Page 1

ZILLOW GROUP Contacts : Investors Brad Berning ir@zillowgroup.com Media Chrissy Roebuck press@zillow.com Company reinforces strength of its core business and vision of building an integrated and digital real estate transaction to shop for , buy , sell , finance and close on homes SEATTLE , Nov. 2 , 2021 Zillow Group , Inc. ( NASDAQ : Z and ZG ) , today announced consolidated financial results for the three months ended Sept. 30 , 2021 , and its plan to wind down Zillow Offers , the company's iBuying service in which Zillow acts as the primary purchaser and seller of homes . Zillow Group Reports Third - Quarter 2021 Financial Results & Shares Plan to Wind Down Zillow Offers Operations " We've determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance - sheet volatility , " said Zillow Group co - founder and CEO Rich Barton . " While we built and learned a tremendous amount operating Zillow Offers , it served only a small portion of our customers . Our core business and brand are strong , and we remain committed to creating an integrated and digital real estate transaction that solves the pain points of buyers and sellers while serving a wider audience . " The wind - down is expected to take several quarters and will include a reduction of Zillow's workforce by approximately 25 % . " The most difficult part of this decision is that it will impact many of our colleagues , " Barton said . " This is not something we take lightly . We are grateful for their efforts , and we are committed to providing a smooth transition . " The company reported the following Q3 financial results : Consolidated Q3 revenue of $ 1.7 billion . IMT segment revenue growth of 16 % year over year to $ 480 million , and Premier Agent revenue growth of 20 % year over year to $ 359 million , both within the company's Q3 outlook ranges . O O O Homes segment revenue of $ 1.2 billion , below the company's Q3 outlook of $ 1.45 billion at the midpoint of the range , due primarily to renovation and resale capacity constraints . Mortgages segment revenue growth of 30 % year over year to $ 70 million , exceeding the high end of the company's outlook range . Consolidated GAAP net loss of $ 328 million in Q3 . Segment income ( loss ) before income taxes of $ 130 million , $ ( 422 ) million and $ ( 6 ) million for the IMT , Homes and Mortgages segments , respectively . Consolidated Adjusted EBITDA loss of $ 169 million with Adjusted EBITDA for the IMT and Mortgages segments exceeding the high end of the company's Q3 outlook . Adjusted EBITDA by segment of $ 207 million , $ ( 381 ) million and $ 5 million for the IMT , Homes and Mortgages segments , respectively . The company ended the third quarter with cash and investments of $ 3.2 billion . Included in the company's third - quarter financial results is a write - down of inventory of approximately $ 304 million within the Homes segment as a result of purchasing homes in Q3 at higher prices than the company's current estimates of future selling prices . The company further expects an additional $ 240 million to $ 265 million of losses to be recognized in Q4 primarily on