ZILLOW GROUP, INC. Q4 FY2024 earnings call

• Zillow has the leading brand in residential real estate with a large and engaged audience, executing on a differentiated housing super app strategy.
• For sale: focused on capturing more revenue by enhancing the experience for buyers, sellers, and professionals, integrating Premier Agent with Zillow Home Loans, expanding seller services with Zillow Showcase which saw strong performance with listings selling faster and for more money.
• Rentals: built a large two-sided marketplace with 1.9 million active rental listings, expanded multifamily properties, and partnered with Redfin to expand reach of multifamily listings, driving growth in revenue.

For sale category in Q4 2024: revenue was $428 million, up 15% year-over-year. Residential revenue grew 11% year-over-year to $387 million, and mortgages revenue grew 86% year-over-year to $41 million. Rentals category in Q4 2024: revenue was $116 million, up 25% year-over-year. Multifamily properties on Zillow increased to 50,000 from 37,000 at the end of 2023. For full year 2024, for sale revenue grew 12%, with residential up 10% and mortgages up 51%. Rentals revenue grew 27% with multifamily revenue growing 42% as multifamily properties increased by 13,000 over the year. Revenue contribution: for sale and rentals are the two main categories, with for sale including residential and mortgages, and rentals having significant growth in multifamily properties.

• Q1 2025: expected total revenue between $575 million and $590 million, implying 10% year-over-year increase at midpoint. For sale revenue mid-single digit growth, mortgages revenue ~30% growth. Rentals revenue ~30% year-over-year growth. EBITDA between $125 million and $140 million, ~23% margin at midpoint.
• Full year 2025: expect enhanced market connections to expand from 21% to 35%+, low to mid-teens revenue growth, positive GAAP net income. Long term, path to $5 billion in revenue and 45% EBITDA margin in normalized housing market with key drivers in for sale, rentals, and market return to mid-cycle levels.

• Uncertainties in housing market conditions which can impact revenue and growth.
• Regulatory changes that may affect operations and partnerships.
• Challenges in integrating new products and services such as the integration of Premier Agent with Zillow Home Loans and expansion of enhanced markets.

Q: On Enhanced Markets, how to get to 75% of connections and details on the Redfin deal?

A: Jeremy Wacksman discussed methodical scaling of Enhanced Markets, with mid-teens Zillow Home Loans adoption rates in mature markets and plans to get majority of customers into the better experience. Jeremy Hofmann talked about the Redfin deal, including $100 million upfront payment, 5-year term with extensions, and ramping over 2025 with financial benefits in 2026 and beyond.

Q: On AI influence on the business?

A: Jeremy Wacksman mentioned Zillow has long been innovating with AI, focusing on making workforce more efficient, helping real estate professionals by automating busy work to provide better service to clients, and investing in AI experiences across search, rich media, etc.

Q: On 2025 outlook and agent behavior?

A: Jeremy Hofmann said expecting outperformance against housing market, with Enhanced Markets showing strong growth in oldest markets and repeatable success in subsequent ones. Jeremy Wacksman noted good support from agent partners, with top producers leaning in for growth opportunities from new solutions like real-time touring and Zillow Home Loans.

Q: On mortgage revenue and market outlook?

A: Jeremy Wacksman discussed strong mortgage growth driven by Enhanced Markets, with mid-teens adoption rates in mature markets. On market outlook, mentioned affordability and supply challenges but Zillow's ability to grow share regardless, expecting positive GAAP net income in 2025 despite flattish housing market in Q1.