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"The second quarter was outstanding for Zillow® with record revenues, traffic and mobile usage. It marks our first profitable quarter on a GAAP net income basis and our fourth consecutive profitable quarter on an Adjusted EBITDA basis," said
Second Quarter 2011 Financial Highlights
2011 Operating and Business Highlights
Quarterly Conference Call
A conference call to discuss
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties, including the statement regarding our belief about our future opportunity. Statements containing words such as "may," "believe," "anticipate," "expect," "intend," "plan," "project," "projections," "business outlook," "estimate," or similar expressions constitute forward-looking statements. Differences in the Company's actual results from those anticipated in these forward-looking statements may result from actions taken by the Company as well as from risks and uncertainties beyond the Company's control. Factors that may contribute to such differences include, but are not limited to, the Company's ability to maintain and effectively manage an adequate rate of growth; the impact
of the real estate industry on the Company's business; the Company's ability to innovate and provide products and services that are attractive to its users advertisers; the Company's ability to increase awareness of the Zillow brand; the Company's ability to maintain or establish relationships with listings and data providers; the Company's ability to attract consumers to the Company's website and mobile applications; the Company's ability to compete successfully against existing or future competitors; the reliable performance of the Company's network infrastructure and content delivery processes; and the Company's ability to protect its intellectual property. The foregoing list of risks and uncertainties is illustrative, but is not exhaustive. For more information about potential factors that could affect the Company's business and financial results, please review "Risk Factors"
described in the Company's final Prospectus related to the initial public offering of the Company's Class A common stock filed pursuant to Rule 424(b) under the Securities Act with the
Use of Non-GAAP Financial Measure: Adjusted EBITDA
To provide investors with additional information regarding our financial results, this press release presents Adjusted EBITDA, a non-GAAP financial measure. We have provided a reconciliation below of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure.
Adjusted EBITDA is a key metric used by our management and board of directors to measure operating performance and trends and to prepare and approve our annual budget. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis.
Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net loss and our other GAAP results.
About
The
Zillow.com,
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| ZILLOW, INC. | ||
| UNAUDITED CONDENSED BALANCE SHEETS | ||
| (in thousands) | ||
| June 30, 2011 | December 31, 2010 | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 16,161 | $ 12,278 |
| Short-term investments | -- | 1,499 |
| Accounts receivable, net | 5,307 | 3,984 |
| Prepaid expenses and other current assets | 670 | 410 |
| Total current assets | 22,138 | 18,171 |
| Property and equipment, net | 5,544 | 4,929 |
| Goodwill | 1,140 | -- |
| Intangible assets, net | 1,934 | 888 |
| Other assets | 3,146 | 25 |
| Total assets | $ 33,902 | $ 24,013 |
| Liabilities and shareholders' equity | ||
| Current liabilities: | ||
| Accounts payable | $ 2,524 | $ 750 |
| Accrued expenses and other current liabilities | 2,336 | 576 |
| Accrued compensation and benefits | 1,564 | 1,349 |
| Deferred revenue | 5,647 | 3,284 |
| Deferred rent, current portion | 285 | 271 |
| Total current liabilities | 12,356 | 6,230 |
| Deferred rent, net of current portion | 405 | 335 |
| Shareholders' equity: | ||
| Convertible preferred stock | 4 | 4 |
| Preferred stock | -- | -- |
| Class A common stock | -- | -- |
| Class B common stock | 1 | 1 |
| Class C nonvoting common stock | -- | -- |
| Additional paid-in capital | 99,095 | 96,152 |
| Accumulated other comprehensive loss | (77,959) | (78,709) |
| Total shareholders' equity | 21,141 | 17,448 |
| Total liabilities and shareholders' equity | $ 33,902 | $ 24,013 |
| ZILLOW, INC. | ||||
| UNAUDITED CONDENSED STATEMENTS OF OPERATIONS | ||||
| (in thousands, except per share data) | ||||
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Revenues | $ 15,845 | $ 7,334 | $ 27,105 | $ 12,665 |
| Costs and expenses: | ||||
| Cost of revenues (exclusive of amortization) (1)(2) | 2,713 | 1,222 | 4,529 | 2,384 |
| Sales and marketing (2) | 5,630 | 3,748 | 11,115 | 6,865 |
| Technology and development (2) | 3,304 | 2,878 | 6,299 | 5,412 |
| General and administrative (2) | 2,627 | 1,483 | 4,455 | 2,824 |
| Total costs and expenses | 14,274 | 9,331 | 26,398 | 17,485 |
| Income (loss) from operations | 1,571 | (1,997) | 707 | (4,820) |
| Other income | 5 | 25 | 43 | 42 |
| Net income (loss) | $ 1,576 | $ (1,972) | $ 750 | $ (4,778) |
| Net income (loss) attributable to common shareholders | $ -- | $ (1,972) | $ -- | $ (4,778) |
| Net income (loss) per share attributable to common shareholders — basic and diluted | $ -- | $ (0.16) | $ -- | $ (0.38) |
| Weighted-average shares outstanding — basic | 13,940 | 12,660 | 13,645 | 12,650 |
| Weighted-average shares outstanding — diluted | 24,106 | 12,660 | 23,604 | 12,650 |
| _________ | ||||
| (1) Amortization of website development costs and intangible | ||||
| assets included in technology and development is as follows: | $ 1,234 | $ 1,107 | $ 2,457 | $ 2,077 |
| (2) Includes share-based compensation as follows: | ||||
| Cost of revenues | $ 46 | $ 53 | $ 87 | $ 107 |
| Sales and marketing | 67 | 111 | 174 | 215 |
| Technology and development | 90 | 106 | 176 | 201 |
| General and administrative | 210 | 159 | 366 | 318 |
| Total | $ 413 | $ 429 | $ 803 | $ 841 |
| Other Financial Data: | ||||
| Adjusted EBITDA (1) | $ 3,852 | $ (202) | $ 4,904 | $ (1,397) |
| (1) See above for more information regarding our presentation of Adjusted EBITDA. | ||||
The following table presents a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, for each of the periods presented (in thousands, unaudited):
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
|
Reconciliation of Adjusted EBITDA to Net Income (Loss): |
||||
| Net income (loss) | $ 1,576 | $ (1,972) | $ 750 | $ (4,778) |
| Income tax expense (benefit) | -- | -- | -- | -- |
| Other income | (5) | (25) | (43) | (42) |
| Depreciation and amortization expense | 1,868 | 1,366 | 3,394 | 2,582 |
| Share-based compensation expense | 413 | 429 | 803 | 841 |
| Adjusted EBITDA | $ 3,852 | $ (202) | $ 4,904 | $ (1,397) |
Revenues by Type
The following tables present our revenues by type and as a percentage of total revenues for each of the periods presented (in thousands, unaudited):
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Revenues: | ||||
| Marketplace revenues | $ 9,723 | $ 2,632 | $ 16,604 | $ 4,486 |
| Display revenues | 6,122 | 4,702 | 10,501 | 8,179 |
| Total | $ 15,845 | $ 7,334 | $ 27,105 | $ 12,665 |
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Percentage of Revenues: | ||||
| Marketplace revenues | 61% | 36% | 61% | 35% |
| Display revenues | 39% | 64% | 39% | 65% |
| Total | 100% | 100% | 100% | 100% |
Key Growth Drivers
The following tables set forth our key growth drivers for each of the periods presented:
|
Average Monthly Unique Users for the Three Months Ended June 30, |
2010 to 2011 |
||
| 2011 | 2010 | % Change | |
| (in thousands) | |||
| Unique Users | 20,758 | 10,751 | 93% |
Unique users source: Internal tracking of
| At June 30, | 2010 to 2011 | ||
| 2011 | 2010 | % Change | |
| Premier Agent Subscribers | 13,385 | 4,777 | 180% |
Investor contact:
866-504-0300
ir@zillow.com
Media contact:
206-757-2701
press@zillow.com
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