x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Washington | 47-1645716 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
1301 Second Avenue, Floor 31, Seattle, Washington | 98101 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | x | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Class A Common Stock, par value $0.0001 per share | ZG | The Nasdaq Global Select Market |
Class C Capital Stock, par value $0.0001 per share | Z | The Nasdaq Global Select Market |
Page | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | ||
• | Zillow Group Investor Relations Webpage (http://investors.zillowgroup.com) |
• | Zillow Group Investor Relations Blog (http://www.zillowgroup.com/ir-blog) |
• | Zillow Group Twitter Account (https://twitter.com/zillowgroup) |
March 31, 2019 | December 31, 2018 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Short-term investments | |||||||
Accounts receivable, net of allowance for doubtful accounts of $4,942 and $4,838 at March 31, 2019 and December 31, 2018, respectively | |||||||
Inventory | |||||||
Mortgage loans held for sale | |||||||
Prepaid expenses and other current assets | |||||||
Restricted cash | |||||||
Total current assets | |||||||
Contract cost assets | |||||||
Property and equipment, net | |||||||
Right of use assets | — | ||||||
Goodwill | |||||||
Intangible assets, net | |||||||
Other assets | |||||||
Total assets | $ | $ | |||||
Liabilities and shareholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | $ | |||||
Accrued expenses and other current liabilities | |||||||
Accrued compensation and benefits | |||||||
Revolving credit facilities | |||||||
Warehouse lines of credit | |||||||
Deferred revenue | |||||||
Deferred rent, current portion | |||||||
Lease liabilities, current portion | — | ||||||
Total current liabilities | |||||||
Deferred rent, net of current portion | |||||||
Lease liabilities, net of current portion | — | ||||||
Long-term debt | |||||||
Deferred tax liabilities and other long-term liabilities | |||||||
Total liabilities | |||||||
Commitments and contingencies (Note 17) | |||||||
Shareholders’ equity: | |||||||
Preferred stock, $0.0001 par value; 30,000,000 shares authorized; no shares issued and outstanding | |||||||
Class A common stock, $0.0001 par value; 1,245,000,000 shares authorized; 58,315,359 and 58,051,448 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | |||||||
Class B common stock, $0.0001 par value; 15,000,000 shares authorized; 6,217,447 shares issued and outstanding as of March 31, 2019 and December 31, 2018 | |||||||
Class C capital stock, $0.0001 par value; 600,000,000 shares authorized; 140,597,526 and 139,635,370 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | |||||||
Additional paid-in capital | |||||||
Accumulated other comprehensive income (loss) | ( | ) | |||||
Accumulated deficit | ( | ) | ( | ) | |||
Total shareholders’ equity | |||||||
Total liabilities and shareholders’ equity | $ | $ |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Revenue: | |||||||
IMT | $ | $ | |||||
Homes | |||||||
Mortgages | |||||||
Total revenue | |||||||
Cost of revenue (exclusive of amortization) (1): | |||||||
IMT | |||||||
Homes | |||||||
Mortgages | |||||||
Total cost of revenue | |||||||
Sales and marketing | |||||||
Technology and development | |||||||
General and administrative | |||||||
Acquisition-related costs | |||||||
Integration costs | |||||||
Total costs and expenses | |||||||
Loss from operations | ( | ) | ( | ) | |||
Other income | |||||||
Interest expense | ( | ) | ( | ) | |||
Loss before income taxes | ( | ) | ( | ) | |||
Income tax benefit (expense) | ( | ) | |||||
Net loss | $ | ( | ) | $ | ( | ) | |
Net loss per share — basic and diluted | $ | ( | ) | $ | ( | ) | |
Weighted-average shares outstanding — basic and diluted | |||||||
____________________ (1) Amortization of website development costs and intangible assets included in technology and development | $ | $ |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Net loss | $ | ( | ) | $ | ( | ) | |
Other comprehensive income (loss): | |||||||
Unrealized gains (losses) on investments | ( | ) | |||||
Currency translation adjustments | ( | ) | ( | ) | |||
Total other comprehensive income (loss) | ( | ) | |||||
Comprehensive loss | $ | ( | ) | $ | ( | ) |
Class A Common Stock, Class B Common Stock and Class C Capital Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Shareholders’ Equity | |||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||
Issuance of common and capital stock upon exercise of stock options | — | — | — | ||||||||||||||||||||
Vesting of restricted stock units | — | — | — | — | |||||||||||||||||||
Shares and value of restricted stock units withheld for tax liability | ( | ) | — | ( | ) | — | — | ( | ) | ||||||||||||||
Share-based compensation expense | — | — | — | — | |||||||||||||||||||
Net loss | — | — | — | ( | ) | — | ( | ) | |||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | ( | ) | $ | $ |
Class A Common Stock, Class B Common Stock and Class C Capital Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Shareholders’ Equity | |||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||
Balance at December 31, 2017 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||
Cumulative-effect adjustment from adoption of guidance on revenue from contracts with customers | — | — | — | — | |||||||||||||||||||
Issuance of common and capital stock upon exercise of stock options | — | — | — | ||||||||||||||||||||
Vesting of restricted stock units | — | — | — | — | |||||||||||||||||||
Shares and value of restricted stock units withheld for tax liability | ( | ) | — | ( | ) | — | — | ( | ) | ||||||||||||||
Share-based compensation expense | — | — | — | — | |||||||||||||||||||
Portion of conversion recorded in additional paid-in-capital in connection with partial conversion of convertible notes maturing in 2020 | — | — | |||||||||||||||||||||
Net loss | — | — | — | ( | ) | — | ( | ) | |||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ) | ( | ) | |||||||||||||||
Balance at March 31, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Operating activities | |||||||
Net loss | $ | ( | ) | $ | ( | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | |||||||
Share-based compensation expense | |||||||
Amortization of right of use assets | — | ||||||
Amortization of contract cost assets | |||||||
Amortization of discount and issuance costs on convertible notes maturing in 2023 and 2021 | |||||||
Deferred income taxes | ( | ) | |||||
Loss on disposal of property and equipment | |||||||
Bad debt expense | ( | ) | |||||
Deferred rent | ( | ) | |||||
Accretion of bond discount | ( | ) | ( | ) | |||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | ( | ) | |||||
Inventory | ( | ) | |||||
Mortgage loans held for sale | |||||||
Prepaid expenses and other assets | ( | ) | ( | ) | |||
Lease liabilities | ( | ) | — | ||||
Contract cost assets | ( | ) | ( | ) | |||
Accounts payable | ( | ) | |||||
Accrued expenses and other current liabilities | ( | ) | |||||
Accrued compensation and benefits | ( | ) | |||||
Deferred revenue | |||||||
Other long-term liabilities | |||||||
Net cash provided by (used in) operating activities | ( | ) | |||||
Investing activities | |||||||
Proceeds from maturities of investments | |||||||
Purchases of investments | ( | ) | ( | ) | |||
Purchases of property and equipment | ( | ) | ( | ) | |||
Purchases of intangible assets | ( | ) | ( | ) | |||
Net cash provided by (used in) investing activities | ( | ) | |||||
Financing activities | |||||||
Proceeds from borrowing on revolving credit facilities | |||||||
Net repayments on warehouse lines of credit | ( | ) | |||||
Proceeds from exercise of stock options | |||||||
Value of equity awards withheld for tax liability | ( | ) | |||||
Net cash provided by financing activities | |||||||
Net increase in cash, cash equivalents and restricted cash during period | |||||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||
Supplemental disclosures of cash flow information | |||||||
Cash paid for interest | $ | $ | |||||
Noncash transactions: | |||||||
Capitalized share-based compensation | $ | $ | |||||
Write-off of fully depreciated property and equipment | $ | $ | |||||
Write-off of fully amortized intangible assets | $ | $ |
• | Level 1—Quoted prices in active markets for identical assets or liabilities. |
• | Level 2—Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities. |
• | Level 3—Unobservable inputs that are supported by little or no market activity; instruments valued based on the best available data, some of which is internally developed, and considers risk premiums that a market participant would require. |
March 31, 2019 | |||||||||||
Total | Level 1 | Level 2 | |||||||||
Cash equivalents: | |||||||||||
Money market funds | $ | $ | $ | ||||||||
Commercial paper | |||||||||||
Short-term investments: | |||||||||||
U.S. government agency securities | |||||||||||
Corporate notes and bonds | |||||||||||
Commercial paper | |||||||||||
Municipal securities | |||||||||||
Foreign government securities | |||||||||||
Certificates of deposit | |||||||||||
Mortgage origination-related: | |||||||||||
Mortgage loans held for sale | |||||||||||
Interest rate lock commitments | |||||||||||
Forward contracts - other current assets | |||||||||||
Forward contracts - other current liabilities | ( | ) | ( | ) | |||||||
Total | $ | $ | $ |
December 31, 2018 | |||||||||||
Total | Level 1 | Level 2 | |||||||||
Cash equivalents: | |||||||||||
Money market funds | $ | $ | $ | ||||||||
Commercial paper | |||||||||||
Short-term investments: | |||||||||||
U.S. government agency securities | |||||||||||
Corporate notes and bonds | |||||||||||
Commercial paper | |||||||||||
Municipal securities | |||||||||||
Foreign government securities | |||||||||||
Certificates of deposit | |||||||||||
Mortgage origination-related: | |||||||||||
Mortgage loans held for sale | |||||||||||
Interest rate lock commitments | |||||||||||
Forward contracts - other current liabilities | ( | ) | ( | ) | |||||||
Total | $ | $ | $ |
March 31, 2019 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Market Value | ||||||||||||
Cash | $ | $ | — | $ | — | $ | |||||||||
Cash equivalents: | |||||||||||||||
Money market funds | — | — | |||||||||||||
Commercial paper | — | — | |||||||||||||
Short-term investments: | |||||||||||||||
U.S. government agency securities | ( | ) | |||||||||||||
Corporate notes and bonds | ( | ) | |||||||||||||
Commercial paper | |||||||||||||||
Municipal securities | ( | ) | |||||||||||||
Foreign government securities | |||||||||||||||
Certificates of deposit | |||||||||||||||
Restricted cash | — | — | |||||||||||||
Total | $ | $ | $ | ( | ) | $ |
December 31, 2018 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Market Value | ||||||||||||
Cash | $ | $ | — | $ | — | $ | |||||||||
Cash equivalents: | |||||||||||||||
Money market funds | — | — | |||||||||||||
Commercial paper | — | — | |||||||||||||
Short-term investments: | |||||||||||||||
U.S. government agency securities | ( | ) | |||||||||||||
Corporate notes and bonds | ( | ) | |||||||||||||
Commercial paper | |||||||||||||||
Municipal securities | ( | ) | |||||||||||||
Foreign government securities | ( | ) | |||||||||||||
Certificates of deposit | ( | ) | |||||||||||||
Restricted cash | — | — | |||||||||||||
Total | $ | $ | $ | ( | ) | $ |
Amortized Cost | Estimated Fair Market Value | ||||||
Due in one year or less | $ | $ | |||||
Due after one year through two years | |||||||
Total | $ | $ |
Balance as of January 1, 2019 | $ | ||
Bad debt expense | |||
Less: write-offs, net of recoveries and other adjustments | ( | ) | |
Balance as of March 31, 2019 | $ |
March 31, 2019 | December 31, 2018 | ||||||
Work-in-progress | $ | $ | |||||
Finished goods | |||||||
Inventory | $ | $ |
March 31, 2019 | December 31, 2018 | ||||||
Website development costs | $ | $ | |||||
Computer equipment | |||||||
Leasehold improvements | |||||||
Construction-in-progress | |||||||
Office equipment, furniture and fixtures | |||||||
Property and equipment | |||||||
Less: accumulated amortization and depreciation | ( | ) | ( | ) | |||
Property and equipment, net | $ | $ |
March 31, 2019 | |||||||||||
Cost | Accumulated Amortization | Net | |||||||||
Purchased content | $ | $ | ( | ) | $ | ||||||
Software | ( | ) | |||||||||
Customer relationships | ( | ) | |||||||||
Developed technology | ( | ) | |||||||||
Trade names and trademarks | ( | ) | |||||||||
Zillow Home Loans lender licenses | ( | ) | |||||||||
Intangibles-in-progress | |||||||||||
Total | $ | $ | ( | ) | $ |
December 31, 2018 | |||||||||||
Cost | Accumulated Amortization | Net | |||||||||
Purchased content | $ | $ | ( | ) | $ | ||||||
Software | ( | ) | |||||||||
Customer relationships | ( | ) | |||||||||
Developed technology | ( | ) | |||||||||
Trade names and trademarks | ( | ) | |||||||||
Zillow Home Loans lender licenses | ( | ) | |||||||||
Intangibles-in-progress | |||||||||||
Total | $ | $ | ( | ) | $ |
Three Months Ended March 31, 2019 | |||
Balance as of January 1, 2019 | $ | ||
Deferral of revenue | |||
Less: Revenue recognized | ( | ) | |
Balance as of March 31, 2019 | $ |
Operating lease cost | $ | ||
Variable lease cost | |||
Total lease cost | $ |
Remainder of 2019 | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 | |||
All future years | |||
Total lease payments | |||
Less: Imputed interest | ( | ) | |
Present value of lease liabilities | $ |
2019 | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 | |||
All future years | |||
Total future minimum lease payments | $ |
Effective Date | Maximum Borrowing Capacity | Outstanding Borrowings at March 31, 2019 | Outstanding Borrowings at December 31, 2018 | Weighted Average Interest Rate | |||||||||||
July 31, 2018 | $ | $ | $ | % | |||||||||||
January 31, 2019 | % | ||||||||||||||
Total | $ | $ | $ |
Maturity Date | Maximum Borrowing Capacity | Outstanding Borrowings at March 31, 2019 | Outstanding Borrowings at December 31, 2018 | Weighted Average Interest Rate | |||||||||||
July 15, 2019 | $ | $ | $ | % | |||||||||||
June 29, 2019 | % | ||||||||||||||
Total | $ | $ | $ |
Maturity Date | Aggregate Principal Amount | Fair Value at March 31, 2019 | Fair Value at December 31, 2018 | Stated Interest Rate | Effective Interest Rate | |||||||||||||
July 1, 2023 | $ | $ | $ | % | % | |||||||||||||
December 1, 2021 | % | % | ||||||||||||||||
December 15, 2020 | % | N/A | ||||||||||||||||
Total | $ | $ | $ |
Number of Shares Subject to Existing Options | Weighted- Average Exercise Price Per Share | Weighted- Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value (in thousands) | |||||||||
Outstanding at January 1, 2019 | $ | $ | ||||||||||
Granted | ||||||||||||
Exercised | ( | ) | ||||||||||
Forfeited or cancelled | ( | ) | ||||||||||
Outstanding at March 31, 2019 | ||||||||||||
Vested and exercisable at March 31, 2019 |
Three Months Ended March 31, | |||
2019 | 2018 | ||
Expected volatility | 46%-47% | 43%-45% | |
Expected dividend yield | |||
Risk-free interest rate | 2.38%-2.53% | 2.52%-2.65% | |
Weighted-average expected life | 4.75-5.25 years | 4.50-5.00 years | |
Weighted-average fair value of options granted | $ | $ |
Restricted Stock Units | Weighted- Average Grant- Date Fair Value | |||||
Unvested outstanding at January 1, 2019 | $ | |||||
Granted | ||||||
Vested | ( | ) | ||||
Forfeited or cancelled | ( | ) | ||||
Unvested outstanding at March 31, 2019 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Cost of revenue | $ | $ | |||||
Sales and marketing | |||||||
Technology and development | |||||||
General and administrative | |||||||
Total | $ | $ |
Three Months Ended March 31, | |||||
2019 | 2018 | ||||
Weighted-average Class A common stock and Class C capital stock option awards outstanding | |||||
Weighted-average Class A common stock and Class C capital stock restricted stock units outstanding | |||||
Class A common stock issuable upon conversion of the convertible notes maturing in 2020 | |||||
Class C capital stock issuable related to conversion spread on the convertible notes maturing in 2021 | |||||
Total Class A common stock and Class C capital stock equivalents |
Three Months Ended March 31, 2019 | |||||||||||
IMT | Homes | Mortgages | |||||||||
Revenue: | |||||||||||
Premier Agent | $ | $ | $ | ||||||||
Rentals | |||||||||||
Other | |||||||||||
Homes | |||||||||||
Mortgages | |||||||||||
Total revenue | |||||||||||
Costs and expenses: | |||||||||||
Cost of revenue | |||||||||||
Sales and marketing | |||||||||||
Technology and development | |||||||||||
General and administrative | |||||||||||
Integration costs | |||||||||||
Total costs and expenses | |||||||||||
Loss from operations | ( | ) | ( | ) | ( | ) | |||||
Segment other income | |||||||||||
Segment interest expense | ( | ) | ( | ) | |||||||
Loss before income taxes (1) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Three Months Ended March 31, 2018 | |||||||||||
IMT | Homes | Mortgages | |||||||||
Revenue: | |||||||||||
Premier Agent | $ | $ | $ | ||||||||
Rentals | |||||||||||
Other | |||||||||||
Homes | |||||||||||
Mortgages | |||||||||||
Total revenue | |||||||||||
Costs and expenses: | |||||||||||
Cost of revenue | |||||||||||
Sales and marketing | |||||||||||
Technology and development | |||||||||||
General and administrative | |||||||||||
Acquisition costs | |||||||||||
Total costs and expenses | |||||||||||
Loss from operations and loss before incomes taxes (1) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Total segment loss before income taxes | $ | ( | ) | $ | ( | ) | |
Corporate interest expense | ( | ) | ( | ) | |||
Corporate other income | |||||||
Consolidated loss before income taxes | $ | ( | ) | $ | ( | ) |
Three Months Ended March 31, | 2018 to 2019 % Change | |||||||
2019 | 2018 | |||||||
(in millions) | ||||||||
Average Monthly Unique Users | 181.1 | 175.5 | 3 | % |
Three Months Ended March 31, | 2018 to 2019 % Change | |||||||
2019 | 2018 | |||||||
(in millions) | ||||||||
Visits | 2,019.8 | 1,764.8 | 14 | % |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(in thousands, except per share data, unaudited) | |||||||
Statements of Operations Data: | |||||||
Revenue: | |||||||
IMT | $ | 298,272 | $ | 280,856 | |||
Homes | 128,472 | — | |||||
Mortgages | 27,360 | 19,023 | |||||
Total revenue | 454,104 | 299,879 | |||||
Cost of revenue (exclusive of amortization) (1)(2): | |||||||
IMT | 24,251 | 22,594 | |||||
Homes | 122,419 | 86 | |||||
Mortgages | 4,678 | 1,239 | |||||
Total cost of revenue | 151,348 | 23,919 | |||||
Sales and marketing (1) | 161,587 | 137,291 | |||||
Technology and development (1) | 107,770 | 93,933 | |||||
General and administrative (1) | 95,774 | 56,073 | |||||
Acquisition-related costs | — | 27 | |||||
Integration costs | 352 | — | |||||
Total costs and expenses | 516,831 | 311,243 | |||||
Loss from operations | (62,727 | ) | (11,364 | ) | |||
Other income | 9,168 | 2,446 | |||||
Interest expense | (16,466 | ) | (7,073 | ) | |||
Loss before income taxes | (70,025 | ) | (15,991 | ) | |||
Income tax benefit (expense) | 2,500 | (2,600 | ) | ||||
Net loss | $ | (67,525 | ) | $ | (18,591 | ) | |
Net loss per share — basic and diluted | $ | (0.33 | ) | $ | (0.10 | ) | |
Weighted-average shares outstanding — basic and diluted | 204,514 | 191,464 | |||||
Other Financial Data: | |||||||
Adjusted EBITDA (3) | $ | 23,922 | $ | 46,310 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(in thousands, unaudited) | |||||||
(1) Includes share-based compensation as follows: | |||||||
Cost of revenue | $ | 881 | $ | 955 | |||
Sales and marketing | 5,650 | 5,162 | |||||
Technology and development | 15,508 | 11,542 | |||||
General and administrative | 44,085 | 13,082 | |||||
Total | $ | 66,124 | $ | 30,741 | |||
(2) Amortization of website development costs and intangible assets included in technology and development | $ | 14,400 | $ | 22,549 | |||
(3) See “Adjusted EBITDA” below for more information and for a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure calculated and presented in accordance with U.S. generally accepted accounting principles, or GAAP. |
Three Months Ended March 31, | |||||
2019 | 2018 | ||||
(unaudited) | |||||
Percentage of Revenue: | |||||
Revenue: | |||||
IMT | 66 | % | 94 | % | |
Homes | 28 | — | |||
Mortgages | 6 | 6 | |||
Total revenue | 100 | 100 | |||
Cost of revenue (exclusive of amortization): | |||||
IMT | 5 | 8 | |||
Homes | 27 | — | |||
Mortgages | 1 | — | |||
Total cost of revenue | 33 | 8 | |||
Sales and marketing | 36 | 46 | |||
Technology and development | 24 | 31 | |||
General and administrative | 21 | 19 | |||
Acquisition-related costs | 0 | — | |||
Integration costs | — | 0 | |||
Total costs and expenses | 114 | 104 | |||
Loss from operations | (14 | ) | (4 | ) | |
Other income | 2 | 1 | |||
Interest expense | (4 | ) | (2 | ) | |
Loss before income taxes | (15 | ) | (5 | ) | |
Income tax benefit (expense) | 1 | (1 | ) | ||
Net loss | (15 | )% | (6 | )% |
• | 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 interest expense or other income; |
• | Adjusted EBITDA does not reflect income taxes; and |
• | Other companies, including companies in our own industry, may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Reconciliation of Adjusted EBITDA to Net Loss: | |||||||
Net loss | $ | (67,525 | ) | $ | (18,591 | ) | |
Other income | (9,168 | ) | (2,446 | ) | |||
Depreciation and amortization expense | 20,525 | 26,906 | |||||
Share-based compensation expense | 66,124 | 30,741 | |||||
Acquisition-related costs | — | 27 | |||||
Interest expense | 16,466 | 7,073 | |||||
Income tax (benefit) expense | (2,500 | ) | 2,600 | ||||
Adjusted EBITDA | $ | 23,922 | $ | 46,310 |
Three Months Ended March 31, | 2018 to 2019 % Change | |||||||||
2019 | 2018 | |||||||||
Percentage of Revenue: | ||||||||||
IMT Revenue: | ||||||||||
Premier Agent | $ | 217,735 | $ | 213,732 | 2 | % | ||||
Rentals | 37,838 | 29,063 | 30 | % | ||||||
Other | 42,699 | 38,061 | 12 | % | ||||||
Total IMT revenue | 298,272 | 280,856 | 6 | % | ||||||
Homes | 128,472 | — | N/A | |||||||
Mortgages | 27,360 | 19,023 | 44 | % | ||||||
Total revenue | $ | 454,104 | $ | 299,879 | 51 | % |
Three Months Ended March 31, | |||||
2019 | 2018 | ||||
Percentage of Total Revenue: | |||||
IMT Revenue: | |||||
Premier Agent | 48 | % | 71 | % | |
Rentals | 8 | 10 | |||
Other | 9 | 13 | |||
Total IMT revenue | 66 | 94 | |||
Homes | 28 | 0 | |||
Mortgages | 6 | 6 | |||
Total revenue | 100 | % | 100 | % |
Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | ||||||||||||||||||||||
IMT | Homes | Mortgages | IMT | Homes | Mortgages | ||||||||||||||||||
Revenue | $ | 298,272 | $ | 128,472 | $ | 27,360 | $ | 280,856 | $ | — | $ | 19,023 | |||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of revenue | 24,251 | 122,419 | 4,678 | 22,594 | 86 | 1,239 | |||||||||||||||||
Sales and marketing | 126,654 | 20,862 | 14,071 | 128,747 | 290 | 8,254 | |||||||||||||||||
Technology and development | 87,969 | 12,281 | 7,520 | 85,917 | 2,236 | 5,780 | |||||||||||||||||
General and administrative | 70,850 | 14,357 | 10,567 | 50,187 | 1,778 | 4,108 | |||||||||||||||||
Acquisition-related costs | — | — | — | 27 | — | — | |||||||||||||||||
Integration costs | — | — | 352 | — | — | — | |||||||||||||||||
Total costs and expenses | 309,724 | 169,919 | 37,188 | 287,472 | 4,390 | 19,381 | |||||||||||||||||
Loss from operations | (11,452 | ) | (41,447 | ) | (9,828 | ) | (6,616 | ) | (4,390 | ) | (358 | ) | |||||||||||
Other income | — | — | 313 | — | — | — | |||||||||||||||||
Interest expense | — | (3,758 | ) | (101 | ) | — | — | — | |||||||||||||||
Loss before income taxes (1) | $ | (11,452 | ) | $ | (45,205 | ) | $ | (9,616 | ) | $ | (6,616 | ) | $ | (4,390 | ) | $ | (358 | ) |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Total segment loss before income taxes | $ | (66,273 | ) | $ | (11,364 | ) | |
Corporate interest expense | (12,607 | ) | (7,073 | ) | |||
Corporate other income | 8,855 | 2,446 | |||||
Consolidated loss before income taxes | $ | (70,025 | ) | $ | (15,991 | ) |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(in thousands, unaudited) | |||||||
Cash Flow Data: | |||||||
Net cash provided by (used in) operating activities | $ | (145,514 | ) | $ | 24,652 | ||
Net cash provided by (used in) investing activities | 108,304 | (32,232 | ) | ||||
Net cash provided by financing activities | 137,869 | 52,878 |
Payments Due By Period | |||||||||||||||||||
Total | Less Than 1 Year | 1-3 Years | 3-5 Years | More Than 5 Years | |||||||||||||||
(in thousands, unaudited) | |||||||||||||||||||
Homes under contract (1) | $ | 140,169 | $ | 140,169 | $ | — | $ | — | $ | — | |||||||||
Revolving credit facilities (2) | 246,028 | 246,028 | — | — | — | ||||||||||||||
Warehouse lines of credit (3) | 27,991 | 27,991 | — | — | — | ||||||||||||||
Total contractual obligations | $ | 414,188 | $ | 414,188 | $ | — | $ | — | $ | — | |||||||||
____________________ (1) We have obligations to purchase homes under contract through our Zillow Offers business. (2) Includes principal amounts due for amounts borrowed under the revolving credit facilities used to provide capital for our Zillow Offers business. Amounts exclude an immaterial amount of estimated interest payments. (3) Includes principal amounts due for amounts borrowed under the warehouse lines of credit used to finance Zillow Home Loans. Amounts exclude an immaterial amount of estimated interest payments. |
Exhibit Number | Description | |
10.1* | ||
10.2* | ||
10.3* | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document). | |
101.SCH | XBRL Taxonomy Extension Schema Document. | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | |
* | Indicates a management contract or compensatory plan or arrangement. |
Dated: May 9, 2019 | ZILLOW GROUP, INC. | ||
By: | /s/ JENNIFER ROCK | ||
Name: | Jennifer Rock | ||
Title: | Chief Accounting Officer |
1. | EMPLOYMENT |
2. | COMPENSATION AND BENEFITS |
3. | TERMINATION |
4. | ASSIGNMENT |
5. | AMENDMENTS IN WRITING |
6. | NOTICES |
If to the Company: | Zillow, Inc. |
If to the Executive: | Arik Prawer |
7. | APPLICABLE LAW |
8. | ENTIRE AGREEMENT |
9. | SEVERABILITY |
10. | WAIVERS |
11. | HEADINGS |
12. | COUNTERPARTS |
13. | CODE SECTION 409A |
ARIK PRAWER | |
/s/ ARIK PRAWER | |
ZILLOW, INC. | |
By | /s/ SPENCER M. RASCOFF |
Its | Chief Executive Officer |
This Agreement shall be effective as of | . | |
(Date) |
Signature |
FULL NAME (print or type) |
ACCEPTED: |
ZILLOW, INC. |
By |
Its Chief People Officer |
Title | Date | Identifying Number or Brief Description |
No inventions or improvements | ||
Additional Sheets Attached |
Signature of Employee: | |
Print Name of Employee: |
Date: |
No Agreements | ||
See below | ||
Additional sheets attached |
Signature of Employee: | |
Print Name of Employee: |
Date: |
Signature of Employee: | |
Print Name of Employee: |
Date: |
[Typed name] |
1. | I have reviewed this report on Form 10-Q of Zillow Group, Inc. for the fiscal quarter ended March 31, 2019; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ RICHARD BARTON | |
Name: | Richard Barton | |
Title: | Chief Executive Officer | |
Date: | May 9, 2019 |
1. | I have reviewed this report on Form 10-Q of Zillow Group, Inc. for the fiscal quarter ended March 31, 2019; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ ALLEN PARKER | |
Name: | Allen Parker | |
Title: | Chief Financial Officer | |
Date: | May 9, 2019 |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ RICHARD BARTON | |
Name: | Richard Barton | |
Title: | Chief Executive Officer | |
Date: | May 9, 2019 |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ ALLEN PARKER | |
Name: | Allen Parker | |
Title: | Chief Financial Officer | |
Date: | May 9, 2019 |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
May 01, 2019 |
|
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ZG | |
Entity Registrant Name | ZILLOW GROUP, INC. | |
Entity Central Index Key | 0001617640 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 58,318,212 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 6,217,447 | |
Class C Capital Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 140,633,463 |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (67,525) | $ (18,591) |
Other comprehensive income (loss): | ||
Unrealized gains (losses) on investments | 1,144 | (332) |
Currency translation adjustments | (42) | (22) |
Total other comprehensive income (loss) | 1,102 | (354) |
Comprehensive loss | $ (66,423) | $ (18,945) |
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands |
Total |
Class A Common Stock, Class B Common Stock and Class C Capital Stock |
Additional Paid-In Capital |
Accumulated Deficit |
Accumulated Other Comprehensive Loss |
---|---|---|---|---|---|
Beginning Balance at Dec. 31, 2017 | $ 2,660,823 | $ 20 | $ 3,254,146 | $ (592,243) | $ (1,100) |
Beginning Balance (in shares) at Dec. 31, 2017 | 190,115,148 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common and capital stock upon exercise of stock options | 52,906 | 52,906 | |||
Issuance of common and capital stock upon exercise of stock options (in shares) | 2,414,214 | ||||
Vesting of restricted stock units | 0 | ||||
Vesting of restricted stock units (in shares) | 394,844 | ||||
Shares and value of restricted stock units withheld for tax liability | (28) | (28) | |||
Shares and value of restricted stock units withheld for tax liability (in shares) | (607) | ||||
Share-based compensation expense | 32,863 | 32,863 | |||
Portion of conversion recorded in additional paid-in-capital in connection with partial conversion of convertible notes maturing in 2020 | 500 | 500 | |||
Portion of conversion recorded in additional paid-in-capital in connection with partial conversion of convertible notes maturing in 2020 (in shares) | 20,727 | ||||
Net loss | (18,591) | (18,591) | |||
Other comprehensive income (loss) | (354) | (354) | |||
Ending Balance at Mar. 31, 2018 | 2,768,441 | $ 20 | 3,340,387 | (570,512) | (1,454) |
Ending Balance (in shares) at Mar. 31, 2018 | 192,944,326 | ||||
Beginning Balance at Dec. 31, 2018 | 3,267,179 | $ 21 | 3,939,842 | (671,779) | (905) |
Beginning Balance (in shares) at Dec. 31, 2018 | 203,904,265 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common and capital stock upon exercise of stock options | $ 13,564 | 13,564 | |||
Issuance of common and capital stock upon exercise of stock options (in shares) | 729,788 | 729,788 | |||
Vesting of restricted stock units | $ 0 | ||||
Vesting of restricted stock units (in shares) | 496,347 | ||||
Shares and value of restricted stock units withheld for tax liability | (2) | (2) | |||
Shares and value of restricted stock units withheld for tax liability (in shares) | (68) | ||||
Share-based compensation expense | 68,814 | 68,814 | |||
Net loss | (67,525) | ||||
Other comprehensive income (loss) | 1,102 | ||||
Ending Balance at Mar. 31, 2019 | $ 3,283,132 | $ 21 | $ 4,022,218 | $ (739,304) | $ 197 |
Ending Balance (in shares) at Mar. 31, 2019 | 205,130,332 |
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Operating activities | ||
Net loss | $ (67,525) | $ (18,591) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 20,525 | 26,906 |
Share-based compensation expense | 66,124 | 30,741 |
Amortization of right of use assets | 4,440 | |
Amortization of contract cost assets | 8,746 | 9,296 |
Amortization of discount and issuance costs on convertible notes maturing in 2023 and 2021 | 8,840 | 4,708 |
Deferred income taxes | (2,500) | 2,600 |
Loss on disposal of property and equipment | 1,704 | 1,803 |
Bad debt expense | 128 | (267) |
Deferred rent | 0 | (3,090) |
Accretion of bond discount | (1,733) | (137) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,650) | 105 |
Inventory | (162,325) | 0 |
Mortgage loans held for sale | 5,940 | 0 |
Prepaid expenses and other assets | (8,537) | (19,923) |
Lease liabilities | (7,010) | |
Contract cost assets | (9,103) | (11,440) |
Accounts payable | (133) | 1,672 |
Accrued expenses and other current liabilities | 328 | (6,747) |
Accrued compensation and benefits | (1,088) | 3,637 |
Deferred revenue | 2,025 | 3,379 |
Other long-term liabilities | 290 | 0 |
Net cash provided by (used in) operating activities | (145,514) | 24,652 |
Investing activities | ||
Proceeds from maturities of investments | 302,187 | 61,386 |
Purchases of investments | (176,412) | (76,729) |
Purchases of property and equipment | (14,202) | (15,791) |
Purchases of intangible assets | (3,269) | (1,098) |
Net cash provided by (used in) investing activities | 108,304 | (32,232) |
Financing activities | ||
Proceeds from borrowing on revolving credit facilities | 129,328 | 0 |
Net repayments on warehouse lines of credit | (5,025) | 0 |
Proceeds from exercise of stock options | 13,564 | 52,906 |
Value of equity awards withheld for tax liability | 2 | (28) |
Net cash provided by financing activities | 137,869 | 52,878 |
Net increase in cash, cash equivalents and restricted cash during period | 100,659 | 45,298 |
Cash, cash equivalents and restricted cash at beginning of period | 663,443 | 352,095 |
Cash, cash equivalents and restricted cash at end of period | 764,102 | 397,393 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 4,956 | 0 |
Noncash transactions: | ||
Capitalized share-based compensation | 2,690 | 2,120 |
Write-off of fully depreciated property and equipment | 6,269 | 7,379 |
Write-off of fully amortized intangible assets | $ 3,200 | $ 10,687 |
Organization and Description of Business |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | Organization and Description of Business Zillow Group, Inc. operates the largest portfolio of real estate and home-related brands on mobile and the web which focus on all stages of the home lifecycle: renting, buying, selling and financing. Zillow Group is committed to empowering consumers with unparalleled data, inspiration and knowledge around homes and connecting them with great real estate professionals. The Zillow Group portfolio of consumer brands includes Zillow, Trulia, Zillow Home Loans, StreetEasy, HotPads, Naked Apartments, RealEstate.com and Out East. In addition, Zillow Group provides a comprehensive suite of marketing software and technology solutions to help real estate professionals maximize business opportunities and connect with millions of consumers. Zillow Offers provides homeowners in certain metropolitan areas with the opportunity to receive offers to purchase their home from Zillow. When Zillow buys a home, it makes certain repairs and lists the home for resale on the open market. Zillow also provides consumers with the opportunity to receive mortgage financing through Zillow Home Loans, a licensed mortgage lender. Zillow Group operates a number of business brands for real estate, rental and mortgage professionals, including Mortech, dotloop, Bridge Interactive and New Home Feed. Zillow, Inc. was incorporated as a Washington corporation in December 2004, and we launched the initial version of our website, Zillow.com, in February 2006. Zillow Group, Inc. was incorporated as a Washington corporation in July 2014 in connection with our acquisition of Trulia, Inc. (“Trulia”). Upon the closing of the Trulia acquisition in February 2015, each of Zillow, Inc. and Trulia became wholly owned subsidiaries of Zillow Group. Certain Significant Risks and Uncertainties We operate in a dynamic industry and, accordingly, can be affected by a variety of factors. For example, we believe that changes in any of the following areas could have a significant negative effect on us in terms of our future financial position, results of operations or cash flows: rates of revenue growth; our ability to manage advertising inventory or pricing; engagement and usage of our products; our investment of resources to pursue strategies that may not prove effective; competition in our market; the stability of the residential real estate market and the impact of interest rate changes; changes in government regulation affecting our business; outcomes of legal proceedings; natural disasters and catastrophic events; scaling and adaptation of existing technology and network infrastructure; management of our growth; our ability to attract and retain qualified employees and key personnel; our ability to successfully integrate and realize the benefits of our past or future strategic acquisitions or investments; protection of customers’ information and other privacy concerns; protection of our brand and intellectual property; and intellectual property infringement and other claims, among other things.
|
Summary of Significant Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements include Zillow Group, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. These condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes included in Zillow Group, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 21, 2019. The condensed consolidated balance sheet as of December 31, 2018, included herein, was derived from the audited financial statements of Zillow Group, Inc. as of that date. The unaudited condensed consolidated interim financial statements, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position as of March 31, 2019, our results of operations, comprehensive loss and cash flows for the three month periods ended March 31, 2019 and 2018. The results of the three month period ended March 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any interim period or for any other future year. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. On an ongoing basis, we evaluate our estimates, including those related to the net realizable value of inventory, amortization period and recoverability of contract cost assets, website and software development costs, recoverability of long-lived assets and intangible assets with definite lives, share-based compensation, income taxes, business combinations, and the recoverability of goodwill and indefinite-lived intangible assets, among others. To the extent there are material differences between these estimates, judgments, or assumptions and actual results, our financial statements will be affected. Recently Adopted Accounting Standards In February 2018, the Financial Accounting Standards Board (“FASB”) issued guidance on income tax accounting related to the Tax Cuts and Jobs Act (the “Tax Act”). This guidance permits a reclassification from accumulated other comprehensive income (loss) to accumulated deficit for the adjustment of deferred taxes due to the reduction of the historical corporate income tax rate to the newly enacted corporate income tax rate under the Tax Act. It also requires certain disclosures regarding these reclassifications. The guidance is effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. This guidance must be applied either on a prospective basis in the period of adoption or retrospectively to each period in which the effect of the change in the corporate income tax rate is recognized. We adopted this guidance on January 1, 2019. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In March 2017, the FASB issued guidance related to the premium amortization on purchased callable debt securities. This guidance shortens the amortization period for certain callable debt securities purchased at a premium by requiring that the premium be amortized to the earliest call date. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. This guidance must be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We adopted this guidance on January 1, 2019. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In February 2016, the FASB issued guidance on leases. This guidance requires the recognition of a right of use asset and lease liability on the balance sheet for all leases. This guidance also requires more detailed disclosures to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018. In July 2018, the FASB issued certain targeted improvements to the accounting and disclosure requirements for leases, including an additional optional transition method that allows entities to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating prior periods. When adopting the lease guidance, an entity may elect a practical expedient package, under which it need not reassess (a) whether any expired or existing contracts are or contain leases; (b) the lease classification for any expired or existing leases; and (c) initial direct costs for any existing leases. These three practical expedients must be elected as a package and must be consistently applied to all existing leases at the date of adoption. We adopted the new guidance on leases on January 1, 2019 using the optional transition method and elected to adopt the practical expedient package. Under this approach, we did not restate the prior financial statements presented. Based on our lease portfolio as of December 31, 2018, we recorded on our consolidated balance sheet right of use assets of $106.5 million as well as operating lease liabilities of $129.0 million, and we removed the existing deferred rent balance of $22.5 million. The adoption of the standard did not have a material impact to our condensed consolidated statements of operations. Recently Issued Accounting Standards Not Yet Adopted In August 2018, the FASB issued guidance related to a customer’s accounting for implementation costs incurred in hosting arrangements. The guidance aligns the requirements for capitalizing implementation costs incurred in cloud computing arrangements with the requirements for capitalizing costs to develop or obtain internal-use software. This guidance is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. This guidance may be applied either retrospectively or prospectively. We expect to adopt this guidance on January 1, 2020. We have not yet determined the impact the adoption of this guidance will have on our financial position, results of operations or cash flows. In August 2018, the FASB issued guidance related to disclosure requirements for fair value measurements. This guidance removes, modifies and adds disclosures related to fair value measurements. This guidance is effective for interim and annual periods beginning after December 15, 2019, and early adoption is permitted. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim and annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. We expect to adopt this guidance on January 1, 2020. We have not yet determined the impact the adoption of this guidance will have on our financial statement disclosures. In June 2016, the FASB issued guidance on the measurement of credit losses on financial instruments. This guidance requires the use of an expected loss impairment model for instruments measured at amortized cost. For available-for-sale debt securities, an entity is required to recognize credit losses through an allowance for credit losses rather than as a write-down. This guidance is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted for interim and annual reporting periods beginning after December 15, 2018. The adoption of this guidance requires a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We expect to adopt this guidance on January 1, 2020. We have not yet determined the impact the adoption of this guidance will have on our financial position, results of operations or cash flows.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:
We applied the following methods and assumptions in estimating our fair value measurements: Cash equivalents — The fair value measurement of money market funds is based on quoted market prices in active markets. The fair value measurement of corporate notes and bonds, commercial paper, U.S. government agency securities and certificates of deposit is based on observable market-based inputs or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Short-term investments — The fair value measurement of our short-term investments is based on observable market-based inputs or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Restricted cash — Restricted cash consists of cash received from the resale of homes through Zillow Offers which is used to repay amounts borrowed on our revolving credit facilities (see Note 13) and amounts held in escrow related to funding home purchases in our mortgage origination business. The carrying value of restricted cash approximates fair value due to the short period of time amounts borrowed on the revolving credit facilities are outstanding. Mortgage loans held for sale—The fair value of mortgage loans held for sale is generally calculated by reference to quoted prices in secondary markets for commitments to sell mortgage loans with similar characteristics. Interest rate lock commitments—The fair value of interest rate lock commitments (“IRLCs”) is calculated by reference to quoted prices in secondary markets for commitments to sell mortgage loans with similar characteristics. Expired commitments are excluded from the fair value measurement. We generally only issue IRLCs for products that meet specific purchaser guidelines. Since not all IRLCs will become closed loans, we adjust our fair value measurements for the estimated amount of IRLCs that will not close. Forward contracts—The fair value of mandatory loan sales commitments and derivative instruments such as forward sales of mortgage-backed securities that are utilized as hedging instruments are calculated by reference to quoted prices for similar assets. The following tables present the balances of assets and liabilities measured at fair value on a recurring basis, by level within the fair value hierarchy, as of the dates presented (in thousands):
At March 31, 2019, the notional amounts of the hedging instruments related to our mortgage loans held for sale were $41.6 million and $49.7 million for our interest rate lock commitments and forward contracts, respectively. At December 31, 2018, the notional amounts of the hedging instruments related to our mortgage loans held for sale were $26.7 million and $28.8 million for our interest rate lock commitments and forward contracts, respectively. We do not have the right to offset our forward contract derivative positions. See Note 13 for the carrying amount and estimated fair value of the Company’s Convertible Senior Notes due in 2023, Convertible Senior Notes due in 2021 and Trulia’s Convertible Senior Notes due in 2020. We did not have any material Level 3 assets or liabilities as of March 31, 2019 or December 31, 2018.
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Cash and Cash Equivalents, Short-term Investments and Restricted Cash |
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Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents, Short-term Investments and Restricted Cash | Cash and Cash Equivalents, Short-term Investments and Restricted Cash The following tables present the amortized cost, gross unrealized gains and losses and estimated fair market value of our cash and cash equivalents, available-for-sale investments and restricted cash as of the dates presented (in thousands):
The following table presents available-for-sale investments by contractual maturity date as of March 31, 2019 (in thousands):
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Accounts Receivable, net |
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Receivables [Abstract] | |||||||||||||||||||||||||
Accounts Receivable, net | Accounts Receivable, net The opening balance of accounts receivable, net was $66.1 million as of January 1, 2019. The following table presents the changes in the allowance for doubtful accounts (in thousands):
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Inventory |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | Inventory The components of inventory, net of applicable lower of cost or net realizable value write-downs, were as follows (in thousands):
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Contract Cost Assets |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||
Contract Cost Assets | Contract Cost AssetsAs of March 31, 2019 and December 31, 2018, we had $46.2 million and $45.8 million, respectively, of contract cost assets. During the three months ended March 31, 2019 and 2018, we recorded no impairment losses. During the three months ended March 31, 2019 and 2018, we recorded $8.7 million and $9.3 million, respectively, of amortization expense related to contract cost assets.Deferred Revenue The following table presents the changes in deferred revenue for the periods presented (in thousands):
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Property and Equipment, net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, net | Property and Equipment, net The following table presents the detail of property and equipment as of the dates presented (in thousands):
We recorded depreciation expense related to property and equipment (other than website development costs) of $6.0 million and $4.2 million, respectively, during the three months ended March 31, 2019 and 2018. |
Equity Investment |
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Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investment | Equity InvestmentIn October 2016, we purchased a 10% equity interest in a privately held variable interest entity within the real estate industry for $10.0 million. The entity is financed through its business operations. We are not the primary beneficiary of the entity, as we do not direct the activities that most significantly impact the entity’s economic performance. Therefore, we do not consolidate the entity. Our maximum exposure to loss is $10.0 million, the carrying amount of the investment as of March 31, 2019. There has been no impairment or upward or downward adjustments to our equity investment as of March 31, 2019 that would impact the carrying amount of the investment. The equity investment is classified within other assets in the condensed consolidated balance sheet. |
Intangible Assets, net |
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Intangible Assets, net | Intangible Assets, net The following tables present the detail of intangible assets subject to amortization as of the dates presented (in thousands):
Amortization expense recorded for intangible assets for the three months ended March 31, 2019 and 2018 was $11.0 million and $13.0 million, respectively. We have an indefinite-lived intangible asset that we recorded in connection with our February 2015 acquisition of Trulia for Trulia’s trade names and trademarks that is not subject to amortization. The carrying value of the Trulia trade names and trademarks intangible asset was $108.0 million as of March 31, 2019 and December 31, 2018. Intangibles-in-progress consists of software that is capitalizable but has not been placed in service.
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Deferred Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||
Deferred Revenue | Contract Cost AssetsAs of March 31, 2019 and December 31, 2018, we had $46.2 million and $45.8 million, respectively, of contract cost assets. During the three months ended March 31, 2019 and 2018, we recorded no impairment losses. During the three months ended March 31, 2019 and 2018, we recorded $8.7 million and $9.3 million, respectively, of amortization expense related to contract cost assets.Deferred Revenue The following table presents the changes in deferred revenue for the periods presented (in thousands):
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Our lease portfolio is primarily composed of operating leases for our office space. We have lease agreements that include lease components (e.g., fixed rent) and non-lease components (e.g., common area maintenance), which are accounted for as a single component, as we have elected the practical expedient to group lease and non-lease components. We also elected the practical expedient to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the condensed consolidated statements of operations on a straight-line basis over the lease term. Our leases have remaining lease terms ranging from less than one year to five years, some of which include options to extend the lease term for up to an additional ten years. For example, our largest leases, which include our corporate headquarters in Seattle, Washington and office space in San Francisco, California, include options to extend the existing leases for two periods of five years each. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. For those leases that existed as of January 1, 2019, we used our incremental borrowing rate based on information available at that date. We apply a portfolio approach for determining the incremental borrowing rate based on the applicable lease terms and the current economic environment, and we utilize the assistance of third-party specialists to assist us in determining our yield curve. The components of our operating lease expense are as follows for the three months ended March 31, 2019 (in thousands):
Cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2019 was $9.1 million. The weighted average remaining term for our leases as of March 31, 2019 was 5 years. The weighted average discount rate for our leases as of March 31, 2019 was 5.9%. Maturities of our operating lease liabilities by fiscal year are as follows as of March 31, 2019 (in thousands):
As of March 31, 2019, we have additional office space operating leases that have not yet commenced with total lease payments of $112.9 million. Our expectation is that these operating leases will commence during fiscal year 2019 with lease terms of five to eleven years. The following table presents our future minimum payments for all operating leases as of December 31, 2018, including future minimum payments for operating leases that had not yet commenced as of December 31, 2018 totaling $112.9 million (in thousands):
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Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Revolving Credit Facilities To provide capital for Zillow Offers, we utilize revolving credit facilities that are classified as current liabilities in our condensed consolidated balance sheets. The following table summarizes our revolving credit facilities as of the periods presented (in thousands, except interest rates):
On January 31, 2019, certain wholly owned subsidiaries of Zillow Group entered into a revolving credit agreement with Citibank, N.A., as the directing lender, and certain other parties thereto. The credit agreement provides for a maximum borrowing capacity of $500.0 million (the “Maximum Amount”) with a current borrowing capacity of $79.0 million as of March 31, 2019, which amount may be increased up to the Maximum Amount subject to the satisfaction of certain conditions, through a non-recourse credit facility secured by a pledge of the equity of certain Zillow Group subsidiaries that purchase and sell select residential properties through Zillow Offers. In certain circumstances Zillow Group may be obligated to fund some or all of the payment obligations under the credit agreement. The credit agreement has an initial term of two years and may be extended for up to one additional year subject to agreement by the directing lender. Zillow Group formed certain special purpose entities to effectuate the transactions contemplated by the January 31, 2019 revolving credit facility. Each special purpose entity is a wholly owned subsidiary of Zillow Group and a separate legal entity, and neither the assets nor credit of any such entity are available to satisfy the debts and other obligations of any affiliate or other entity. The July 31, 2018 revolving credit facility had an initial term of one year which may be extended for up to two additional years, subject to agreement by the directing lender, and has a current borrowing capacity of $177.3 million as of March 31, 2019. Zillow Group formed certain special purpose entities to effectuate the transactions contemplated by the July 31, 2018 revolving credit facility. Each special purpose entity is a wholly owned subsidiary of Zillow Group and a separate legal entity, and neither the assets nor credit of any such entity are available to satisfy the debts and other obligations of any affiliate or other entity. The stated interest rate on our revolving credit facilities is one-month LIBOR plus an applicable margin as defined in the respective credit agreements. Our revolving credit facilities include customary representations and warranties, covenants (including financial covenants applicable to Zillow Group), and provisions regarding events of default. As of March 31, 2019, Zillow Group was in compliance with all financial covenants and no event of default had occurred. Our revolving credit facilities also require that we establish, maintain, and in certain circumstances fund, certain specified reserve accounts. These reserve accounts include, but are not limited to, interest reserves, insurance, tax reserves, renovation cost reserves and special reserves. Amounts funded to these reserve accounts and the collection accounts have been classified within our consolidated balance sheets as restricted cash. For additional details related to our revolving credit facilities, see Note 14 in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. Warehouse Lines of Credit To provide capital for Zillow Home Loans, we utilize warehouse lines of credit that are classified as current liabilities in our condensed consolidated balance sheets. The following table summarizes our warehouse lines of credit as of the periods presented (in thousands, except interest rates):
Borrowings on the lines of credit bear interest at the one-month LIBOR plus an applicable margin, as defined in the credit agreements governing the warehouse lines of credit. The lines of credit include customary representations and warranties, covenants and provisions regarding events of default. As of March 31, 2019, Zillow Group was in compliance with all financial covenants and no event of default had occurred. Convertible Senior Notes The following table summarizes our outstanding convertible senior notes as of the periods presented (in thousands, except interest rates):
The convertible notes are senior unsecured obligations and are classified as long-term debt in our condensed consolidated balance sheets. Interest on the convertible notes is paid semi-annually. As of March 31, 2019 and December 31, 2018, respectively, the total unamortized debt discount and debt issuance costs for our outstanding senior convertible notes were $135.5 million and $144.4 million. The convertible senior notes maturing in 2023 and 2021 are not redeemable or convertible as of March 31, 2019. The convertible senior notes maturing in 2020 are convertible, at the option of the holder, and redeemable, at our option, as of March 31, 2019. For additional details related to our convertible senior notes, see Note 14 in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.
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Income Taxes |
3 Months Ended |
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Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesWe are subject to federal and state income taxes in the United States and in Canada. As of March 31, 2019 and December 31, 2018, we have provided a valuation allowance against our net deferred tax assets that we believe, based on the weight of available evidence, are not more likely than not to be realized. Therefore, no material current tax liability or expense has been recorded in the condensed consolidated financial statements. We have accumulated federal tax losses of approximately $1,081.7 million as of December 31, 2018, which are available to reduce future taxable income. We have accumulated state tax losses of approximately $32.5 million (tax effected) as of December 31, 2018. |
Share-Based Awards |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Awards | Share-Based Awards Option Awards The following table summarizes option award activity for the three months ended March 31, 2019:
The fair value of options granted is estimated at the date of grant using the Black-Scholes-Merton option-pricing model, assuming no dividends and with the following assumptions for the periods presented:
As of March 31, 2019, there was a total of $229.5 million in unrecognized compensation cost related to unvested stock options. Restricted Stock Units The following table summarizes activity for restricted stock units for the three months ended March 31, 2019:
As of March 31, 2019, there was $279.8 million of total unrecognized compensation cost related to unvested restricted stock units. Share-Based Compensation Expense The following table presents the effects of share-based compensation in our condensed consolidated statements of operations during the periods presented (in thousands):
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Net Loss Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share | Net Loss Per Share For the periods presented, the following Class A common stock and Class C capital stock equivalents were excluded from the calculations of diluted net loss per share because their effect would have been antidilutive (in thousands):
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Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Commitments We have entered into various non-cancelable operating lease agreements for certain of our office space and equipment with original lease periods expiring between 2019 and 2024. For additional information regarding our lease agreements, see Note 12. Purchase Commitments Purchase commitments primarily include various non-cancelable agreements to purchase content related to our mobile applications and websites as well as homes we are under contract to purchase through Zillow Offers but that have not closed as of the respective date. As of March 31, 2019, the value of homes under contract that have not closed was $140.2 million. Surety Bonds In the course of business, we are required to provide financial commitments in the form of surety bonds to third parties as a guarantee of our performance on and our compliance with certain obligations. If we were to fail to perform or comply with these obligations, any draws upon surety bonds issued on our behalf would then trigger our payment obligation to the surety bond issuer. We have outstanding surety bonds issued for our benefit of approximately $8.6 million and $8.9 million, respectively, as of March 31, 2019 and December 31, 2018. Legal Proceedings We are involved in a number of legal proceedings concerning matters arising in connection with the conduct of our business activities, some of which are at preliminary stages and some of which seek an indeterminate amount of damages. We regularly evaluate the status of legal proceedings in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss or additional loss may have been incurred to determine if accruals are appropriate. We further evaluate each legal proceeding to assess whether an estimate of possible loss or range of loss can be made if accruals are not appropriate. For certain cases described below, management is unable to provide a meaningful estimate of the possible loss or range of possible loss because, among other reasons, (i) the proceedings are in preliminary stages; (ii) specific damages have not been sought; (iii) damages sought are, in our view, unsupported and/or exaggerated; (iv) there is uncertainty as to the outcome of pending appeals or motions; (v) there are significant factual issues to be resolved; and/or (vi) there are novel legal issues or unsettled legal theories presented. For these cases, however, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material effect on our financial position, results of operations or cash flow. In July 2015, VHT, Inc. (“VHT”) filed a complaint against us in the U.S. District Court for the Western District of Washington alleging copyright infringement of VHT’s images on the Zillow Digs site. In January 2016, VHT filed an amended complaint alleging copyright infringement of VHT’s images on the Zillow Digs site as well as the Zillow listing site. In December 2016, the court granted a motion for partial summary judgment that dismissed VHT’s claims with respect to the Zillow listing site. A federal jury trial began on January 23, 2017, and on February 9, 2017, the jury returned a verdict finding that the Company had infringed VHT’s copyrights in images displayed or saved to the Digs site. The jury awarded VHT $79,875 in actual damages and approximately $8.2 million in statutory damages. In March 2017, the Company filed motions in the district court seeking judgment for the Company on certain claims that are the subject of the verdict, and for a new trial on others. On June 20, 2017, the judge ruled and granted in part our motions, finding that VHT failed to present sufficient evidence to prove direct copyright infringement for a portion of the images, reducing the total damages to approximately $4.1 million. On October 26, 2017, the Company filed an appeal with the Ninth Circuit Court of Appeals seeking review of the final judgment and certain prior rulings entered by the district court. The oral hearing for the appeal took place on August 28, 2018. On March 15, 2019, the Ninth Circuit Court of Appeals issued an opinion that, among other things, (i) affirmed the district court’s grant of summary judgment in favor of Zillow on direct infringement of images on Zillow’s listing site, (ii) affirmed the district court’s grant in favor of Zillow of judgment notwithstanding the verdict on certain images that were displayed on the Zillow Digs site, (iii) remanded consideration of the issue whether VHT’s images on the Zillow Digs site were part of a compilation or individual photos, and (iv) vacated the jury’s finding of willful infringement. We have recorded an estimated liability for immaterial amounts related to this matter as of March 31, 2019 and December 31, 2018. We do not believe there is a reasonable possibility that a material loss in excess of amounts accrued may be incurred. In August and September 2017, two purported class action lawsuits were filed against us and certain of our executive officers, alleging, among other things, violations of federal securities laws on behalf of a class of those who purchased our common stock between February 12, 2016 and August 8, 2017. One of those purported class actions, captioned Vargosko v. Zillow Group, Inc. et al, was brought in the U.S. District Court for the Central District of California. The other purported class action lawsuit, captioned Shotwell v. Zillow Group, Inc. et al, was brought in the U.S. District Court for the Western District of Washington. The complaints allege, among other things, that during the period between February 12, 2016 and August 8, 2017, we issued materially false and misleading statements regarding our business practices. The complaints seek to recover, among other things, alleged damages sustained by the purported class members as a result of the alleged misconduct. In November 2017, an amended complaint was filed against us and certain of our executive officers in the Shotwell v. Zillow Group class action lawsuit, extending the beginning of the class period to November 17, 2014. In January 2018, the Vargosko v. Zillow Group purported class action lawsuit was transferred to the U.S. District Court for the Western District of Washington and consolidated with the Shotwell v. Zillow Group purported class action lawsuit. In February 2018, the plaintiffs filed a consolidated amended complaint, and in April 2018, we filed our motion to dismiss the consolidated amended complaint. In May 2018, the plaintiffs filed their opposition to our motion to dismiss the consolidated amended complaint. In June 2018, we filed our reply in support of our motion to dismiss the consolidated amended complaint. In October 2018, our motion to dismiss was granted without prejudice, and the plaintiffs were given 45 days file a second consolidated amended complaint and attempt to cure the defects in their consolidated amended complaint. In November 2018, the plaintiffs filed a second consolidated amended complaint, which we moved to dismiss in December 2018. In January 2019, the plaintiffs filed their opposition to our motion to dismiss the second consolidated amended complaint. In February 2019, we filed our reply in support of our motion to dismiss the second consolidated amended complaint. On April 19, 2019, our motion to dismiss the second consolidated amended complaint was denied, and we filed our answer to the second amended complaint on May 3, 2019. We have denied the allegations of wrongdoing and intend to vigorously defend the claims in this lawsuit. We have not recorded an accrual related to this lawsuit as of March 31, 2019 and December 31, 2018, as we do not believe a loss is probable. In October and November 2017 and January and February 2018, four shareholder derivative lawsuits were filed in the U.S. District Court for the Western District of Washington and the Superior Court of the State of Washington, against certain of our executive officers and directors seeking unspecified damages on behalf of the Company and certain other relief, such as reform to corporate governance practices. The plaintiffs in the derivative suits (in which the Company is a nominal defendant) allege, among other things, that the defendants breached their fiduciary duties in connection with oversight of the Company’s public statements and legal compliance, and as a result of the breach of such fiduciary duties, the Company was damaged, and defendants were unjustly enriched. Certain of the plaintiffs also allege, among other things, violations of Section 14(a) of the Securities Exchange Act of 1934 and waste of corporate assets. All four of the shareholder derivative lawsuits have been stayed until after final resolution of pleading motions and related appeals, if any, in the consolidated securities class action lawsuit discussed above. The defendants intend to deny the allegations of wrongdoing and vigorously defend the claims in these lawsuits. We have not recorded an accrual related to these lawsuits as of March 31, 2019 and December 31, 2018, as we do not believe a loss is probable. In addition to the matters discussed above, from time to time, we are involved in litigation and claims that arise in the ordinary course of business. Although we cannot be certain of the outcome of any such litigation or claims, nor the amount of damages and exposure that we could incur, we currently believe that the final disposition of such matters will not have a material effect on our business, financial position, results of operations or cash flow. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Indemnifications In the ordinary course of business, we enter into contractual arrangements under which we agree to provide indemnification of varying scope and terms to business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements and out of intellectual property infringement claims made by third parties. In addition, we have agreements that indemnify certain issuers of surety bonds against losses that they may incur as a result of executing surety bonds on our behalf. For our indemnification arrangements, payment may be conditional on the other party making a claim pursuant to the procedures specified in the particular contract. Further, our obligations under these agreements may be limited in terms of time and/or amount, and in some instances, we may have recourse against third parties for certain payments. In addition, we have indemnification agreements with certain of our directors and executive officers that require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The terms of such obligations may vary.
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Self-Insurance |
3 Months Ended |
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Mar. 31, 2019 | |
Insurance [Abstract] | |
Self-Insurance | Self-InsuranceWe are self-insured for medical benefits and dental benefits for all qualifying Zillow Group employees. The medical plan carries a stop-loss policy which will protect when cumulative medical claims exceed 125% of expected claims for the plan year with a limit of $1.0 million and from individual claims during the plan year exceeding $500,000. We record estimates of the total costs of claims incurred based on an analysis of historical data and independent estimates. Our liability for self-insured claims is included within accrued compensation and benefits in our condensed consolidated balance sheets and was $4.1 million and $3.9 million, respectively, as of March 31, 2019 and December 31, 2018. |
Employee Benefit Plan |
3 Months Ended |
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Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit PlanWe have a defined contribution 401(k) retirement plan covering Zillow Group employees who have met certain eligibility requirements (the “Zillow Group 401(k) Plan”). Eligible employees may contribute pretax compensation up to a maximum amount allowable under the Internal Revenue Service limitations. Employee contributions and earnings thereon vest immediately. We currently match up to 4% of employee contributions under the Zillow Group 401(k) Plan. The total expense related to the Zillow Group 401(k) Plan for the three months ended March 31, 2019 and 2018 was $4.9 million and $3.8 million, respectively. |
Segment Information and Revenue |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information and Revenue | Segment Information and Revenue 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 Internet, Media & Technology (“IMT”), Homes and Mortgages segments. 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 Homes segment includes the financial results from Zillow Group’s buying and selling of homes directly. 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 and facilities costs and 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):
(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):
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Summary of Significant Accounting Policies (Policies) |
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Mar. 31, 2019 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements include Zillow Group, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. These condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes included in Zillow Group, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 21, 2019. The condensed consolidated balance sheet as of December 31, 2018, included herein, was derived from the audited financial statements of Zillow Group, Inc. as of that date. The unaudited condensed consolidated interim financial statements, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position as of March 31, 2019, our results of operations, comprehensive loss and cash flows for the three month periods ended March 31, 2019 and 2018. The results of the three month period ended March 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any interim period or for any other future year.
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Use of Estimates | Use of EstimatesThe preparation of financial statements in conformity with GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. On an ongoing basis, we evaluate our estimates, including those related to the net realizable value of inventory, amortization period and recoverability of contract cost assets, website and software development costs, recoverability of long-lived assets and intangible assets with definite lives, share-based compensation, income taxes, business combinations, and the recoverability of goodwill and indefinite-lived intangible assets, among others. To the extent there are material differences between these estimates, judgments, or assumptions and actual results, our financial statements will be affected. | ||||||||||||
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In February 2018, the Financial Accounting Standards Board (“FASB”) issued guidance on income tax accounting related to the Tax Cuts and Jobs Act (the “Tax Act”). This guidance permits a reclassification from accumulated other comprehensive income (loss) to accumulated deficit for the adjustment of deferred taxes due to the reduction of the historical corporate income tax rate to the newly enacted corporate income tax rate under the Tax Act. It also requires certain disclosures regarding these reclassifications. The guidance is effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. This guidance must be applied either on a prospective basis in the period of adoption or retrospectively to each period in which the effect of the change in the corporate income tax rate is recognized. We adopted this guidance on January 1, 2019. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In March 2017, the FASB issued guidance related to the premium amortization on purchased callable debt securities. This guidance shortens the amortization period for certain callable debt securities purchased at a premium by requiring that the premium be amortized to the earliest call date. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. This guidance must be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We adopted this guidance on January 1, 2019. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In February 2016, the FASB issued guidance on leases. This guidance requires the recognition of a right of use asset and lease liability on the balance sheet for all leases. This guidance also requires more detailed disclosures to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018. In July 2018, the FASB issued certain targeted improvements to the accounting and disclosure requirements for leases, including an additional optional transition method that allows entities to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restating prior periods. When adopting the lease guidance, an entity may elect a practical expedient package, under which it need not reassess (a) whether any expired or existing contracts are or contain leases; (b) the lease classification for any expired or existing leases; and (c) initial direct costs for any existing leases. These three practical expedients must be elected as a package and must be consistently applied to all existing leases at the date of adoption. We adopted the new guidance on leases on January 1, 2019 using the optional transition method and elected to adopt the practical expedient package. Under this approach, we did not restate the prior financial statements presented. Based on our lease portfolio as of December 31, 2018, we recorded on our consolidated balance sheet right of use assets of $106.5 million as well as operating lease liabilities of $129.0 million, and we removed the existing deferred rent balance of $22.5 million. The adoption of the standard did not have a material impact to our condensed consolidated statements of operations. Recently Issued Accounting Standards Not Yet Adopted In August 2018, the FASB issued guidance related to a customer’s accounting for implementation costs incurred in hosting arrangements. The guidance aligns the requirements for capitalizing implementation costs incurred in cloud computing arrangements with the requirements for capitalizing costs to develop or obtain internal-use software. This guidance is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. This guidance may be applied either retrospectively or prospectively. We expect to adopt this guidance on January 1, 2020. We have not yet determined the impact the adoption of this guidance will have on our financial position, results of operations or cash flows. In August 2018, the FASB issued guidance related to disclosure requirements for fair value measurements. This guidance removes, modifies and adds disclosures related to fair value measurements. This guidance is effective for interim and annual periods beginning after December 15, 2019, and early adoption is permitted. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim and annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. We expect to adopt this guidance on January 1, 2020. We have not yet determined the impact the adoption of this guidance will have on our financial statement disclosures. In June 2016, the FASB issued guidance on the measurement of credit losses on financial instruments. This guidance requires the use of an expected loss impairment model for instruments measured at amortized cost. For available-for-sale debt securities, an entity is required to recognize credit losses through an allowance for credit losses rather than as a write-down. This guidance is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted for interim and annual reporting periods beginning after December 15, 2018. The adoption of this guidance requires a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We expect to adopt this guidance on January 1, 2020. We have not yet determined the impact the adoption of this guidance will have on our financial position, results of operations or cash flows.
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Fair Value Measurements | Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:
We applied the following methods and assumptions in estimating our fair value measurements: Cash equivalents — The fair value measurement of money market funds is based on quoted market prices in active markets. The fair value measurement of corporate notes and bonds, commercial paper, U.S. government agency securities and certificates of deposit is based on observable market-based inputs or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Short-term investments — The fair value measurement of our short-term investments is based on observable market-based inputs or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Restricted cash — Restricted cash consists of cash received from the resale of homes through Zillow Offers which is used to repay amounts borrowed on our revolving credit facilities (see Note 13) and amounts held in escrow related to funding home purchases in our mortgage origination business. The carrying value of restricted cash approximates fair value due to the short period of time amounts borrowed on the revolving credit facilities are outstanding. Mortgage loans held for sale—The fair value of mortgage loans held for sale is generally calculated by reference to quoted prices in secondary markets for commitments to sell mortgage loans with similar characteristics. Interest rate lock commitments—The fair value of interest rate lock commitments (“IRLCs”) is calculated by reference to quoted prices in secondary markets for commitments to sell mortgage loans with similar characteristics. Expired commitments are excluded from the fair value measurement. We generally only issue IRLCs for products that meet specific purchaser guidelines. Since not all IRLCs will become closed loans, we adjust our fair value measurements for the estimated amount of IRLCs that will not close. Forward contracts—The fair value of mandatory loan sales commitments and derivative instruments such as forward sales of mortgage-backed securities that are utilized as hedging instruments are calculated by reference to quoted prices for similar assets.
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Segment Reporting | 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 Internet, Media & Technology (“IMT”), Homes and Mortgages segments. 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 Homes segment includes the financial results from Zillow Group’s buying and selling of homes directly. 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 and facilities costs and 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.
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Balances of Cash Equivalents and Investments | The following tables present the balances of assets and liabilities measured at fair value on a recurring basis, by level within the fair value hierarchy, as of the dates presented (in thousands):
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Cash and Cash Equivalents, Short-term Investments and Restricted Cash (Tables) |
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Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost, Gross Unrealized Gains and Losses, and Estimated Fair Market Value of Cash and Cash Equivalents and Available-for-Sale Investments | The following tables present the amortized cost, gross unrealized gains and losses and estimated fair market value of our cash and cash equivalents, available-for-sale investments and restricted cash as of the dates presented (in thousands):
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Available-for-Sale Investments by Contractual Maturity | The following table presents available-for-sale investments by contractual maturity date as of March 31, 2019 (in thousands):
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Accounts Receivable, net (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||
Schedule of Accounts Receivable, Net | The following table presents the changes in the allowance for doubtful accounts (in thousands):
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Inventory (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Inventory | The components of inventory, net of applicable lower of cost or net realizable value write-downs, were as follows (in thousands):
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Property and Equipment, net (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Detail of Property and Equipment | The following table presents the detail of property and equipment as of the dates presented (in thousands):
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Intangible Assets, net (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | The following tables present the detail of intangible assets subject to amortization as of the dates presented (in thousands):
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Deferred Revenue (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||
Schedule of Change in Deferred Revenue | The following table presents the changes in deferred revenue for the periods presented (in thousands):
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Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Expense | The components of our operating lease expense are as follows for the three months ended March 31, 2019 (in thousands):
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Schedule of Maturities for Operating Lease Liabilities | Maturities of our operating lease liabilities by fiscal year are as follows as of March 31, 2019 (in thousands):
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Schedule of Future Minimum Payments for Operating Leases | The following table presents our future minimum payments for all operating leases as of December 31, 2018, including future minimum payments for operating leases that had not yet commenced as of December 31, 2018 totaling $112.9 million (in thousands):
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revolving Credit Facilities and Lines of Credit | The following table summarizes our warehouse lines of credit as of the periods presented (in thousands, except interest rates):
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Schedule of Convertible Senior Notes | The following table summarizes our outstanding convertible senior notes as of the periods presented (in thousands, except interest rates):
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Share-Based Awards (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Option Award Activity | The following table summarizes option award activity for the three months ended March 31, 2019:
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Fair Value of Options Granted, Estimated at Date of Grant Using Black Scholes Merton Option Pricing Model | The fair value of options granted is estimated at the date of grant using the Black-Scholes-Merton option-pricing model, assuming no dividends and with the following assumptions for the periods presented:
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Summary of Restricted Stock Units Activity | The following table summarizes activity for restricted stock units for the three months ended March 31, 2019:
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Effects of Share Based Compensation in Consolidated Statements of Operations | The following table presents the effects of share-based compensation in our condensed consolidated statements of operations during the periods presented (in thousands):
|
Net Loss Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | For the periods presented, the following Class A common stock and Class C capital stock equivalents were excluded from the calculations of diluted net loss per share because their effect would have been antidilutive (in thousands):
|
Segment Information and Revenue (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Categories | This information is included in the following tables for the periods presented (in thousands):
(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):
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Reconciliation of Total Segment Loss | 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):
|
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Property, Plant and Equipment [Line Items] | |||
Right of use assets | $ 102,056 | ||
Operating lease liabilities | $ 121,966 | ||
Accounting Standards Update 2016-02 | |||
Property, Plant and Equipment [Line Items] | |||
Right of use assets | $ 106,500 | ||
Operating lease liabilities | $ 129,000 | ||
Removal of deferred rent balance | $ 22,500 |
Fair Value Measurements - Fair Value of Cash Equivalents and Investments (Detail) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 780,963 | |
Mortgage loans held for sale | 29,469 | $ 35,409 |
Total | 1,399,459 | 1,485,572 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage loans held for sale | 0 | 0 |
Total | 578,037 | 541,575 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage loans held for sale | 29,469 | 35,409 |
Total | 821,422 | 943,997 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 578,037 | 541,575 |
Money market funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 578,037 | 541,575 |
Money market funds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 9,940 | 3,999 |
Short-term investments | 82,755 | 85,506 |
Commercial paper | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Commercial paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 9,940 | 3,999 |
Short-term investments | 82,755 | 85,506 |
U.S. government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 531,006 | 646,496 |
U.S. government agency securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
U.S. government agency securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 531,006 | 646,496 |
Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 115,682 | 112,933 |
Corporate notes and bonds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Corporate notes and bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 115,682 | 112,933 |
Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 33,331 | 39,306 |
Municipal securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Municipal securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 33,331 | 39,306 |
Foreign government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 14,965 | 14,915 |
Foreign government securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Foreign government securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 14,965 | 14,915 |
Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 3,224 | 4,711 |
Certificates of deposit | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Certificates of deposit | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 3,224 | 4,711 |
Interest rate lock commitments | Not Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 1,257 | 847 |
Interest rate lock commitments | Level 1 | Not Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Interest rate lock commitments | Level 2 | Not Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 1,257 | 847 |
Forward contracts | Not Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 19 | (125) |
Derivative liability | (226) | |
Forward contracts | Level 1 | Not Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liability | 0 | |
Forward contracts | Level 2 | Not Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 19 | $ (125) |
Derivative liability | $ (226) |
Fair Value Measurements - Additional Information (Detail) - USD ($) |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities measured at fair value | $ 0 | $ 0 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 0 | 0 |
Interest rate lock commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notional amount | 41,600,000 | 26,700,000 |
Forward contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notional amount | $ 49,700,000 | $ 28,800,000 |
Cash and Cash Equivalents, Short-term Investments and Restricted Cash - Amortized Cost, Gross Unrealized Gains and Losses, and Estimated Fair Market Value of Cash and Cash Equivalents and Available-for-Sale Investments (Detail) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Cash and Cash Equivalents, at Carrying Value [Abstract] | ||
Cash and cash equivalents | $ 736,507 | $ 651,058 |
Short-term investments: | ||
Amortized Cost | 780,791 | |
Gross Unrealized Gains | 409 | 76 |
Gross Unrealized Losses | (237) | |
Estimated Fair Market Value | 780,963 | |
Restricted cash | 27,595 | 12,385 |
Cash, cash equivalents, short-term investments, and restricted cash, amortized cost | 1,544,893 | 1,568,280 |
Cash, cash equivalents, short-term investments, and restricted cash, gross unrealized losses | (1,046) | |
Cash, cash equivalents, short-term investments, and restricted cash, estimated fair market value | 1,545,065 | 1,567,310 |
U.S. government agency securities | ||
Short-term investments: | ||
Amortized Cost | 530,938 | 647,266 |
Gross Unrealized Gains | 268 | 51 |
Gross Unrealized Losses | (200) | (821) |
Estimated Fair Market Value | 531,006 | 646,496 |
Corporate notes and bonds | ||
Short-term investments: | ||
Amortized Cost | 115,648 | 113,109 |
Gross Unrealized Gains | 65 | 1 |
Gross Unrealized Losses | (31) | (177) |
Estimated Fair Market Value | 115,682 | 112,933 |
Commercial paper | ||
Short-term investments: | ||
Amortized Cost | 82,755 | 85,506 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Market Value | 82,755 | 85,506 |
Municipal securities | ||
Short-term investments: | ||
Amortized Cost | 33,263 | 39,316 |
Gross Unrealized Gains | 74 | 23 |
Gross Unrealized Losses | (6) | (33) |
Estimated Fair Market Value | 33,331 | 39,306 |
Foreign government securities | ||
Short-term investments: | ||
Amortized Cost | 14,963 | 14,929 |
Gross Unrealized Gains | 2 | 0 |
Gross Unrealized Losses | 0 | (14) |
Estimated Fair Market Value | 14,965 | 14,915 |
Certificates of deposit | ||
Short-term investments: | ||
Amortized Cost | 3,224 | 4,711 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | 0 | (1) |
Estimated Fair Market Value | 3,224 | 4,711 |
Cash | ||
Cash and Cash Equivalents, at Carrying Value [Abstract] | ||
Cash and cash equivalents | 148,530 | 105,484 |
Money market funds | ||
Cash and Cash Equivalents, at Carrying Value [Abstract] | ||
Cash and cash equivalents | 578,037 | 541,575 |
Commercial paper | ||
Cash and Cash Equivalents, at Carrying Value [Abstract] | ||
Cash and cash equivalents | $ 9,940 | $ 3,999 |
Cash and Cash Equivalents, Short-term Investments and Restricted Cash - Available-for-Sale Investments by Contractual Maturity (Detail) $ in Thousands |
Mar. 31, 2019
USD ($)
|
---|---|
Cash and Cash Equivalents [Abstract] | |
Amortized Cost, Due in one year or less | $ 723,241 |
Amortized Cost, Due after one year through two years | 57,550 |
Amortized Cost | 780,791 |
Estimated Fair Market Value, Due in one year or less | 723,207 |
Estimated Fair Market Value, Due after one year through two years | 57,756 |
Total | $ 780,963 |
Accounts Receivable, net (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Jan. 01, 2019 |
Dec. 31, 2018 |
|
Receivables [Abstract] | ||||
Accounts receivable, net | $ 70,605 | $ 66,100 | $ 66,083 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||
Beginning balance | 4,838 | |||
Bad debt expense | 128 | $ (267) | ||
Less: write-offs, net of recoveries and other adjustments | (24) | |||
Ending balance | $ 4,942 |
Inventory (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Work-in-progress | $ 76,283 | $ 45,943 |
Finished goods | 248,871 | 116,886 |
Inventory | $ 325,154 | $ 162,829 |
Contract Cost Assets (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Revenue from Contract with Customer [Abstract] | |||
Contract cost assets | $ 46,176,000 | $ 45,819,000 | |
Impairment of contract cost assets | 0 | $ 0 | |
Amortization of contract cost assets | $ 8,746,000 | $ 9,296,000 |
Property and Equipment, net - Detail of Property and Equipment (Detail) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 315,549 | $ 305,927 |
Less: accumulated amortization and depreciation | (173,403) | (170,755) |
Property and equipment, net | 142,146 | 135,172 |
Website development costs | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 149,558 | 149,891 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 22,675 | 22,477 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 74,888 | 65,012 |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 26,027 | 29,037 |
Office equipment, furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 42,401 | $ 39,510 |
Property and Equipment, net - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Property, Plant and Equipment [Line Items] | ||
Amortization and depreciation expense related to property and equipment other than website development costs | $ 6.0 | $ 4.2 |
Capitalization of website development costs | 10.0 | 8.6 |
Amortization of website development costs and intangible assets included in technology and development | 11.0 | 13.0 |
Technology and development | Software Development | ||
Property, Plant and Equipment [Line Items] | ||
Amortization of website development costs and intangible assets included in technology and development | $ 3.4 | $ 9.5 |
Equity Investment - Additional Information (Detail) - October 2016 Investment - USD ($) |
1 Months Ended | |
---|---|---|
Oct. 31, 2016 |
Mar. 31, 2019 |
|
Schedule of Equity Method Investments [Line Items] | ||
Cumulative impairment charge | $ 0 | |
Upward adjustments | 0 | |
Downward adjustments | 0 | |
Variable Interest Entity, Not Primary Beneficiary | ||
Schedule of Equity Method Investments [Line Items] | ||
Percentage of equity interest held | 10.00% | |
Equity investments | $ 10,000,000.0 | |
Maximum exposure to loss | $ 10,000,000.0 |
Intangible Assets, net - Intangible Assets (Detail) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 290,076 | $ 290,527 |
Accumulated Amortization | (190,143) | (182,623) |
Net | 99,933 | 107,904 |
Purchased content | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 42,224 | 42,110 |
Accumulated Amortization | (33,017) | (30,477) |
Net | 9,207 | 11,633 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 24,770 | 24,296 |
Accumulated Amortization | (15,339) | (13,925) |
Net | 9,431 | 10,371 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 103,600 | 103,900 |
Accumulated Amortization | (63,861) | (60,733) |
Net | 39,739 | 43,167 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 109,080 | 111,980 |
Accumulated Amortization | (73,459) | (72,788) |
Net | 35,621 | 39,192 |
Trade names and trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 4,400 | 4,900 |
Accumulated Amortization | (4,400) | (4,683) |
Net | 0 | 217 |
Zillow Home Loans lender licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 400 | 400 |
Accumulated Amortization | (67) | (17) |
Net | 333 | 383 |
Intangibles-in-progress | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 5,602 | 2,941 |
Accumulated Amortization | 0 | 0 |
Net | $ 5,602 | $ 2,941 |
Intangible Assets, net - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Indefinite-lived Intangible Assets [Line Items] | |||
Amortization of website development costs and intangible assets included in technology and development | $ 11.0 | $ 13.0 | |
Trade names and trademarks | Trulia | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible asset | $ 108.0 | $ 108.0 |
Deferred Revenue (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Change in Contract with Customer, Liability [Roll Forward] | |
Beginning balance | $ 34,080 |
Deferral of revenue | 242,852 |
Less: Revenue recognized | (240,827) |
Ending balance | 36,105 |
Revenue recognized, recorded in deferred revenue as of prior period | $ 30,700 |
Leases - Narrative (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019
USD ($)
renewal_option
|
Dec. 31, 2018
USD ($)
|
|
Lessee, Lease, Description [Line Items] | ||
Option to extend lease | 10 years | |
Option to extend existing lease | 5 years | |
Number of periods | renewal_option | 2 | |
Cash paid for amounts included in measurement of lease liabilities | $ 9.1 | |
Weighted average remaining lease term | 5 years | |
Weighted average discount rate | 5.90% | |
Lease payments for leases not yet commenced | $ 112.9 | |
Operating leases not yet commenced | $ 112.9 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 1 year | |
Operating lease commencement period | 5 years | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 5 years | |
Operating lease commencement period | 11 years |
Leases - Components of Lease Expense (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Leases [Abstract] | |
Operating lease cost | $ 6,523 |
Variable lease cost | 4,781 |
Total lease cost | $ 11,304 |
Leases - Schedule of Maturities for Operating Lease Liabilities (Details) $ in Thousands |
Mar. 31, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
Remainder of 2019 | $ 19,196 |
2020 | 28,550 |
2021 | 28,090 |
2022 | 24,565 |
2023 | 22,388 |
All future years | 19,009 |
Total lease payments | 141,798 |
Less: Imputed interest | (19,832) |
Present value of lease liabilities | $ 121,966 |
Leases - Schedule of Future Minimum Payments for Operating Leases (Details) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Leases [Abstract] | |
2019 | $ 29,085 |
2020 | 38,060 |
2021 | 40,099 |
2022 | 37,721 |
2023 | 36,458 |
All future years | 85,462 |
Total future minimum lease payments | $ 266,885 |
Debt - Schedule of Revolving Credit Facilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Instrument [Line Items] | ||
Outstanding borrowings on revolving credit facility | $ 246,028 | $ 116,700 |
Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum Borrowing Capacity | 1,000,000 | |
Outstanding borrowings on revolving credit facility | 246,028 | 116,700 |
Line of Credit | Revolving Credit Facility | July 31, 2018 | ||
Debt Instrument [Line Items] | ||
Maximum Borrowing Capacity | 500,000 | |
Outstanding borrowings on revolving credit facility | $ 167,279 | 116,700 |
Weighted Average Interest Rate | 6.00% | |
Line of Credit | Revolving Credit Facility | January 31, 2019 | ||
Debt Instrument [Line Items] | ||
Maximum Borrowing Capacity | $ 500,000 | |
Outstanding borrowings on revolving credit facility | $ 78,749 | $ 0 |
Weighted Average Interest Rate | 5.99% |
Debt - Narrative (Detail) - USD ($) |
Jan. 31, 2019 |
Jul. 31, 2018 |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Unamortized debt discount and debt issuance costs | $ 135,500,000 | $ 144,400,000 | ||
Revolving Credit Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 1,000,000,000 | |||
Extension of expiration period (up to) | 2 years | |||
Credit Agreement | Revolving Credit Facility | Citibank, N.A. | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 500,000,000.0 | |||
Current borrowing capacity | 79,000,000.0 | |||
Revolving credit facility, initial term | 2 years | |||
July 31, 2018 | Revolving Credit Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 500,000,000 | |||
Current borrowing capacity | $ 177,300,000 | |||
Revolving credit facility, initial term | 1 year |
Debt - Schedule of Warehouse Lines of Credit (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Instrument [Line Items] | ||
Warehouse lines of credit | $ 27,991 | $ 33,018 |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Maximum Borrowing Capacity | 100,000 | |
Warehouse lines of credit | 27,991 | 33,017 |
Line of Credit | July 15, 2019 | ||
Debt Instrument [Line Items] | ||
Maximum Borrowing Capacity | 50,000 | |
Warehouse lines of credit | $ 13,300 | 14,125 |
Weighted Average Interest Rate | 5.00% | |
Line of Credit | June 29, 2019 | ||
Debt Instrument [Line Items] | ||
Maximum Borrowing Capacity | $ 50,000 | |
Warehouse lines of credit | $ 14,691 | $ 18,892 |
Weighted Average Interest Rate | 5.00% |
Debt - Schedule of Convertible Senior Notes (Detail) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Instrument [Line Items] | ||
Aggregate Principal Amount | $ 843,387 | |
Fair Value | 829,603 | $ 784,799 |
Convertible Debt | July 1, 2023 | ||
Debt Instrument [Line Items] | ||
Aggregate Principal Amount | 373,750 | |
Fair Value | $ 341,850 | 321,855 |
Stated Interest Rate | 1.50% | |
Effective Interest Rate | 6.99% | |
Convertible Debt | December 1, 2021 | ||
Debt Instrument [Line Items] | ||
Aggregate Principal Amount | $ 460,000 | |
Fair Value | $ 470,911 | 446,200 |
Stated Interest Rate | 2.00% | |
Effective Interest Rate | 7.44% | |
Convertible Debt | December 15, 2020 | ||
Debt Instrument [Line Items] | ||
Aggregate Principal Amount | $ 9,637 | |
Fair Value | $ 16,842 | $ 16,744 |
Stated Interest Rate | 2.75% |
Income Taxes - Additional Information (Detail) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Federal | |
Schedule Of Income Tax [Line Items] | |
Net operating loss carryforwards | $ 1,081.7 |
State | |
Schedule Of Income Tax [Line Items] | |
Net operating loss carryforwards | $ 32.5 |
Share-Based Awards - Summary of Option Award (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Number of Shares Subject to Existing Options | ||
Beginning Balance (in shares) | 27,310,110 | |
Granted (in shares) | 6,155,283 | |
Exercised (in shares) | (729,788) | |
Forfeited or cancelled (in shares) | (993,437) | |
Ending Balance (in shares) | 31,742,168 | 27,310,110 |
Vested and exercisable ending balance (in shares) | 16,791,512 | |
Weighted- Average Exercise Price Per Share | ||
Beginning Balance (usd per share) | $ 34.04 | |
Granted (usd per share) | 39.97 | |
Exercised (usd per share) | 18.59 | |
Forfeited or cancelled (usd per share) | 42.01 | |
Ending Balance (usd per share) | 35.30 | $ 34.04 |
Vested and exercisable (usd per share) | $ 30.84 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted-Average Remaining Contractual Life, Outstanding | 6 years 9 months 3 days | 6 years 2 months 23 days |
Weighted-Average Remaining Contractual Life, Vested and exercisable | 4 years 9 months 29 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract] | ||
Aggregate Intrinsic Value, Outstanding | $ 122,262 | $ 97,941 |
Aggregate Intrinsic Value Vested, and exercisable | $ 101,912 |
Share-Based Awards - Fair Value of Options Granted, Estimated at Date of Grant Using Black Scholes Merton Option Pricing Model (Detail) - Option Awards - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Weighted-average fair value of options granted (usd per share) | $ 16.77 | $ 20.88 |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 46.00% | 43.00% |
Risk-free interest rate | 2.38% | 2.52% |
Weighted-average expected life | 4 years 9 months | 4 years 6 months |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 47.00% | 45.00% |
Risk-free interest rate | 2.53% | 2.65% |
Weighted-average expected life | 5 years 3 months | 5 years |
Share-Based Awards - Option Awards - Additional Information (Detail) $ in Millions |
Mar. 31, 2019
USD ($)
|
---|---|
Option Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized cost of unvested share-based compensation awards | $ 229.5 |
Share-Based Awards - Summary of Restricted Stock Units Activity (Detail) - Restricted Stock Units |
3 Months Ended |
---|---|
Mar. 31, 2019
$ / shares
shares
| |
Restricted Stock Units | |
Beginning balance (in shares) | shares | 5,266,324 |
Granted (in shares) | shares | 2,749,293 |
Vested (in shares) | shares | (496,347) |
Forfeited or cancelled (in shares) | shares | (273,753) |
Ending balance (in shares) | shares | 7,245,517 |
Weighted- Average Grant- Date Fair Value | |
Unvested outstanding, beginning balance (usd per share) | $ / shares | $ 42.19 |
Granted (usd per share) | $ / shares | 39.06 |
Vested (usd per share) | $ / shares | 37.94 |
Forfeited or cancelled (usd per share) | $ / shares | 40.44 |
Unvested outstanding, ending balance (usd per share) | $ / shares | $ 41.36 |
Share-Based Awards - Restricted Stock Units - Additional Information (Detail) $ in Millions |
Mar. 31, 2019
USD ($)
|
---|---|
Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized compensation cost | $ 279.8 |
Share-Based Awards - Effects of Share Based Compensation in Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Feb. 21, 2019 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | $ 66,124 | $ 30,741 | |
Chief Executive Officer | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 26,400 | ||
Accelerated vesting period from departure date | 18 months | ||
Exercisable period from final date | 90 days | ||
Minimum | Chief Executive Officer | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Expected volatility | 46.00% | ||
Risk-free interest rate | 2.47% | ||
Weighted-average expected life | 3 years 10 months 2 days | ||
Maximum | Chief Executive Officer | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Expected volatility | 47.00% | ||
Risk-free interest rate | 2.49% | ||
Weighted-average expected life | 5 years 3 months | ||
Cost of revenue | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 881 | 955 | |
Sales and marketing | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 5,650 | 5,162 | |
Technology and development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 15,508 | 11,542 | |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | $ 44,085 | $ 13,082 |
Net Loss Per Share - Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Class A Common Stock and Class C Capital Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total Class A common stock and Class C capital stock equivalents (in shares) | 25,689 | 30,206 |
Class A Common Stock and Class C Capital Stock | Weighted Average | Option Awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total Class A common stock and Class C capital stock equivalents (in shares) | 19,408 | 25,222 |
Class A Common Stock and Class C Capital Stock | Weighted Average | Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total Class A common stock and Class C capital stock equivalents (in shares) | 5,860 | 4,346 |
Class A Common Stock | December 15, 2020 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total Class A common stock and Class C capital stock equivalents (in shares) | 421 | 403 |
Class C Capital Stock | December 1, 2021 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total Class A common stock and Class C capital stock equivalents (in shares) | 0 | 235 |
Commitments and Contingencies - Additional Information (Detail) |
Jun. 20, 2017
USD ($)
|
Feb. 09, 2017
USD ($)
|
Mar. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
Feb. 28, 2018
claim
|
Sep. 30, 2017
claim
|
---|---|---|---|---|---|---|
Other Commitments [Line Items] | ||||||
Outstanding surety bonds | $ 8,600,000 | $ 8,900,000 | ||||
VHT Vs Zillow Group Inc. | ||||||
Other Commitments [Line Items] | ||||||
Jury awarded damages | $ 4,100,000 | |||||
VHT Vs Zillow Group Inc. | Actual Damages | ||||||
Other Commitments [Line Items] | ||||||
Jury awarded damages | $ 79,875 | |||||
VHT Vs Zillow Group Inc. | Statutory Damages | ||||||
Other Commitments [Line Items] | ||||||
Jury awarded damages | $ 8,200,000 | |||||
Class Action Lawsuits | ||||||
Other Commitments [Line Items] | ||||||
Number of pending claims | claim | 2 | |||||
Shareholder Derivative Lawsuits | ||||||
Other Commitments [Line Items] | ||||||
Number of pending claims | claim | 4 | |||||
Homes under contract to purchase that have not closed | ||||||
Other Commitments [Line Items] | ||||||
Value of homes under contract that have not closed | $ 140,200,000 |
Self-Insurance - Additional Information (Detail) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Insurance [Abstract] | ||
Percentage of cumulative medical claim under self insurance plan (percent exceeded) | 125.00% | |
Limit of medical claim under self insurance plan (limit) | $ 1,000,000.0 | |
Minimum amount of individual claim under self insurance plan | 500,000 | |
Liability for self-insured claims included in accrued compensation and benefits | $ 4,100,000 | $ 3,900,000 |
Employee Benefit Plan - Additional Information (Detail) - Zillow Merger - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Defined Contribution Plan Disclosure [Line Items] | ||
Company's contribution based on employee contribution (up to) | 4.00% | |
Company's expense related to its defined contribution 401(k) retirement plans | $ 4.9 | $ 3.8 |
Segment Information and Revenue - Additional Information (Detail) |
3 Months Ended |
---|---|
Mar. 31, 2019
Segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information and Revenue - Revenue Categories (Detail) - USD ($) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
||||
Revenue: | |||||
Total revenue | $ 454,104 | $ 299,879 | |||
Costs and expenses: | |||||
Cost of revenue | 151,348 | 23,919 | |||
Sales and marketing | 161,587 | 137,291 | |||
Technology and development | 107,770 | 93,933 | |||
General and administrative | 95,774 | 56,073 | |||
Acquisition-related costs | 352 | 0 | |||
Integration costs | 0 | 27 | |||
Total costs and expenses | 516,831 | 311,243 | |||
Loss from operations | (62,727) | (11,364) | |||
Other income | 9,168 | 2,446 | |||
Interest expense | (16,466) | (7,073) | |||
Loss before income taxes | (70,025) | (15,991) | |||
IMT | |||||
Revenue: | |||||
Total revenue | 298,272 | 280,856 | |||
Costs and expenses: | |||||
Cost of revenue | [1] | 24,251 | 22,594 | ||
Sales and marketing | 126,654 | 128,747 | |||
Technology and development | 87,969 | 85,917 | |||
General and administrative | 70,850 | 50,187 | |||
Integration costs | 0 | 27 | |||
Total costs and expenses | 309,724 | 287,472 | |||
Loss from operations | (11,452) | ||||
Other income | 0 | ||||
Interest expense | 0 | ||||
Loss before income taxes | (11,452) | (6,616) | |||
IMT | Premier Agent | |||||
Revenue: | |||||
Total revenue | 217,735 | 213,732 | |||
IMT | Rentals | |||||
Revenue: | |||||
Total revenue | 37,838 | 29,063 | |||
IMT | Other | |||||
Revenue: | |||||
Total revenue | 42,699 | 38,061 | |||
IMT | Homes | |||||
Revenue: | |||||
Total revenue | 0 | 0 | |||
IMT | Mortgages | |||||
Revenue: | |||||
Total revenue | 0 | 0 | |||
Homes | |||||
Revenue: | |||||
Total revenue | 128,472 | 0 | |||
Costs and expenses: | |||||
Cost of revenue | [1] | 122,419 | 86 | ||
Sales and marketing | 20,862 | 290 | |||
Technology and development | 12,281 | 2,236 | |||
General and administrative | 14,357 | 1,778 | |||
Integration costs | 0 | 0 | |||
Total costs and expenses | 169,919 | 4,390 | |||
Loss from operations | (41,447) | ||||
Other income | 0 | ||||
Interest expense | (3,758) | ||||
Loss before income taxes | (45,205) | (4,390) | |||
Homes | Premier Agent | |||||
Revenue: | |||||
Total revenue | 0 | 0 | |||
Homes | Rentals | |||||
Revenue: | |||||
Total revenue | 0 | 0 | |||
Homes | Other | |||||
Revenue: | |||||
Total revenue | 0 | 0 | |||
Homes | Homes | |||||
Revenue: | |||||
Total revenue | 128,472 | 0 | |||
Homes | Mortgages | |||||
Revenue: | |||||
Total revenue | 0 | 0 | |||
Mortgages | |||||
Revenue: | |||||
Total revenue | 27,360 | 19,023 | |||
Costs and expenses: | |||||
Cost of revenue | [1] | 4,678 | 1,239 | ||
Sales and marketing | 14,071 | 8,254 | |||
Technology and development | 7,520 | 5,780 | |||
General and administrative | 10,567 | 4,108 | |||
Integration costs | 352 | 0 | |||
Total costs and expenses | 37,188 | 19,381 | |||
Loss from operations | (9,828) | ||||
Other income | 313 | ||||
Interest expense | (101) | ||||
Loss before income taxes | (9,616) | (358) | |||
Mortgages | Premier Agent | |||||
Revenue: | |||||
Total revenue | 0 | 0 | |||
Mortgages | Rentals | |||||
Revenue: | |||||
Total revenue | 0 | 0 | |||
Mortgages | Other | |||||
Revenue: | |||||
Total revenue | 0 | 0 | |||
Mortgages | Homes | |||||
Revenue: | |||||
Total revenue | 0 | 0 | |||
Mortgages | Mortgages | |||||
Revenue: | |||||
Total revenue | $ 27,360 | $ 19,023 | |||
|
Segment Information and Revenue - Reconciliation of Total Segment Loss (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Loss before income taxes | $ (70,025) | $ (15,991) |
Corporate interest expense | (16,466) | (7,073) |
Corporate other income | 9,168 | 2,446 |
Consolidated loss before income taxes | (70,025) | (15,991) |
Operating Segments | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Loss before income taxes | (66,273) | (11,364) |
Consolidated loss before income taxes | (66,273) | (11,364) |
Corporate | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Corporate interest expense | (12,607) | (7,073) |
Corporate other income | $ 8,855 | $ 2,446 |
Label | Element | Value |
---|---|---|
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 40,322,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 40,322,000 |
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