Zillow Group, Inc.
Aug 4, 2016

Zillow Group Reports Second Quarter 2016 Results

SEATTLE, Aug. 04, 2016 (GLOBE NEWSWIRE) -- 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 web, today announced its consolidated financial results for the three months ended June 30, 2016.

"Record revenue and traffic growth were highlights of Zillow Group's tremendous second quarter," said Zillow Group CEO Spencer Rascoff. "We continue to command significant category leadership on mobile and web, reaching an all-time high of unique users in May and achieving our largest market share of the real estate category. It is clear that our monetization on mobile is benefiting from our significant market leadership, which now captures 78% of the mobile-only category. We are executing well against our long-term strategic priorities to increase our audience size, grow our Premier Agent and emerging marketplaces, and attract and retain the best talent in the industry."    

Second Quarter 2016 Financial Highlights

Throughout this release, certain historical financial results and year-over-year comparisons are presented on a pro forma basis. Pro forma results exclude items described in the reconciliation tables below and assume the February 2015 acquisition of Trulia occurred on January 1, 2014, the beginning of the comparable reporting period for the year prior to the year of acquisition. The pro forma results are presented in order to provide additional insights into the underlying trends in the business. Financial information for the three and six month periods ended June 30, 2016 is presented in this release on an as-reported basis. Reported results were prepared in accordance with U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

Operating and Business Highlights

                                                                 
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.
2 comScore data June 2016

Business Outlook - Third Quarter and Full Year 2016

For full year 2016, Zillow Group is increasing its outlook for Revenue to a range of $830 million to $840 million, up from a range of $825 million to $835 million. The 2016 Revenue outlook represents a 30% year-over-year increase at the midpoint of the range, compared to a 24% increase from 2014 to 2015, on a pro forma basis and excluding revenue from Market Leader, which was divested in 2015.

The following table presents Zillow Group's business outlook for the periods presented (in millions):

          
  Three Months Ending Year Ending 
Zillow Group Outlook as of August 4, 2016 September 30, 2016 December 31, 2016 
(in millions)         
Revenue $217 to$222  $830 to$840  
Premier Agent revenue $156 to$158  $597 to$602  
Display revenue $15 to$16  $60 to$62  
Operating expenses $220 to$225  *** 
Adjusted EBITDA (1) $48 to$53  $125 to$135  
Depreciation and amortization $24 to$26  $97 to$102  
Share-based compensation expense $26 to$28  $105 to$110  
Capital expenditures *** $44 to$46  
Weighted average shares outstanding — basic   179.5 to181.5   179.0 to 181.0  
Weighted average shares outstanding — diluted  196.0 to 198.0   195.5 to 197.5  
          
*** Outlook not provided         
          

(1) Forecasted Adjusted EBITDA for the year ending December 31, 2016 in the table above excludes the impact of a $130.0 million litigation settlement and includes $28.2 million in related legal costs. Including the impact of the $130.0 million litigation settlement and $28.2 million in related legal costs, forecasted Adjusted EBITDA for the year ending December 31, 2016 is $0. A reconciliation of forecasted Adjusted EBITDA (including the impact of the $130.0 million litigation settlement and $28.2 million in related legal costs) to forecasted net loss is provided below in this press release.

Conference Call and Webcast Information

Zillow Group's 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 management's 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.

Zillow Group's management will first read the prepared remarks and then answer questions submitted via Twitter® during the live conference call, in addition to answering questions from dialed-in participants. 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, with conference ID# 42951979. 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 2016. Statements containing words such as "may," "believe," "anticipate," "expect," "intend," "plan," "project," "will," "projections," "continue," "business outlook," "estimate," "outlook," or similar expressions constitute forward-looking statements. 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, Zillow Group's ability to successfully integrate and realize the benefits of our past or future strategic acquisitions or investments; Zillow Group's ability to maintain and effectively manage an adequate rate of growth; Zillow Group's ability to maintain or establish relationships with listings and data providers; the impact of the real estate industry on Zillow Group's business; Zillow Group's ability to innovate and provide products and services that are attractive to its users and advertisers; Zillow Group's ability to increase awareness of the Zillow Group brands; Zillow Group's ability to attract consumers to Zillow Group's mobile applications and websites; Zillow Group's ability to compete successfully against existing or future competitors; the reliable performance of Zillow Group's network infrastructure and content delivery processes; and Zillow Group's 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 Group's business and financial results, please review the "Risk Factors" described in Zillow Group's Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission, or SEC, and in Zillow Group's 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 certain pro forma financial results, Adjusted EBITDA and non-GAAP net income (loss) per share, all of which are non-GAAP financial measures. We have provided a reconciliation of pro forma Adjusted EBITDA to pro forma net loss, Adjusted EBITDA 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 and pro forma weighted-average shares outstanding - basic and diluted, within this earnings release.

The pro forma financial results included in this press release, although helpful in illustrating the financial characteristics of Zillow Group under one set of assumptions, are not true historical financial results. They are provided for informational purposes and do not attempt to represent Zillow Group's actual financial condition if the February 2015 acquisition of Trulia had been completed on the applicable dates of the financial statements presented herein, or to predict or suggest future results.

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:

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 and income taxes. 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 and income taxes 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 company's brands focus on all stages of the home lifecycle: renting, buying, selling, financing and home improvement. Zillow Group is committed to empowering consumers with 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® 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, Inc.

Twitter is a registered trademark of Twitter, Inc.

(ZFIN)

Pro Forma Financial Information

The following financial information for the three and six month periods ended June 30, 2015 is presented on a pro forma basis and gives effect to the February 2015 acquisition of Trulia as if it were consummated on January 1, 2014, the beginning of the comparable reporting period for the year prior to the year of acquisition. For ease of year-over-year comparison, this pro forma financial information is presented with financial information for the three and six month periods ended June 30, 2016, which is presented on an as-reported basis (in thousands, except per share data, unaudited):

 Three Months Ended Six Months Ended 
 June 30,  June 30, 
 2016 (1) 2015 (2) 2016 (1)  2015 (3) 
         
Pro forma revenue$  208,403  $  171,269  $  394,385  $  333,800  
Pro forma net loss$ (156,149) $  (26,731) $ (203,754) $  (44,585) 
Pro forma net loss per share — basic and diluted$  (0.87) $  (0.15) $  (1.14) $  (0.25) 
Pro forma weighted-average shares outstanding — basic and diluted   179,451     176,142     179,067     175,290  
_________        
         
Other Financial Data:        
Pro forma Adjusted EBITDA (4)$ (101,260) $  21,039  $  (99,386) $  45,540  
         

(1) The financial information for the three and six month periods ended June 30, 2016 is presented on an as-reported basis.

(2) The pro forma net loss for the three months ended June 30, 2015 includes pro forma adjustments for $6.7 million to eliminate restructuring costs associated with the acquisition of Trulia reflected in the historical financial statements, $3.7 million to eliminate share-based compensation expense attributable to substituted equity awards and $1.7 million to eliminate direct and incremental acquisition-related costs reflected in the historical financial statements.

(3) The pro forma net loss for the six months ended June 30, 2015 includes pro forma adjustments for $47.9 million to eliminate direct and incremental acquisition-related costs reflected in the historical financial statements, $37.3 million to eliminate share-based compensation expense attributable to substituted equity awards and to record additional share-based compensation expense attributable to substituted equity awards, $31.9 million to eliminate restructuring costs associated with the acquisition of Trulia reflected in the historical financial statements, $2.4 million to record additional amortization expense for acquired intangible assets and $1.1 million to eliminate Trulia's historical amortization of capitalized website development costs.  

(4) See below for a reconciliation of pro forma Adjusted EBITDA to pro forma net loss. For the three and six month periods ended June 30, 2016, Adjusted EBITDA includes the impact of a $130.0 million litigation settlement. Adjusted EBITDA for the three and six month periods ended June 30, 2016 also includes $12.5 million and $28.2 million, respectively, in related legal costs.

The basic and diluted pro forma net loss per share is based on the weighted-average number of shares of Zillow Group common stock and Class C capital stock outstanding for the period presented and adjusted for the number of shares of Class A common stock issued in connection with the February 2015 acquisition of Trulia, assuming for the purposes of the unaudited pro forma condensed combined statements of operations that the closing date of the acquisition was January 1, 2014. The calculation of the number of shares used in the computation of pro forma basic and diluted net loss per share is as follows (in thousands, unaudited):

         
  Three Months Ended  Six Months Ended
  June 30, June 30,
  2016 2015 2016 2015
          
 Weighted-average shares outstanding — basic and diluted (1)127,671 124,362 127,287  123,510
 Class A common stock issued in connection with the acquisition of Trulia51,780 51,780 51,780 51,780
 Pro forma weighted-average shares outstanding — basic and diluted179,451 176,142 179,067 175,290
          
 (1) Amounts exclude shares of Zillow Group Class A common stock issued in connection with the acquisition of Trulia.  

The following table presents a reconciliation of pro forma Adjusted EBITDA to pro forma net loss for the three and six month periods ended June 30, 2015. For ease of year-over-year comparison, this pro forma financial information is presented with financial information for the three and six month periods ended June 30, 2016, which is presented on an as-reported basis (in thousands, unaudited):   

          
  Three Months Ended Six Months Ended 
  June 30, June 30, 
  2016 (1)  2015  2016 (1)  2015  
Reconciliation of Pro Forma Adjusted EBITDA to Pro Forma Net Loss:         
Pro forma net loss $ (156,149) $ (26,731) $ (203,754) $ (44,585) 
Pro forma other income    (753)    (450)    (1,434)    (752) 
Pro forma depreciation and amortization expense    25,550     20,419     49,357     40,281  
Pro forma share-based compensation expense    28,316     26,221     53,867     47,457  
Pro forma acquisition-related costs    204     -     797     -  
Pro forma interest expense    1,572     1,580      3,145     3,139  
Pro forma income tax benefit    -     -     (1,364)    -  
  Pro forma Adjusted EBITDA $  (101,260) $  21,039  $  (99,386) $  45,540  
          

(1) The financial information for the three and six month periods ended June 30, 2016 is presented on an as-reported basis. For the three and six month periods ended June 30, 2016, Adjusted EBITDA includes the impact of a $130.0 million litigation settlement. Adjusted EBITDA for the three and six month periods ended June 30, 2016 also includes $12.5 million and $28.2 million, respectively, in related legal costs.

The following table presents our pro forma revenue by type for the six months ended June 30, 2015. For ease of year-over-year comparison, the pro forma financial information is presented with financial information for the three and six month periods ended June 30, 2016, which is presented on an as-reported basis (in thousands, unaudited):

         
 Three Months Ended Six Months Ended 
 June 30, June 30, 
 2016 (1) 2015 (1) 2016 (1)  2015  
Pro Forma Revenue:        
Pro forma Marketplace revenue:        
  Real estate:        
    Premier Agent$  147,106  $  115,185  $  281,635  $  222,342  
    Other real estate    26,070     7,373     44,048     13,612  
  Total pro forma Real estate revenue    173,176     122,558     325,683     235,954  
  Mortgages   18,392     10,393     34,846     20,343  
  Market Leader   -      12,530     -      26,111  
Total pro forma Marketplace revenue   191,568     145,481     360,529     282,408  
Pro forma Display revenue   16,835     25,788     33,856     51,392  
   Total pro forma revenue$  208,403  $  171,269  $  394,385  $  333,800  
         

(1) The financial information for the three months ended June 30, 2015 and for the three and six month periods ended June 30, 2016 is presented on an as-reported basis.

Reported Consolidated Results   

ZILLOW GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS 
(in thousands)
     
   
  June 30, 2016 December 31, 2015
Assets    
Current assets:    
  Cash and cash equivalents $  155,210  $  229,138 
  Short-term investments    264,933     291,151 
  Accounts receivable, net     35,494     29,789 
  Prepaid expenses and other current assets    15,728     24,016 
Total current assets    471,365     574,094 
Restricted cash    1,053     3,015 
Property and equipment, net    98,799     89,639 
Goodwill    1,919,777     1,909,167 
Intangible assets, net    539,965     554,765  
Other assets    6,142     5,020 
Total assets $  3,037,101  $  3,135,700 
     
Liabilities and shareholders' equity    
Current liabilities:    
  Accounts payable $  17,144  $  3,361 
  Accrued expenses and other current liabilities    48,475     43,047 
  Accrued compensation and benefits    24,303     11,392 
  Deferred revenue    25,651     21,450 
  Deferred rent, current portion    1,215     1,172 
Total current liabilities    116,788     80,422 
Deferred rent, net of current portion    15,020     13,743 
Long-term debt    230,000     230,000 
Deferred tax liabilities and other long-term liabilities    132,521     132,482 
Total liabilities    494,329     456,647 
Shareholders' equity:    
  Class A common stock    5     5 
  Class B common stock    1     1 
  Class C capital stock    12     12 
  Additional paid-in capital    3,022,736     2,956,111 
  Accumulated other comprehensive income (loss)    377     (471)
  Accumulated deficit    (480,359)    (276,605)
Total shareholders' equity    2,542,772     2,679,053 
Total liabilities and shareholders' equity $  3,037,101  $  3,135,700 
      

 

ZILLOW GROUP, INC. 
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(in thousands, except per share data) 
         
 Three Months Ended Six Months Ended 
 June 30, June 30, 
  2016   2015   2016   2015  
         
Revenue$  208,403  $  171,269  $  394,385  $  298,542   
Costs and expenses:        
       Cost of revenue (exclusive of amortization) (1)(2)   17,220     17,037     33,672     30,056  
       Sales and marketing (2)   99,256     87,942     198,016     147,228  
       Technology and development (2)   67,421     51,740     131,838     89,065  
       General and administrative (2)   179,632     43,810     233,469     81,834  
       Acquisition-related costs   204     1,679     797     14,156  
       Restructuring costs (2)   -     6,652     -     31,717  
Total costs and expenses   363,733     208,860     597,792     394,056  
Loss from operations   (155,330)    (37,591)    (203,407)    (95,514) 
Other income   753     450     1,434     719  
Interest expense   (1,572)    (1,580)    (3,145)    (2,310) 
Loss before income taxes   (156,149)    (38,721)    (205,118)    (97,105) 
Income tax benefit   -     -     1,364     -  
Net loss$ (156,149) $  (38,721) $ (203,754) $  (97,105) 
Net loss per share — basic and diluted$  (0.87) $  (0.22) $  (1.14) $  (0.60) 
Weighted-average shares outstanding — basic and diluted   179,451     176,142      179,067     161,847  
_________        
(1) Amortization of website development costs and intangible assets included in technology and development$  20,845  $  17,117  $  40,904  $  28,899  
         
(2)  Includes share-based compensation expense as follows:        
       Cost of revenue$  1,627  $  1,110   $  2,846  $  2,062  
       Sales and marketing   6,395     8,784     11,598     12,993  
       Technology and development   8,366     7,005     15,125     12,771  
       General and administrative   11,928     12,981     24,298     25,061  
       Restructuring costs   -     3,584     -     14,004  
         Total $  28,316  $  33,464  $  53,867  $  66,891  
         
Other Financial Data:        
Adjusted EBITDA (3)$ (101,260) $  21,039  $  (99,386) $  37,693  
         
(3)  See above for more information regarding our presentation of Adjusted EBITDA.      
         

 

ZILLOW GROUP, INC. 
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(in thousands) 
      
  Six Months Ended 
  June 30, 
   2016   2015  
Operating activities     
Net loss $  (203,754) $  (97,105) 
Adjustments to reconcile net loss to net cash provided by (used in) operating activities, net of amounts assumed in connection with acquisitions:     
  Depreciation and amortization    49,357     34,447  
  Share-based compensation expense    53,867     52,887  
  Restructuring costs    -     18,147  
  Release of valuation allowance on certain deferred tax assets    1,364     -  
  Loss on disposal of property and equipment    2,170     499  
  Bad debt expense    927     1,605  
  Deferred rent    1,321     2,310  
  Amortization of bond premium    808     1,593  
  Changes in operating assets and liabilities:     
    Accounts receivable    (6,608)    (5,026) 
    Prepaid expenses and other assets     7,122     8,494  
    Accounts payable     13,743     (2,516) 
    Accrued expenses and other current liabilities    5,005     13  
    Accrued compensation and benefits     12,877     (3,259) 
    Accrued restructuring costs    (169)    1,425  
    Deferred revenue    4,190      (366) 
    Other long-term liabilities    (2,749)    2,998  
Net cash provided by (used in) operating activities    (60,529)    16,146  
      
Investing activities     
Proceeds from maturities of investments    105,440     165,723  
Purchases of investments    (83,976)    (164,718 ) 
Proceeds from sales of investments    4,795     4,979  
Decrease in restricted cash, net of amounts assumed in connection with an acquisition    1,962     312  
Purchases of property and equipment    (33,393)    (25,546) 
Purchases of intangible assets    (3,321)    (8,006) 
Cash acquired in acquisition, net    -     173,406  
Cash paid for acquisition, net     (12,357)    -  
Net cash provided by (used in) investing activities    (20,850)    146,150  
      
Financing activities     
Proceeds from exercise of stock options    7,737     14,722  
Value of equity awards withheld for tax liability    (286)    (511) 
Net cash provided by financing activities    7,451     14,211  
Net increase (decrease) in cash and cash equivalents during period    (73,928)    176,507  
Cash and cash equivalents at beginning of period    229,138     125,765  
Cash and cash equivalents at end of period $  155,210  $  302,272  
      
Supplemental disclosures of cash flow information     
    Cash paid for interest $  3,163  $  3,163  
  Noncash transactions:     
    Value of Class A common stock issued in connection with an acquisition $  -  $  1,883,728  
    Capitalized share-based compensation  $  5,304  $  4,783  
    Write-off of fully depreciated property and equipment $  9,986  $  13,001  
  

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 Six Months Ended 
  June 30, June 30, 
   2016   2015   2016   2015  
Reconciliation of Adjusted EBITDA to Net Loss:          
Net loss $ (156,149) $ (38,721) $  (203,754) $ (97,105) 
Other income    (753)    (450)    (1,434)    (719) 
Depreciation and amortization expense    25,550     20,419     49,357     34,447  
Share-based compensation expense    28,316     29,880     53,867     52,887  
Acquisition-related costs     204     1,679     797     14,156  
Restructuring costs    -     6,652     -     31,717  
Interest expense    1,572     1,580     3,145     2,310  
Income tax benefit    -     -     (1,364)    -  
  Adjusted EBITDA (1)  $ (101,260) $  21,039  $  (99,386) $  37,693  
          

(1) For the three and six month periods ended June 30, 2016, Adjusted EBITDA includes the impact of a $130.0 million litigation settlement. Adjusted EBITDA for the three and six month periods ended June 30, 2016 also includes $12.5 million and $28.2 million, respectively, in related legal costs. Excluding the $130.0 million litigation settlement, Adjusted EBITDA in the second quarter of 2016 would have been $28.7 million.

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 Year Ending
  September 30, 2016 December 31, 2016
Reconciliation of Forecasted Adjusted EBITDA to Forecasted Net Loss:    
Forecasted Net loss $  (3,100) $  (210,900)
Forecasted Other income  (700)  (2,800)
Forecasted Depreciation and amortization expense  25,000   99,500 
Forecasted Share-based compensation expense  27,000   107,500 
Forecasted Acquisition-related costs  600   1,600 
Forecasted Interest expense  1,600   6,300 
Forecasted Income tax expense (benefit)  100    (1,200)
  Forecasted Adjusted EBITDA $  50,500  $  - 
     

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 Six Months Ended 
  June 30,  June 30, 
   2016   2015   2016   2015  
           
Net loss, as reported $ (156,149) $ (38,721) $ (203,754) $ (97,105) 
Share-based compensation expense    28,316     29,880     53,867      52,887  
Acquisition-related costs    204     1,679     797     14,156  
Restructuring costs    -     6,652     -     31,717  
Income tax benefit    -     -     (1,364)    -  
  Net income (loss), adjusted $ (127,629) $  (510) $ (150,454) $  1,655  
          
Non-GAAP net income (loss) per share - basic $  (0.71) $  (0.00) $  (0.84) $  0.01  
Non-GAAP net income (loss) per share - diluted $  (0.71) $  (0.00) $  (0.84) $  0.02  
Weighted-average shares outstanding - basic    179,451     176,142     179,067     161,847  
Weighted-average shares outstanding - diluted    179,451     176,142     179,067     179,876  
          

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 Six Months Ended 
 June 30, June 30, 
  2016   2015    2016   2015  
Revenue:        
Marketplace revenue:        
  Real estate:        
    Premier Agent$  147,106  $  115,185  $  281,635  $  203,077  
    Other real estate   26,070     7,373     44,048     12,793  
  Total Real estate revenue   173,176     122,558     325,683     215,870  
  Mortgages   18,392     10,393     34,846     19,951  
  Market Leader   -      12,530     -      18,587  
Total Marketplace revenue   191,568     145,481     360,529     254,408  
Display revenue   16,835     25,788     33,856     44,134  
   Total revenue$  208,403  $  171,269  $  394,385  $  298,542  
         
         
          
 Three Months Ended Six Months Ended 
 June 30, June 30, 
  2016   2015   2016    2015  
Percentage of Total Revenue:        
Marketplace revenue:        
  Real estate:         
    Premier Agent 71%  67%  71%  68% 
    Other real estate 13%  4%  11%  4% 
  Total Real estate revenue 83%  72%  83%  72% 
  Mortgages 9%  6%  9%  7% 
  Market Leader  0%  7%  0%  6% 
Total Marketplace revenue 92%  85%  91%  85% 
Display revenue 8%  15%  9%  15% 
    Total revenue 100%  100%  100%  100% 
         

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 June 30,
 2015 to 2016 
 2016 2015 % Change 
 (in thousands)   
Unique Users168,700 140,959  20% 
        

Unique users source: We measure Zillow unique users with Google Analytics and Trulia unique users with Omniture analytical tools.

Raymond Jones

Investor Relations

206-470-7137

ir@zillow.com



Katie Curnutte

Public Relations

206-757-2701

press@zillow.com

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Source: Zillow Group, Inc.

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