UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): February 7, 2017
ZILLOW GROUP, INC.
(Exact name of registrant as specified in its charter)
Washington |
001-36853 |
47-1645716 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
1301 Second Avenue, Floor 31, Seattle, Washington |
98101 | |
(Address of principal executive offices) | (Zip Code) |
(206) 470-7000
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Zillow Group, Inc. (the Company) today issued a press release announcing its financial results for the fiscal quarter and full year ended December 31, 2016. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in Item 2.02 and Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit Number |
Description | |
99.1 | Press release dated February 7, 2017 entitled Zillow Group Reports Fourth Quarter and Full Year 2016 Results issued by Zillow Group, Inc. on February 7, 2017. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: February 7, 2017 | ZILLOW GROUP, INC. | |||||
By: | /s/ SPENCER M. RASCOFF | |||||
Name: | Spencer M. Rascoff | |||||
Title: | Chief Executive Officer |
EXHIBIT INDEX
Exhibit Number |
Description | |
99.1 | Press release dated February 7, 2017 entitled Zillow Group Reports Fourth Quarter and Full Year 2016 Results issued by Zillow Group, Inc. on February 7, 2017. |
Exhibit 99.1
Contacts: | ||
Raymond Jones | Katie Curnutte | |
Investor Relations | Public Relations | |
206-470-7137 | press@zillow.com | |
ir@zillow.com |
ZILLOW GROUP REPORTS FOURTH QUARTER AND FULL YEAR 2016 RESULTS
| Quarterly record Revenue of $227.6 million increased 34% year-over-year. |
| Full year 2016 record Revenue of $846.6 million, up 31% year-over-year. |
| Traffic to Zillow Group brands mobile apps and websites reached more than 140 million average monthly unique users in the fourth quarter of 2016 and an annual seasonal peak of more than 171 million unique users in May 2016. |
SEATTLE February 7, 2017 Zillow Group, Inc. (NASDAQ:Z) (NASDAQ:ZG), which houses a portfolio of the largest and most vibrant real estate and home-related brands on mobile and the web, today announced its consolidated financial results for the quarter and full year ended December 31, 2016.
Zillow Group had a fantastic year in 2016, said Zillow Group CEO Spencer Rascoff. We set records for annual revenue and site traffic, and ended on a strong note with solid fourth quarter results that were ahead of expectations. We executed on all of our strategic priorities for the year and completed the roll out of our self-serve account interface to Premier Agents nationally. In 2017, we are committed to further extending our audience leadership in the online real estate category. We expect to pass the $1 billion annual revenue mark in 2017, and we will press our advantage with continued investment across all Zillow Groups brands and emerging marketplaces.
Fourth Quarter 2016 Financial Highlights
| Revenue increased 34% to $227.6 million from $169.4 million in the fourth quarter of 2015. |
| Marketplace Revenue increased 42% to $210.6 million from $148.3 million in the fourth quarter of 2015. |
| Premier Agent Revenue increased 32% to $164.3 million from $124.4 million in the fourth quarter of 2015. |
| Other Real Estate Revenue1 increased 145% to $29.8 million from $12.2 million in the fourth quarter of 2015. |
1 | Other Real Estate Revenue includes agent services, dotloop, StreetEasy, Naked Apartments, rentals and other offerings to endemic advertisers that are not traditional display advertising, including New Construction, where builders can display real-time lot availability on search results and maps. |
| Mortgages Revenue increased 41% to $16.5 million from $11.7 million in the fourth quarter of 2015. |
| Display Revenue decreased 20% to $17.0 million from $21.1 million in the fourth quarter of 2015. The decrease is primarily a result of the companys strategy to deemphasize display advertising and improve the user experience. |
| GAAP net loss was $23.5 million, or 10% of Revenue, in the fourth quarter of 2016, compared to GAAP net loss of $25.7 million, or 15% of Revenue, in the same period last year. |
| Adjusted EBITDA was $54.7 million in the fourth quarter of 2016, or 24% of Revenue, which was an increase from $20.4 million, or 12% of Revenue, in the fourth quarter of 2015. |
Full Year 2016 Financial Highlights
| Revenue increased 31% to $846.6 million from $644.7 million in 2015. |
| Marketplace Revenue increased 40% to $778.1 million from $555.9 million in 2015. |
| Premier Agent Revenue grew 35% to $604.3 million from $446.9 million in 2015. |
| Other Real Estate Revenue grew 192% to $102.6 million from $35.2 million in 2015. |
| Mortgages Revenue grew 61% to $71.1 million from $44.3 million in 2015. |
| Display Revenue decreased 23% to $68.5 million from $88.8 million in 2015. |
| GAAP net loss was $220.4 million in 2016, or 26% of Revenue, which includes the impact of a $130.0 million litigation settlement, compared to GAAP net loss of $148.9 million, or 23% of revenue, in 2015. |
| Adjusted EBITDA was $14.8 million in 2016, or 2% of Revenue, which includes the impact of a $130.0 million litigation settlement, which was a decrease from Adjusted EBITDA of $87.6 million, or 14% of revenue, in 2015. Excluding the impact of the $130.0 million litigation settlement, Adjusted EBITDA in 2016 would have been $144.8 million, or 17% of Revenue. |
Operating and Business Highlights
| More than 140 million average monthly unique users visited Zillow Group consumer brands Zillow, Trulia, StreetEasy, HotPads and Naked Apartments during the fourth quarter of 2016, an increase of 13% year-over-year. Traffic to Zillow Group brands mobile apps and websites reached an annual seasonal peak of more than 171 million unique users in May 2016. |
| Leads to Zillow Group Premier Agent Advertisers for the fourth quarter of 2016 grew nearly 33% year-over-year to 3.9 million. For the full year 2016, leads to Zillow Group Premier Agent Advertisers grew 44% year-over-year to 16.9 million. |
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| During the fourth quarter of 2016, Premier Agent Advertisers who spend more than $5,000 per month: |
| Increased 95% year-over-year on a total dollar basis. |
| Increased 100% year-over-year in the number of agent advertisers. |
| During the fourth quarter of 2016, total sales to Premier Agent Advertisers who have been customers for more than one year increased 58% year-over-year. |
| Sales to existing Premier Agent Advertisers accounted for 63% of total bookings for the fourth quarter of 2016. |
Business Outlook - First Quarter and Full Year 2017
The following table presents Zillow Groups business outlook for the periods presented (in millions):
Zillow Group Outlook as of February 7, 2017 |
Three Months Ending March 31, 2017 |
Year Ending December 31, 2017 | ||
(in millions) | ||||
Revenue |
$232 to $237 | $1,030 to $1,050 | ||
Premier Agent revenue |
$170 to $172 | $745 to $755 | ||
Other real estate revenue |
$31 to $32 | $145 to $150 | ||
Mortgages revenue |
$17 to $18 | $77 to $80 | ||
Display revenue |
$14 to $15 | $63 to $65 | ||
Operating expenses |
$247 to $252 | *** | ||
Net loss |
$(14.1) to $(19.1) | $(20.2) to $(40.2) | ||
Adjusted EBITDA (1) |
$36 to $41 | $190 to $210 | ||
Depreciation and amortization |
$26 to $28 | $115 to $120 | ||
Share-based compensation expense |
$26 to $28 | $106 to $111 | ||
Capital expenditures |
*** | $48 to $50 | ||
Weighted average shares outstanding basic |
182.0 to 184.0 | 183.5 to 185.5 | ||
Weighted average shares outstanding diluted |
190.5 to 192.5 | 192.0 to 194.0 |
*** | Outlook not provided |
(1) | A reconciliation of forecasted Adjusted EBITDA to forecasted net loss is provided below in this press release. |
Conference Call and Webcast Information
Zillow Groups CEO Spencer Rascoff and CFO Kathleen Philips will host a live conference call and webcast to discuss the results today at 2 p.m. Pacific Time (5 p.m. Eastern Time). A copy of managements prepared remarks will be made available on the investor relations section of Zillow Group, Inc.s website at http://investors.zillowgroup.com/results.cfm prior to the live conference call and webcast to allow analysts and investors additional time to review the details of the results.
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Zillow Groups management will first read the prepared remarks and then answer questions from dialed-in participants, in addition to those submitted via Twitter® during the live conference call. Questions can be submitted to the @ZillowGroup Twitter® handle using #ZEarnings.
A link to the live webcast of the conference call will be available on the investor relations section of Zillow Group, Inc.s website at http://investors.zillowgroup.com/results.cfm. The live call may also be accessed via phone at (877) 643-7152 toll-free domestically and at (443) 863-7921 internationally. Following completion of the call, a recorded replay of the webcast will be available on the investor relations section of Zillow Group, Inc.s website.
Forward-Looking Statements
This press release 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 business outlook, strategic priorities, and operational plans for 2017. Statements containing words such as may, believe, anticipate, expect, intend, plan, project, will, projections, continue, business outlook, forecast, estimate, outlook, or similar expressions constitute forward-looking statements. Differences in Zillow Groups 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 Groups control. Factors that may contribute to such differences include, but are not limited to, Zillow Groups ability to successfully integrate and realize the benefits of our past or future strategic acquisitions or investments; Zillow Groups ability to maintain and effectively manage an adequate rate of growth; Zillow Groups ability to maintain or establish relationships with listings and data providers; the impact of the real estate industry on Zillow Groups business; Zillow Groups ability to innovate and provide products and services that are attractive to its users and advertisers; Zillow Groups ability to increase awareness of the Zillow Group brands; Zillow Groups ability to attract consumers to Zillow Groups mobile applications and websites; Zillow Groups ability to compete successfully against existing or future competitors; the reliable performance of Zillow Groups network infrastructure and content delivery processes; and Zillow Groups ability to protect its intellectual property. The foregoing list of risks and uncertainties is illustrative, but is not exhaustive. For more information about potential factors that could affect Zillow Groups business and financial results, please review the Risk Factors described in Zillow Groups Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission, or SEC, and in Zillow Groups other filings with the SEC. 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.
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding our financial results, this press release includes references to Adjusted EBITDA (including forecasted Adjusted EBITDA) and non-GAAP net income (loss) per share, which are non-GAAP financial measures. We have provided a reconciliation of Adjusted EBITDA (historical and forecasted) to net loss, the most directly comparable GAAP financial measure, and a reconciliation of net income (loss), adjusted, to net loss, as reported on a GAAP basis, and the calculations of non-GAAP net income (loss) per share - basic and diluted, within this earnings release.
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Adjusted EBITDA 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. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis.
Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
| 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 restructuring costs; |
| Adjusted EBITDA does not reflect the loss (gain) on divestiture of businesses; |
| Adjusted EBITDA does not reflect interest expense or other income; |
| Adjusted EBITDA does not reflect income taxes; |
| Adjusted EBITDA does not reflect the loss on debt extinguishment; and |
| Other companies, including companies in our own industry, may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. |
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net loss and our other GAAP results.
Our presentation of non-GAAP net income (loss) per share excludes the impact of share-based compensation expense, acquisition-related costs, restructuring costs, income taxes, loss on debt extinguishment and the loss (gain) on divestiture of businesses. This measure is not a key metric used by our management and board of directors to measure operating performance or otherwise manage the business. However, we provide non-GAAP net income (loss) per share as supplemental information to investors, as we believe the exclusion of share-based compensation expense, acquisition-related costs, restructuring costs, income taxes, loss on debt extinguishment and the loss (gain) on divestiture of businesses facilitates investors operating performance comparisons on a period-to-period basis. You should not consider these metrics in isolation or as substitutes for analysis of our results as reported under GAAP.
About Zillow Group
Zillow Group (NASDAQ:Z) (NASDAQ:ZG) houses a portfolio of the largest real estate and home-related brands on mobile and the web. The companys brands focus on all stages of the home lifecycle: renting, buying, selling and financing. Zillow Group is committed to empowering consumers with
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unparalleled data, inspiration and knowledge around homes, and connecting them with the right local professionals to help. The Zillow Group portfolio of consumer brands includes real estate and rental marketplaces Zillow®, Trulia®, StreetEasy®, HotPads® and Naked Apartments®. In addition, Zillow Group works with tens of thousands of real estate agents, lenders and rental professionals, helping maximize business opportunities and connect to millions of consumers. The company operates a number of business brands for real estate, rental and mortgage professionals, including Mortech®, dotloop®, Bridge Interactive and Retsly®. The company is headquartered in Seattle.
Please visit http://investors.zillowgroup.com, www.zillowgroup.com/ir-blog, and www.twitter.com/zillowgroup, where Zillow Group discloses information about the company, its financial information, and its business which may be deemed material.
The Zillow Group logo is available at http://zillowgroup.mediaroom.com/logos-photos.
Zillow, Premier Agent, Mortech, StreetEasy, Retsly and HotPads are registered trademarks of Zillow, Inc. Trulia is a registered trademark of Trulia, LLC. dotloop is a registered trademark of DotLoop, LLC. Naked Apartments is a registered trademark of Naked Apartments, LLC. Bridge Interactive is a trademark of Zillow, Inc.
Twitter is a registered trademark of Twitter, Inc.
(ZFIN)
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Reported Consolidated Results
ZILLOW GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, 2016 | December 31, 2015 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 243,592 | $ | 229,138 | ||||
Short-term investments |
262,870 | 291,151 | ||||||
Accounts receivable, net |
40,527 | 29,789 | ||||||
Prepaid expenses and other current assets |
34,817 | 24,016 | ||||||
|
|
|
|
|||||
Total current assets |
581,806 | 574,094 | ||||||
Restricted cash |
1,053 | 3,015 | ||||||
Property and equipment, net |
98,288 | 85,523 | ||||||
Goodwill |
1,923,480 | 1,909,167 | ||||||
Intangible assets, net |
527,464 | 558,881 | ||||||
Other assets |
17,586 | 5,020 | ||||||
|
|
|
|
|||||
Total assets |
$ | 3,149,677 | $ | 3,135,700 | ||||
|
|
|
|
|||||
Liabilities and shareholders equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 4,257 | $ | 3,361 | ||||
Accrued expenses and other current liabilities |
38,427 | 43,047 | ||||||
Accrued compensation and benefits |
24,057 | 11,392 | ||||||
Deferred revenue |
29,154 | 21,450 | ||||||
Deferred rent, current portion |
1,347 | 1,172 | ||||||
|
|
|
|
|||||
Total current liabilities |
97,242 | 80,422 | ||||||
Deferred rent, net of current portion |
15,298 | 13,743 | ||||||
Long-term debt |
367,404 | 230,000 | ||||||
Deferred tax liabilities and other long-term liabilities |
136,146 | 132,482 | ||||||
|
|
|
|
|||||
Total liabilities |
616,090 | 456,647 | ||||||
Shareholders equity: |
||||||||
Preferred stock |
| | ||||||
Class A common stock |
5 | 5 | ||||||
Class B common stock |
1 | 1 | ||||||
Class C capital stock |
12 | 12 | ||||||
Additional paid-in capital |
3,030,854 | 2,956,111 | ||||||
Accumulated other comprehensive loss |
(242 | ) | (471 | ) | ||||
Accumulated deficit |
(497,043 | ) | (276,605 | ) | ||||
|
|
|
|
|||||
Total shareholders equity |
2,533,587 | 2,679,053 | ||||||
|
|
|
|
|||||
Total liabilities and shareholders equity |
$ | 3,149,677 | $ | 3,135,700 | ||||
|
|
|
|
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ZILLOW GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended December 31, |
Year Ended December 31, |
|||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenue |
$ | 227,612 | $ | 169,370 | $ | 846,589 | $ | 644,677 | ||||||||
Costs and expenses: |
||||||||||||||||
Cost of revenue (exclusive of amortization) (1)(2) |
19,665 | 15,105 | 71,591 | 61,614 | ||||||||||||
Sales and marketing (2) |
90,109 | 77,817 | 380,919 | 307,089 | ||||||||||||
Technology and development (2) |
72,057 | 55,782 | 273,066 | 198,565 | ||||||||||||
General and administrative (2) |
42,536 | 45,939 | 313,695 | 170,445 | ||||||||||||
Acquisition-related costs |
533 | 432 | 1,423 | 16,576 | ||||||||||||
Restructuring costs (2) |
| 409 | | 35,551 | ||||||||||||
Loss (gain) on divestiture of businesses |
| 225 | (1,251 | ) | 4,368 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total costs and expenses |
224,900 | 195,709 | 1,039,443 | 794,208 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations |
2,712 | (26,339 | ) | (192,854 | ) | (149,531 | ) | |||||||||
Loss on debt extinguishment |
(22,757 | ) | | (22,757 | ) | | ||||||||||
Other income |
716 | 416 | 2,711 | 1,501 | ||||||||||||
Interest expense |
(2,668 | ) | (1,589 | ) | (7,408 | ) | (5,489 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes |
(21,997 | ) | (27,512 | ) | (220,308 | ) | (153,519 | ) | ||||||||
Income tax benefit (expense) |
(1,494 | ) | 1,792 | (130 | ) | 4,645 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ | (23,491 | ) | $ | (25,720 | ) | $ | (220,438 | ) | $ | (148,874 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share basic and diluted |
$ | (0.13 | ) | $ | (0.14 | ) | $ | (1.22 | ) | $ | (0.88 | ) | ||||
Weighted-average shares outstanding basic and diluted |
181,852 | 178,020 | 180,149 | 169,767 | ||||||||||||
|
||||||||||||||||
(1) Amortization of website development costs and intangible assets included in technology and development |
$ | 22,130 | $ | 17,885 | $ | 84,951 | $ | 63,189 | ||||||||
(2) Includes share-based compensation expense as follows: |
||||||||||||||||
Cost of revenue |
$ | 1,553 | $ | 1,254 | $ | 5,923 | $ | 4,694 | ||||||||
Sales and marketing |
5,754 | 4,952 | 23,320 | 25,391 | ||||||||||||
Technology and development |
8,306 | 6,436 | 31,466 | 26,849 | ||||||||||||
General and administrative |
10,153 | 11,670 | 46,209 | 48,280 | ||||||||||||
Restructuring costs |
| (204 | ) | | 14,859 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 25,766 | $ | 24,108 | $ | 106,918 | $ | 120,073 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Other Financial Data: |
||||||||||||||||
Adjusted EBITDA (3) |
$ | 54,749 | $ | 20,394 | $ | 14,826 | $ | 87,564 |
(3) | See above for more information regarding our presentation of Adjusted EBITDA. |
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ZILLOW GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended | ||||||||
December 31, | ||||||||
2016 | 2015 | |||||||
Operating activities |
||||||||
Net loss |
$ | (220,438 | ) | $ | (148,874 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities, net of amounts assumed in connection with acquisitions: |
||||||||
Depreciation and amortization |
100,590 | 75,386 | ||||||
Share-based compensation expense |
106,918 | 105,214 | ||||||
Loss on debt extinguishment |
22,757 | | ||||||
Amortization of discount and issuance costs on 2021 Notes |
883 | | ||||||
Restructuring costs |
| 19,001 | ||||||
Release of valuation allowance on certain deferred tax assets |
(1,370 | ) | (2,853 | ) | ||||
Loss on disposal of property and equipment |
3,689 | 1,384 | ||||||
Loss (gain) on divestiture of businesses, net |
(1,360 | ) | 3,899 | |||||
Bad debt expense |
2,681 | 3,235 | ||||||
Deferred rent |
1,730 | 2,553 | ||||||
Amortization of bond premium |
1,489 | 2,487 | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
(13,324 | ) | (1,051 | ) | ||||
Prepaid expenses and other assets |
(13,260 | ) | (761 | ) | ||||
Accounts payable |
856 | (11,158 | ) | |||||
Accrued expenses and other current liabilities |
(5,065 | ) | (18,384 | ) | ||||
Accrued compensation and benefits |
12,463 | (4,020 | ) | |||||
Deferred revenue |
7,794 | (2,434 | ) | |||||
Other long-term liabilities |
1,612 | (965 | ) | |||||
|
|
|
|
|||||
Net cash provided by operating activities |
8,645 | 22,659 | ||||||
Investing activities |
||||||||
Proceeds from maturities of investments |
197,407 | 335,443 | ||||||
Purchases of investments |
(175,210 | ) | (307,658 | ) | ||||
Proceeds from sales of investments |
4,963 | 8,260 | ||||||
Decrease in restricted cash, net of amounts assumed in connection with an acquisition |
1,962 | 3,931 | ||||||
Purchases of property and equipment |
(62,060 | ) | (52,685 | ) | ||||
Purchases of intangible assets |
(9,662 | ) | (15,423 | ) | ||||
Purchase of cost method investment |
(10,000 | ) | | |||||
Proceeds from divestiture of businesses |
3,200 | 23,359 | ||||||
Cash acquired in acquisition, net |
| 173,406 | ||||||
Cash paid for acquisitions, net |
(16,319 | ) | (104,192 | ) | ||||
|
|
|
|
|||||
Net cash provided by (used in) investing activities |
(65,719 | ) | 64,441 | |||||
Financing activities |
||||||||
Proceeds from issuance of 2021 Notes, net of issuance costs |
447,784 | | ||||||
Premiums paid for Capped Call Confirmations |
(36,616 | ) | | |||||
Partial repurchase of 2020 Notes |
(370,235 | ) | | |||||
Proceeds from exercise of stock options |
31,211 | 24,423 | ||||||
Value of equity awards withheld for tax liability |
(616 | ) | (8,150 | ) | ||||
|
|
|
|
|||||
Net cash provided by financing activities |
71,528 | 16,273 | ||||||
Net increase in cash and cash equivalents during period |
14,454 | 103,373 | ||||||
Cash and cash equivalents at beginning of period |
229,138 | 125,765 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period |
$ | 243,592 | $ | 229,138 | ||||
|
|
|
|
|||||
Supplemental disclosures of cash flow information |
||||||||
Cash paid for interest |
$ | 6,325 | $ | 6,325 | ||||
Noncash transactions: |
||||||||
Value of Class A common stock issued in connection with an acquisition |
$ | | $ | 1,883,728 | ||||
Capitalized share-based compensation |
$ | 10,061 | $ | 10,319 | ||||
Write-off of fully depreciated property and equipment |
$ | 14,564 | $ | 26,242 | ||||
Write-off of fully amortized intangible assets |
$ | 9,293 | $ | |
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Adjusted EBITDA
The following table presents a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, for each of the periods presented (in thousands, unaudited):
Three Months Ended December 31, |
Year Ended December 31, |
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2016 | 2015 | 2016 | 2015 | |||||||||||||
Reconciliation of Adjusted EBITDA to Net Loss: |
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Net loss |
$ | (23,491 | ) | $ | (25,720 | ) | $ | (220,438 | ) | $ | (148,874 | ) | ||||
Other income |
(716 | ) | (416 | ) | (2,711 | ) | (1,501 | ) | ||||||||
Depreciation and amortization expense |
25,738 | 21,355 | 100,590 | 75,386 | ||||||||||||
Share-based compensation expense |
25,766 | 24,312 | 106,918 | 105,214 | ||||||||||||
Acquisition-related costs |
533 | 432 | 1,423 | 16,576 | ||||||||||||
Restructuring costs |
| 409 | | 35,551 | ||||||||||||
Loss (gain) on divestiture of businesses |
| 225 | (1,251 | ) | 4,368 | |||||||||||
Interest expense |
2,668 | 1,589 | 7,408 | 5,489 | ||||||||||||
Loss on debt extinguishment |
22,757 | | 22,757 | | ||||||||||||
Income tax (benefit) expense |
1,494 | (1,792 | ) | 130 | (4,645 | ) | ||||||||||
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Adjusted EBITDA (1) |
$ | 54,749 | $ | 20,394 | $ | 14,826 | $ | 87,564 | ||||||||
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(1) | For the year ended December 31, 2016, Adjusted EBITDA includes the impact of a $130.0 million litigation settlement and $28.9 million in related legal costs. |
The following table presents a reconciliation of forecasted Adjusted EBITDA to forecasted net loss for each of the periods presented (in thousands, unaudited):
Three Months Ending March 31, 2017 |
Year Ending December 31, 2017 |
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Reconciliation of Forecasted Adjusted EBITDA to Forecasted Net Loss: |
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Forecasted Net loss |
$ | (16,550 | ) | $ | (30,200 | ) | ||
Forecasted Other income |
(750 | ) | (3,000 | ) | ||||
Forecasted Depreciation and amortization expense |
27,000 | 117,500 | ||||||
Forecasted Share-based compensation expense |
27,000 | 108,500 | ||||||
Forecasted Interest expense |
1,800 | 7,200 | ||||||
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Forecasted Adjusted EBITDA |
$ | 38,500 | $ | 200,000 | ||||
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Non-GAAP Net Income (Loss) per Share
The following table presents a reconciliation of net income (loss), adjusted, to net loss, as reported on a GAAP basis, and the calculation of non-GAAP net income (loss) per share - basic and diluted, for each of the periods presented (in thousands, except per share data, unaudited):
Three Months Ended December 31, |
Year Ended December 31, |
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2016 | 2015 | 2016 | 2015 | |||||||||||||
Net loss, as reported |
$ | (23,491 | ) | $ | (25,720 | ) | $ | (220,438 | ) | $ | (148,874 | ) | ||||
Share-based compensation expense |
25,766 | 24,312 | 106,918 | 105,214 | ||||||||||||
Acquisition-related costs |
533 | 432 | 1,423 | 16,576 | ||||||||||||
Restructuring costs |
| 409 | | 35,551 | ||||||||||||
Loss on debt extinguishment |
22,757 | | 22,757 | | ||||||||||||
Income tax (benefit) expense |
1,494 | (1,792 | ) | 130 | (4,645 | ) | ||||||||||
Loss (gain) on divestiture of businesses |
| 225 | (1,251 | ) | 4,368 | |||||||||||
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Net income (loss), adjusted |
$ | 27,059 | $ | (2,134 | ) | $ | (90,461 | ) | $ | 8,190 | ||||||
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Non-GAAP net income (loss) per share - basic |
$ | 0.15 | $ | (0.01 | ) | $ | (0.50 | ) | $ | 0.05 | ||||||
Non-GAAP net income (loss) per share - diluted |
$ | 0.14 | $ | (0.01 | ) | $ | (0.50 | ) | $ | 0.05 | ||||||
Weighted-average shares outstanding - basic |
181,852 | 178,020 | 180,149 | 169,767 | ||||||||||||
Weighted-average shares outstanding - diluted |
190,331 | 178,020 | 180,149 | 177,157 |
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Revenue by Type
The following tables present our revenue by type and as a percentage of total revenue for each of the periods presented (in thousands, unaudited):
Three Months Ended December 31, |
Year Ended December 31, |
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2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenue: |
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Marketplace revenue: |
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Premier Agent |
$ | 164,335 | $ | 124,396 | $ | 604,292 | $ | 446,921 | ||||||||
Other real estate |
29,788 | 12,164 | 102,635 | 35,171 | ||||||||||||
Mortgages |
16,512 | 11,688 | 71,133 | 44,263 | ||||||||||||
Market Leader |
| 5 | | 29,549 | ||||||||||||
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Total Marketplace revenue |
210,635 | 148,253 | 778,060 | 555,904 | ||||||||||||
Display revenue |
16,977 | 21,117 | 68,529 | 88,773 | ||||||||||||
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Total revenue |
$ | 227,612 | $ | 169,370 | $ | 846,589 | $ | 644,677 | ||||||||
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Three Months Ended December 31, |
Year Ended December 31, |
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2016 | 2015 | 2016 | 2015 | |||||||||||||
Percentage of Total Revenue: |
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Marketplace revenue: |
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Premier Agent |
72 | % | 73 | % | 71 | % | 69 | % | ||||||||
Other real estate |
13 | % | 7 | % | 12 | % | 5 | % | ||||||||
Mortgages |
7 | % | 7 | % | 8 | % | 7 | % | ||||||||
Market Leader |
0 | % | 0 | % | 0 | % | 5 | % | ||||||||
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Total Marketplace revenue |
93 | % | 88 | % | 92 | % | 86 | % | ||||||||
Display revenue |
7 | % | 12 | % | 8 | % | 14 | % | ||||||||
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Total revenue |
100 | % | 100 | % | 100 | % | 100 | % | ||||||||
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Unique Users
The following table sets forth our average monthly unique users for each of the periods presented:
Average Monthly Unique Users for the Three Months Ended December 31, |
2015 to 2016 | |||||
2016 | 2015 | % Change | ||||
(in thousands) | ||||||
Unique Users |
140,141 | 123,658 | 13% |
Unique Users source: We measure Zillow unique users with Google Analytics and Trulia unique users with Omniture analytical tools.
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