February 2024
Zillow Investor Presentation
Legal Disclosure
This presentation 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 future targets, the future performance and operation of our business, our business strategies and ability to translate such strategies into financial performance, the current and future health and stability of the residential housing market and economy, volatility of mortgage interest rates, and our expectations regarding future shifts in behavior by consumers and employees. Statements containing words such as "may," "believe," "anticipate," "expect," "intend," "plan," "project," "predict," "will," "projections," "continue," "estimate," "outlook," "opportunity," "guidance," "would," "could," "strive," or similar expressions constitute forward-looking statements. Unless otherwise noted in the presentation, forward-looking statements are made based on assumptions as of February 13, 2024, and although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee these results. 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: the current and future health and stability of the economy and United States residential real estate industry, including changes in inflationary conditions, interest rates, housing availability and affordability, labor shortages and supply chain issues; our ability to manage advertising and product inventory and pricing and maintain relationships with our real estate partners; our ability to establish or maintain relationships with listing and data providers, which affects traffic to our mobile applications and websites; our ability to comply with current and future multiple listing service ("MLS") rules and requirements; our ability to navigate industry changes, including as a result of certain or future class action lawsuits or government investigations, which may include lawsuits or investigations in which we are not a party; our ability to continue to innovate and compete successfully against our existing or future competitors to attract customers and real estate partners; our ability to effectively invest resources to pursue new strategies, develop new products and services and expand existing products and services into new markets; our ability to operate and grow Zillow Home Loans, our mortgage origination business, including the ability to obtain or maintain sufficient financing to fund its origination of mortgages, meet customers' financing needs with its product offerings, continue to grow the origination business and resell originated mortgages on the secondary market; the duration and impact of natural disasters, geopolitical events, and other catastrophic events (including public health crises); our ability to maintain adequate security measures or technology systems, or those of third parties on which we rely, to protect data integrity and the information and privacy of our customers and other third parties; the impact of pending or future litigation and other disputes or enforcement actions, which may include lawsuits or investigations in which we are not a party; our ability to attract, engage, and retain a highly skilled, remote workforce; acquisitions, investments, strategic partnerships, capital-raising activities, or other corporate transactions or commitments by us or our competitors; our ability to continue relying on third-party services to support critical functions of our business; our ability to protect and continue using our intellectual property and prevent others from copying, infringing upon, or developing similar intellectual property, including as a result of generative artificial intelligence; our ability to comply with domestic and international laws, regulations, rules, contractual obligations, policies and other obligations, or to obtain or maintain required licenses to support our business and operations; our ability to pay debt, settle conversions of our convertible senior notes, or repurchase our convertible senior notes upon a fundamental change; our ability to raise additional capital or refinance on acceptable terms, or at all; actual or anticipated fluctuations in quarterly and annual results of operations and financial position; the assumptions, estimates and internal or third-party data that we use to calculate business, performance and operating metrics; and volatility of our Class A common stock and Class C capital stock prices.
The foregoing list of risks and uncertainties is illustrative but 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 SEC filings. 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.
This presentation includes certain non-GAAP financial measures, including forecasted Adjusted EBITDA margin, which 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. You should not consider this forecasted non-GAAP measure in isolation or as a substitute for analysis of our results as reported under GAAP.
This presentation also contains estimates and other statistical data made by independent parties and by Zillow Group relating to market size, the housing market, connections, engagement, transactions, growth and other data about Zillow Group's industry and performance. These data involve a number of assumptions and limitations, which may significantly impact their accuracy, and you are cautioned not to give undue weight to such estimates. Projections, assumptions and estimates of future performance are necessarily subject to a high degree of uncertainty and risk. Other important information about Zillow Group's financial results and operating metrics used herein are included in the Appendix of this presentation.
The trademarks included herein are the property of the owners thereof and are used for reference purposes only.
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Zillow Investment Overview
Largest real estate brand building integrated solutions to make transacting better for customers, partners and the industry while targeting sustainable profitable growth
Big Customer Problem
Complicated and expensive to move - people desire a simpler and more affordable way to transact
Our Solution
Zillow, the 'housing super app' - end-to-end transaction solutions provided by integrated digital tools, 1P operators and best in class 3P partners
Well-Positioned Brand with Industry-Leading Engagement
Leading online real estate audience1, engagement with high-intent movers2 and best-in-class partner networks
Deep Technology Expertise
We are an engineering- and product-first,founder-led company using our technology expertise to solve real pain points for customers, partners and the industry
Large Growth Market Near Cyclical Lows
Total transaction value has averaged 6% annual growth over the past ~50 years3 on an annualized basis with existing home sales and purchase mortgages near cyclical lows
Significant Growth Opportunity
$187B4 TAM opportunity to convert high-intent customers on our apps and sites as we expand our depth and breadth, with more products and services in more markets
Our Strategy is Working
Our growth pillars have us on track for 6% customer transaction share5 by the end of 2025 while we grow our revenue
Strong Financial Foundation and Philosophy
Flexible balance sheet and positive operating cash flow give us the ability to invest in innovation to drive sustainable revenue growth
Controlling fixed costs expected to deliver target of 45% Adjusted EBITDA margins6 and strong GAAP profitability over time
Seasoned Management Team
Experienced team with a long history of focus on shareholder value creation
- Comscore data for the year ended December 31, 2023.
- Zillow Group internal data.
- See slide 11 for additional information about how we calculate total transaction value.
- See slide 13 for additional information about how we calculate our total addressable market.
5. | See appendix slides for important information about these operating metrics. See Legal Disclosures (slide 2) for additional information about our forward-looking statements. | 3 |
6. | Zillow has not provided a quantitative reconciliation of forecasted Adjusted EBITDA margin to the most directly comparable GAAP measure within this presentation because the company is unable, without making |
unreasonable efforts, to calculate certain reconciling items with confidence. For more information regarding the non-GAAP financial measures discussed in this presentation, see the appendix slides.
The Problem: Moving is Complicated and Expensive
Customer journey is often non-linear, requiring multiple vendors with no central navigator
ShopInspect
Appraise
Research | Select | Close | Move |
Current | |||
Finance | |||
Home |
Separate Service Providers
New Home
Seller | + | Buyer | + Inspector + | Mortgage | + Appraiser + | Title | + | Escrow + | Moving |
agent | agent | lender | company | company |
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Our Solution: Our Housing Super App - Zillow
Continually adding functionality that integrates software and services to solve real customer and partner pain points
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Housing Super App Experience: For Sale
Experience integrates technology, products, services, AI and partners to better serve customers
Mover
Agent
Real Time | Tour | Collaborative | Digital | Offer | Integrated Title | Sell |
Touring | Management | Messaging | Pre-Approval | & Close |
Calendar | Smart Tour | Collaborative | Intro to ZHL | Visibility with | Closing | Win |
Management | Recommendation | Messaging | Loan Officer | Financing | Listings |
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Screen and app images are simulated for illustrative purposes. It may not be an exact representation of the product, and not all features are available on all listings or listing types.
Housing Super App Experience: Rentals
Experience integrates technology, products, services, AI and operators to better serve customers
Mover Landlord
Search | Tour | Apply | Sign a Lease | Pay | Insure |
List | Tour | Screen | Create a Lease | Collect Rent |
Screen and app images are simulated for illustrative purposes. It may not be an exact representation of the product, and not all features are available on all listings or listing types.
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Leading Internet Brand Position
Product-led → ~80%1 of Zillow Group's traffic is organic
Sample of Leading Brands' Unique Visitors (Millions), per Comscore2
U.S. Internet
Population
1. Zillow Group internal data. | 8 |
2. Comscore Top 100 Internet Properties data for the month of December 2023. Zillow Group is ranked #35. |
Leading Category Internet Search Position
Decades of product innovation have driven unrivaled unaided brand awareness of >60%1 and category-leading search
Searched
more
3x
"real estate"
our nearest competitor
Source: Google Trends (2010-2023) for search terms "Zillow," "real estate," "Realtor.com," "Redfin."
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1. Based on Zillow Group internal data of buyers.
Leading Category App Position
#1 U.S. residential real estate app drives direct engagement
Daily Active App Users Among Real Estate Marketplaces
Zillow Group1 is
>3x
our nearest competitor
1 | ® |
Source: data.ai data for January 2023 - December 2023.
- Zillow Group includes Zillow, Trulia, Hotpads and StreetEasy brands.
- Other includes Rocket Money + Rocket Homes (6.0%), CoStar Apartments.com (1.6%), CoStar Homes.com (0.7%), and various others.
Average Daily Active App Users
Realtor.com®
Redfin
Zillow Group1
Other2
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Disclaimer
Zillow Group Inc. published this content on 13 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 March 2024 00:21:07 UTC.