|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Washington
|
|
47-1645716
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification No.)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Class A Common Stock, par value $0.0001 per share
|
ZG
|
The Nasdaq Global Select Market
|
Class C Capital Stock, par value $0.0001 per share
|
Z
|
The Nasdaq Global Select Market
|
Large accelerated filer
|
|
☒
|
|
Accelerated filer
|
|
☐
|
|
|
|
|
|
|
|
Non-accelerated filer
|
|
☐
|
|
Smaller reporting company
|
|
☐
|
|
|
|
|
|
|
|
|
|
|
|
Emerging growth company
|
|
☐
|
|
|
|
Page
|
|
|
|
|
|
|
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
|
|
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
||
|
|
|
|
•
|
Zillow Group Investor Relations Webpage (http://investors.zillowgroup.com)
|
•
|
Zillow Group Investor Relations Blog (http://www.zillowgroup.com/ir-blog)
|
•
|
Zillow Group Twitter Account (https://twitter.com/zillowgroup)
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
766,698
|
|
|
$
|
651,058
|
|
Short-term investments
|
673,029
|
|
|
903,867
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $4,809 and $4,838 at June 30, 2019 and December 31, 2018, respectively
|
82,261
|
|
|
66,083
|
|
||
Mortgage loans held for sale
|
38,653
|
|
|
35,409
|
|
||
Inventory
|
552,823
|
|
|
162,829
|
|
||
Prepaid expenses and other current assets
|
62,062
|
|
|
61,067
|
|
||
Restricted cash
|
43,882
|
|
|
12,385
|
|
||
Total current assets
|
2,219,408
|
|
|
1,892,698
|
|
||
Contract cost assets
|
46,271
|
|
|
45,819
|
|
||
Property and equipment, net
|
145,932
|
|
|
135,172
|
|
||
Right of use assets
|
210,080
|
|
|
—
|
|
||
Goodwill
|
1,984,907
|
|
|
1,984,907
|
|
||
Intangible assets, net
|
202,824
|
|
|
215,904
|
|
||
Other assets
|
16,498
|
|
|
16,616
|
|
||
Total assets
|
$
|
4,825,920
|
|
|
$
|
4,291,116
|
|
Liabilities and shareholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
8,028
|
|
|
$
|
7,471
|
|
Accrued expenses and other current liabilities
|
68,520
|
|
|
63,101
|
|
||
Accrued compensation and benefits
|
32,001
|
|
|
31,388
|
|
||
Revolving credit facilities
|
409,799
|
|
|
116,700
|
|
||
Warehouse lines of credit
|
30,057
|
|
|
33,018
|
|
||
Deferred revenue
|
37,080
|
|
|
34,080
|
|
||
Deferred rent, current portion
|
—
|
|
|
1,740
|
|
||
Lease liabilities, current portion
|
18,794
|
|
|
—
|
|
||
Total current liabilities
|
604,279
|
|
|
287,498
|
|
||
Deferred rent, net of current portion
|
—
|
|
|
19,945
|
|
||
Lease liabilities, net of current portion
|
211,593
|
|
|
—
|
|
||
Long-term debt
|
716,819
|
|
|
699,020
|
|
||
Deferred tax liabilities and other long-term liabilities
|
15,123
|
|
|
17,474
|
|
||
Total liabilities
|
1,547,814
|
|
|
1,023,937
|
|
||
Commitments and contingencies (Note 17)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, $0.0001 par value; 30,000,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Class A common stock, $0.0001 par value; 1,245,000,000 shares authorized; 58,474,815 and 58,051,448 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively
|
6
|
|
|
6
|
|
||
Class B common stock, $0.0001 par value; 15,000,000 shares authorized; 6,217,447 shares issued and outstanding as of June 30, 2019 and December 31, 2018
|
1
|
|
|
1
|
|
||
Class C capital stock, $0.0001 par value; 600,000,000 shares authorized; 141,821,374 and 139,635,370 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively
|
14
|
|
|
14
|
|
||
Additional paid-in capital
|
4,088,470
|
|
|
3,939,842
|
|
||
Accumulated other comprehensive income (loss)
|
896
|
|
|
(905
|
)
|
||
Accumulated deficit
|
(811,281
|
)
|
|
(671,779
|
)
|
||
Total shareholders’ equity
|
3,278,106
|
|
|
3,267,179
|
|
||
Total liabilities and shareholders’ equity
|
$
|
4,825,920
|
|
|
$
|
4,291,116
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
IMT
|
$
|
323,669
|
|
|
$
|
305,941
|
|
|
$
|
621,941
|
|
|
$
|
586,797
|
|
Homes
|
248,924
|
|
|
—
|
|
|
377,396
|
|
|
—
|
|
||||
Mortgages
|
26,985
|
|
|
19,305
|
|
|
54,345
|
|
|
38,328
|
|
||||
Total revenue
|
599,578
|
|
|
325,246
|
|
|
1,053,682
|
|
|
625,125
|
|
||||
Cost of revenue (exclusive of amortization) (1):
|
|
|
|
|
|
|
|
||||||||
IMT
|
26,059
|
|
|
24,290
|
|
|
50,310
|
|
|
46,884
|
|
||||
Homes
|
240,732
|
|
|
—
|
|
|
363,151
|
|
|
86
|
|
||||
Mortgages
|
4,430
|
|
|
1,237
|
|
|
9,108
|
|
|
2,476
|
|
||||
Total cost of revenue
|
271,221
|
|
|
25,527
|
|
|
422,569
|
|
|
49,446
|
|
||||
Sales and marketing
|
187,433
|
|
|
147,727
|
|
|
349,020
|
|
|
285,018
|
|
||||
Technology and development
|
120,330
|
|
|
100,376
|
|
|
228,100
|
|
|
194,309
|
|
||||
General and administrative
|
82,839
|
|
|
60,579
|
|
|
178,613
|
|
|
116,652
|
|
||||
Acquisition-related costs
|
—
|
|
|
632
|
|
|
—
|
|
|
659
|
|
||||
Integration costs
|
293
|
|
|
—
|
|
|
645
|
|
|
—
|
|
||||
Total costs and expenses
|
662,116
|
|
|
334,841
|
|
|
1,178,947
|
|
|
646,084
|
|
||||
Loss from operations
|
(62,538
|
)
|
|
(9,595
|
)
|
|
(125,265
|
)
|
|
(20,959
|
)
|
||||
Other income
|
9,458
|
|
|
3,089
|
|
|
18,626
|
|
|
5,535
|
|
||||
Interest expense
|
(18,897
|
)
|
|
(7,187
|
)
|
|
(35,363
|
)
|
|
(14,260
|
)
|
||||
Loss before income taxes
|
(71,977
|
)
|
|
(13,693
|
)
|
|
(142,002
|
)
|
|
(29,684
|
)
|
||||
Income tax benefit
|
—
|
|
|
10,600
|
|
|
2,500
|
|
|
8,000
|
|
||||
Net loss
|
$
|
(71,977
|
)
|
|
$
|
(3,093
|
)
|
|
$
|
(139,502
|
)
|
|
$
|
(21,684
|
)
|
Net loss per share — basic and diluted
|
$
|
(0.35
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.68
|
)
|
|
$
|
(0.11
|
)
|
Weighted-average shares outstanding — basic and diluted
|
205,754
|
|
|
194,155
|
|
|
205,137
|
|
|
192,807
|
|
||||
____________________
(1) Amortization of website development costs and intangible assets included in technology and development
|
$
|
14,656
|
|
|
$
|
21,020
|
|
|
$
|
29,056
|
|
|
$
|
43,569
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net loss
|
$
|
(71,977
|
)
|
|
$
|
(3,093
|
)
|
|
$
|
(139,502
|
)
|
|
$
|
(21,684
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Unrealized gains (losses) on investments
|
751
|
|
|
223
|
|
|
1,895
|
|
|
(109
|
)
|
||||
Currency translation adjustments
|
(52
|
)
|
|
(44
|
)
|
|
(94
|
)
|
|
(66
|
)
|
||||
Total other comprehensive income (loss)
|
699
|
|
|
179
|
|
|
1,801
|
|
|
(175
|
)
|
||||
Comprehensive loss
|
$
|
(71,278
|
)
|
|
$
|
(2,914
|
)
|
|
$
|
(137,701
|
)
|
|
$
|
(21,859
|
)
|
|
Class A Common
Stock, Class B
Common Stock and
Class C Capital Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Income
|
|
Total
Shareholders’
Equity
|
||||||||||||||
Shares
|
|
Amount
|
|
||||||||||||||||||||
Balance at April 1, 2019
|
205,130,332
|
|
|
$
|
21
|
|
|
$
|
4,022,218
|
|
|
$
|
(739,304
|
)
|
|
$
|
197
|
|
|
$
|
3,283,132
|
|
|
Issuance of common and capital stock upon exercise of stock options
|
814,062
|
|
|
—
|
|
|
19,433
|
|
|
—
|
|
|
—
|
|
|
19,433
|
|
||||||
Vesting of restricted stock units
|
569,260
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares and value of restricted stock units withheld for tax liability
|
(18
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
46,820
|
|
|
—
|
|
|
—
|
|
|
46,820
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(71,977
|
)
|
|
—
|
|
|
(71,977
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
699
|
|
|
699
|
|
||||||
Balance at June 30, 2019
|
206,513,636
|
|
|
$
|
21
|
|
|
$
|
4,088,470
|
|
|
$
|
(811,281
|
)
|
|
$
|
896
|
|
|
$
|
3,278,106
|
|
|
Class A Common
Stock, Class B
Common Stock and
Class C Capital Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Shareholders’
Equity
|
||||||||||||||
Shares
|
|
Amount
|
|
||||||||||||||||||||
Balance at April 1, 2018
|
192,944,326
|
|
|
$
|
20
|
|
|
$
|
3,340,387
|
|
|
$
|
(570,512
|
)
|
|
$
|
(1,454
|
)
|
|
$
|
2,768,441
|
|
|
Issuance of common and capital stock upon exercise of stock options
|
2,065,545
|
|
|
—
|
|
|
46,747
|
|
|
—
|
|
|
—
|
|
|
46,747
|
|
||||||
Vesting of restricted stock units
|
439,944
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares and value of restricted stock units withheld for tax liability
|
(711
|
)
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
41,444
|
|
|
—
|
|
|
—
|
|
|
41,444
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,093
|
)
|
|
—
|
|
|
(3,093
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
179
|
|
|
179
|
|
||||||
Balance at June 30, 2018
|
195,449,104
|
|
|
$
|
20
|
|
|
$
|
3,428,541
|
|
|
$
|
(573,605
|
)
|
|
$
|
(1,275
|
)
|
|
$
|
2,853,681
|
|
|
Class A Common
Stock, Class B
Common Stock and
Class C Capital Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Shareholders’
Equity
|
||||||||||||||
Shares
|
|
Amount
|
|
||||||||||||||||||||
Balance at January 1, 2019
|
203,904,265
|
|
|
$
|
21
|
|
|
$
|
3,939,842
|
|
|
$
|
(671,779
|
)
|
|
$
|
(905
|
)
|
|
$
|
3,267,179
|
|
|
Issuance of common and capital stock upon exercise of stock options
|
1,543,850
|
|
|
—
|
|
|
32,997
|
|
|
—
|
|
|
—
|
|
|
32,997
|
|
||||||
Vesting of restricted stock units
|
1,065,607
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares and value of restricted stock units withheld for tax liability
|
(86
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
115,634
|
|
|
—
|
|
|
—
|
|
|
115,634
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(139,502
|
)
|
|
—
|
|
|
(139,502
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,801
|
|
|
1,801
|
|
||||||
Balance at June 30, 2019
|
206,513,636
|
|
|
$
|
21
|
|
|
$
|
4,088,470
|
|
|
$
|
(811,281
|
)
|
|
$
|
896
|
|
|
$
|
3,278,106
|
|
|
Class A Common
Stock, Class B
Common Stock and
Class C Capital Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Shareholders’
Equity
|
||||||||||||||
Shares
|
|
Amount
|
|
||||||||||||||||||||
Balance at January 1, 2018
|
190,115,148
|
|
|
$
|
20
|
|
|
$
|
3,254,146
|
|
|
$
|
(592,243
|
)
|
|
$
|
(1,100
|
)
|
|
$
|
2,660,823
|
|
|
Cumulative-effect adjustment from adoption of guidance on revenue from contracts with customers
|
—
|
|
|
—
|
|
|
—
|
|
|
40,322
|
|
|
—
|
|
|
40,322
|
|
||||||
Issuance of common and capital stock upon exercise of stock options
|
4,479,759
|
|
|
—
|
|
|
99,653
|
|
|
—
|
|
|
—
|
|
|
99,653
|
|
||||||
Vesting of restricted stock units
|
834,788
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares and value of restricted stock units withheld for tax liability
|
(1,318
|
)
|
|
—
|
|
|
(65
|
)
|
|
—
|
|
|
—
|
|
|
(65
|
)
|
||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
74,307
|
|
|
—
|
|
|
—
|
|
|
74,307
|
|
||||||
Portion of conversion recorded in additional paid-in-capital in connection with partial conversion of convertible notes maturing in 2020
|
20,727
|
|
|
—
|
|
|
500
|
|
|
—
|
|
|
—
|
|
|
500
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,684
|
)
|
|
—
|
|
|
(21,684
|
)
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(175
|
)
|
|
(175
|
)
|
||||||
Balance at June 30, 2018
|
195,449,104
|
|
|
$
|
20
|
|
|
$
|
3,428,541
|
|
|
$
|
(573,605
|
)
|
|
$
|
(1,275
|
)
|
|
$
|
2,853,681
|
|
|
Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Operating activities
|
|
|
|
||||
Net loss
|
$
|
(139,502
|
)
|
|
$
|
(21,684
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
41,728
|
|
|
52,926
|
|
||
Share-based compensation expense
|
109,756
|
|
|
69,684
|
|
||
Amortization of right of use assets
|
10,572
|
|
|
—
|
|
||
Amortization of contract cost assets
|
17,880
|
|
|
18,309
|
|
||
Amortization of discount and issuance costs on convertible notes maturing in 2023 and 2021
|
17,799
|
|
|
9,504
|
|
||
Deferred income taxes
|
(2,500
|
)
|
|
(8,000
|
)
|
||
Loss on disposal of property and equipment
|
3,878
|
|
|
2,106
|
|
||
Bad debt expense
|
706
|
|
|
(352
|
)
|
||
Deferred rent
|
—
|
|
|
(2,845
|
)
|
||
Accretion of bond discount
|
(3,695
|
)
|
|
(504
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(16,884
|
)
|
|
(9,335
|
)
|
||
Mortgage loans held for sale
|
(3,244
|
)
|
|
—
|
|
||
Inventory
|
(389,994
|
)
|
|
(5,666
|
)
|
||
Prepaid expenses and other assets
|
(2,015
|
)
|
|
(14,697
|
)
|
||
Lease liabilities
|
(11,946
|
)
|
|
—
|
|
||
Contract cost assets
|
(18,332
|
)
|
|
(21,371
|
)
|
||
Accounts payable
|
1,256
|
|
|
1,855
|
|
||
Accrued expenses and other current liabilities
|
6,952
|
|
|
(5,189
|
)
|
||
Accrued compensation and benefits
|
613
|
|
|
4,309
|
|
||
Deferred revenue
|
3,000
|
|
|
4,002
|
|
||
Other long-term liabilities
|
149
|
|
|
—
|
|
||
Net cash provided by (used in) operating activities
|
(373,823
|
)
|
|
73,052
|
|
||
Investing activities
|
|
|
|
||||
Proceeds from maturities of investments
|
539,312
|
|
|
172,573
|
|
||
Purchases of investments
|
(302,891
|
)
|
|
(230,276
|
)
|
||
Purchases of property and equipment
|
(29,672
|
)
|
|
(31,212
|
)
|
||
Purchases of intangible assets
|
(8,927
|
)
|
|
(4,777
|
)
|
||
Net cash provided by (used in) investing activities
|
197,822
|
|
|
(93,692
|
)
|
||
Financing activities
|
|
|
|
||||
Proceeds from borrowing on revolving credit facilities
|
293,099
|
|
|
—
|
|
||
Net repayments on warehouse lines of credit
|
(2,961
|
)
|
|
—
|
|
||
Proceeds from exercise of stock options
|
32,997
|
|
|
99,656
|
|
||
Value of equity awards withheld for tax liability
|
3
|
|
|
(66
|
)
|
||
Net cash provided by financing activities
|
323,138
|
|
|
99,590
|
|
||
Net increase in cash, cash equivalents and restricted cash during period
|
147,137
|
|
|
78,950
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
663,443
|
|
|
352,095
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
810,580
|
|
|
$
|
431,045
|
|
Supplemental disclosures of cash flow information
|
|
|
|
||||
Cash paid for interest
|
$
|
16,616
|
|
|
$
|
4,733
|
|
Noncash transactions:
|
|
|
|
||||
Capitalized share-based compensation
|
$
|
5,878
|
|
|
$
|
4,623
|
|
Write-off of fully depreciated property and equipment
|
$
|
9,867
|
|
|
$
|
13,293
|
|
Write-off of fully amortized intangible assets
|
$
|
3,311
|
|
|
$
|
10,797
|
|
•
|
Level 1—Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2—Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.
|
•
|
Level 3—Unobservable inputs that are supported by little or no market activity; instruments valued based on the best available data, some of which is internally developed, and considers risk premiums that a market participant would require.
|
|
June 30, 2019
|
||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
Money market funds
|
$
|
641,436
|
|
|
$
|
641,436
|
|
|
$
|
—
|
|
Short-term investments:
|
|
|
|
|
|
||||||
U.S. government agency securities
|
446,736
|
|
|
—
|
|
|
446,736
|
|
|||
Corporate notes and bonds
|
94,922
|
|
|
—
|
|
|
94,922
|
|
|||
Commercial paper
|
87,062
|
|
|
—
|
|
|
87,062
|
|
|||
Municipal securities
|
33,352
|
|
|
—
|
|
|
33,352
|
|
|||
Foreign government securities
|
5,997
|
|
|
—
|
|
|
5,997
|
|
|||
Certificates of deposit
|
1,481
|
|
|
—
|
|
|
1,481
|
|
|||
Treasury bills
|
3,479
|
|
|
—
|
|
|
3,479
|
|
|||
Mortgage origination-related:
|
|
|
|
|
|
||||||
Mortgage loans held for sale
|
38,653
|
|
|
—
|
|
|
38,653
|
|
|||
IRLCs
|
1,186
|
|
|
—
|
|
|
1,186
|
|
|||
Forward contracts - other current assets
|
32
|
|
|
—
|
|
|
32
|
|
|||
Forward contracts - other current liabilities
|
(225
|
)
|
|
—
|
|
|
(225
|
)
|
|||
Total
|
$
|
1,354,111
|
|
|
$
|
641,436
|
|
|
$
|
712,675
|
|
|
December 31, 2018
|
||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
Money market funds
|
$
|
541,575
|
|
|
$
|
541,575
|
|
|
$
|
—
|
|
Commercial paper
|
3,999
|
|
|
—
|
|
|
3,999
|
|
|||
Short-term investments:
|
|
|
|
|
|
||||||
U.S. government agency securities
|
646,496
|
|
|
—
|
|
|
646,496
|
|
|||
Corporate notes and bonds
|
112,933
|
|
|
—
|
|
|
112,933
|
|
|||
Commercial paper
|
85,506
|
|
|
—
|
|
|
85,506
|
|
|||
Municipal securities
|
39,306
|
|
|
—
|
|
|
39,306
|
|
|||
Foreign government securities
|
14,915
|
|
|
—
|
|
|
14,915
|
|
|||
Certificates of deposit
|
4,711
|
|
|
—
|
|
|
4,711
|
|
|||
Mortgage origination-related:
|
|
|
|
|
|
||||||
Mortgage loans held for sale
|
35,409
|
|
|
—
|
|
|
35,409
|
|
|||
IRLCs
|
847
|
|
|
—
|
|
|
847
|
|
|||
Forward contracts - other current liabilities
|
(125
|
)
|
|
—
|
|
|
(125
|
)
|
|||
Total
|
$
|
1,485,572
|
|
|
$
|
541,575
|
|
|
$
|
943,997
|
|
|
June 30, 2019
|
||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Market
Value
|
||||||||
Cash
|
$
|
125,262
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
125,262
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
641,436
|
|
|
—
|
|
|
—
|
|
|
641,436
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. government agency securities
|
446,098
|
|
|
668
|
|
|
(30
|
)
|
|
446,736
|
|
||||
Corporate notes and bonds
|
94,739
|
|
|
184
|
|
|
(1
|
)
|
|
94,922
|
|
||||
Commercial paper
|
87,062
|
|
|
—
|
|
|
—
|
|
|
87,062
|
|
||||
Municipal securities
|
33,253
|
|
|
99
|
|
|
—
|
|
|
33,352
|
|
||||
Foreign government securities
|
5,996
|
|
|
1
|
|
|
—
|
|
|
5,997
|
|
||||
Certificates of deposit
|
1,481
|
|
|
—
|
|
|
—
|
|
|
1,481
|
|
||||
Treasury bills
|
3,475
|
|
|
4
|
|
|
—
|
|
|
3,479
|
|
||||
Restricted cash
|
43,882
|
|
|
—
|
|
|
—
|
|
|
43,882
|
|
||||
Total
|
$
|
1,482,684
|
|
|
$
|
956
|
|
|
$
|
(31
|
)
|
|
$
|
1,483,609
|
|
|
December 31, 2018
|
||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Market
Value
|
||||||||
Cash
|
$
|
105,484
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
105,484
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
541,575
|
|
|
—
|
|
|
—
|
|
|
541,575
|
|
||||
Commercial paper
|
3,999
|
|
|
—
|
|
|
—
|
|
|
3,999
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. government agency securities
|
647,266
|
|
|
51
|
|
|
(821
|
)
|
|
646,496
|
|
||||
Corporate notes and bonds
|
113,109
|
|
|
1
|
|
|
(177
|
)
|
|
112,933
|
|
||||
Commercial paper
|
85,506
|
|
|
—
|
|
|
—
|
|
|
85,506
|
|
||||
Municipal securities
|
39,316
|
|
|
23
|
|
|
(33
|
)
|
|
39,306
|
|
||||
Foreign government securities
|
14,929
|
|
|
—
|
|
|
(14
|
)
|
|
14,915
|
|
||||
Certificates of deposit
|
4,711
|
|
|
1
|
|
|
(1
|
)
|
|
4,711
|
|
||||
Restricted cash
|
12,385
|
|
|
—
|
|
|
—
|
|
|
12,385
|
|
||||
Total
|
$
|
1,568,280
|
|
|
$
|
76
|
|
|
$
|
(1,046
|
)
|
|
$
|
1,567,310
|
|
|
Amortized
Cost
|
|
Estimated Fair
Market Value
|
||||
Due in one year or less
|
$
|
651,437
|
|
|
$
|
652,206
|
|
Due after one year through two years
|
20,667
|
|
|
20,823
|
|
||
Total
|
$
|
672,104
|
|
|
$
|
673,029
|
|
Balance as of January 1, 2019
|
$
|
4,838
|
|
Bad debt expense
|
706
|
|
|
Less: write-offs, net of recoveries and other adjustments
|
(735
|
)
|
|
Balance as of June 30, 2019
|
$
|
4,809
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Work-in-progress
|
$
|
174,272
|
|
|
$
|
45,943
|
|
Finished goods
|
378,551
|
|
|
116,886
|
|
||
Inventory
|
$
|
552,823
|
|
|
$
|
162,829
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Website development costs
|
$
|
153,905
|
|
|
$
|
149,891
|
|
Leasehold improvements
|
77,737
|
|
|
65,012
|
|
||
Office equipment, furniture and fixtures
|
43,484
|
|
|
39,510
|
|
||
Construction-in-progress
|
27,293
|
|
|
29,037
|
|
||
Computer equipment
|
23,024
|
|
|
22,477
|
|
||
Property and equipment
|
325,443
|
|
|
305,927
|
|
||
Less: accumulated amortization and depreciation
|
(179,511
|
)
|
|
(170,755
|
)
|
||
Property and equipment, net
|
$
|
145,932
|
|
|
$
|
135,172
|
|
|
June 30, 2019
|
||||||||||
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Purchased content
|
$
|
43,886
|
|
|
$
|
(35,555
|
)
|
|
$
|
8,331
|
|
Software
|
28,807
|
|
|
(16,850
|
)
|
|
11,957
|
|
|||
Customer relationships
|
103,600
|
|
|
(67,257
|
)
|
|
36,343
|
|
|||
Developed technology
|
109,080
|
|
|
(76,869
|
)
|
|
32,211
|
|
|||
Trade names and trademarks
|
4,400
|
|
|
(4,400
|
)
|
|
—
|
|
|||
Lender licenses
|
400
|
|
|
(117
|
)
|
|
283
|
|
|||
Intangibles-in-progress
|
5,699
|
|
|
—
|
|
|
5,699
|
|
|||
Total
|
$
|
295,872
|
|
|
$
|
(201,048
|
)
|
|
$
|
94,824
|
|
|
December 31, 2018
|
||||||||||
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Purchased content
|
$
|
42,110
|
|
|
$
|
(30,477
|
)
|
|
$
|
11,633
|
|
Software
|
24,296
|
|
|
(13,925
|
)
|
|
10,371
|
|
|||
Customer relationships
|
103,900
|
|
|
(60,733
|
)
|
|
43,167
|
|
|||
Developed technology
|
111,980
|
|
|
(72,788
|
)
|
|
39,192
|
|
|||
Trade names and trademarks
|
4,900
|
|
|
(4,683
|
)
|
|
217
|
|
|||
Lender licenses
|
400
|
|
|
(17
|
)
|
|
383
|
|
|||
Intangibles-in-progress
|
2,941
|
|
|
—
|
|
|
2,941
|
|
|||
Total
|
$
|
290,527
|
|
|
$
|
(182,623
|
)
|
|
$
|
107,904
|
|
|
Three Months Ended
June 30, 2019 |
||
Balance as of April 1, 2019
|
$
|
36,105
|
|
Deferral of revenue
|
259,132
|
|
|
Less: Revenue recognized
|
(258,157
|
)
|
|
Balance as of June 30, 2019
|
$
|
37,080
|
|
|
Six Months Ended
June 30, 2019 |
||
Balance as of January 1, 2019
|
$
|
34,080
|
|
Deferral of revenue
|
501,984
|
|
|
Less: Revenue recognized
|
(498,984
|
)
|
|
Balance as of June 30, 2019
|
$
|
37,080
|
|
|
Three Months Ended
June 30, 2019 |
|
Six Months Ended
June 30, 2019 |
||||
Operating lease cost
|
$
|
9,004
|
|
|
$
|
15,527
|
|
Variable lease cost
|
4,965
|
|
|
9,746
|
|
||
Total lease cost
|
$
|
13,969
|
|
|
$
|
25,273
|
|
Remainder of 2019
|
$
|
15,106
|
|
2020
|
37,558
|
|
|
2021
|
41,089
|
|
|
2022
|
37,173
|
|
|
2023
|
34,990
|
|
|
All future years
|
164,992
|
|
|
Total lease payments
|
330,908
|
|
|
Less: Imputed interest
|
(100,521
|
)
|
|
Present value of lease liabilities
|
$
|
230,387
|
|
2019
|
$
|
29,085
|
|
2020
|
38,060
|
|
|
2021
|
40,099
|
|
|
2022
|
37,721
|
|
|
2023
|
36,458
|
|
|
All future years
|
85,462
|
|
|
Total future minimum lease payments
|
$
|
266,885
|
|
Effective Date
|
|
Maximum Borrowing Capacity
|
|
Outstanding Borrowings at
June 30, 2019
|
|
Outstanding Borrowings at December 31, 2018
|
|
Weighted Average Interest Rate
|
|||||||
July 31, 2018
|
|
$
|
500,000
|
|
|
$
|
265,097
|
|
|
$
|
116,700
|
|
|
5.97
|
%
|
January 31, 2019
|
|
500,000
|
|
|
144,702
|
|
|
—
|
|
|
5.95
|
%
|
|||
Total
|
|
$
|
1,000,000
|
|
|
$
|
409,799
|
|
|
$
|
116,700
|
|
|
|
Maturity Date
|
|
Maximum Borrowing Capacity
|
|
Outstanding Borrowings at
June 30, 2019
|
|
Outstanding Borrowings at December 31, 2018
|
|
Weighted Average Interest Rate
|
|||||||
July 15, 2019
|
|
$
|
50,000
|
|
|
$
|
15,722
|
|
|
$
|
14,125
|
|
|
4.95
|
%
|
June 27, 2020
|
|
50,000
|
|
|
14,335
|
|
|
18,892
|
|
|
4.95
|
%
|
|||
Total
|
|
$
|
100,000
|
|
|
$
|
30,057
|
|
|
$
|
33,017
|
|
|
|
Maturity Date
|
|
Aggregate Principal Amount
|
|
Fair Value at
June 30, 2019
|
|
Fair Value at December 31, 2018
|
|
Stated Interest Rate
|
|
Effective Interest Rate
|
||||||||
July 1, 2023
|
|
$
|
373,750
|
|
|
$
|
370,095
|
|
|
$
|
321,855
|
|
|
1.50
|
%
|
|
6.99
|
%
|
December 1, 2021
|
|
460,000
|
|
|
521,318
|
|
|
446,200
|
|
|
2.00
|
%
|
|
7.44
|
%
|
|||
December 15, 2020
|
|
9,637
|
|
|
16,842
|
|
|
16,744
|
|
|
2.75
|
%
|
|
N/A
|
|
|||
Total
|
|
$
|
843,387
|
|
|
$
|
908,255
|
|
|
$
|
784,799
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Expected volatility
|
45%
|
|
43%
|
|
45%-47%
|
|
43%-45%
|
Expected dividend yield
|
—
|
|
—
|
|
—
|
|
—
|
Risk-free interest rate
|
2.00%
|
|
2.70%
|
|
2.00%-2.53%
|
|
2.52%-2.70%
|
Weighted-average expected life
|
5.00 years
|
|
4.50 years
|
|
4.75-5.25 years
|
|
4.50-5.00 years
|
Weighted-average fair value of options granted
|
$16.96
|
|
$23.30
|
|
$16.79
|
|
$21.07
|
|
Restricted
Stock Units
|
|
Weighted-
Average Grant-
Date Fair
Value
|
|||
Unvested outstanding at January 1, 2019
|
5,266,324
|
|
|
$
|
42.19
|
|
Granted
|
3,638,550
|
|
|
39.32
|
|
|
Vested
|
(1,065,607
|
)
|
|
39.46
|
|
|
Forfeited or cancelled
|
(601,829
|
)
|
|
41.23
|
|
|
Unvested outstanding at June 30, 2019
|
7,237,438
|
|
|
41.23
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cost of revenue
|
$
|
936
|
|
|
$
|
1,256
|
|
|
$
|
1,816
|
|
|
$
|
2,211
|
|
Sales and marketing
|
6,801
|
|
|
6,340
|
|
|
12,451
|
|
|
11,502
|
|
||||
Technology and development
|
18,399
|
|
|
14,347
|
|
|
33,908
|
|
|
25,889
|
|
||||
General and administrative
|
17,496
|
|
|
17,000
|
|
|
61,581
|
|
|
30,082
|
|
||||
Total
|
$
|
43,632
|
|
|
$
|
38,943
|
|
|
$
|
109,756
|
|
|
$
|
69,684
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Weighted-average Class A common stock and Class C capital stock option awards outstanding
|
19,502
|
|
|
27,428
|
|
|
19,656
|
|
|
24,393
|
|
Weighted-average Class A common stock and Class C capital stock restricted stock units outstanding
|
7,230
|
|
|
5,246
|
|
|
6,548
|
|
|
4,799
|
|
Class A common stock issuable upon conversion of the convertible notes maturing in 2020
|
411
|
|
|
402
|
|
|
411
|
|
|
402
|
|
Class C capital stock issuable related to conversion spread on the convertible notes maturing in 2021
|
—
|
|
|
997
|
|
|
—
|
|
|
997
|
|
Total Class A common stock and Class C capital stock equivalents
|
27,143
|
|
|
34,073
|
|
|
26,615
|
|
|
30,591
|
|
|
Three Months Ended
June 30, 2019 |
|
Three Months Ended
June 30, 2018 |
||||||||||||||||||||
|
IMT
|
|
Homes
|
|
Mortgages
|
|
IMT
|
|
Homes
|
|
Mortgages
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Premier Agent
|
$
|
231,961
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
230,885
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Rentals
|
42,670
|
|
|
—
|
|
|
—
|
|
|
33,288
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
49,038
|
|
|
—
|
|
|
—
|
|
|
41,768
|
|
|
—
|
|
|
—
|
|
||||||
Homes
|
—
|
|
|
248,924
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Mortgages
|
—
|
|
|
—
|
|
|
26,985
|
|
|
—
|
|
|
—
|
|
|
19,305
|
|
||||||
Total revenue
|
323,669
|
|
|
248,924
|
|
|
26,985
|
|
|
305,941
|
|
|
—
|
|
|
19,305
|
|
||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of revenue
|
26,059
|
|
|
240,732
|
|
|
4,430
|
|
|
24,290
|
|
|
—
|
|
|
1,237
|
|
||||||
Sales and marketing
|
135,440
|
|
|
37,409
|
|
|
14,584
|
|
|
137,972
|
|
|
2,095
|
|
|
7,660
|
|
||||||
Technology and development
|
94,261
|
|
|
18,198
|
|
|
7,871
|
|
|
91,131
|
|
|
3,790
|
|
|
5,455
|
|
||||||
General and administrative
|
54,671
|
|
|
17,808
|
|
|
10,360
|
|
|
52,438
|
|
|
4,176
|
|
|
3,965
|
|
||||||
Acquisition-related costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
632
|
|
||||||
Integration costs
|
—
|
|
|
—
|
|
|
293
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total costs and expenses
|
310,431
|
|
|
314,147
|
|
|
37,538
|
|
|
305,831
|
|
|
10,061
|
|
|
18,949
|
|
||||||
Income (loss) from operations
|
13,238
|
|
|
(65,223
|
)
|
|
(10,553
|
)
|
|
110
|
|
|
(10,061
|
)
|
|
356
|
|
||||||
Segment other income
|
—
|
|
|
—
|
|
|
402
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Segment interest expense
|
—
|
|
|
(5,899
|
)
|
|
(287
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Income (loss) before income taxes (1)
|
$
|
13,238
|
|
|
$
|
(71,122
|
)
|
|
$
|
(10,438
|
)
|
|
$
|
110
|
|
|
$
|
(10,061
|
)
|
|
$
|
356
|
|
|
Six Months Ended
June 30, 2019 |
|
Six Months Ended
June 30, 2018 |
||||||||||||||||||||
|
IMT
|
|
Homes
|
|
Mortgages
|
|
IMT
|
|
Homes
|
|
Mortgages
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Premier Agent
|
$
|
449,696
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
444,617
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Rentals
|
80,508
|
|
|
—
|
|
|
—
|
|
|
62,351
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
91,737
|
|
|
—
|
|
|
—
|
|
|
79,829
|
|
|
—
|
|
|
—
|
|
||||||
Homes
|
—
|
|
|
377,396
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Mortgages
|
—
|
|
|
—
|
|
|
54,345
|
|
|
—
|
|
|
—
|
|
|
38,328
|
|
||||||
Total revenue
|
621,941
|
|
|
377,396
|
|
|
54,345
|
|
|
586,797
|
|
|
—
|
|
|
38,328
|
|
||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of revenue
|
50,310
|
|
|
363,151
|
|
|
9,108
|
|
|
46,884
|
|
|
86
|
|
|
2,476
|
|
||||||
Sales and marketing
|
262,094
|
|
|
58,271
|
|
|
28,655
|
|
|
266,719
|
|
|
2,385
|
|
|
15,914
|
|
||||||
Technology and development
|
182,230
|
|
|
30,479
|
|
|
15,391
|
|
|
177,048
|
|
|
6,026
|
|
|
11,235
|
|
||||||
General and administrative
|
125,521
|
|
|
32,165
|
|
|
20,927
|
|
|
102,625
|
|
|
5,954
|
|
|
8,073
|
|
||||||
Acquisition-related costs
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
632
|
|
||||||
Integration costs
|
—
|
|
|
—
|
|
|
645
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total costs and expenses
|
620,155
|
|
|
484,066
|
|
|
74,726
|
|
|
593,303
|
|
|
14,451
|
|
|
38,330
|
|
||||||
Income (loss) from operations
|
1,786
|
|
|
(106,670
|
)
|
|
(20,381
|
)
|
|
(6,506
|
)
|
|
(14,451
|
)
|
|
(2
|
)
|
||||||
Segment other income
|
—
|
|
|
—
|
|
|
715
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Segment interest expense
|
—
|
|
|
(9,657
|
)
|
|
(388
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Income (loss) before income taxes (1)
|
$
|
1,786
|
|
|
$
|
(116,327
|
)
|
|
$
|
(20,054
|
)
|
|
$
|
(6,506
|
)
|
|
$
|
(14,451
|
)
|
|
$
|
(2
|
)
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Total segment loss before income taxes
|
$
|
(68,322
|
)
|
|
$
|
(9,595
|
)
|
|
$
|
(134,595
|
)
|
|
$
|
(20,959
|
)
|
Corporate interest expense
|
(12,711
|
)
|
|
(7,187
|
)
|
|
(25,318
|
)
|
|
(14,260
|
)
|
||||
Corporate other income
|
9,056
|
|
|
3,089
|
|
|
17,911
|
|
|
5,535
|
|
||||
Consolidated loss before income taxes
|
$
|
(71,977
|
)
|
|
$
|
(13,693
|
)
|
|
$
|
(142,002
|
)
|
|
$
|
(29,684
|
)
|
|
Three Months Ended
June 30, |
|
2018 to 2019
% Change
|
|||||
|
2019
|
|
2018
|
|
||||
|
(in millions)
|
|
|
|||||
Average Monthly Unique Users
|
194.3
|
|
|
186.1
|
|
|
4
|
%
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands, except per share data, unaudited)
|
||||||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
IMT
|
$
|
323,669
|
|
|
$
|
305,941
|
|
|
$
|
621,941
|
|
|
$
|
586,797
|
|
Homes
|
248,924
|
|
|
—
|
|
|
377,396
|
|
|
—
|
|
||||
Mortgages
|
26,985
|
|
|
19,305
|
|
|
54,345
|
|
|
38,328
|
|
||||
Total revenue
|
599,578
|
|
|
325,246
|
|
|
1,053,682
|
|
|
625,125
|
|
||||
Cost of revenue (exclusive of amortization) (1)(2):
|
|
|
|
|
|
|
|
||||||||
IMT
|
26,059
|
|
|
24,290
|
|
|
50,310
|
|
|
46,884
|
|
||||
Homes
|
240,732
|
|
|
—
|
|
|
363,151
|
|
|
86
|
|
||||
Mortgages
|
4,430
|
|
|
1,237
|
|
|
9,108
|
|
|
2,476
|
|
||||
Total cost of revenue
|
271,221
|
|
|
25,527
|
|
|
422,569
|
|
|
49,446
|
|
||||
Sales and marketing (1)
|
187,433
|
|
|
147,727
|
|
|
349,020
|
|
|
285,018
|
|
||||
Technology and development (1)
|
120,330
|
|
|
100,376
|
|
|
228,100
|
|
|
194,309
|
|
||||
General and administrative (1)
|
82,839
|
|
|
60,579
|
|
|
178,613
|
|
|
116,652
|
|
||||
Acquisition-related costs
|
—
|
|
|
632
|
|
|
—
|
|
|
659
|
|
||||
Integration costs
|
293
|
|
|
—
|
|
|
645
|
|
|
—
|
|
||||
Total costs and expenses
|
662,116
|
|
|
334,841
|
|
|
1,178,947
|
|
|
646,084
|
|
||||
Loss from operations
|
(62,538
|
)
|
|
(9,595
|
)
|
|
(125,265
|
)
|
|
(20,959
|
)
|
||||
Other income
|
9,458
|
|
|
3,089
|
|
|
18,626
|
|
|
5,535
|
|
||||
Interest expense
|
(18,897
|
)
|
|
(7,187
|
)
|
|
(35,363
|
)
|
|
(14,260
|
)
|
||||
Loss before income taxes
|
(71,977
|
)
|
|
(13,693
|
)
|
|
(142,002
|
)
|
|
(29,684
|
)
|
||||
Income tax benefit
|
—
|
|
|
10,600
|
|
|
2,500
|
|
|
8,000
|
|
||||
Net loss
|
$
|
(71,977
|
)
|
|
$
|
(3,093
|
)
|
|
$
|
(139,502
|
)
|
|
$
|
(21,684
|
)
|
Net loss per share — basic and diluted
|
$
|
(0.35
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.68
|
)
|
|
$
|
(0.11
|
)
|
Weighted-average shares outstanding — basic and diluted
|
205,754
|
|
|
194,155
|
|
|
205,137
|
|
|
192,807
|
|
||||
Other Financial Data:
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA (3)
|
$
|
2,297
|
|
|
$
|
56,000
|
|
|
$
|
26,219
|
|
|
$
|
102,310
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
|
(unaudited)
|
||||||||||
Percentage of Revenue:
|
|
|
|
|
|
|
|
||||
Revenue:
|
|
|
|
|
|
|
|
||||
IMT
|
54
|
%
|
|
94
|
%
|
|
59
|
%
|
|
94
|
%
|
Homes
|
42
|
|
|
0
|
|
|
36
|
|
|
0
|
|
Mortgages
|
5
|
|
|
6
|
|
|
5
|
|
|
6
|
|
Total revenue
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
Cost of revenue (exclusive of amortization):
|
|
|
|
|
|
|
|
||||
IMT
|
4
|
|
|
8
|
|
|
5
|
|
|
8
|
|
Homes
|
40
|
|
|
0
|
|
|
34
|
|
|
—
|
|
Mortgages
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
Total cost of revenue
|
45
|
|
|
8
|
|
|
40
|
|
|
8
|
|
Sales and marketing
|
31
|
|
|
45
|
|
|
33
|
|
|
46
|
|
Technology and development
|
20
|
|
|
31
|
|
|
22
|
|
|
31
|
|
General and administrative
|
14
|
|
|
19
|
|
|
17
|
|
|
19
|
|
Acquisition-related costs
|
0
|
|
|
—
|
|
|
0
|
|
|
—
|
|
Integration costs
|
—
|
|
|
0
|
|
|
—
|
|
|
0
|
|
Total costs and expenses
|
110
|
|
|
103
|
|
|
112
|
|
|
103
|
|
Loss from operations
|
(10
|
)
|
|
(3
|
)
|
|
(12
|
)
|
|
(3
|
)
|
Other income
|
2
|
|
|
1
|
|
|
2
|
|
|
1
|
|
Interest expense
|
(3
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
(2
|
)
|
Loss before income taxes
|
(12
|
)
|
|
(4
|
)
|
|
(13
|
)
|
|
(5
|
)
|
Income tax benefit
|
0
|
|
|
3
|
|
|
—
|
|
|
1
|
|
Net loss
|
(12
|
)%
|
|
(1
|
)%
|
|
(13
|
)%
|
|
(3
|
)%
|
•
|
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 acquisition-related costs;
|
•
|
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.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands, unaudited)
|
||||||||||||||
Reconciliation of Adjusted EBITDA to Net Loss:
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(71,977
|
)
|
|
$
|
(3,093
|
)
|
|
$
|
(139,502
|
)
|
|
$
|
(21,684
|
)
|
Other income
|
(9,458
|
)
|
|
(3,089
|
)
|
|
(18,626
|
)
|
|
(5,535
|
)
|
||||
Depreciation and amortization expense
|
21,203
|
|
|
26,020
|
|
|
41,728
|
|
|
52,926
|
|
||||
Share-based compensation expense
|
43,632
|
|
|
38,943
|
|
|
109,756
|
|
|
69,684
|
|
||||
Acquisition-related costs
|
—
|
|
|
632
|
|
|
—
|
|
|
659
|
|
||||
Interest expense
|
18,897
|
|
|
7,187
|
|
|
35,363
|
|
|
14,260
|
|
||||
Income tax benefit
|
—
|
|
|
(10,600
|
)
|
|
(2,500
|
)
|
|
(8,000
|
)
|
||||
Adjusted EBITDA
|
$
|
2,297
|
|
|
$
|
56,000
|
|
|
$
|
26,219
|
|
|
$
|
102,310
|
|
|
Three Months Ended
June 30, |
|
2018 to 2019
% Change
|
|||||||
|
2019
|
|
2018
|
|
||||||
Percentage of Revenue:
|
|
|
|
|||||||
IMT Revenue:
|
|
|
|
|
|
|||||
Premier Agent
|
$
|
231,961
|
|
|
$
|
230,885
|
|
|
—
|
%
|
Rentals
|
42,670
|
|
|
33,288
|
|
|
28
|
%
|
||
Other
|
49,038
|
|
|
41,768
|
|
|
17
|
%
|
||
Total IMT revenue
|
323,669
|
|
|
305,941
|
|
|
6
|
%
|
||
Homes
|
248,924
|
|
|
—
|
|
|
N/A
|
|
||
Mortgages
|
26,985
|
|
|
19,305
|
|
|
40
|
%
|
||
Total revenue
|
$
|
599,578
|
|
|
$
|
325,246
|
|
|
84
|
%
|
|
Three Months Ended
June 30, |
||||
|
2019
|
|
2018
|
||
Percentage of Total Revenue:
|
|
|
|
||
IMT Revenue:
|
|
|
|
||
Premier Agent
|
39
|
%
|
|
71
|
%
|
Rentals
|
7
|
|
|
10
|
|
Other
|
8
|
|
|
13
|
|
Total IMT revenue
|
54
|
|
|
94
|
|
Homes
|
42
|
|
|
0
|
|
Mortgages
|
5
|
|
|
6
|
|
Total revenue
|
100
|
%
|
|
100
|
%
|
|
Six Months Ended
June 30, |
|
2018 to 2019
% Change
|
|||||||
|
2019
|
|
2018
|
|
||||||
Percentage of Revenue:
|
|
|
|
|||||||
IMT Revenue:
|
|
|
|
|
|
|||||
Premier Agent
|
$
|
449,696
|
|
|
$
|
444,617
|
|
|
1
|
%
|
Rentals
|
80,508
|
|
|
62,351
|
|
|
29
|
%
|
||
Other
|
91,737
|
|
|
79,829
|
|
|
15
|
%
|
||
Total IMT revenue
|
621,941
|
|
|
586,797
|
|
|
6
|
%
|
||
Homes
|
377,396
|
|
|
—
|
|
|
N/A
|
|
||
Mortgages
|
54,345
|
|
|
38,328
|
|
|
42
|
%
|
||
Total revenue
|
$
|
1,053,682
|
|
|
$
|
625,125
|
|
|
69
|
%
|
|
Six Months Ended
June 30, |
||||
|
2019
|
|
2018
|
||
Percentage of Total Revenue:
|
|
|
|
||
IMT Revenue:
|
|
|
|
||
Premier Agent
|
43
|
%
|
|
71
|
%
|
Rentals
|
8
|
|
|
10
|
|
Other
|
9
|
|
|
13
|
|
Total IMT revenue
|
59
|
|
|
94
|
|
Homes
|
36
|
|
|
0
|
|
Mortgages
|
5
|
|
|
6
|
|
Total revenue
|
100
|
%
|
|
100
|
%
|
|
Three Months Ended
June 30, 2019 |
|
Three Months Ended
June 30, 2018 |
||||||||||||||||||||
|
IMT
|
|
Homes
|
|
Mortgages
|
|
IMT
|
|
Homes
|
|
Mortgages
|
||||||||||||
Revenue
|
$
|
323,669
|
|
|
$
|
248,924
|
|
|
$
|
26,985
|
|
|
$
|
305,941
|
|
|
$
|
—
|
|
|
$
|
19,305
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of revenue
|
26,059
|
|
|
240,732
|
|
|
4,430
|
|
|
24,290
|
|
|
—
|
|
|
1,237
|
|
||||||
Sales and marketing
|
135,440
|
|
|
37,409
|
|
|
14,584
|
|
|
137,972
|
|
|
2,095
|
|
|
7,660
|
|
||||||
Technology and development
|
94,261
|
|
|
18,198
|
|
|
7,871
|
|
|
91,131
|
|
|
3,790
|
|
|
5,455
|
|
||||||
General and administrative
|
54,671
|
|
|
17,808
|
|
|
10,360
|
|
|
52,438
|
|
|
4,176
|
|
|
3,965
|
|
||||||
Acquisition-related costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
632
|
|
||||||
Integration costs
|
—
|
|
|
—
|
|
|
293
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total costs and expenses
|
310,431
|
|
|
314,147
|
|
|
37,538
|
|
|
305,831
|
|
|
10,061
|
|
|
18,949
|
|
||||||
Income (loss) from operations
|
13,238
|
|
|
(65,223
|
)
|
|
(10,553
|
)
|
|
110
|
|
|
(10,061
|
)
|
|
356
|
|
||||||
Other income
|
—
|
|
|
—
|
|
|
402
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Interest expense
|
—
|
|
|
(5,899
|
)
|
|
(287
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Income (loss) before income taxes (1)
|
$
|
13,238
|
|
|
$
|
(71,122
|
)
|
|
$
|
(10,438
|
)
|
|
$
|
110
|
|
|
$
|
(10,061
|
)
|
|
$
|
356
|
|
|
Three Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Total segment loss before income taxes
|
$
|
(68,322
|
)
|
|
$
|
(9,595
|
)
|
Corporate interest expense
|
(12,711
|
)
|
|
(7,187
|
)
|
||
Corporate other income
|
9,056
|
|
|
3,089
|
|
||
Consolidated loss before income taxes
|
$
|
(71,977
|
)
|
|
$
|
(13,693
|
)
|
|
Six Months Ended
June 30, 2019 |
|
Six Months Ended
June 30, 2018 |
||||||||||||||||||||
|
IMT
|
|
Homes
|
|
Mortgages
|
|
IMT
|
|
Homes
|
|
Mortgages
|
||||||||||||
Revenue
|
$
|
621,941
|
|
|
$
|
377,396
|
|
|
$
|
54,345
|
|
|
$
|
586,797
|
|
|
$
|
—
|
|
|
$
|
38,328
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of revenue
|
50,310
|
|
|
363,151
|
|
|
9,108
|
|
|
46,884
|
|
|
86
|
|
|
2,476
|
|
||||||
Sales and marketing
|
262,094
|
|
|
58,271
|
|
|
28,655
|
|
|
266,719
|
|
|
2,385
|
|
|
15,914
|
|
||||||
Technology and development
|
182,230
|
|
|
30,479
|
|
|
15,391
|
|
|
177,048
|
|
|
6,026
|
|
|
11,235
|
|
||||||
General and administrative
|
125,521
|
|
|
32,165
|
|
|
20,927
|
|
|
102,625
|
|
|
5,954
|
|
|
8,073
|
|
||||||
Acquisition-related costs
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
632
|
|
||||||
Integration costs
|
—
|
|
|
—
|
|
|
645
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total costs and expenses
|
620,155
|
|
|
484,066
|
|
|
74,726
|
|
|
593,303
|
|
|
14,451
|
|
|
38,330
|
|
||||||
Income (loss) from operations
|
1,786
|
|
|
(106,670
|
)
|
|
(20,381
|
)
|
|
(6,506
|
)
|
|
(14,451
|
)
|
|
(2
|
)
|
||||||
Other income
|
—
|
|
|
—
|
|
|
715
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Interest expense
|
—
|
|
|
(9,657
|
)
|
|
(388
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Income (loss) before income taxes (1)
|
$
|
1,786
|
|
|
$
|
(116,327
|
)
|
|
$
|
(20,054
|
)
|
|
$
|
(6,506
|
)
|
|
$
|
(14,451
|
)
|
|
$
|
(2
|
)
|
|
Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Total segment loss before income taxes
|
$
|
(134,595
|
)
|
|
$
|
(20,959
|
)
|
Corporate interest expense
|
(25,318
|
)
|
|
(14,260
|
)
|
||
Corporate other income
|
17,911
|
|
|
5,535
|
|
||
Consolidated loss before income taxes
|
$
|
(142,002
|
)
|
|
$
|
(29,684
|
)
|
|
Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
|
(in thousands, unaudited)
|
||||||
Cash Flow Data:
|
|
|
|
||||
Net cash provided by (used in) operating activities
|
$
|
(373,823
|
)
|
|
$
|
73,052
|
|
Net cash provided by (used in) investing activities
|
197,822
|
|
|
(93,692
|
)
|
||
Net cash provided by financing activities
|
323,138
|
|
|
99,590
|
|
Exhibit
Number
|
|
Description
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document).
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
Dated: August 7, 2019
|
|
ZILLOW GROUP, INC.
|
|
|
|
|
|
|
|
By:
|
/s/ JENNIFER ROCK
|
|
|
Name:
|
Jennifer Rock
|
|
|
Title:
|
Chief Accounting Officer
|
1.
|
I have reviewed this report on Form 10-Q of Zillow Group, Inc. for the fiscal quarter ended June 30, 2019;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
By:
|
/s/ RICHARD BARTON
|
|
Name:
|
Richard Barton
|
|
Title:
|
Chief Executive Officer
|
|
Date:
|
August 7, 2019
|
1.
|
I have reviewed this report on Form 10-Q of Zillow Group, Inc. for the fiscal quarter ended June 30, 2019;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
By:
|
/s/ ALLEN PARKER
|
|
Name:
|
Allen Parker
|
|
Title:
|
Chief Financial Officer
|
|
Date:
|
August 7, 2019
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
By:
|
/s/ RICHARD BARTON
|
|
Name:
|
Richard Barton
|
|
Title:
|
Chief Executive Officer
|
|
Date:
|
August 7, 2019
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
By:
|
/s/ ALLEN PARKER
|
|
Name:
|
Allen Parker
|
|
Title:
|
Chief Financial Officer
|
|
Date:
|
August 7, 2019
|