XML 38 R26.htm IDEA: XBRL DOCUMENT v3.20.2
Segment Information and Revenue
9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Segment Information and Revenue Segment Information and Revenue
We have three operating and reportable segments, which have been identified based on the way in which our chief operating decision-maker manages our business, makes operating decisions and evaluates operating performance. The chief executive officer acts as the chief operating decision-maker and reviews financial and operational information for the Homes, Internet, Media & Technology (“IMT”) and Mortgages segments.
The Homes segment includes the financial results from Zillow Group’s purchase and sale of homes directly through Zillow Offers and the financial results from title and escrow services through Zillow Closing Services. The IMT segment includes the financial results for the Premier Agent, rentals and new construction marketplaces, dotloop and display, as well as revenue from the sale of various other marketing and business products and services to real estate professionals. The Mortgages segment includes financial results for mortgage originations and the sale of mortgages on the secondary market through Zillow Home Loans, advertising sold to mortgage lenders and other mortgage professionals as well as Mortech mortgage software solutions.
Revenue and costs are directly attributed to our segments when possible. However, due to the integrated structure of our business, certain costs incurred by one segment may benefit the other segments. These costs primarily include headcount-related expenses, general and administrative expenses including executive, finance, accounting, legal, human resources, recruiting and facilities costs, product development and data acquisition costs and marketing and advertising costs. These costs are allocated to each segment based on the estimated benefit each segment receives from such expenditures.
The chief executive officer reviews information about our revenue categories as well as statement of operations data inclusive of income (loss) before income taxes by segment. This information is included in the following tables for the periods presented (in thousands, unaudited):
 Three Months Ended
September 30, 2020
Three Months Ended
September 30, 2019
HomesIMTMortgagesHomesIMTMortgages
Revenue:
Zillow Offers$185,904 $— $— $384,626 $— $— 
Premier Agent— 298,673 — — 240,698 — 
Other1,201 116,716 — — 94,592 — 
Mortgages— — 54,198 — — 25,292 
Total revenue187,105 415,389 54,198 384,626 335,290 25,292 
Costs and expenses:
Cost of revenue179,804 28,448 7,972 370,796 24,318 4,721 
Sales and marketing32,714 102,902 15,210 49,186 118,514 13,647 
Technology and development28,273 90,536 8,491 20,651 94,656 8,667 
General and administrative20,334 53,547 12,014 22,174 55,749 10,570 
Integration costs— — — — — 
Total costs and expenses (1)261,125 275,433 43,687 462,807 293,237 37,610 
Income (loss) from operations(74,020)139,956 10,511 (78,181)42,053 (12,318)
Segment other income— — 636 — — 344 
Segment interest expense (1,597)— (553)(9,689)— (280)
Income (loss) before income taxes (2)$(75,617)$139,956 $10,594 $(87,870)$42,053 $(12,254)

Nine Months Ended
September 30, 2020
Nine Months Ended
September 30, 2019
HomesIMTMortgagesHomesIMTMortgages
Revenue:
Zillow Offers$1,408,832 $— $— $762,022 $— $— 
Premier Agent— 732,741 — — 690,394 — 
Other2,398 293,653 — — 266,837 — 
Mortgages— — 113,241 — — 79,637 
Total revenue1,411,230 1,026,394 113,241 762,022 957,231 79,637 
Costs and expenses:
Cost of revenue1,343,791 76,153 19,023 733,947 74,628 13,829 
Sales and marketing152,180 319,101 39,791 107,457 380,608 42,302 
Technology and development89,729 278,740 22,606 51,130 276,886 24,058 
General and administrative65,657 166,185 31,849 54,339 181,270 31,497 
Impairment costs— 73,900 2,900 — — — 
Integration costs— — — — — 650 
Total costs and expenses (1)1,651,357 914,079 116,169 946,873 913,392 112,336 
Income (loss) from operations(240,127)112,315 (2,928)(184,851)43,839 (32,699)
Segment other income— 5,300 1,223 — — 1,059 
Segment interest expense (13,506)— (1,086)(19,346)— (668)
Income (loss) before income taxes (2)$(253,633)$117,615 $(2,791)$(204,197)$43,839 $(32,308)
(1) The following tables present depreciation and amortization expense and share-based compensation expense for each of our segments for the periods presented (in thousands, unaudited):
 Three Months Ended
September 30, 2020
Three Months Ended
September 30, 2019
HomesIMTMortgagesHomesIMTMortgages
Depreciation and amortization expense$3,029 $22,074 $1,675 $2,331 $18,362 $1,467 
Share-based compensation expense$11,815 $33,435 $3,709 $8,025 $30,687 $3,416 

 Nine Months Ended
September 30, 2020
Nine Months Ended
September 30, 2019
HomesIMTMortgagesHomesIMTMortgages
Depreciation and amortization expense$9,201 $67,889 $4,887 $5,384 $54,264 $4,240 
Share-based compensation expense$35,847 $98,940 $10,318 $20,666 $118,101 $13,117 

(2) The following table presents the reconciliation of total segment income (loss) before income taxes to consolidated income (loss) before income taxes for the periods presented (in thousands, unaudited):
Three Months Ended
September 30,
Nine Months Ended
September 30, 2020
2020201920202019
Total segment income (loss) before income taxes$74,933 $(58,071)$(138,809)$(192,666)
Corporate interest expense(37,320)(16,533)(100,060)(41,851)
Corporate other income2,382 8,655 16,203 26,566 
Gain on partial extinguishment of 2021 Notes— — 6,391 — 
Consolidated income (loss) before income taxes$39,995 $(65,949)$(216,275)$(207,951)
Certain corporate items are not directly attributable to any of our segments, including the gain on the partial extinguishment of the 2021 Notes, interest income earned on our short-term investments included in Other income and interest costs on our convertible senior notes included in Interest expense.