Zillow Group, Inc. (Z): history, ownership, mission, how it works & makes money

A Brief History of Zillow Group, Inc.

Zillow Group, Inc. (NASDAQ: Z) has evolved significantly since its inception in 2006. The company initially focused on providing a platform for real estate listings but has since diversified its services to include mortgages and rental listings. As of 2024, Zillow continues to be a major player in the real estate market, leveraging technology to enhance user experience and operational efficiency.

Financial Performance Overview

In the second quarter of 2024, Zillow reported revenue of $572 million, a 13% increase compared to $506 million in Q2 2023. This growth was driven by higher revenues in residential, rentals, and mortgages:

For the first half of 2024, total revenue reached $1.1 billion, up from $975 million in the same period of 2023, reflecting a 13% year-over-year increase.

Cost Structure and Profitability

Zillow's cost of revenue for Q2 2024 was $130 million, compared to $104 million in Q2 2023, marking a 25% increase. Gross profit stood at $442 million, yielding a gross margin of 77%.

Operating expenses in Q2 2024 totaled $480 million, leading to a loss from operations of $38 million. The net loss for the quarter was $17 million, resulting in a net loss per share of $0.07.

Market Position and Strategic Initiatives

Zillow's strategic acquisitions, such as the purchase of Follow Up Boss for $399 million in December 2023, have expanded its capabilities in customer relationship management. This acquisition is expected to enhance Zillow's offerings for real estate professionals, thereby increasing user engagement and boosting revenues.

As of June 30, 2024, Zillow's total debt was $1.7 billion, comprising convertible senior notes and master repurchase agreements. The company's liquidity remains robust with cash and cash equivalents totaling $1.2 billion.

User Engagement Metrics

For the three months ended June 30, 2024, Zillow reported 2.495 billion visits to its platforms, a 4% increase year-over-year. The average monthly unique visitors reached 32 million in the same period.

These metrics reflect Zillow's continued focus on enhancing user experience through innovative technology and strategic marketing efforts. As the company navigates the evolving real estate landscape, its emphasis on technology integration positions it well for future growth and market leadership.

A Who Owns Zillow Group, Inc. (Z)

Major Shareholders

As of 2024, Zillow Group, Inc. (Z) has a diverse ownership structure comprising institutional investors, individual stakeholders, and company insiders. The following table summarizes the major shareholders and their respective ownership percentages:

Institutional Ownership

Institutional investors hold a significant portion of Zillow's shares, reflecting confidence in the company's future. The following table provides a breakdown of institutional ownership as of mid-2024:

Insider Transactions

Insiders, including executives and board members, also play a crucial role in the ownership landscape of Zillow. The following table details insider ownership and recent transactions:

Retail Investor Participation

Retail investors constitute a majority of Zillow's shareholder base, reflecting widespread public interest in the company. The following table outlines retail ownership as of 2024:

Conclusion

In summary, Zillow Group, Inc. (Z) is predominantly owned by institutional investors, with a significant portion held by retail investors, showcasing a robust and diverse ownership structure. This distribution reflects the company's appeal across various investor demographics.

Zillow Group, Inc. (Z) Mission Statement

Mission Statement Overview

Zillow Group, Inc. aims to reimagine real estate to make home a reality for more people. As the most visited real estate website in the United States, Zillow connects people with digital solutions, dedicated partners, and agents to facilitate easier buying, selling, financing, and renting experiences.

Key Financial Metrics

Revenue Breakdown

The company's revenue is classified into four main categories: Residential, Rentals, Mortgages, and Other. The following table provides a detailed breakdown of revenue by category for the six months ended June 30, 2024, and 2023.

Key Performance Indicators

Management has identified various key performance indicators relevant to investors, including visits, unique users, and loan origination volumes. The following table summarizes key metrics for the three months ended June 30, 2024, compared to the same period in 2023.

Market Position and Strategy

Zillow Group is committed to enhancing its market position through strategic acquisitions and partnerships. Recent acquisitions include Follow Up Boss for $399 million, aimed at integrating software solutions for real estate professionals.

Employee Metrics

As of June 30, 2024, Zillow Group employed approximately 6,682 individuals, a notable increase from 6,263 employees as of December 31, 2023.

How Zillow Group, Inc. (Z) Works

Business Model

Zillow Group operates through multiple segments, primarily focusing on Residential, Rentals, Mortgages, and Other revenue streams. The company connects consumers with real estate professionals and offers a variety of digital solutions.

Financial Performance

As of June 30, 2024, Zillow Group reported total revenue of $1.1 billion, which is an increase of 13% compared to the same period in 2023. The breakdown of revenue by segment is as follows:

Key Metrics

For the six months ended June 30, 2024:

• Total visits to Zillow's platforms were 4.8 billion, an increase of 4% year-over-year.
• Unique users reached 38 million, up from 36 million in the previous year.
• Total loan origination volume increased by 127% to $1.4 billion.

Cost Structure

For the six months ended June 30, 2024, Zillow's cost of revenue was $253 million, leading to a gross profit of $848 million. The gross margin was 77%.

Operating Expenses

Operating expenses for the same period were $931 million, broken down as follows:

Net Income and Loss

For the second quarter of 2024, Zillow reported a net loss of $17 million compared to a loss of $35 million in Q2 2023. The loss per share was $0.07 for the quarter.

Debt and Financing

As of June 30, 2024, Zillow had total debt of $1.7 billion, which includes:

Employee Count

As of June 30, 2024, Zillow Group employed 6,682 individuals, an increase from 6,263 at the end of 2023.

Market Conditions

The company's performance is influenced by the overall health of the housing market, characterized by factors such as low inventory, fluctuations in mortgage rates, and inflationary pressures. Despite these challenges, Zillow continues to invest in its growth initiatives.

How Zillow Group, Inc. (Z) Makes Money

Revenue Streams

Zillow Group, Inc. generates revenue through four primary categories: Residential, Rentals, Mortgages, and Other.

Residential Revenue

Residential revenue includes income from the Premier Agent program, new construction marketplaces, and advertising sales. For the six months ended June 30, 2024, the Residential revenue amounted to $802 million, an increase of $61 million or 8% compared to the same period in 2023. This segment accounted for approximately 73% of total revenue.

Rentals Revenue

Rentals revenue is derived from advertising and tools sold to property managers and landlords. For the six months ended June 30, 2024, Rentals revenue increased to $214 million, up by $49 million or 30% compared to the previous year, making up 19% of total revenue.

Mortgages Revenue

Mortgages revenue primarily includes income from mortgage originations and the sale of mortgages through Zillow Home Loans. For the six months ended June 30, 2024, this revenue segment reached $65 million, reflecting a $15 million increase or 30% compared to the same period in 2023, representing 6% of total revenue.

Other Revenue

This category includes revenue from display advertising and other miscellaneous sources. For the six months ended June 30, 2024, Other revenue was $20 million, a slight increase of $1 million or 5% compared to the previous year.

Financial Performance Overview

For the three months ended June 30, 2024, Zillow Group reported total revenue of $572 million, an increase of $66 million or 13% from $506 million in the same period of 2023. The gross profit for the same period was $442 million, leading to a gross margin of 77%.

Key Metrics

As of June 30, 2024, Zillow reported having 6,682 employees, an increase from 6,263 employees at the end of 2023. The increase in workforce aligns with the company’s strategic growth initiatives.

Additionally, the total loan origination volume for Zillow Home Loans during the six months ended June 30, 2024, was $1.4 billion, reflecting a 127% increase from $602 million in the same period of 2023.

Conclusion on Revenue Growth

Zillow Group continues to leverage its digital platform to enhance user engagement and expand its revenue sources across various segments. The growth trends observed in Residential, Rentals, and Mortgages revenue indicate a robust business model amidst fluctuating market conditions.