Segment Information and Revenue

12 Months Ended

Dec. 31, 2019

Beginning January 1, 2019, we have three operating and reportable segments, which have been identified based on the way in which our chief operating decision-maker manages our business, makes operating decisions and evaluates operating performance. The chief executive officer acts as the chief operating decision-maker and reviews financial and operational information for the Homes, Internet, Media & Technology (“IMT”) and Mortgages segments.

The Homes segment includes the financial results from Zillow Group’s purchase and sale of homes directly. The IMT segment includes the financial results for the Premier Agent, Rentals and new construction marketplaces, dotloop, and display, as well as revenue from the sale of various other marketing and business products and services to real estate professionals. The Mortgages segment includes financial results for advertising sold to mortgage lenders and other mortgage professionals, mortgage originations through Zillow Home Loans and the sale of mortgages on the secondary market, as well as Mortech mortgage software solutions.

Revenue and costs are directly attributed to our segments when possible. However, due to the integrated structure of our business, certain costs incurred by one segment may benefit the other segments. These costs primarily include headcount-related expenses, general and administrative expenses including executive, finance, accounting, legal, human resources, recruiting, and facilities costs, product development and data acquisition costs and marketing and advertising costs. These costs are allocated to each segment based on the estimated benefit each segment receives from such expenditures.

The chief executive officer reviews information about our revenue categories as well as statement of operations data inclusive of loss before income taxes by segment. This information is included in the following tables for the periods presented (in thousands):


	Year Ended December 31, 2019										Year Ended December 31, 2018								Year Ended December 31, 2017
	Homes		IMT		Mortgages		Homes		IMT		Mortgages		Homes		IMT		Mortgages
Revenue:
Homes	$	1,365,250	$	—	$	—	$	52,365	$	—	$	—	$	—	$	—	$	—
Premier Agent	—		923,876		—		—		898,332		—		—		761,594		—
Rentals	—		164,173		—		—		134,587		—		—		102,544		—
Other	—		188,847		—		—		168,224		—		—		132,065		—
Mortgages	—		—		100,691		—		—		80,046		—		—		80,591
Total revenue	1,365,250		1,276,896		100,691		52,365		1,201,143		80,046		—		996,203		80,591
Costs and expenses:
Cost of revenue	1,315,345		98,522		18,154		49,392		96,693		7,505		—		80,310		4,893
Sales and marketing	171,634		488,909		53,585		17,134		502,785		32,702		—		415,739		32,462
Technology and development	78,994		365,769		32,584		21,351		363,712		25,755		—		297,007		22,978
General and administrative	81,407		243,636		41,133		22,002		220,564		19,587		—		192,581		18,235
Impairment costs	—		—		—		—		75,000		4,000		—		161,850		12,150
Acquisition-related costs	—		—		—		—		27		2,305		—		463		—
Integration costs	—		—		650		—		—		2,015		—		—		—
Total costs and expenses	1,647,380		1,196,836		146,106		109,879		1,258,781		93,869		—		1,147,950		90,718
Income (loss) from operations	(282,130)		80,060		(45,415)		(57,514)		(57,638)		(13,823)		—		(151,747)		(10,127)
Segment other income	—		—		1,409		—		—		244		—		—		—
Segment interest expense	(29,990)		—		(956)		(2,177)		—		(132)		—		—		—
Income (loss) before income taxes (1)	$	(312,120)	$	80,060	$	(44,962)	$	(59,691)	$	(57,638)	$	(13,711)	$	—	$	(151,747)	$	(10,127)

(1) The following table presents the reconciliation of total segment loss before income taxes to consolidated loss before income taxes for the periods presented (in thousands):


	Year Ended December 31,
	2019		2018		2017
Total segment loss before income taxes	$	(277,022)	$	(131,040)	$	(161,874)
Corporate interest expense	(70,846)		(38,946)		(27,517)
Corporate other income	38,249		19,026		5,385
Consolidated loss before income taxes	$	(309,619)	$	(150,960)	$	(184,006)

Certain corporate items are not directly attributable to any of our segments, including interest income earned on our short-term investments included in Other income and interest costs on our convertible senior notes included in Interest expense.