Zillow Group, Inc.

Hello, and welcome to Zillow's second quarter 2024 earnings call. We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question and answer session. Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Brad, you may begin.

Thank you. Good afternoon and welcome to Zillow Group's second quarter 2024 call. Joining me today to discuss our results are Zillow Group's co-founder and co-executive chairman, Rich Barton, newly appointed CEO, Jeremy Waxman, and CFO, Jeremy Hoffman. During today's call, we will make forward-looking statements about our future performance and operating plans based on our current expectations and assumptions. These statements are subject to risks and uncertainties, and we encourage you to consider the risk factors described in our SEC filings for additional information. We undertake no obligation to update these statements as a result of new information or future events, except as required by law. This call is being broadcast on the Internet and is accessible on our Investor Relations website. A recording of the call will be available later today. During the call, we will discuss GAAP and non-GAAP measures, including adjusted EBITDA, which we refer to as EBITDA. We encourage you to read our shareholder letter and earnings release, which can be found on our investor relations website as they contain important information about our GAAP and non-GAAP results, including reconciliations of historical non-GAAP financial measures. We will now open the call for the remarks followed by live Q&A. With that, I will turn the call over to Rich.

Thanks, Brad. Good afternoon and good evening to everyone dialing in to hear our second quarter 2024 results. We delivered another strong quarter in an ongoing challenging real estate macro environment, exceeding our outlook for revenue and EBITDA as we continue to successfully execute on our growth strategy. Today, we also announced Jeremy Waxman has been promoted to Chief Executive Officer of Zillow Group, and I will serve as Co-Exec Chair of the Board of Directors alongside my co-founder, Lloyd Frink. I have been CEO and or Chairman since the day Lloyd and I seed-funded the company in 2004 and will remain engaged. My role, however, will shift to supporting and counseling Jeremy Waxman and the leadership team rather than daily operational leadership. Before talking about Jeremy and the team, let me talk about the state of the company. The short version is that Zillow business is in great shape financially, strategically, operationally, and organizationally. We are executing well and are consistently outperforming the broader residential real estate industry as we methodically ship great software and services to digitize and integrate home buying, selling, financing, and renting. empowering consumers and partners alike. We have done this inside the Zillow branded Housing Super App, the integrated consumer and partner experience we are rolling out in markets across the country. And we continue to increase the breadth of our market coverage and the depth of transaction penetration within those markets. I am pleased with where we are in this effort and the opportunity we see for many years of growth ahead. We have also increasingly leveraged our brand trust and massive audience to diversify our revenue streams. We've leaned hard into the obvious and adjacent rentals and purchase mortgage opportunities, both of which are now exciting growth businesses for Zillow. Rentals now account for one-fifth of total company revenue, and Zillow Home Loans purchase mortgage origination volume grew more than 100% year-over-year again this quarter. Rentals has plenty of room to run, and the mortgages opportunity for us is wide open and large. Additionally, we have built and acquired and integrated a quietly exciting set of products and services that we offer to the broader industry, brokers, MLSs, and the whole of the professional agent community. We are investing in broad industry-wide adoption of our suite of increasingly integrated digital content and workflow tools, including incredible products like our showing time home touring solution, follow-up boss agent CRM, dot loop forms and document management, and showcase 3D interactive listings. Our conviction is that a rising digital tide lifts all boats. A more digital industry using our software is better for consumers, better for our partners, and ultimately better for Zillow Group. We have unique ambition here and unique talent and resources to conjure it into reality. And through all of this innovation and expansion, the leadership team has maintained real cost discipline that is delivering improvements in EBITDA margins. Executing well against big, complex, interconnected opportunities requires amazing talent who have a clear strategy, high accountability, and high trust in one another. Which leads me to Jeremy Waxman, our new CEO, and the person we organized most of the company around three years ago when we promoted him to COO. He has been supported by an exceptional team and has successfully positioned the company to go after these multiple large opportunities, as I have laid out. Jeremy is a familiar voice to you all on this call, but allow me to share some of his history. He has an engineering degree, which is not required here at Zillow, but it's nice. He also got his MBA many years ago, which the engineers don't hold against him. We found Jeremy at Microsoft in 2009 when Zillow was very small and recruited him into a product and marketing role. Throughout his time at Zillow, Jeremy has worn many hats. His responsibilities have steadily gained scope, spanning product, marketing, and operations. He has been a key strategic partner throughout his tenure, advising Lloyd and me on major strategy and product decisions. Early on, he helped pioneer mobile real estate shopping with the launch of the Zillow app. Later as CMO, he was critical to leading Zillow's consumer marketing strategy, establishing a high bar and a branding framework for what has become a rare loved and trusted household brand. His tenure as COO the past three years with all product, engineering, design, marketing, sales, IT, and go-to-market business operations reporting to him has been a time of particularly impressive innovation for Zillow, which has put the company back on an accelerating growth path following pandemic dislocation from which the industry has yet to recover. Jeremy operationalized Zillow's housing super app strategy while maintaining strong cost discipline, diversifying our revenue base, and growing the rentals and mortgages businesses. He successfully championed the follow-up boss and showing time acquisitions, helping us deliver on our goal to provide agent partners and the broader industry with the best software solutions to power their businesses. He also organized, elevated, and recruited talent that makes up Zillow's world-class R&D organizations and increasingly critical sales and marketing operations. Jeremy's product-forward, consumer-first leadership, operational experience, and technology orientation make him right and ready to be CEO of Zillow now. I am confident in his judgment and his leadership, and I am excited to support him as he leads Zillow's next chapter. And with that, I'll now hand the mic over to Zillow Group's new Chief Executive Officer, Jeremy Waxman.