Z Q1 2024 Earnings

Call Details

• Call Title: Zillow Group, Inc. Q1 2024 Earnings Call
• Date: May 1, 2024 at 9:00 PM UTC
• Management Team:
  • Rich Barton (Chief Executive Officer)
  • Jeremy Wacksman (Chief Operating Officer)
  • Jeremy Hofmann (Chief Financial Officer)
  • Brad Berning (Vice President, Strategic Affairs and Investor Relations)

Call Summary

Financial Performance

• Q1 total revenue was $529M, representing 13% year-over-year growth.
• Q1 EBITDA was $125M, representing a 24% EBITDA margin and a 200 basis point expansion year over year on a non-GAAP basis.
• Q1 GAAP net loss was $23M, equal to 4% of revenue.
• Rentals revenue in Q1 was $97M, up 31% year over year, with multifamily revenue up 46% year over year.
• Mortgage revenue in Q1 was $31M, up 19% year over year, driven by $601M of purchase origination volume, which grew more than 130% year over year.
• Total listings in the rentals marketplace reached 1.8M in March, up 20% year over year.
• Cost of revenue increased by $31M, or 34% year over year, driven by website development and higher mortgage loan processing costs.

Guidance

• Q2 revenue is guided to be $525M to $540M, implying approximately 5% year-over-year growth at the midpoint.
• Q2 residential revenue is guided to $372M to $382M and is expected to be down sequentially due to first-time buyer weakness and recent interest rate moves.
• Q2 EBITDA is guided to $85M to $100M, implying roughly a 17% margin at the midpoint.
• EBITDA expenses are expected to rise from $404M in Q1 to ~$440M in Q2, with roughly 85% of the increase driven by seasonal brand marketing and rentals marketing.
• The company reiterated full-year expectations of double-digit revenue growth and modest EBITDA margin expansion for 2024.
• Q2 rentals revenue is expected to grow in the mid-20% year-over-year range, while mortgages revenue is expected to grow in the high-20% year-over-year range.