|
|
|
*** Outlook not
provided |
|
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|
|
|
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|
|
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|
(1) Zillow Group will begin reporting Rentals
Revenue as a separate revenue category beginning with quarterly
reporting for the three months ending March 31, 2018. In addition,
Display Revenue will be included in the Other Revenue category and
not reported separately. Beginning in 2018, Other Real Estate
Revenue will be redefined as Other Revenue and will include revenue
from New Construction, dotloop, Display, as well as from the sale
of various other advertising and business software solutions.
(2) A reconciliation of forecasted Adjusted EBITDA to
forecasted net income (loss) is provided below in this press
release.
Conference Call and Webcast Information
Zillow Group CEO Spencer Rascoff and CFO Kathleen Philips will
host a live conference call and webcast to discuss the results
today at 2 p.m. Pacific Time (5 p.m. Eastern Time). A copy of
management’s prepared remarks will be made available on the
investor relations section of Zillow Group’s website at
http://investors.zillowgroup.com/results.cfm prior to the live
conference call and webcast to allow analysts and investors
additional time to review the details of the results.
Zillow Group’s management will first read the prepared remarks
and then answer questions submitted via Sli.do, in addition to
answering questions from dialed-in participants, during the live
conference call. Questions may be submitted at www.slido.com using
the event code #ZEarnings.
A link to the live webcast and recorded replay of the conference
call will be available on the investor relations section
of Zillow Group’s website
at http://investors.zillowgroup.com/results.cfm. The live call
may also be accessed via phone at (877) 643-7152 toll-free
domestically and at (443) 863-7921 internationally.
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 our business outlook, strategic priorities, and
operational plans for 2018. Statements containing words such as
“may,” “believe,” “anticipate,” “expect,” “intend,” “plan,”
“project,” “will,” “projections,” “continue,” “business outlook,”
“forecast,” “estimate,” “outlook,” “guidance,” or similar
expressions constitute forward-looking statements. 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, Zillow Group’s ability to maintain and
effectively manage an adequate rate of growth; Zillow Group’s
ability to innovate and provide products and services that are
attractive to its users and advertisers; Zillow Group’s ability to
compete successfully against existing or future competitors; Zillow
Group’s investment of resources to pursue strategies that may not
prove effective; the impact of the real estate industry on Zillow
Group’s business; the impact of pending litigation and other legal
and regulatory matters; Zillow Group’s ability to increase
awareness of the Zillow Group brands in a cost-effective manner;
Zillow Group’s ability to attract consumers to Zillow Group’s
mobile applications and websites; Zillow Group’s ability to
successfully integrate and realize the benefits of our past or
future strategic acquisitions or investments; the reliable
performance of Zillow Group’s network infrastructure and content
delivery processes; and Zillow Group’s ability to protect its
intellectual property. The foregoing list of risks and
uncertainties is illustrative, but is 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 December 31, 2016 filed with the Securities and
Exchange Commission, or 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 (including forecasted Adjusted
EBITDA) and non-GAAP net income (loss) per share, which are
non-GAAP financial measures. We have provided a reconciliation of
Adjusted EBITDA (historical and forecasted) to net income (loss)
(historical and forecasted), the most directly comparable GAAP
financial measure, and a reconciliation of net income (loss),
adjusted, to net loss, as reported on a GAAP basis, and the
calculations of non-GAAP net income (loss) per share - basic and
diluted, within this earnings release.
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. The
exclusion of certain expenses in calculating Adjusted EBITDA
facilitates operating performance comparisons on a period-to-period
basis.
Our use of Adjusted EBITDA has limitations as an
analytical tool, and you should not consider it 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 costs;
- Adjusted EBITDA does not reflect
acquisition-related costs;
- Adjusted EBITDA does not reflect
the gain on divestiture of business;
- Adjusted EBITDA does not reflect
interest expense or other income;
- Adjusted EBITDA does not reflect
the loss on debt extinguishment;
- Adjusted EBITDA does not reflect
income tax benefit (expense); 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 alongside other financial performance measures, including
various cash flow metrics, net loss and our other GAAP results.
Our presentation of non-GAAP net income (loss) per share
excludes the impact of share-based compensation expense, impairment
costs, acquisition-related costs, loss on debt extinguishment,
income tax benefit (expense) and the gain on divestiture of
business. 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 (loss) per share as supplemental information to investors,
as we believe the exclusion of share-based compensation expense,
impairment costs, acquisition-related costs, loss on debt
extinguishment, income tax benefit (expense) and the gain on
divestiture of business facilitates investors’ operating
performance comparisons on a period-to-period basis. You should not
consider these metrics in isolation or as substitutes for analysis
of our results as reported under GAAP.
About Zillow Group
Zillow Group (NASDAQ:Z) (NASDAQ:ZG) houses a portfolio of the
largest real estate and home-related brands on mobile and the web.
The company’s brands focus on all stages of the home lifecycle:
renting, buying, selling and financing. Zillow Group is committed
to empowering consumers with unparalleled data, inspiration and
knowledge around homes, and connecting them with the right local
professionals to help. The Zillow Group portfolio of consumer
brands includes real estate and rental marketplaces Zillow®,
Trulia®, StreetEasy®, HotPads®, Naked Apartments® and
RealEstate.com. In addition, Zillow Group provides a comprehensive
suite of marketing software and technology solutions to help real
estate, rental and mortgage professionals maximize business
opportunities and connect with millions of consumers. The company
operates a number of business brands for real estate, rental and
mortgage professionals, including Mortech®, dotloop®, Bridge
Interactive® and New Home Feed®. The company is headquartered
in Seattle.
Please visit http://investors.zillowgroup.com,
www.zillowgroup.com/ir-blog, and www.twitter.com/zillowgroup,
where Zillow Group discloses information about the company, its
financial information, and its business which may be deemed
material.
The Zillow Group logo is available at
http://zillowgroup.mediaroom.com/logos-photos.
Zillow, Premier Agent, Mortech, Bridge Interactive, StreetEasy,
HotPads and New Home Feed are registered trademarks of Zillow,
Inc. Trulia is a registered trademark of Trulia,
LLC. dotloop is a registered trademark of DotLoop, LLC. Naked
Apartments is a registered trademark of Naked Apartments,
LLC.
Twitter is a registered trademark of Twitter, Inc.
(ZFIN)
Reported Consolidated Results
|
ZILLOW GROUP, INC. |
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS |
(in thousands) |
|
|
|
|
|
|
|
December 31,
2017 |
|
December 31,
2016 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
352,095 |
|
|
$ |
243,592 |
|
Short-term investments |
|
410,444 |
|
|
|
263,923 |
|
Accounts
receivable, net |
|
54,396 |
|
|
|
40,527 |
|
Prepaid
expenses and other current assets |
|
24,590 |
|
|
|
34,817 |
|
Total current
assets |
|
841,525 |
|
|
|
582,859 |
|
Property and equipment,
net |
|
112,271 |
|
|
|
98,288 |
|
Goodwill |
|
1,931,076 |
|
|
|
1,923,480 |
|
Intangible assets,
net |
|
319,711 |
|
|
|
527,464 |
|
Other assets |
|
25,934 |
|
|
|
17,586 |
|
Total assets |
$ |
3,230,517 |
|
|
$ |
3,149,677 |
|
|
|
|
|
Liabilities and
shareholders’ equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
3,587 |
|
|
$ |
4,257 |
|
Accrued
expenses and other current liabilities |
|
61,373 |
|
|
|
38,427 |
|
Accrued
compensation and benefits |
|
19,109 |
|
|
|
24,057 |
|
Deferred
revenue |
|
31,918 |
|
|
|
29,154 |
|
Deferred
rent, current portion |
|
2,400 |
|
|
|
1,347 |
|
Total current
liabilities |
|
118,387 |
|
|
|
97,242 |
|
Deferred rent, net of
current portion |
|
21,330 |
|
|
|
15,298 |
|
Long-term debt |
|
385,416 |
|
|
|
367,404 |
|
Deferred tax
liabilities and other long-term liabilities |
|
44,561 |
|
|
|
136,146 |
|
Total liabilities |
|
569,694 |
|
|
|
616,090 |
|
Shareholders’
equity: |
|
|
|
Class A
common stock |
|
6 |
|
|
|
5 |
|
Class B
common stock |
|
1 |
|
|
|
1 |
|
Class C
capital stock |
|
13 |
|
|
|
12 |
|
Additional paid-in capital |
|
3,254,146 |
|
|
|
3,030,854 |
|
Accumulated other comprehensive loss |
|
(1,100 |
) |
|
|
(242 |
) |
Accumulated deficit |
|
(592,243 |
) |
|
|
(497,043 |
) |
Total shareholders’
equity |
|
2,660,823 |
|
|
|
2,533,587 |
|
Total liabilities and
shareholders’ equity |
$ |
3,230,517 |
|
|
$ |
3,149,677 |
|
|
|
|
|
|
|
ZILLOW GROUP, INC. |
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
(in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
282,330 |
|
|
$ |
227,612 |
|
|
$ |
1,076,794 |
|
|
$ |
846,589 |
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
Cost of
revenue (exclusive of amortization) (1)(2) |
|
22,559 |
|
|
|
18,706 |
|
|
|
85,203 |
|
|
|
69,262 |
|
|
Sales and
marketing (2) |
|
103,935 |
|
|
|
90,509 |
|
|
|
448,201 |
|
|
|
382,419 |
|
|
Technology and development (2) |
|
85,187 |
|
|
|
67,320 |
|
|
|
319,985 |
|
|
|
255,583 |
|
|
General
and administrative (2) |
|
57,778 |
|
|
|
47,832 |
|
|
|
210,816 |
|
|
|
332,007 |
|
|
Impairment costs |
|
174,000 |
|
|
|
- |
|
|
|
174,000 |
|
|
|
- |
|
|
Acquisition-related costs |
|
97 |
|
|
|
533 |
|
|
|
463 |
|
|
|
1,423 |
|
|
Gain on
divestiture of business |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,251 |
) |
|
Total costs and
expenses |
|
443,556 |
|
|
|
224,900 |
|
|
|
1,238,668 |
|
|
|
1,039,443 |
|
|
Income (loss) from
operations |
|
(161,226 |
) |
|
|
2,712 |
|
|
|
(161,874 |
) |
|
|
(192,854 |
) |
|
Loss on debt
extinguishment |
|
- |
|
|
|
(22,757 |
) |
|
|
- |
|
|
|
(22,757 |
) |
|
Other income |
|
1,415 |
|
|
|
716 |
|
|
|
5,385 |
|
|
|
2,711 |
|
|
Interest expense |
|
(6,991 |
) |
|
|
(2,668 |
) |
|
|
(27,517 |
) |
|
|
(7,408 |
) |
|
Loss before income
taxes |
|
(166,802 |
) |
|
|
(21,997 |
) |
|
|
(184,006 |
) |
|
|
(220,308 |
) |
|
Income tax benefit
(expense) |
|
89,627 |
|
|
|
(1,494 |
) |
|
|
89,586 |
|
|
|
(130 |
) |
|
Net loss |
$ |
(77,175 |
) |
|
$ |
(23,491 |
) |
|
$ |
(94,420 |
) |
|
$ |
(220,438 |
) |
|
Net loss per share —
basic and diluted |
$ |
(0.41 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.51 |
) |
|
$ |
(1.22 |
) |
|
Weighted-average shares
outstanding — basic and diluted |
|
189,439 |
|
|
|
181,852 |
|
|
|
186,453 |
|
|
|
180,149 |
|
|
_________ |
|
|
|
|
|
|
|
|
(1) Amortization of
website development costs and intangible assets included in
technology and development |
$ |
24,392 |
|
|
$ |
22,130 |
|
|
$ |
94,349 |
|
|
$ |
87,060 |
|
|
|
|
|
|
|
|
|
|
|
(2) Includes
share-based compensation expense as follows: |
|
|
|
|
|
|
|
|
Cost of
revenue |
$ |
942 |
|
|
$ |
888 |
|
|
$ |
3,884 |
|
|
$ |
3,550 |
|
|
Sales and
marketing |
|
5,041 |
|
|
|
5,754 |
|
|
|
22,735 |
|
|
|
23,320 |
|
|
Technology and development |
|
10,609 |
|
|
|
8,306 |
|
|
|
39,938 |
|
|
|
31,466 |
|
|
General
and administrative |
|
12,817 |
|
|
|
10,818 |
|
|
|
47,014 |
|
|
|
48,582 |
|
|
Total |
$ |
29,409 |
|
|
$ |
25,766 |
|
|
$ |
113,571 |
|
|
$ |
106,918 |
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Data: |
|
|
|
|
|
|
|
|
Adjusted EBITDA
(3) |
$ |
70,859 |
|
|
$ |
54,749 |
|
|
$ |
236,315 |
|
|
$ |
14,826 |
|
|
|
|
|
|
|
|
|
|
|
(3)
See above for more information regarding our presentation of
Adjusted EBITDA. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ZILLOW GROUP, INC. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS |
(in thousands) |
|
|
|
|
|
|
|
Year Ended |
|
|
December 31, |
|
|
|
2017 |
|
|
|
2016 |
|
Operating
activities |
|
|
|
|
Net loss |
|
$ |
(94,420 |
) |
|
$ |
(220,438 |
) |
Adjustments to
reconcile net loss to net cash provided by operating activities,
net of amounts assumed in connection with acquisitions: |
|
|
|
|
Depreciation and amortization |
|
|
110,155 |
|
|
|
100,590 |
|
Share-based compensation expense |
|
|
113,571 |
|
|
|
106,918 |
|
Loss on
debt extinguishment |
|
|
- |
|
|
|
22,757 |
|
Amortization of discount and issuance costs on 2021 Notes |
|
|
18,012 |
|
|
|
883 |
|
Impairment costs |
|
|
174,000 |
|
|
|
- |
|
Deferred
income taxes |
|
|
(89,586 |
) |
|
|
(1,370 |
) |
Loss on
disposal of property and equipment |
|
|
5,678 |
|
|
|
3,689 |
|
Gain on
divestiture of business |
|
|
- |
|
|
|
(1,360 |
) |
Bad debt
expense |
|
|
7,349 |
|
|
|
2,681 |
|
Deferred
rent |
|
|
7,085 |
|
|
|
1,730 |
|
Amortization of bond premium |
|
|
431 |
|
|
|
1,489 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
Accounts
receivable |
|
|
(21,203 |
) |
|
|
(13,324 |
) |
Prepaid
expenses and other assets |
|
|
10,807 |
|
|
|
(13,260 |
) |
Accounts
payable |
|
|
(373 |
) |
|
|
856 |
|
Accrued
expenses and other current liabilities |
|
|
19,000 |
|
|
|
(5,065 |
) |
Accrued
compensation and benefits |
|
|
(4,948 |
) |
|
|
12,463 |
|
Deferred
revenue |
|
|
2,633 |
|
|
|
7,794 |
|
Other
long-term liabilities |
|
|
- |
|
|
|
1,612 |
|
Net cash provided by
operating activities |
|
|
258,191 |
|
|
|
8,645 |
|
|
|
|
|
|
Investing
activities |
|
|
|
|
Proceeds from
maturities of investments |
|
|
259,227 |
|
|
|
199,369 |
|
Purchases of
investments |
|
|
(407,032 |
) |
|
|
(175,210 |
) |
Proceeds from sales of
investments |
|
|
- |
|
|
|
4,963 |
|
Purchases of property
and equipment |
|
|
(66,728 |
) |
|
|
(62,060 |
) |
Purchases of intangible
assets |
|
|
(11,907 |
) |
|
|
(9,662 |
) |
Purchases of cost
method investments |
|
|
(10,000 |
) |
|
|
(10,000 |
) |
Proceeds from
divestiture of a business |
|
|
579 |
|
|
|
3,200 |
|
Cash paid for
acquisitions, net |
|
|
(11,533 |
) |
|
|
(16,319 |
) |
Net cash used in
investing activities |
|
|
(247,394 |
) |
|
|
(65,719 |
) |
|
|
|
|
|
Financing
activities |
|
|
|
|
Proceeds from issuance
of 2021 Notes, net of issuance costs |
|
|
- |
|
|
|
447,784 |
|
Premiums paid for
Capped Call Confirmations |
|
|
- |
|
|
|
(36,616 |
) |
Partial repurchase of
2020 Notes |
|
|
- |
|
|
|
(370,235 |
) |
Proceeds from exercise
of stock options |
|
|
98,071 |
|
|
|
31,211 |
|
Value of equity awards
withheld for tax liability |
|
|
(365 |
) |
|
|
(616 |
) |
Net cash provided by
financing activities |
|
|
97,706 |
|
|
|
71,528 |
|
Net increase in cash
and cash equivalents during period |
|
|
108,503 |
|
|
|
14,454 |
|
Cash and cash
equivalents at beginning of period |
|
|
243,592 |
|
|
|
229,138 |
|
Cash and cash
equivalents at end of period |
|
$ |
352,095 |
|
|
$ |
243,592 |
|
|
|
|
|
|
Supplemental
disclosures of cash flow information |
|
|
|
|
Cash paid
for interest |
|
$ |
9,198 |
|
|
$ |
6,325 |
|
Noncash
transactions: |
|
|
|
|
Capitalized share-based compensation |
|
$ |
11,236 |
|
|
$ |
10,061 |
|
Write-off
of fully depreciated property and equipment |
|
$ |
15,004 |
|
|
$ |
14,564 |
|
Write-off
of fully amortized intangible assets |
|
$ |
5,473 |
|
|
$ |
9,293 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
The following table presents a reconciliation of Adjusted EBITDA
to net loss, the most directly comparable GAAP financial measure,
for each of the periods presented (in thousands, unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
Reconciliation
of Adjusted EBITDA to Net Loss: |
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(77,175 |
) |
|
$ |
(23,491 |
) |
|
$ |
(94,420 |
) |
|
$ |
(220,438 |
) |
|
Other income |
|
|
(1,415 |
) |
|
|
(716 |
) |
|
|
(5,385 |
) |
|
|
(2,711 |
) |
|
Depreciation and
amortization expense |
|
|
28,579 |
|
|
|
25,738 |
|
|
|
110,155 |
|
|
|
100,590 |
|
|
Share-based
compensation expense |
|
|
29,409 |
|
|
|
25,766 |
|
|
|
113,571 |
|
|
|
106,918 |
|
|
Impairment costs |
|
|
174,000 |
|
|
|
- |
|
|
|
174,000 |
|
|
|
- |
|
|
Acquisition-related
costs |
|
|
97 |
|
|
|
533 |
|
|
|
463 |
|
|
|
1,423 |
|
|
Gain on divestiture of
business |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,251 |
) |
|
Interest expense |
|
|
6,991 |
|
|
|
2,668 |
|
|
|
27,517 |
|
|
|
7,408 |
|
|
Loss on debt
extinguishment |
|
|
- |
|
|
|
22,757 |
|
|
|
- |
|
|
|
22,757 |
|
|
Income tax (benefit)
expense |
|
|
(89,627 |
) |
|
|
1,494 |
|
|
|
(89,586 |
) |
|
|
130 |
|
|
Adjusted
EBITDA (1) |
|
$ |
70,859 |
|
|
$ |
54,749 |
|
|
$ |
236,315 |
|
|
$ |
14,826 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the year ended December 31, 2016, Adjusted
EBITDA includes the impact of a $130.0 million litigation
settlement. Adjusted EBITDA for the year ended December 31, 2016
also includes $28.8 million in related legal costs.
Non-GAAP Net Income (Loss) per Share
The following table presents a reconciliation of net income
(loss), adjusted, to net loss, as reported on a GAAP basis, and the
calculation of non-GAAP net income (loss) per share - basic and
diluted, for each of the periods presented (in thousands, except
per share data, unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss, as
reported |
|
$ |
(77,175 |
) |
|
$ |
(23,491 |
) |
|
$ |
(94,420 |
) |
|
$ |
(220,438 |
) |
|
Share-based
compensation expense |
|
|
29,409 |
|
|
|
25,766 |
|
|
|
113,571 |
|
|
|
106,918 |
|
|
Impairment costs |
|
|
174,000 |
|
|
|
- |
|
|
|
174,000 |
|
|
|
- |
|
|
Acquisition-related
costs |
|
|
97 |
|
|
|
533 |
|
|
|
463 |
|
|
|
1,423 |
|
|
Loss on debt
extinguishment |
|
|
- |
|
|
|
22,757 |
|
|
|
- |
|
|
|
22,757 |
|
|
Income tax (benefit)
expense |
|
|
(89,627 |
) |
|
|
1,494 |
|
|
|
(89,586 |
) |
|
|
130 |
|
|
Gain on divestiture of
business |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,251 |
) |
|
Net
income (loss), adjusted |
|
$ |
36,704 |
|
|
$ |
27,059 |
|
|
$ |
104,028 |
|
|
$ |
(90,461 |
) |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
(loss) per share - basic |
|
$ |
0.19 |
|
|
$ |
0.15 |
|
|
$ |
0.56 |
|
|
$ |
(0.50 |
) |
|
Non-GAAP net income
(loss) per share - diluted |
|
$ |
0.19 |
|
|
$ |
0.14 |
|
|
$ |
0.53 |
|
|
$ |
(0.50 |
) |
|
Weighted-average shares
outstanding - basic |
|
|
189,439 |
|
|
|
181,852 |
|
|
|
186,453 |
|
|
|
180,149 |
|
|
Weighted-average shares
outstanding - diluted |
|
|
197,442 |
|
|
|
190,331 |
|
|
|
194,837 |
|
|
|
180,149 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by Type
The following tables present our revenue by type (in thousands,
unaudited) and as a percentage of total revenue for each of the
periods presented (unaudited):
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
Revenue: |
|
|
|
|
|
|
|
|
Marketplace
revenue: |
|
|
|
|
|
|
|
|
Premier
Agent |
$ |
199,514 |
|
|
$ |
164,335 |
|
|
$ |
761,594 |
|
|
$ |
604,292 |
|
|
Other
real estate |
|
47,564 |
|
|
|
29,788 |
|
|
|
164,991 |
|
|
|
102,635 |
|
|
Mortgages |
|
18,516 |
|
|
|
16,512 |
|
|
|
80,591 |
|
|
|
71,133 |
|
|
Total Marketplace
revenue |
|
265,594 |
|
|
|
210,635 |
|
|
|
1,007,176 |
|
|
|
778,060 |
|
|
Display revenue |
|
16,736 |
|
|
|
16,977 |
|
|
|
69,618 |
|
|
|
68,529 |
|
|
Total
revenue |
$ |
282,330 |
|
|
$ |
227,612 |
|
|
$ |
1,076,794 |
|
|
$ |
846,589 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
Percentage of
Total Revenue: |
|
|
|
|
|
|
|
|
Marketplace
revenue: |
|
|
|
|
|
|
|
|
Premier
Agent |
|
71 |
% |
|
|
72 |
% |
|
|
71 |
% |
|
|
71 |
% |
|
Other
real estate |
|
17 |
% |
|
|
13 |
% |
|
|
15 |
% |
|
|
12 |
% |
|
Mortgages |
|
7 |
% |
|
|
7 |
% |
|
|
7 |
% |
|
|
8 |
% |
|
Total Marketplace
revenue |
|
94 |
% |
|
|
93 |
% |
|
|
94 |
% |
|
|
92 |
% |
|
Display revenue |
|
6 |
% |
|
|
7 |
% |
|
|
6 |
% |
|
|
8 |
% |
|
Total
revenue |
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
Key Metrics
The following table sets forth our key metrics for each of the
periods presented:
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
2016 to 2017 |
|
|
2017 |
|
2016 |
|
% Change |
|
|
(in millions) |
|
|
|
Average Monthly Unique
Users (1) |
151.6 |
|
140.1 |
|
8 |
% |
|
Visits (2) |
1,435.6 |
|
1,189.7 |
|
21 |
% |
|
|
|
|
|
|
|
|
(1) Zillow, StreetEasy, HotPads, Naked Apartments and
RealEstate.com (as of June 2017) measure unique users with Google
Analytics, and Trulia measures unique users with Adobe Analytics
(formerly called Omniture analytical tools).
(2) Visits includes visits to the Zillow, Trulia,
StreetEasy (as of March 2017) and RealEstate.com (as of June 2017)
mobile apps and websites. We measure Zillow, StreetEasy and
RealEstate.com visits with Google Analytics and Trulia visits with
Adobe Analytics.
Reconciliation of Forecasted Adjusted EBITDA to
Forecasted Net Income (Loss)
The following table presents a reconciliation of forecasted
Adjusted EBITDA to forecasted net income (loss) at the midpoint of
the range for each of the periods presented (in thousands,
unaudited):
|
|
|
|
|
|
|
Three Months Ending |
|
Year Ending |
|
|
March 31, 2018 |
|
December 31, 2018 |
Reconciliation
of Forecasted Adjusted EBITDA to Forecasted Net Income
(Loss): |
|
|
|
|
Forecasted Net income
(loss) |
|
$ |
(15,800 |
) |
|
$ |
45,500 |
|
Forecasted Other
income |
|
|
(1,500 |
) |
|
|
(5,200 |
) |
Forecasted Depreciation
and amortization expense |
|
|
28,000 |
|
|
|
120,500 |
|
Forecasted Share-based
compensation expense |
|
|
27,000 |
|
|
|
124,500 |
|
Forecasted Interest
expense |
|
|
6,800 |
|
|
|
27,200 |
|
Forecasted Income tax
benefit |
|
|
- |
|
|
|
(5,000 |
) |
Forecasted Adjusted EBITDA |
|
$ |
44,500 |
|
|
$ |
307,500 |
|
|
|
|
|
|
Contacts:
Raymond JonesInvestor
Relationsir@zillowgroup.com
Katie CurnuttePublic
Relationspress@zillow.com
A photo accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/3afbfd73-a73e-49a0-bbaa-c71b0d19eebf
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