Zillow Group (Z) Financials

Zillow Group (NASDAQ: ZG) has reported its most recent quarterly results for Q1 2025, alongside financial data from previous quarters going back to Q3 2022. Here's a summary of key trends and observations from the analysis of income statements, cash flow statements, and balance sheets over the last four years:

• In Q1 2025, Zillow reported a net income of $8 million continuing operations, marking a positive swing compared to losses in previous quarters from 2024 and 2023 where net income often was in the negative tens of millions.
• Total revenue for Q1 2025 stood at $615 million, showing a gradual increase compared to previous quarters where revenues ranged around $490-$610 million. This indicates steady top-line growth.
• Non-interest income remains robust, with $620 million in Q1 2025, continuing Zillow's strong income from other services and non-interest sources.
• Cash and cash equivalents remain relatively strong at $914 million as of Q1 2025, providing liquidity to support operations and investments.
• Marketing expenses and other operating expenses continue to be significant cost centers, with $347 million and $260 million respectively in Q1 2025, consistent with prior quarters, indicating stable investment in growth but also pressure on margins.
• Depreciation and amortization expenses remain high, reflecting capital investments in technology and infrastructure, standing at $65 million and $8 million respectively in Q1 2025.
• Zillow’s balance sheet shows a large amount of goodwill ($2.8 billion) and intangible assets ($297 million) reflecting acquisitions or investments in intangible assets.
• Long-term debt interest expense decreased to $5 million in Q1 2025 from $8-10 million in prior quarters, signaling either lower interest rates, refinancing, or reduction in debt cost.
• Despite recent profitability, Zillow has experienced several quarters of net losses over the past two years, with net income/loss figures frequently showing losses between $20 million to over $70 million, indicating volatility in earnings.
• Net cash from financing activities was significantly negative in Q1 2025 (-$219 million), mainly due to common equity repurchase of $250 million, which may impact financial flexibility despite potentially benefiting shareholder value.

Summary: Zillow Group is showing modest improvement with a return to profitability in Q1 2025 after several quarters of losses, accompanied by steady revenue growth and strong non-interest income. However, operating costs remain high especially in marketing and depreciation, and the company continues to carry significant goodwill and intangible assets on the balance sheet. The recent equity repurchases suggest management confidence but also reduce cash reserves, while interest expenses show improvement. Retail investors should watch upcoming quarters for sustained profitability and operational efficiency improvements.