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"The fourth quarter was another terrific one as incredible execution by the
Fourth Quarter 2012 Financial Highlights
- Marketplace Revenue increased 95% to
$26.8 million from$13.7 million in the fourth quarter of 2011.Zillow achieved record Marketplace Revenue while executing a pricing model transition in the Premier Agent business.- Display Revenue increased 22% to
$7.5 million from$6.1 million in the fourth quarter of 2011.- Net income was
$0.5 million , compared to net income of$0.9 million in the fourth quarter of 2011. The fourth quarter of 2012 results include a year-over-year increase in depreciation and amortization expense, and share-based compensation expense, primarily related to acquisitions.- Basic and diluted earnings per share were
$0.02 , compared to basic and diluted earnings per share of$0.03 in the same period last year.- Adjusted EBITDA was
$6.8 million , or 20% of revenue, which was an increase from$3.3 million in the fourth quarter of 2011, or 17% of revenue.
Full Year 2012 Financial Highlights
- Marketplace Revenue increased 105% to
$86.7 million from$42.2 million in 2011.- Display Revenue increased 26% to
$30.2 million from$23.9 million in 2011.
Operating and Business Highlights
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1 According to |
Quarterly Conference Call to Include Business Outlook
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, without limitation, the statements regarding our belief about our re-acceleration of year-over-year growth, our belief about 2013 and our three core priorities, and our business outlook. Statements containing words such as "may," "believe," "anticipate," "expect," "intend," "plan," "project," "will," "projections," "business outlook," "estimate," or similar expressions constitute forward-looking statements. Differences in
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding our financial results, this press release includes references to Adjusted EBITDA, which is a non-GAAP financial measure. We have provided a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, within this earnings release.
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 income and our other GAAP results.
About
Zillow.com,
Buyfolio, Mortech, HotPads and Digs are trademarks of
iPad is a registered trademark of Apple, Inc.
The
(ZFIN)
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| UNAUDITED CONDENSED BALANCE SHEETS | ||
| (in thousands) | ||
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| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 150,040 | $ 47,926 |
| Short-term investments | 44,054 | 28,925 |
| Accounts receivable, net | 8,655 | 5,638 |
| Prepaid expenses and other current assets | 2,652 | 3,214 |
| Total current assets | 205,401 | 85,703 |
| Long-term investments | 9,389 | 15,285 |
| Property and equipment, net | 13,634 | 7,227 |
| Goodwill | 54,284 | 3,676 |
| Intangible assets, net | 21,248 | 4,532 |
| Other assets | 279 | 245 |
| Total assets | $ 304,235 | $ 116,668 |
| Liabilities and shareholders' equity | ||
| Current liabilities: | ||
| Accounts payable | $ 3,158 | $ 1,681 |
| Accrued expenses and other current liabilities | 6,318 | 4,893 |
| Accrued compensation and benefits | 2,514 | 1,587 |
| Deferred revenue | 8,349 | 5,769 |
| Deferred rent, current portion | 94 | 60 |
| Total current liabilities | 20,433 | 13,990 |
| Deferred rent, net of current portion | 3,485 | 1,347 |
| Other non-current liabilities | -- | 118 |
| Shareholders' equity: | ||
| Preferred stock | -- | -- |
| Class A common stock | 3 | 2 |
| Class B common stock | 1 | 1 |
| Additional paid-in capital | 351,981 | 178,817 |
| Accumulated deficit | (71,668) | (77,607) |
| Total shareholders' equity | 280,317 | 101,213 |
| Total liabilities and shareholders' equity | $ 304,235 | $ 116,668 |
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| UNAUDITED CONDENSED STATEMENTS OF OPERATIONS | ||||
| (in thousands, except per share data) | ||||
| Three Months Ended | Year Ended | |||
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| 2012 | 2011 | 2012 | 2011 | |
| Revenue | $ 34,337 | $ 19,891 | $ 116,850 | $ 66,053 |
| Costs and expenses: | ||||
| Cost of revenue (exclusive of amortization) (1) (2) | 3,806 | 2,961 | 14,043 | 10,575 |
| Sales and marketing (2) | 14,519 | 7,576 | 49,105 | 25,725 |
| Technology and development (2) | 9,079 | 3,994 | 26,614 | 14,143 |
| General and administrative (2) (3) | 6,422 | 4,463 | 21,291 | 14,613 |
| Total costs and expenses | 33,826 | 18,994 | 111,053 | 65,056 |
| Income from operations | 511 | 897 | 5,797 | 997 |
| Other income | 38 | 25 | 142 | 105 |
| Net income | $ 549 | $ 922 | $ 5,939 | $ 1,102 |
| Net income attributable to common shareholders | $ 549 | $ 922 | $ 5,939 | $ -- |
| Net income per share attributable to common shareholders — basic | $ 0.02 | $ 0.03 | $ 0.20 | $ -- |
| Net income per share attributable to common shareholders — diluted | $ 0.02 | $ 0.03 | $ 0.18 | $ -- |
| Weighted-average shares outstanding — basic | 33,408 | 27,748 | 30,194 | 19,815 |
| Weighted-average shares outstanding — diluted | 36,292 | 30,592 | 32,709 | 22,305 |
| _________ | ||||
| (1) Amortization of website development costs and intangible assets included in technology and development is as follows: | $ 3,603 | $ 1,466 | $ 11,179 | $ 5,384 |
| (2) Includes share-based compensation expense as follows: | ||||
| Cost of revenue | $ 109 | $ 54 | $ 380 | $ 189 |
| Sales and marketing | 1,084 | 129 | 2,433 | 388 |
| Technology and development | 704 | 235 | 1,886 | 546 |
| General and administrative | 359 | 236 | 1,912 | 822 |
| Total | $ 2,256 | $ 654 | $ 6,611 | $ 1,945 |
| (3) General and administrative includes a facility exit charge as follows: | $ -- | $ -- | $ -- | $ 1,737 |
| Other Financial Data: | ||||
| Adjusted EBITDA (4) | $ 6,838 | $ 3,312 | $ 25,181 | $ 11,869 |
| (4) See above for more information regarding our presentation of Adjusted EBITDA. | ||||
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| UNAUDITED STATEMENTS OF CASH FLOWS | ||
| (in thousands) | ||
|
Year Ended |
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| 2012 | 2011 | |
| Operating activities | ||
| Net income | $ 5,939 | $ 1,102 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 12,773 | 7,190 |
| Facility exit charge | -- | 1,737 |
| Share-based compensation expense | 6,611 | 1,945 |
| Loss on disposal of property and equipment | 353 | 157 |
| Bad debt expense | 1,227 | 594 |
| Deferred rent | 2,155 | 1,243 |
| Amortization of bond premium | 751 | 181 |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | (3,458) | (2,208) |
| Prepaid expenses and other assets | 650 | (2,882) |
| Accounts payable | 991 | 916 |
| Accrued expenses | 1,776 | 2,460 |
| Deferred revenue | 2,530 | 2,391 |
| Net cash provided by operating activities | 32,298 | 14,826 |
| Investing activities | ||
| Proceeds from investment maturities | 28,434 | 4,750 |
| Purchases of investments | (38,397) | (47,772) |
| Purchases of property and equipment | (12,677) | (7,686) |
| Purchases of intangible assets | (4,073) | (1,135) |
| Acquisitions, net of cash acquired | (67,645) | (6,540) |
| Net cash used in investing activities | (94,358) | (58,383) |
| Financing activities | ||
| Proceeds from exercise of Class A common stock options | 7,448 | 2,917 |
| Proceeds from public offering, net of offering costs | 156,726 | 70,788 |
| Proceeds from concurrent private placement | -- | 5,500 |
| Net cash provided by financing activities | 164,174 | 79,205 |
| Net increase in cash and cash equivalents during period | 102,114 | 35,648 |
| Cash and cash equivalents at beginning of period | 47,926 | 12,278 |
| Cash and cash equivalents at end of period | $ 150,040 | $ 47,926 |
| Supplemental disclosures of cash flow information | ||
| Noncash transactions: | ||
| Capitalized share-based compensation | $ 2,379 | $ 600 |
| Class A common stock issued in connection with an acquisition | $ -- | $ 910 |
| Write-off of fully depreciated property and equipment | $ 2,986 | $ 2,133 |
Adjusted EBITDA
The following table presents a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, for each of the periods presented (in thousands, unaudited):
| Three Months Ended | Year Ended | |||
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| 2012 | 2011 | 2012 | 2011 | |
| Reconciliation of Adjusted EBITDA to Net Income: | ||||
| Net income | $ 549 | $ 922 | $ 5,939 | $ 1,102 |
| Other income | (38) | (25) | (142) | (105) |
| Depreciation and amortization expense | 4,071 | 1,761 | 12,773 | 7,190 |
| Share-based compensation expense | 2,256 | 654 | 6,611 | 1,945 |
| Facility exit charge | -- | -- | -- | 1,737 |
| Adjusted EBITDA | $ 6,838 | $ 3,312 | $ 25,181 | $ 11,869 |
Revenue by Type
The following tables present our revenue by type and as a percentage of total revenue for each of the periods presented (in thousands, unaudited):
| Three Months Ended | Year Ended | |||
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| 2012 | 2011 | 2012 | 2011 | |
| Revenue: | ||||
| Marketplace revenue | $26,838 | $13,746 | $ 86,670 | $42,190 |
| Display revenue | 7,499 | 6,145 | 30,180 | 23,863 |
| Total | $34,337 | $19,891 | $ 116,850 | $66,053 |
| Three Months Ended | Year Ended | |||
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| 2012 | 2011 | 2012 | 2011 | |
| Percentage of Revenue: | ||||
| Marketplace revenue | 78% | 69% | 74% | 64% |
| Display revenue | 22% | 31% | 26% | 36% |
| 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 |
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| December 31, | 2011 to 2012 | ||
| 2012 | 2011 | % Change | |
| (in thousands) | |||
| Unique Users | 34,535 | 23,507 | 47% |
Unique users source: We measure unique users with Google Analytics. Beginning in
| At December 31, | 2011 to 2012 | ||
| 2012 | 2011 | % Change | |
| Premier Agent Subscribers | 29,473 | 15,799 | 87% |
CONTACT:Raymond Jones Investor Relations 206-470-7137 ir@zillow.comKatie Curnutte Public Relations 206-757-2785 press@zillow.com
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