Adjustments for Non-Cash Items (USD, millions)

Stock-Based Compensation (USD, millions)

Changes in Working Capital (USD, millions)

Capital Expenditures (CapEx) (USD, millions)

Proceeds from / Repayments of Debt (USD, millions)

Share Repurchases (USD, millions)

Dividend Payments (USD, millions)

Net Change in Cash (USD, millions)

970ffe24c4a6b1fb3e757dad345dd892cd78ea8472f9140151a780f3a78633eb

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be01cb59c64ac0e1c1d8a6e417379f18300058ab6f18ce9db7c8b0068912900f

Residential

Rentals

Mortgages

Other

Total Revenue

891cdc43b1d1e459a1d598b8a8e98709a7f8121ea543f55f7d584b65e724bf6d

1. Given the ongoing regulatory changes and recent NAR settlements, how do you anticipate these industry evolutions will impact Zillow's Premier Agent business, particularly concerning commission rates and your relationships with top agents?

2. You mentioned that stock-based compensation expenses are down year-over-year and that you plan to leverage them going forward; can you provide specific targets for stock-based compensation over the next two years and elaborate on how this will contribute to achieving sustained GAAP profitability?

3. With Zillow Showcase now representing nearly 1.5% of new listings, what challenges are you encountering in scaling this product to your medium-term goal of 5–10% of total active listings, and how are you addressing operational hurdles and agent adoption to accelerate this growth?

4. Despite maintaining your annual fixed cost run rate at approximately $1 billion, how do you plan to manage variable costs, especially in marketing and advertising, to ensure EBITDA margin expansion in a potentially prolonged choppy macro environment with high mortgage rates?

5. As you settle your convertible senior notes and repurchase shares, reducing your cash and investments, how do you balance returning capital to shareholders with the need to invest in growth opportunities, and what impact might this have on your financial flexibility amid potential macroeconomic headwinds?

0be6636286e977c3c22564fbdc08993239946d6ac047069df1088d087cd12edc

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

Zillow Group, Inc. (ZG) operates as a leading real estate technology company, providing a comprehensive platform for real estate listings, information, and services. The company connects users with real estate professionals and offers tools for buying, selling, renting, and financing homes. Its offerings include advertising and marketing services, mortgage origination, and innovative technology solutions tailored to the real estate market.  **[0001617640-24-000022_z-20231231.htm:48]** **[0001617640-24-000022_z-20231231.htm:3]** 

1. **Internet, Media & Technology (IMT)** - Provides a platform for real estate listings, rentals, and advertising services. Includes sub-products such as:
   - **Premier Agent** - Offers advertising opportunities for real estate agents to connect with potential buyers and sellers.
   - **Rentals** - Facilitates rental property listings and advertising for property managers and rental agents.
   - **Other IMT** - Includes new construction marketplaces, business technology solutions like ShowingTime+, and other advertising services.  **[0001617640-23-000006_q42022992.htm:4]** 

2. **Mortgages** - Operates Zillow Home Loans, offering mortgage origination services and reselling mortgages on the secondary market. Also includes advertising sold to mortgage lenders.  **[0001617640-23-000006_q42022992.htm:4]** **[0001617640-24-000022_z-20231231.htm:3]** 

3. **Homes** - Provides title and escrow services through Zillow Closing Services, supporting real estate transactions.  **[0001617640-22-000106_z-20220930.htm:38]**

72c212851f9a1c042b035b99effd9e0365f400315f350236365f1a5aecd25022

| Program Details           | Program 1            |
|---------------------------|----------------------|
| Approval Date             | N/A                  |
| End Date/Duration         | N/A                  |
| Total Additional Amount   | **$2.5 billion**  **[0001617640-24-000126_z-20240930.htm:21]** **[0001617640-24-000126_z-20240930.htm:50]**  |
| Remaining Authorization   | **$381 million**  **[0001617640-24-000126_z-20240930.htm:21]** **[0001617640-24-000126_z-20240930.htm:50]**  |
| Details                   | Includes repurchase of Class A common stock, Class C capital stock, and outstanding Notes.  **[0001617640-24-000126_z-20240930.htm:21]** **[0001617640-24-000126_z-20240930.htm:50]**  |

0503d53c5f119327a5bac6871a9ee6767fe32d309a92acb2f9af8b4a75822e7f

cb4ee9e74c2e997ed1cacebd3879bbcbcb62d31a4e594b14d5747bd80445d7b6

Residential Revenue per Visit ($)

Revenue per Avg Monthly Rentals Visitor ($)

Gain on Sale Margin (%)

cf4c556bbda76c93659cc713b7bc8721674d982ee94216ddb50a03b5112b7dde

| Name               | Position                                   | Start Date         | Short Bio                                                                                                                                                                                                                     |
|--------------------|-------------------------------------------|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Richard N. Barton  | Co-Founder, Co-Executive Chairman         | August 2024        | Co-founded Zillow in **2004**. Served as CEO from **2004–2010** and **2019–2024**. Transitioned to Co-Executive Chairman in **August 2024**.  **[0001617640-24-000061_z-20240415.htm:7]** **[0001617640-24-000095_exhibit993.htm:0]** **[ZG_3397080_1]**                                                                      |
| Lloyd D. Frink     | Co-Founder, Co-Executive Chairman         | August 2024        | Co-founded Zillow in **2004**. Held various leadership roles, including President since **2005** and Executive Chairman since **2019**. Transitioned to Co-Executive Chairman in **August 2024**.  **[0001617640-23-000056_z-20230426.htm:8]** **[0001617640-24-000061_z-20240415.htm:7]** **[0001617640-24-000095_z-20240807.htm:2]**                   |
| Jeremy Wacksman    | Chief Executive Officer                   | August 2024        | Joined Zillow in **2009**. Held roles such as COO (2021–2024) and President (2019–2021). Became CEO in **August 2024**.  **[0001617640-24-000095_z-20240807.htm:2]** **[0001617640-24-000061_z-20240415.htm:34]** **[0001617640-24-000061_z-20240415.htm:32]**                                                                                            |
| Jun Choo           | Chief Operating Officer                   | November 2024      | Joined Zillow in **2015** via Trulia acquisition. Held leadership roles, including SVP of Real Estate Software (2022–2024). Became COO in **November 2024**.  **[0001617640-24-000129_z-20241112.htm:1]**                                                              |
| Jeremy Hofmann     | Chief Financial Officer                   | May 2023           | Joined Zillow in **2018**. Previously SVP of Corporate Development and Strategy (2022–2023). Became CFO in **May 2023**.  **[0001617640-24-000061_z-20240415.htm:33]** **[0001617640-23-000070_exhibit991.htm:0]**                                                                                               |
| Susan Daimler      | President of Zillow                       | February 2021      | Joined Zillow in **2012** after Buyfolio acquisition. Held roles such as SVP, Premier Agent (2018–2021). Became President in **February 2021**.  **[0001617640-24-000061_z-20240415.htm:33]** **[0001617640-23-000056_z-20230426.htm:32]**                                                                        |
| David A. Beitel    | Chief Technology Officer                  | February 2005      | Joined Zillow in **2005**. Previously CTO at Expedia (2003–2005) and part of the original Expedia team at Microsoft.  **[0001617640-24-000061_z-20240415.htm:33]** **[0001617640-23-000056_z-20230426.htm:32]** **[0001617640-22-000050_a2022proxystatement.htm:28]**                                                                                                |
| Bradley D. Owens   | SVP, General Counsel, Corporate Secretary | September 2014     | Joined Zillow in **2012** as corporate counsel. Became General Counsel in **2014** and Corporate Secretary in **2018**.  **[0001617640-23-000056_z-20230426.htm:32]** **[0001617640-24-000061_z-20240415.htm:33]**                                                                                                |
| Jennifer Rock      | Chief Accounting Officer                  | October 2018       | Joined Zillow in **2015**. Held roles such as Interim CFO (2018). Became Chief Accounting Officer in **October 2018**.  **[0001617640-24-000061_z-20240415.htm:33]**                                                                                                    |
| Errol G. Samuelson | Chief Industry Development Officer        | March 2014         | Joined Zillow in **2014**. Previously held leadership roles at Move, Inc., including President of Realtor.com (2007–2014).  **[0001617640-24-000061_z-20240415.htm:34]** **[0001617640-23-000056_z-20230426.htm:33]** **[0001617640-22-000050_a2022proxystatement.htm:29]**                                                                                        |
| Dan Spaulding      | Chief People Officer                      | April 2016         | Joined Zillow in **2016**. Previously held HR leadership roles at Starbucks and Life Technologies.  **[0001617640-24-000061_z-20240415.htm:34]** **[0001617640-23-000056_z-20230426.htm:33]**                                                                                                                    |

cf04beff2e27e6693348a4fe414e6a04cfa8067c4e99498ca8cf91b3875a39e7

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: Q4 2024
- **Guidance**:
  1. **Total Company Revenue**: $525 million to $540 million, 12% year-over-year increase at midpoint.
  2. **Residential Revenue**: $364 million to $374 million.
  3. **Rentals Revenue**: Mid-20% range year-over-year growth.
  4. **Mortgages Revenue**: Mid-60% range year-over-year growth.
  5. **EBITDA**: $90 million to $105 million, 18% margin at midpoint.
  6. **EBITDA Expenses**: Decrease from $454 million in Q3 to $435 million in Q4.  **[ZG_3406350_7]** 

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: Q3 2024
- **Guidance**:
  1. **Residential Revenue**: $375 million to $385 million.
  2. **Rentals Revenue Growth**: Mid-20% range year-over-year.
  3. **Multifamily Revenue Growth**: Faster than overall rentals revenue.
  4. **Mortgages Revenue Growth**: Similar to Q2 2024, which was 42% year-over-year.
  5. **Total Revenue**: $545 million to $560 million, 11% year-over-year increase at midpoint.
  6. **EBITDA**: $95 million to $110 million, 19% margin at midpoint.
  7. **EBITDA Expenses**: Increase to $450 million from $438 million in Q2.
  8. **Q4 2024 EBITDA Costs**: Decline sequentially from Q3.
  9. **Full-Year 2024 Revenue Growth**: Double-digit growth.
  10. **Full-Year 2024 EBITDA Margin Expansion**: Modest expansion.
  11. **Annual Fixed Cost Run Rate**: Approximately $1 billion.  **[ZG_3397080_9]** 

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: Q2 2024 and FY 2024
- **Guidance**:
  1. **Q2 2024 Revenue**: $525 million to $540 million, 5% year-over-year increase at midpoint.
  2. **Q2 2024 Residential Revenue**: $372 million to $382 million.
  3. **Q2 2024 EBITDA**: $85 million to $100 million, 17% margin at midpoint.
  4. **Q2 2024 EBITDA Expenses**: Increase from $404 million in Q1 to $440 million in Q2.
  5. **Full-Year 2024 Revenue Growth**: Double-digit percentages.
  6. **Full-Year 2024 EBITDA Margin Expansion**: Modest expansion.
  7. **Rentals Revenue Growth**: Mid-20% range year-over-year.
  8. **Mortgages Revenue Growth**: High 20% range year-over-year.  **[ZG_3381917_9]** **[ZG_3381917_11]** 

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: Q1 2024
- **Guidance**:
  1. **Total Company Revenue**: $495 million to $510 million, 7% year-over-year increase at midpoint.
  2. **Residential Revenue**: $365 million to $375 million, 2% year-over-year increase at midpoint.
  3. **Rentals Revenue**: More than 30% year-over-year growth.
  4. **Mortgages Revenue**: Positive growth year-over-year.
  5. **EBITDA**: $95 million to $105 million, 20% margin at midpoint.
  6. **EBITDA Expenses**: Increase from $391 million in Q4 2023.
  7. **Full-Year 2024 Guidance**:
     - Housing Market Assumption: Relatively flat.
     - Total Revenue Growth: Double-digit growth.
     - Residential Revenue: Market outperformance.
     - Rentals Revenue: Continued strong growth.
     - Mortgages Revenue: Meaningful growth.
     - Fixed Costs: Modest growth with inflation.
     - Variable Costs: Grow with or slightly ahead of revenue.
     - EBITDA Margin: Modest expansion.
     - Share-Based Compensation: Lower than 2023.  **[ZG_3373153_11]** 

6a9809d89b35fa47322c5cc35ddd43c82e1255b1bfe89a8224541d402d0da4c3

- **Zillow Group's revenue per total transaction value has doubled in their oldest enhanced markets since the beginning of 2023**, demonstrating strong growth and a successful expansion strategy. They expanded from 9 enhanced markets at the end of last year to **43 as of October**, with consistent positive trends across these markets.  **[ZG_3406350_14]**
- **Zillow Rentals boasts the largest audience of renters in the country, up 20% year-over-year**, significantly outpacing the competition. Their multifamily revenue grew **38% year-over-year**, driven by a multifamily advertising campaign and a partnership with realtor.com, which are attracting high-quality renters and increasing advertiser interest.  **[ZG_3406350_16]**
- **Zillow is gaining market share versus total transaction value, up 800 basis points year-over-year in Q3 and 2,000 basis points since the beginning of 2023**. They anticipate continued growth due to enhanced market rollouts and the success of products like Zillow Showcase, rentals, Follow Up Boss, and ShowingTime+.  **[ZG_3406350_18]**

086e573644cabc79c61946e46a2a03d5afa4ae24264efbe89e2dd9b129d0b3e8

- **Zillow anticipates double-digit revenue growth in 2024**, outperforming a flat housing market, driven by expansion into **40 enhanced markets by the end of 2024** and growth in key pillars like **real-time touring** (expected to increase from 10% to 20% of connections) and **Zillow Home Loans**.  **[ZG_3373153_17]**
- The **rentals segment is experiencing strong growth**, with **multifamily revenue growing 52% year-over-year** in Q4 2023 and expecting **over 30% growth in Q1 2024**, leveraging the largest audience and most listings in the market.  **[ZG_3373153_17]** **[ZG_3373153_20]**
- **Share gains in enhanced markets are expected to continue**, with connections growth outpacing the industry, as Zillow rolls out more enhanced markets, leading to similar **outperformance versus the national market** over the balance of the year.  **[ZG_3373153_13]**

f7ea6917f4dbfa90e36335bab989734bb42ff0ebe7987a63d3e457d4be506fd0

- **Zillow expects to accelerate revenue growth in the second half of the year, achieving double-digit growth despite a flat housing market**, driven by contributions from enhanced markets, accelerating mortgages, nationwide rollout of showcases, and continued strong growth in rentals.  **[ZG_3381917_12]**
- **Zillow's rentals business is growing strongly, with a sustainable $1 billion-plus revenue opportunity ahead**, supported by the launch of a national marketing campaign and a strategic partnership with Realtor.com to increase demand and supply in the multifamily segment.  **[ZG_3381917_20]**
- **Zillow is seeing continued share gains and positive signals in its 13 enhanced markets**, with plans to expand to **40 enhanced markets by the end of the year**, which is expected to drive revenue growth in the second half of the year.  **[ZG_3381917_12]**

ee580848f279570dde9f5e56c3131aa0c178318d43238e423795425346bcf4b0

- **Increased competition from CoStar's aggressive marketing spend may pressure Zillow to boost its own brand investment, potentially impacting profitability.**  **[ZG_3373153_14]**
- **Zillow is experiencing deleverage in variable costs due to staffing up sales ahead of growth in areas like rentals, Listing Showcase, and Zillow Home Loans, which may delay expected operating leverage.**  **[ZG_3373153_17]**
- **There is uncertainty about sustaining outperformance versus the residential market into 2024 due to the fluid macroeconomic environment, which could affect Zillow's future growth.**  **[ZG_3373153_17]** **[ZG_3373153_13]**

c43e9b9c76fc1323cf8c936c411317da64bf40bf585c990016e7f6427f78477d

- **Macroeconomic Challenges:** Zillow expects the macroeconomic environment to remain **choppy**, with **affordability remaining a challenge** in the housing market, which could impact future growth.  **[ZG_3406350_20]** ,  **[ZG_3406350_18]**
- **Potential Decline in Premier Agent Revenue:** When asked if the guidance implies a **Premier Agent revenue decline year-over-year**, the executive focused on seasonality and overall performance, suggesting possible weakness in this segment.  **[ZG_3406350_18]**
- **Adoption Challenges with Zillow Showcase:** Scaling Zillow Showcase is **challenging due to operational changes required by agents**, and currently, it is only on **nearly 1.5% of new for-sale listings**, indicating slow adoption.  **[ZG_3406350_13]**

4b8e75686eea29eb7506b927f5f3f653cbcd0cebbff9ddb9c86e4ed871f4c07b

- **Revenue per total transaction value in the first four enhanced markets grew from 50% to 80% year-over-year**, demonstrating strong success of the enhanced market strategy.  **[ZG_3397080_13]**
- Zillow plans to **expand enhanced markets to 36 by end of August and 40 by year-end**, expecting similar revenue gains and contributing to overall company growth.  **[ZG_3397080_10]**
- The company is showing **strong financial discipline with EBITDA margin expansion**, focusing on controlling fixed costs and moving towards GAAP profitability.  **[ZG_3397080_19]**

e06ef30ec1f50870b5785bb4d0dda2694305e704905630f1242a70cb09431417

1. **Revenue Guidance and Growth**  
   **Q:** Does guidance imply Premier Agent revenue decline?  
   **A:** Jeremy Hofmann stated that Zillow expects **12% growth at the midpoint for Q4**.  **[ZG_3406350_18]**  Despite challenges in the housing market, they anticipate **double-digit growth and margin expansion in both Q4 and full year '24**, with revenue projected to grow **14% year-over-year in 2024**.  **[ZG_3406350_18]**  They also mentioned **22% EBITDA margins**, implying **200 basis points of margin expansion**.  **[ZG_3406350_18]**  Premier Agent is gaining share, up **800 basis points year-over-year in Q3** and **2,000 basis points since early '23**.  **[ZG_3406350_18]** 

2. **Regulatory Changes Impact**  
   **Q:** How do regulatory changes affect conversion and market share?  
   **A:** Jeremy Wacksman explained that mandated buyer agreements are a healthy evolution, improving buyer education and preparing them to meet agents.  **[ZG_3406350_10]**  They haven't seen concrete data on structural changes to conversion but view it positively.  **[ZG_3406350_10]**  Regarding the NAR settlement impact, Jeremy Hofmann noted that commission rates have stayed in a tight band, and Zillow and their partners are expected to benefit from industry changes due to having the most customers, best partners, and providing the most technology.  **[ZG_3406350_12]** 

3. **Stock-Based Compensation Outlook**  
   **Q:** What's the plan for managing stock-based compensation?  
   **A:** Jeremy Hofmann stated they plan to leverage stock-based compensation going forward.  **[ZG_3406350_12]**  With a fixed cost base of about **$1 billion annually**, and **90% of SBC within that**, as they grow revenue while controlling fixed costs, they'll get more leverage on the SBC line, driving greater GAAP profitability over time.  **[ZG_3406350_12]** 

4. **Drivers of Revenue Outperformance**  
   **Q:** What's driving better overall outperformance?  
   **A:** Jeremy Hofmann highlighted double-digit growth across residential, rentals, and mortgages, with total growth of **17% year-over-year**.  **[ZG_3406350_11]**  Residential growth is driven by continued conversion improvements, particularly in enhanced markets and contributions from Real Time Touring.  **[ZG_3406350_11]**  Zillow Showcase, now nearly **1.5% of all new listings**, along with strong performance from new construction marketplace, ShowingTime+, and Follow Up Boss also contributed.  **[ZG_3406350_11]** 

5. **Zillow Showcase Demand**  
   **Q:** What is the demand and pricing outlook for Zillow Showcase?  
   **A:** Jeremy Wacksman stated that Zillow Showcase has reached nearly **1.5% share of new listings**, with pricing variable by home price and geography landing well with agents and teams.  **[ZG_3406350_13]**  They aim for a medium-term target of **5% to 10% of total active listings**, translating to a **$150 million to $300 million annual business**.  **[ZG_3406350_13]**  The product is engaging buyers and sellers, and agents are winning more business, fueling confidence in reaching and potentially surpassing their goals.  **[ZG_3406350_13]** 

6. **Follow Up Boss Growth**  
   **Q:** How has Follow Up Boss adoption progressed?  
   **A:** Jeremy Wacksman noted great success, with **80% of connections in Enhanced Markets now flowing through Follow Up Boss**.  **[ZG_3406350_19]**  The strategy includes growing efforts to attract more agent teams and integrating Zillow customers with Enhanced Market partners.  **[ZG_3406350_19]**  Feedback from agent partners is positive, and the integration is helping power their business.  **[ZG_3406350_19]** 

7. **Clear Cooperation Risks**  
   **Q:** Are there risks from changes in clear cooperation policies?  
   **A:** Jeremy Wacksman emphasized that changes pulling listings off MLSs would not be good for buyers, sellers, or agents.  **[ZG_3406350_17]**  Zillow supports strengthening policies that promote transparency and access, as restrictive changes could harm the consumer experience and the industry's overall transparency.  **[ZG_3406350_17]** 

8. **Rentals Growth Opportunities**  
   **Q:** Can you expand the rentals marketing campaign?  
   **A:** Jeremy Wacksman expressed satisfaction with demand efforts, noting that Zillow has the **largest audience of renters in the country, up 20% year-over-year**.  **[ZG_3406350_16]**  Multifamily revenue grew **38% year-over-year**.  **[ZG_3406350_16]**  They see continued growth potential, aiming beyond the **$1 billion revenue milestone**, with marketing being part of the mix to accelerate growth.  **[ZG_3406350_16]** 

9. **Expense Growth Outlook**  
   **Q:** Will expense growth trends continue if the market remains slow?  
   **A:** Jeremy Hofmann indicated they plan to continue their strategy, expanding enhanced markets and driving revenue across segments.  **[ZG_3406350_20]**  They'll remain disciplined on costs, expecting the macro environment to stay choppy, and will plan the cost structure accordingly.  **[ZG_3406350_20]**  They feel comfortable with the fixed cost level to achieve their 2025 share targets.  **[ZG_3406350_20]** 

07b30d43978703c02d940816ac33328952a98026413c03f988f9fbf455eb4266

- **Zillow has yet to reach its goal of 6% transaction share**, and even in its oldest enhanced markets, they are still working towards that target. Despite reporting growth, they have only accelerated from **50%** to **80%** year-over-year in revenue per total transaction value, indicating progress but potentially slower than expected.  **[ZG_3397080_13]**
- **The first-time homebuyer market is underperforming significantly**, with estimates showing it lagging by **800 to 1,000 basis points** in Q2 compared to the overall market. Zillow expects these challenging conditions to continue into Q3, which may negatively impact their core customer base.  **[ZG_3397080_18]** ,  **[ZG_3397080_14]**
- **High fixed costs and stock-based compensation may hinder GAAP profitability**, as Zillow has approximately **$1 billion** in fixed costs, and variable costs are expected to scale faster than revenue during ramp-up. Additionally, **90%** of their stock-based compensation costs are in the fixed cost bucket, potentially impacting margins.  **[ZG_3397080_19]**

106e28bb30d85a683ab55117d3671e30e2344dd542d9ea4943f6b10292aa0aea

- **First-time homebuyers are underperforming significantly due to recent interest rate spikes, creating a headwind for Zillow's residential revenue growth.**  **[ZG_3381917_22]**
- **Premier Agent partners are adopting a "wait-and-see" approach amid rate volatility, which may impact Zillow's revenue from this segment in the near term.**  **[ZG_3381917_17]**
- **Zillow's guidance for Q2 does not anticipate outpacing the real estate industry's total transaction value as it has in previous quarters, suggesting potential slowing growth and reliance on an acceleration in the second half that may not materialize.**  **[ZG_3381917_17]**

796cd5e306db1c084d73a67c56a14100807104abc77d6ebfae30d72a8b5ace67

Zillow Group Inc (ZG)

Financials