The one that changes the way people purchase, rent, sell, and finance homes known as Zillow Group, Inc., has announced its consolidated financial results for the three months, which ended on September 30, 2020. You are able to find the full financial results and outlook for the 4th quarter of 2020 in the shareholder letter of the company on the investor relations section of the official website of Zillow. Here is the link to take you there: https://investors.zillowgroup.com/investors/financials/quarterly-results/default.aspx.
The co-founder and the CEO of Zillow Group named Rich Barton stated that the strong third quarter of the company results reflect impressive execution during a time of challenge and opportunity. He added that everyone is evaluating where they live and how they live, which has started a Great Reshuffling, and ways to get a better place are definitely needed. Due to the current event (Covid-19 pandemic), the real way is to set up new digital solutions for both life and work. It causes record demand for housing and record engagement with the popular digital real estate brands of Zillow. When you combine it with the level headed cost decisions, the result has shown profitable growth.
Investor Relations stats:
- Revenue in Q3 2020: $657M
- Average monthly unique users in Q3 2020: 236M
- Visits in Q3 2020: 2.8B
- Homes in Living Database: 135M
- Employees: 5,400
The highlights of the third quarter of 2020 include:
- The total consolidated revenue reached $657 million and the revenue of all three segments surpassed the high end of the revenue outlook of the company for the third quarter.
- According to the report released by no other than Zillow, the segment income (loss) before income taxes was $140 million, $76 million and $11 million for IMT, Homes, and Mortgage segments, respectively, and $40 million was the consolidated GAAP net income.
- The offered EBITDA surpassed the high end outlook for the company for all three segments, bringing Adjusted EBITDA of $152 million home.
- Traffic to the mobile apps and websites of the Zillow Group broke a record of 236 million average monthly unique users. It is definitely an increase of 21% year over year, making 2.8 billion visits during the quarter, which is an increase of 32% year over year.
- Zillow Group ended the quarter with the highest cash and investments balance in its history, increasing the cash and investments from the previously $3.5 billion to $3.8 billion at the end of the Q2 2020.
This following table shows the financial highlights of the third quarter 2020:
| Three Months Ended September 30 | 2019 to 2020 % change | Nine Months Ended September 30 | 2019 to 2020 % Change | |||
| 2020 | 2019 | 2020 | 2019 | |||
| Revenue | ||||||
| Homes segment | ||||||
| Zillow Offers | $ 185,904 | $ 384,626 | (52)% | $ 1,408,832 | $ 762,022 | 85% |
| Other (1) | 1,201 | · | N/A | 2,398 | · | N/A |
| Total Homes segment revenue | 187,105 | 384,626 | (51)% | 1,411,230 | 762,022 | 85% |
| IMT segment | ||||||
| Premier Agent | 298,673 | 240,698 | 24% | 732,741 | 690,394 | 6% |
| Other (2) | 116,716 | 94,592 | 23% | 293,653 | 266,837 | 10% |
| Total IMT segment revenue | 415,389 | 335,290 | 24% | 1,026,394 | 957,231 | 7% |
| Mortgage segment | 54,198 | 25,292 | 114% | 113,241 | 79,637 | 42% |
| Total revenue | $ 656,692 | $ 745,208 | (12)% | $ 2,550,865 | $ 1,798,890 | 42% |
| Other Financial Data: | ||||||
| Segment income (loss) before income taxes: | ||||||
| Homes segment | $ (75,617) | $ (87,870) | ||||
| IMT segment | 139,956 | 42,053 | ||||
| Mortgage segment | 10,594 | (12,254) | ||||
| Total segment income (loss) before income taxes | $ 74,933 | $ (64,071) | ||||
| Net income (loss) | $ 39,670 | $ (64,649) | ||||
| Adjusted EBITDA (3): | ||||||
| Homes segment | $ (59,176) | $ (67,825) | ||||
| IMT segment | 195,895 | 91,102 | ||||
| Mortgages segment | 15,895 | (7,435) | ||||
| Total Adjusted EBITDA | $ 152,184 | $ 15,842 | ||||
| Percentage of Revenue: | ||||||
| Segment income (loss) before income taxes: | ||||||
| Homes segment | (40)% | (23)% | ||||
| IMT segment | 34 | 13 | ||||
| Mortgages segment | 20 | (48) | ||||
| Total segment income (loss) before income taxes | 11% | (8)% | ||||
| Net income (loss) | 6% | (9)% | ||||
| Adjusted EBITDA: | ||||||
| Homes segment | (32)% | (!8)% | ||||
| IMT segment | 47 | 27 | ||||
| Mortgages segment | 29 | (29) | ||||
| Total Adjusted EBITDA | 23% | 2% | ||||
Note:
- The other homes segment revenue such as revenue generated through Zillow Closing Services.
- The revenue generated by rentals, new construction and display, and the revenue from the sale of some different kinds of marketing and business products and services to the real estate professionals are included in the other IMT segment revenue.
- Adjusted EBITDA is known as a non-GAAP financial measure and it is not either calculated or presented in accordance with U.S generally accepted accounting principles, which is also more known as GAAP.
The CEO and the co-founder of Zillow Group, Rich Barton, and the CFO Allen Parker hosted a live conference call to discuss the results of the investor relations. The recorded replay of the live conference may be accessed on the official website of Zillow Group, on the Quarterly Results section for the exact.
The press release contained forward looking statements about the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which included the risks and uncertainties such as without limitation, statements about the future performance and operation of the business and the current and future health and stability of the residential housing market and economy and the things expected by them about the future shifts in behavior by both consumers and employees. The sentences that contained the words such as may, believe, expect, anticipate, plan, intend, project, will, predict, continue, outlook, projections, estimate, guidance, or some other forward looking statements. They were all made based on assumptions as of November 5, 2020, and even though people believe the expectations reflected in those statements make sense, there is no guarantee about the results. What makes it different between the actual results by Zillow Group and from those described in these forward looking statements may result from actions taken by the company as well as from risks and uncertainties beyond the control of the company. There are some factors that may contribute to such differences, but the pandemic, the other public health crisis, any associated economic downturn on the future financial position of the company, the current and future health, and stability of the economy also play a role.
