Zillow Group (Z) Financials

Zillow Group's financials from Q3 2022 through Q1 2025 show a company navigating challenges but also demonstrating some operational strengths. Here is a breakdown of key trends and important data points from the income statements, cash flow statements, and balance sheets:

• Net income improved significantly in Q1 2025, with a small net income of $8 million, compared to consistent losses in prior quarters (e.g., a loss of $52 million in Q4 2024 and $20 million loss in Q3 2024), indicating a turnaround in profitability.
• Operating cash flow remained strong, with $104 million generated in Q1 2025, consistent with prior quarters where operating cash flow ranged from $55 million to $171 million, showing solid cash generation despite net losses in most periods.
• Zillow consistently invests in property, equipment, and purchases of investment securities, reflecting a commitment to maintaining and growing operational capacity and potentially making strategic investments.
• Total assets stayed relatively stable, around $5.7 - $6.8 billion, with a significant portion in goodwill (~$2.8 billion), intangible assets, and trading account securities, reflecting the company's asset base and intangible value.
• Total equity remains positive and around $4.5 - $4.7 billion over the periods, showing that Zillow maintains a solid equity base despite losses and liabilities.

• Interest expense related to long-term debt remains consistent at about $5-$10 million per quarter, with no interest income, indicating reliance on debt financing but manageable interest costs relative to revenue.
• Total revenue increased steadily from about $450 million in Q4 2022 to $615 million in Q1 2025, primarily from non-interest income sources, indicating growth in core business activities.
• Marketing expenses are high, ranging from $290 million to $360 million quarterly, reflecting significant spending to drive growth but also pressure on margins.
• No significant impairment charges reported in recent quarters, implying asset values have remained steady.

• Zillow has consistently posted net losses from Q3 2022 through Q4 2024, reflecting ongoing challenges in achieving profitability until the slight net income in Q1 2025.
• High levels of repurchase of common equity have been a feature, with hundreds of millions spent on buybacks each quarter, which may strain cash resources given ongoing losses and investing activities.
• Long-term debt remains elevated, with balances around $1 billion or more, alongside large short-term debt of $600 million to $1.2 billion, potentially increasing financial risk.
• Cash and equivalents declined from about $2 billion in mid-2022 to about $914 million in Q1 2025, suggesting liquidity is decreasing in line with net losses and investing outflows.
• Despite strong operating cash flow, net cash from financing activities has been negative in recent quarters, driven mainly by debt repayments and equity repurchases, contributing to overall cash burn.

Overall, Zillow Group has shown progress toward improving profitability and maintaining strong operating cash flow, though it faces risks related to high debt levels, substantial marketing spend, and cash outflows from equity repurchases. Investors should monitor if the recent positive net income is sustainable and how the company manages its capital structure and liquidity going forward.