Good afternoon. My name is Hannah, and I will be your conference operator today. At this time, I would like to welcome everyone to the Zillow Group Third Quarter 2022 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. Please note, this event is being recorded. I would now like to turn the conference over to Brad Berning, Vice President, Strategic Affairs and Investor Relations. Please go ahead. Thank you. Good afternoon, and welcome to Zillow Group's Third Quarter 2022 Conference Call. Joining me today to discuss our results are Zillow Group's Co-founder and CEO, Rich Barton, CFO, Allen Parker, and COO, Jeremy Wacksman. During today's call, we will be making forward-looking statements about our future performance and operating plans and the housing market based on 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 our earnings release, which can be found on our investor relations website, as they contain information about our GAAP and non-GAAP results, including reconciliations of historical non-GAAP financial measures. In addition, please note that we will refer to our Internet, media, and technology segment as our IMT segment. Beginning in Q3, the financial results of Zillow Offers have been presented as discontinued operations and are therefore excluded from the discussion of the results of our continuing operations. We will now open the call with remarks followed by live Q&A. With that, I will now turn the call over to Rich. Thank you, Brad, and good afternoon, everyone. Thank you for joining us today. A brief programming note before we get going. Allen and I will talk through results from the quarter like we normally do, and then, as Brad just mentioned, our COO, Jeremy Wacksman, will join us for Q&A. As Chief Operating Officer, Jeremy is an integral part of delivering on our strategy and therefore an important resource for you all, especially with respect to the progress we're making against our growth pillars. I'm excited for you to have the chance to hear from him directly once again. Now to our results. We exceeded our guidance ranges for total revenue and EBITDA in the third quarter through a combination of better-than-expected revenue growth coupled with active cost management. Of note, our IMT segment EBITDA for the quarter came in at $164 million, which was $43 million higher than the high end of our guidance range. IMT segment EBITDA margin was 36%, demonstrating the incremental margin leverage our core business exhibits when revenues grow beyond our expectations, with much of that revenue flowing directly to profit for us. Alongside strong financial results, this last quarter has been an important one for our product roadmap on our journey to our midterm targets that we introduced nine months ago. As a reminder, we introduced a goal to grow our share of customer transactions from 3% to 6% by the end of 2025, oriented around increasing engagement, increasing transactions, and increasing revenue per transaction. The path to achieving those targets involves product initiatives within five growth pillars, touring, financing, seller solutions, enhancing our partner network, and integrating our services. As you've heard us talk about, Zillow's vision of a housing super app is to create a single digital experience to help customers across all of their real estate needs, including buying, selling, financing, and renting, serving as one ecosystem of connected solutions for all the tasks and services related to moving. Customers want this super app. It's a very large business opportunity, and given Zillow's brand strength, audience, and technology capabilities, we are in an advantaged position to deliver. We've heard loud and clear from you all that it is critical to understand what metrics and milestones we are most focused on internally as you evaluate the company amid a housing market that is as choppy as it has been in decades. I'll spend some time going through what we are seeing in our early data, what I'm expecting our team to deliver through the rest of this year and into next year, and why I am confident that our strategy is the right one to grow share as we keep a careful eye on the housing macro. The first growth pillar on our product roadmap is touring. Touring is important because we, along with our customers and Premier Agent partners, know that the tour is the point-of-sale moment for the customer in the buying journey. We acquired ShowingTime, the leader in centralized software and phone-based real estate tour reservation services, just over a year ago to make the touring process more seamless compared to what it is today. As many agents will tell you, arranging tours can devolve into a painful game of phone tag, coordinating multiple different schedules. Juggling availability for the seller, the listing agent, the buyer, and the buyer's agent just to step foot in the house. Our integration roadmap started with going out to all ShowingTime users across agents, brokers, and MLSs and enabling them to enter availability into ShowingTime so that we have real-time availability of sellers and/or listing agents running through our software. Our bet was that this was a no-brainer feature that would reduce a good chunk of the administrative scheduling phone tag, and so far, we've been correct with this application of software. Already across more than 300 markets, nearly 90% of ShowingTime industry users have enabled this feature for themselves and their sellers. From there, we told you our next step was to expose this availability on Zillow to reduce the friction that currently exists for our mover customers in touring homes through Zillow, so that booking a home tour for a home shopper is as seamless as booking a restaurant reservation online. I'm pleased to announce that in September, we launched what we call Real-Time Touring capability in Atlanta. It is early days, but the feedback from both customers and Premier Agent partners alike is encouragingly positive, with early data showing increased intent to transact and increased conversion rates. We feel confident in the results we are seeing in Atlanta, and we are planning to expand to additional markets throughout 2023. I'll share with you one example of the excitement we are hearing from our Premier Agent partners in the program. Ross Hester and Barbara Meek of The Hester Group in Atlanta said, "This was the most seamless pilot Zillow has launched from a tech user interface perspective that we have ever been involved with, and we have been waiting for a long time for leads of this quality to come in." Rollout of Real-Time Touring will be a market-by-market operation. Educating our partners on using the system and ensuring that our shared mover customers have a great experience is important, so it will take some time. Given the signal we have seen out of Atlanta, we will press forward with intensity. Adoption of this product enables a better experience, which we believe will drive more transactions. Given the size of our brand, audience, and engagement throughout the industry, we are well-positioned to deliver this feature at scale in a way that will benefit the entire industry. Because ultimately, helping the whole industry be more efficient in removing friction for agents and customers is a win for all. The key to having Real-Time Touring drive share gains here will be facilitating more successful tours. Our current non-real-time tour-enabled "successful tour rate" on Zillow is roughly 30%. This means that 30% of buyers on Zillow get to see the house at the time they requested, and 70% do not. If we are able to increase that successful tour rate, we will see share gains emerge because our data shows that successful tours convert to transactions at approximately 3 times the rate of other actions on Zillow today. The next growth pillar update for this quarter is on enhancing our partner network. For those of you that have followed us for a long time, you know that we have consistently innovated on our partner network and pricing models to create the best experience for our customers, for our Premier Agent partners, and for Zillow. The most recent evolution of our partner network is in flight in one of our key test markets, Raleigh, North Carolina. We did a few things here earlier this year. First, we significantly consolidated the number of partners we work with to enable scalable testing, to send more customers to our top-performing partners, and to offer our shared customers an improved mortgage product experience. Second, we have a partner that has created a team solely built to serve Zillow customers in order to provide a much more integrated customer experience. Now, with roughly 15% customer adoption rate of Zillow Home Loans in Raleigh, our new approaches to serving Zillow customers in this market give us increased confidence in our strategy of integrating and improving our mortgage product experience. That 15% ZHL adoption rate metric in Raleigh leads us nicely to our next update on the growth pillar product roadmap, which is financing. We've said it many times before, but it's worth reiterating that we believe financing is core to a buyer's experience, all the way from first dreaming about a home and what one can afford through to the close of the contract. We see integration of financing as critical to the end-to-end customer experience we envision. Our previous swings at creating a mortgage business were focused on providing financing for our iBuying customers and using ZHL for refi, neither of which turned out to be durable sources of loan volume. This year, we've turned our focus towards building the foundation for a substantial direct-to-consumer purchase mortgage operation. In addition to improvement of the customer experience when a mortgage is integrated, we see a real business opportunity in a large and fragmented market where we are well-positioned to take share over time. We know that 87% of home buyers get a purchase mortgage, that the top 25 lenders in the country have only about one-third market share of purchase originations combined, that industry customer acquisition costs are on average 25% of origination revenue, and that the total addressable market for purchase mortgages is about $50 billion in origination revenue annually. We believe the fragmentation in this space exists for a few reasons. First, because of the highly regulated nature of the product, manufacturing a loan is a commodity. Additionally, there are few nationally recognized brands making customer acquisition expensive for most. Finally, distribution requires both meaningful brand power and a network of real estate agents in local communities throughout the country. Against that backdrop, we see a significant opportunity for Zillow. We know that roughly 67% of actual home buyers use Zillow today. We also know that roughly 40% of all home buyers begin their journey with financing. Despite fairly limited investment on our apps and sites and in our marketing efforts, millions of prospective Zillow Home Loans customers raised their hand for financing help and were sent to third-party lenders for lead generation in the last 12 months, which provides us ample customer acquisition on small dollar investments. We have found that roughly 80% of those prospective mortgage customers do not have a real estate agent when they look to us for financing advice. Beyond the built-in brand and distribution we have from being Zillow, we also have a fantastic national network of Premier Agent partners that provides us with a potential distribution channel for Zillow Home Loans as we deliver on behalf of our shared customers. Of course, we know this big opportunity is merely theoretical without solid execution. For us to capture share in this market, we are embarking on a few critical work streams. First, we need to overhaul and transition our current mortgage funnels away from third-party lead generation towards being powered by Zillow Home Loans. Today, we have multiple entry points for customers who need financing on our apps and sites, and those customers are then sent to a wide variety of lenders in our mortgage marketplace. Those lenders then work with their real estate agent relationships to serve our customers. Our product roadmap starts with simplifying the entry points in our funnel and being much more explicit that Zillow provides financing through Zillow Home Loans. From there, we have four key areas that we have to execute on from now through 2023 to start to capture share. First, we have to make sure more of our customers are aware we offer home loans through Zillow Home Loans. The term Zillow is more often googled than the term real estate, so our overall brand awareness is quite high. Once again, the majority of people on our apps and sites don't know that they can get a mortgage through Zillow Home Loans. The combination of the funnel work I outlined before, alongside using our mobile and web platforms to better explain ZHL to customers should help solve this challenge. Next, we have to build a better digital mortgage experience on Zillow, so we are meeting customers wherever they are in their journey. As I said before, millions of people per year contact us about financing help. In a lead generation model, volume is the name of the game. For a transaction model, we have to get far better at filtering those customers, so the customers that have the highest intent are speaking with our loan officers, while those that are years away from purchasing a home are offered nurture services, so they stay in our ecosystem until they are ready to buy a home. Alongside better serving our customer base, we have to bolster our loan officer tools and capabilities, so our loan officers can handle the volume and do their jobs more efficiently while we manufacture loans more effectively. Last, but certainly not least, we need our Premier Agent partner base to understand the value Zillow Home Loans can provide their customers. This is a combination of technology service, technology service model, and providing to our best partners who are most invested in Zillow that Zillow Home Loans can provide the best financing experience for our mutual customers. Our future state is one where customers that start with Zillow Home Loans work with a Premier Agent partner we've connected them to, and customers that start with a Premier Agent partner through a touring product are also choosing Zillow Home Loans as their mortgage provider. Ultimately, the metrics we are measuring ourselves against are number of purchase loans per loan officer, and Zillow Home Loans customer adoption rate. Of course, beyond all the product improvements we are making to the buying experience, we are also innovating rapidly on behalf of sellers and listing agents. We announced our strategic partnership with Opendoor last quarter, and teams at both companies are working hard to launch the product in Q1 of 2023, with expansion plans outlined throughout next year. While it will take time to scale the partnership, we believe the combination of the customer signal we saw when operating our iBuying business, along with Opendoor's nationwide presence, should allow us to serve a significant number of sellers through a suite of seller services that includes the option of a cash offer or a traditional listing when at scale. Additionally, we're investing in solutions that better equip the more than one million real estate agents that use ShowingTime today. We've recently reorganized our real estate software offerings under one umbrella brand called ShowingTime+, which houses ShowingTime, dotloop, Bridge Interactive, and Rich Media Technology, which includes our homegrown AI-powered interactive floor plans and 3D home tours. The ShowingTime+ software suite is designed to help agents and brokers operate their businesses more efficiently, win more customers, and elevate the listing experience for themselves and their clients. The long-term problem we are looking to solve is to make the listing process simpler for listing agents. Listing agents have many jobs to do on behalf of their customers. They need to win the new listing, then manage and market those listings, then coordinate showings, offer management, and transaction management, all before selling the home. We start this journey with a number of beloved and broadly licensed assets in the real estate community with the ShowingTime+ portfolio I mentioned a moment ago. In 2023, we plan to launch Listing Media Services and Listing Showcase, two new listing agent marketing tools from ShowingTime+ to help agents win their next listing. First is Listing Media Services, which is a photography service and comprehensive media package that captures all aspects of a home for agents and gives potential buyers an immersive digital home shopping experience. Alongside Listing Media Services is Listing Showcase, which is a complete media and placement package that will showcase the seller's home with the most cutting-edge, interactive, immersive listing presentations on the internet, and importantly, will put the listing agent's brand front and center. The combination of ShowingTime+'s software capabilities and Zillow's audience reach and proprietary technologies should allow us to access listing agent wallet share through both software and marketing spend, further broadening our reach within the addressable market that we are going after. We will begin launching the products in early 2023, with additional launches throughout the remainder of the year. Positive feedback from early demos to agents and investors alike has us excited about the opportunity in front of us, though once again, it is early days. Okay, I've spent a lot of time going through all of the reasons I'm excited about what we are building, the stuff that we have control over. Of course, the elephant in the virtual room is the state of the housing market and just how significant the gyrations are to those involved in helping customers move. 12 months later, we feel we made the right decision to wind down our iBuying operations, particularly given how this year has played out. I am pleased that as of September 30th, we have no more inventory on our balance sheet. That said, we are not immune to the challenges in the housing market right now. We've seen 30-year mortgage rates spike over the last few months to more than 7%, a level that hasn't been reached in 20 years. Big weekly swings in rates continue to occur as well. What this means is that buyers are recalculating what they can afford on the fly and are uncertain about their ability to purchase and afford a home. This volatility has impacted our funnel as our connections suffer while buyers decide whether or not they wanna be on or off the sidelines in this current market. When coupled with persistently low inventory and continued lackluster flow of new listings, the setup to begin 2023 in housing looks challenged. With that in mind, we made the difficult but necessary decision to let go of a set of employees after having let go of about 25% of the company earlier this year during the wind down of our i-buying operations. This decision and the impact it has on people is not taken lightly by any of us. That said, we have to be clear-eyed about the market we find ourselves in, so we've taken cost actions to streamline our operations and to prioritize investments through a combination of this reduction in force, a decrease in committed marketing dollars, and further tightening of discretionary spend. While we are actively managing our cost structure, we are still investing against our product roadmap and growth pillars. We have made the decision not to cut into our product and technology investments, including continued hiring in these areas because of the confidence we have in our go-forward product roadmap. While the housing market is challenged right now, if long-term average turnover rates persist, we would expect that 60 million homes will trade hands over the next 10 years, and that's the basis of the long-term opportunity in front of us. Additionally, we expect to continue to be active in our repurchase program, given our go-forward opportunity. We have the benefit of a well-capitalized business that produces operating cash flow, and we are going to use those benefits to our and your advantage. Having led Expedia through 9/11, Zillow through the financial crisis in 2008, and early COVID in 2020, we have experience staying relatively steady on the gas when others are slamming on the brakes. We are well aware of the dangers on the road, but our vehicle is charged up and handling well, and we see opportunity on the road ahead. We appreciate your partnership through these volatile times and look forward to connecting with many of you in the days and weeks ahead. With that, I'll turn it over to Allen. Allen? Allen, Allen, you're on, you're on mute. Yep. I'm sorry. Got it. Thank you, Rich, and hello, everyone. As we continue to focus on executing against our growth strategy, we are increasingly becoming more confident in our opportunity to create an end-to-end real estate transactional experience for our customers. We believe the strategic investments we are making in our five growth pillars will allow us to better serve more customers and in turn, drive more transactions and more revenue per transaction. We have our eyes wide open and are confident in our ability to navigate through the current environment by balancing investments to drive future growth with active cost management. Turning to our results, we delivered consolidated results above our outlook for both revenue and EBITDA. IMT's segment revenue was $457 million, down 5% year-over-year, and above the high end of our outlook range, driven by better than expected performance in Premier Agent and growth in rentals. Premier Agent revenue decreased 13% year-over-year and outperformed both our expectations and our estimated industry decline of 15%. Better than expected conversion rates, customer connections, and retention rates during the quarter were the primary driver behind our slight revenue outperformance relative to the industry. Lead volumes continued to be volatile throughout the quarter, with August being a positive outlier as we experienced a brief rebound in demand that coincided with interest rates declining from their previous high in June. Rentals revenue was up 10% year-over-year, returning to positive year-over-year growth and outperformed our expectations. Rentals traffic on Zillow grew 30% year-over-year to 27 million average monthly unique users in Q3 per Comscore data. Occupancy rates have continued to drift lower from the historically high levels of the past couple of years, which will increase overall rental industry demand for advertising. With our industry-leading rentals traffic combined with investments in our sales force, our team grew the number of multi-family properties on our platform in Q3. IMT segment EBITDA was $164 million for Q3, or 36% of revenue, exceeding the high end of our outlook range for IMT segment EBITDA of $121 million and 28% of revenue. The outperformance was driven by a combination of better than expected revenue, which has an outsized impact on our high incremental margin business. The timing related to hiring pushed some positions into Q4 and active cost management to drive operating efficiencies, including lower than anticipated advertising and marketing costs. Mortgages segment revenue of $26 million was near the high end of our outlook range. While deteriorating affordability negatively impacted customer demand for financing in the quarter, we continue to make progress building our Zillow Home Loans purchase mortgage business. Purchase loan origination volume was up 24% sequentially in Q3. Mortgages segment EBITDA was a loss of $27 million as we operate at subscale while continuing to invest in building a better customer-facing origination experience, efficient and scalable internal loan officer tools, and back-end systems and integration with our Premier Agent business. We believe these investments lay the foundation for Zillow Home Loans to serve a much broader set of customers, many of whom we currently send to third-party lenders today. We expect financing will be a key driver behind the step function changes we are targeting to grow our share of customer transactions and revenue per transaction. We ended the quarter with $3.5 billion of cash and investments on the balance sheet, flat from Q2, which includes the benefit from operating cash flow from continuing operations, the full wind down of iBuyer inventory, as well as the impact of $176 million in share repurchases during Q3. While our results this quarter were better than expected, trends deteriorated at the end of September and into October, as we've seen another rapid increase in interest rates. This has pushed the median U.S. household as a new buyer into the realm often considered housing burdened, which occurs once households spend more than a third of their income on housing. As a result, the industry is continuing to decelerate, trending towards a decline of 25%-35% year-over-year in Q4. As we pointed out last quarter, we suggest that investors pay close attention to the directional trends in the MBA Mortgage Purchase Application Index and the average purchase loan amount, which when multiplied, become a leading indicator for total transaction dollar volume growth. In recent weeks, this has trended down more than 40% year-over-year. These macro factors continue to weigh on our Premier Agent business, which has seen a similar change in trend for lead volume as we start Q4. While we expect the macro environment to remain under pressure for the foreseeable future, our cash position, cash-generating business, and now less capital-intensive operations give us the flexibility to continue to invest against our growth strategy as we look to navigate through the current macro environment. We continue to believe we are making the right investments to drive share growth across the business cycle. We remain in control of our cost levers and the pace of our investments. Last week, we took cost actions to streamline our operations and prioritize investments. We have also identified other discretionary and non-people cost actions we expect to take over the next year to help offset planned investments. Looking ahead, we continue to be focused on cash flow generation rather than a defined margin rate for a specific quarter. Before I turn to our outlook for Q4, I would like to note that the wind down of our iBuying business was complete as of September 30th, 2022, and the financial results are now being reported as discontinued operations. In our IMT segment, we expect a 19% year-over-year revenue decline in Q4 at the midpoint of our outlook range. Within the IMT segment, we expect Premier Agent revenue to be between $250-$270 million, down 27% year-over-year at the midpoint of the outlook range, relatively in line with our expectations for industry performance in Q4. In rentals, we are seeing more multi-family properties on our platform, and we continue to see signs that low rental vacancies are subsiding, which we expect to drive increased demand for rentals advertising. We expect Q4 IMT segment EBITDA margin to be 24% at the midpoint of our outlook. Q3 IMT segment operating costs came in lower than previously expected, and given this, we now expect Q4 IMT segment operating costs to be flat to slightly up from Q3 and below our prior expectations we discussed on the Q2 call. We expect mortgages segment revenue to be between $15 million and $20 million in Q4, which is down sequentially from Q3. Our Q4 outlook reflects continued softening demand for our marketplace business. It also assumes sequential growth in purchase loan originations despite macro headwinds and seasonality as we continue to make progress on building our purchase mortgage platform. We expect mortgages segment EBITDA to be between a loss of $36 million and a loss of $31 million, given we are holding our investment levels relatively flat from Q3 as we experience macro and seasonal pressures in revenue. As we sit here today, we believe the trends we are seeing in Q4 will continue as we start 2023. That being said, we are excited about the progress against our five growth pillars, positive signals from our test markets and planned product launches in 2023. In closing, we believe we have the right strategy to better serve more customers, resulting in share growth and more revenue per transaction, and employees are aligned to execute to drive shareholder value. As we look forward, our priorities remain focused on innovating and executing on behalf of our customers and partners, and we plan to grow our customer engagement through a compelling dream and shop experience, deliver a more integrated customer transactional experience to drive customers to choose to transact with us and our partners, invest in sustainable top-line growth opportunities across the company, including new integrated services that are more scalable, less subject to earnings volatility and more capital efficient. Manage our cost structure and improve productivity, including continued prioritization of our investments that we expect will drive a profitable, scalable and positive cash flow company. With that, operator, we'll open the line for questions. At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Our first question comes from John Colantuoni with Jefferies. Please proceed. Hey, thanks for taking my questions. Maybe you could just start by giving us a sense for when you expect progress on your growth pillars to begin impacting the business. Then second, based on recent mortgage applications, it seems like the housing market hasn't quite found a floor yet. What are you hearing from brokers and agents regarding how they're thinking about the approach to digital advertising in a softening market? Thanks. Okay. Hey, John, this is Rich. Thanks for your question. I actually think we should hand the microphone over to Jeremy Wacksman, our COO, to dig a little deeper on the growth pillars. Yeah, happy to. Thanks, John, for the question. I mean, as you heard from Rich earlier, you know, we're already seeing progress against our growth pillars, and that progress is increasing our confidence that we have the right strategy to help drive share in the long term. You know, on touring, we talked about real-time availability through ShowingTime now being available in more than 300 markets by more than 90% of our ShowingTime users. Recently launching this Real-Time Touring consumer experience, this OpenTable-like reservation system, you know, one market early data, but really positive partner and customer signals there. On financing, you heard Allen talk about growing purchases sequentially. Yes, that's very small N, but as you point out, it's in a very challenged macro environment. The 15% customer adoption rate we're seeing on home loans in our test markets, you know, that's an early progress indicator that the strategy of having the right agent and the right mortgage for the right customer is the right strategy there. Then as Rich talked about, you know, seller services, launching the Opendoor partnership in Q1 and rolling it out through additional markets throughout 2023, and then launching those new ShowingTime+ products starting early next year. You know, those are great product roadmap proof points for you to think about the growth pillars. We're gonna continue rolling out those innovations and market by market, as we begin to launch those service and new ways of working with our partners. The early customer and partner reactions, you know, keep giving us confidence. You'll see more come from us throughout 2023. As those gain traction, that's then what you'll see drive the outputs and drive the revenue and the path towards that 6% share we talk about. As to the second bit, John, maybe Allen, just as a reminder what he asked, it was, you know, how are we viewing agent and broker advertising, you know, given the forecast decline, you know that that we're seeing? I mean, you addressed a little bit of it in your script. Yeah. Hey, John, thanks for the question. This is Allen. I'll take it. I guess I think the question was, you know, what are we hearing? What we're hearing and seeing is, I mean, obviously there's a lot of uncertainty and volatility out there. We're seeing our best performing agents kind of move to a flight to quality. You know, we continue to see our demand, customer demand slightly stronger than industry. We're seeing our lead to transaction rates from that demand improve, and they're slightly higher than our expectations. You know, as Premier Agents, you know, look to obtain quality leads in a challenging market, what we're seeing is that our best performing agents are relying on our platform, and we continue to, you know, take actions to ensure we're working to align with their needs as well as our customers. We're seeing a retention that is pretty strong around our best partners. Great. Thanks for the details. Next question. Yeah. Thank you. The next question is from Michael Ng with Goldman Sachs. Please proceed. Hey, good afternoon. Thank you for the question. I have two. The first is just on the macro environment. It was really helpful to hear your views, Rich, on the industry housing backdrop. I was just wondering if you could expand on those views a little bit more and tie them back to the impact to Zillow's businesses. I'll follow up with the second one. Thanks. Okay. Thanks, Michael. Thanks. Yeah, I mean, it is super challenging to predict right now. You know, it's hard enough in the broader macro sense to predict what's going on, as evidenced by just, you know, take a look at the market today. But in housing, it's even stormier and more difficult. You know, I won't tick through all the factors that I did before, but you know them well around affordability and volatility and such. But what we wanna communicate to you guys is make sure you understand that we, as Allen likes to say, we have our hands on the wheel. I like to say we know where the accelerator and where the brake is. You've seen us make tough decisions around cost control. You know, unfortunately, we last week did a meaningful reduction in force. Allen talked about some other cost controls we implemented. You know, you all saw us at the end of last year and early this year do a major reduction in force around exiting the iBuying business that we obviously now feel really good about. It took us a while to land the plane, but we did it really gracefully. I'm glad that we're now at kinda zero homes on the balance sheet. You know, Allen just talked about the immediate macro, but zooming out for a sec, we are privileged because we have a good balance sheet with a lot of cash, and we produce cash. We can continue to lean forward, and we are doing that. Many companies in our industry are not in that position, so we are relatively advantaged. You heard us talk a lot about. Jeremy just talked about the seeds we have planted for our growth pillars and the progress we're seeing. We expect to see more progress on those growth pillars next year, and we're, you know, excited to report out to you all as we see that progress. Maybe I know you had another bit of the question. Yeah, why don't I wrap it there and hear what your next part is? Great. Thank you, Rich. That was helpful. I wanted to- Yeah. ...ask a little bit more about Premier Agent. Obviously revenue declines track the overall housing market this quarter, and, you know, your guidance for 4Q implies the same. You know, should we continue with that framework throughout 2023, you know, Premier Agent revenue declines along with the broader market? Or, at what point does Premier Agent revenue outperform, you know, presumably driven by the roadmap traction and share gains? Thank you. Yeah. Maybe I'll kick that. That's kind of an expansion on your last one, Allen. Yeah. I'll try not to be redundant. It talks a little about it. Listen, as we look at navigating the current macro environment, for Q3, we had previously guided for results to be in line or slightly worse than the industry leading indicators we saw, and we came out slightly better. As we look to our Q4 guide, we expect to perform a little bit better than the leading indicator data that we see going into Q4. You know, we're confident we can outgrow the industry over the long term based on our product improvements and our expectation to increase transaction rates and revenue per transaction. In the short term, there's just a lot of volatility and uncertainty surrounding affordability and housing availability. It's really hard to put two points into a trend for any individual quarter. With that said, as we come out of Q3 and we look to Q4, if you wanna try to glean something, we have seen our customer demand perform slightly better than the industry. We expect our continued investment in the customer journey and experience is going to maintain this performance. Our traffic is strong. Visits and unique users in Q3 both were up 4% year-over-year despite macro headwinds. You know, we view that as a fantastic asset that we have, and we've built it up over time. People's interest in dreaming and moving persists, and we have that relationship with people while they dream. Our customer lead to transaction rate also has performed better than expected. You know, touring is one of the growth drivers that we believe is going to improve that in the long term. We also suspect that more serious buyers in this tough environment are clicking the box to connect. As I mentioned, and so I don't want to be redundant, but our Premier Agents are valuing our platform. There's a flight to quality in advertising, you know, broadly across all industries, and we're seeing that too, and we'll continue to work with our partners. As I mentioned, what we're seeing is our best partners valuing our platform for the quality of leads that we're providing, even though the quantity of leads in this macro is declining and going down. Hopefully that helps. Thank you, Allen. Thanks very much, Rich. Thank you. Thank you, Mr. Ng. Next one. The next question is from Brad Erickson with RBC. Please proceed. You know, enhancing- Unmute, Brad. ...the partner networks you talk about, you get some... Try that again. I get to be that guy. No, no problem. I already was. Maybe we'll circle back to Brad and take the next one first. Of course. Can you still not hear me? The next question. Yes. You're coming in and out, Brad. Let's take another one, and we'll come back to you. Hopefully, you can get a connection worked out. The next question is from Ryan McKeveny with Zelman. Please proceed. Hey, thank you very much. One on the mortgage business. You mentioned financing is core to the buyer's experience, and I think you called it a must, in terms of the integrated end-to-end experience. At the same time, there's obviously some level of skepticism across the mortgage industry, you know, looking at the public mortgage companies or just generally on the, on the ability to transition that to meaningful profitability. I guess when we include the 4Q guide, it looks like, you know, something like a $90 million adjusted EBITDA loss this year. Just hoping, Rich or Allen, maybe you can share some thoughts on how, I guess, your comfort level with the trajectory of the financials within that segment or just more generally your comfort level, continuing to invest within mortgage, kind of going after that bigger opportunity, you know, to ideally reach longer term returns. Hey, Ryan. This is Rich. You have heard me, you know, make a pretty detailed case in the script for why I think this is, you know, such an important and large opportunity. But maybe I'll throw it over to Jeremy to talk a little bit more about that. Just remind Jeremy that maybe having one of the emphases be on how we view ourselves as having a meaningful cost advantage in this business. Yeah, happy to. Yeah, I mean, I'll echo a little bit about what you said in our prepared remarks. You know, this is a business that can and should benefit from digitization and centralization. It's one we wanna build and own because it's such an interesting TAM. As Rich said earlier, it's what the customer wants, and we think for us, it can be a great business because of our CAC and distribution advantage. I'll just tick through each of those, right? Rich talked about the sort of 60 million transactions over 10 years. That would mean 50 million purchase mortgages, and at $9,000 in revenue a mortgage, that's a $50 billion annual TAM opportunity that is currently sitting in a highly fragmented, local, geographically distributed business that has a lot of characteristics to be centralized because ultimately it's manufacturing as versus a commodity. Therefore, a lot of the money spent to make that business go as standalone business is in CAC. And as Rich pointed out, there are millions of customers on Zillow asking for financing help and getting connected to a lender today. We like the business profile, and as we talk about a lot, it is what the customer wants. It's a business problem we wanna solve because it also solves what our customer needs to buy the house. They need a great agent, and they need a mortgage to buy the house. Having that integrated and digitized is what they're asking for and gonna expect in Real Estate 2.0. You know, the last part on why will this eventually be a great business? Well, that CAC advantage, you know, for us to have the brand and have the audience and have the customers always already raising their hands and to have that national partner network for distribution and integration of the mortgage, you know, that creates a really great margin potential business for us when we're at scale. You're right, we're currently investing to build that significant purchase mortgage business, and we're currently subscale, especially in a challenged macro environment. While we talk about growing share sequentially, it's still relatively small. We're really excited about the potential ROI of that investment as we hit scale- ... As we talked about today, you know, when you see our loans, our loans per loan officer and our adoption rate of our customers through our partners grow, that's when you'll see the ROI on those investments that we're really excited about. Yeah, that's great. Super helpful. Thank you. Just one other question. I guess Flex wasn't really much. I don't think it was hit on. Just curious, any updates on the Flex program or some of the markets where that's been rolling out? Thank you. Maybe Allen, you wanna hit that one? Yeah. Nothing really significant to call out. We talked about, we had moved some of our test markets to a Flex position primarily to ensure alignment with our partners as we work through some of these integration products and services. We did that in Q2. There's no significant thing to call out for Flex. Again, just to remind everyone that, you know, we operate with two primary monetization models, the prepaid and postpaid. We find, you know, both to be very valuable to us. We do believe Flex can offer a stronger alignment with our partners, but we expect going forward that we will continue in order to optimize for our customers both of those monetization models, and that a lot of the things we create or develop, you know, we will look for opportunities to distribute across both. Thank you. All right, next question. Thank you. The next question is from Brad Erickson with RBC. Please proceed. Thanks. Let's try this one more time. Just following up on the last one, I guess, maybe if you can speak to Raleigh as an example or elsewhere. Can you talk about how the Flex model might work alongside the traditional MPP model? Is that something that can even work? Just curious if you have any evidence out there of the net effect it could have maybe on your market share, say, in a particular market. Second, I guess for Allen, you know, is there a level where you sort of draw a line in the sand around margins, you know, where you try and hold firm relative to the, I guess, 24% you just guided to? Just curious if you manage the business to some specific level in the event that the macro worsens, I guess. Just maybe with like any guardrails as to how to think about that in terms of either margin or cash generation or both. Thanks. Thanks, Brad. Glad the mic is working. Maybe Jeremy, you take the first bit on that and then toss it over to Allen. Yeah, happy to. Thanks, Brad. I mean, as Allen said earlier, I think, you know, we think about it as enhanced partners, kind of regardless of monetization model. There's a nuance there that in these test markets we have consolidated and so we can work more closely in a scaled way with partners to test a bunch of these ingredients that we're building. Those are all on the postpaid model, right, where the economics are directly aligned as we test those things. Ultimately, our aim is to have these growth pillars be able to be scaled across our enhanced partner network that we'll end up with. That's why you always hear us talk about it's not really about monetization model, it's about trying to get to the right set of enhanced partners and ultimately getting these growth pillars and touring and working with our new touring customers in new ways, financing and working with Zillow Home Loans as our loan operators, and eventually seller services through both our Opendoor partnership and our ShowingTime+ software. You know, having that enhanced partner network, wanting to and helping to drive their business as long as that drives ours. That's our goal. Monetization model is just kind of a tool in there. Great. Brad, I'll try to touch on yours second. You know, the degradation we see from 36% in Q3 for IMT margins to 24% at the midpoint, you know, is attributable to, as we talked about, the macro impacts on our revenue. We're keeping our cost structure really the same. I guess, you know, when you think about what we're willing to absorb, we do kind of look at our investments and prioritizing our investments on a return, what we believe will be a future return basis, either in driving revenue per transaction or additional share value over time. That's kind of the starting point for what investment levels we feel are prudent to drive this opportunity given the TAM. You know, we're not managing to a near-term margin rate, especially not over a quarter or two. We are very cognizant of it. As we called out before, we also are very cognizant of, you know, our business model producing cash flow. We do continually look at both the macro long-term and investment levels at ROIs as we pull those levers. We're actively managing costs, and in some cases to prioritize or to reinvest in the investments that we feel like are gonna drive our opportunity for share growth. In other cases, letting that fall through because it's a prudent thing to do in the environment. You know, my takeaway would be, we're gonna continue to actively manage costs. We're gonna continue to monitor and hold accountable our investments for a strong return in that share growth. We're not gonna be managing that on a specific quarter basis. We view cash flow to be also, you know, important. That's really cash flow over a period of time, not quarter-to-quarter as well. I guess that's the takeaway. Yes, that's helpful. Thanks. Thank you. No problem. Our next question is from Justin Patterson with KeyCorp. Please proceed. Great. Thank you very much, and good afternoon. You know, thinking about just kind of the moving parts here, there's a lot of encouraging micro-level trends at the product level that you've been investing into. At the same time, affordability is quite the challenge, to say the least. When you kind of step back and think of other periods where interest rates have spiked, to some degree, how have agents really responded to that? Is this something that could be, you know, call it a blessing in disguise as we come out of this, agents become more reliant on Zillow for future leads? Thank you. Brad, you correct me if I'm wrong. Thanks for your question, Justin. You know, we haven't seen this kind of market in a couple decades, this kind of a spike. You know more about the history of the rates in this business than I do. Yeah. I mean, from a rate perspective, you're gonna have to go back to 1982, 1984, right? to see this kind of incremental increase in rates. Hard for us to say from experience. Yeah. There have been prior periods, like 2018 or so, where granted much smaller levels. Yeah. You did see some shocks come to the business to a degree. Just juxtaposing against that- Yeah, I mean. how it took agents. Sure. So the affordability has moved against the home buyer dramatically, and suddenly, and in a jagged, volatile way, which we as humans tend to freeze in that situation. We're seeing a lot of wait and see, and we think therefore, this is gonna take some time to rationalize and adjust and renormalize. There is a big demographic pressure, kind of human and demographic pressure, coming from the demand side to get it unstuck at some point, however. We think that it is a very reasonable to expect that in the, you know, medium term, we're gonna see the market revert to a more normal volume of transactions. You know, in terms of the other part of your question, yeah, I mean, I think that. I don't know, I think it was Allen who said it in a previous answer. In times of turmoil, sometimes marketing partners become more important to marketers to the folks doing the marketing, and we're maybe seeing some of that effect right now, as well as a concentration of effort against the bigger brands. I think we're probably seeing some of that too. There is a bit of a silver lining there. Once again, while we see these things as near to midterm headwinds, we do, stepping back and looking down the road a bit, we think we're setting up really nicely to be investing smartly through this storm and come out on the other side in a position to really take transaction share. You know, we're excited about that. I thank you for commending us on some of the more micro progress we're making that we're talking a lot about. We're feeling it. We're feeling it happening. I wish we had even more results to show you guys, but hopefully over the next several quarters, we will come back to you with more and more. Great. Thank you. Yep. Brad, we're kind of hitting the end of the hour. Yeah, go ahead, operator. This completes the allotted time for questions. I will now turn the call back over to Rich Barton for any closing remarks. Well, just thank you guys for taking time and giving your attention to us this afternoon. I know it's kind of a crazy time for all of us. We look forward to chatting with you real soon. Take care. This concludes today's conference call. You may now disconnect.