Q1 2024 Zillow Group Inc Earnings Call

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[music].

Elliot: Good afternoon, my name is Elliot, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Zillow Group first quarter 2024 conference call. All lines have been placed on mute to prevent any background noise.

Allianz: Good afternoon, My name is Allianz and I'll be your conference operator today at this.

Allianz: Time, I would like to welcome everyone to the Zillow Group first quarter 2024 conference call all.

Elliot: After the speaker's 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 the star two key. Please note this event is being recorded. And I would now like to turn the conference over to Brad Berning, Vice President, Strategic Affairs and Investor Relations. Please go ahead.

Allianz: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Allianz: You would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.

Allianz: If you would like to withdraw your question. Please press the star Turkey.

Allianz: Please note this event is being recorded.

Allianz: And I would now like to turn conference over to Brad Berning, Vice President Strategic Affairs and Investor Relations. Please go ahead.

Brad Berning: Thank you. Good afternoon, and welcome to Zillow Group's first quarter 2024 conference call. Joining me today to discuss our results are Zillow Group co-founder and CEO Rich Barton, COO Jeremy Wacksman, and CFO Jeremy Hofmann. During today's call, we will make forward-looking statements about our future performance and operating plans 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.

Brad Berning: Thank you good afternoon, and welcome to Zillow group's first quarter 2024 conference call. Joining me today to discuss our results are Zillow group's co founder and CEO Rich Barton C O O, Jeremy Wacksman and CFO Jeremy Hoffman.

Brad Berning: During today's call, we will make forward looking statements about our future performance and operating plans 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.

Brad Berning: New information or future events, except as required by law.

Brad Berning: 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 with remarks followed by live Q&A. With that, I will turn the call over to Rich. Thanks.

Brad Berning: This call is being broadcast on the Internet and is accessible on our Investor Relations website.

Brad Berning: We're recording the call will be available later today during the call, we will discuss GAAP and non-GAAP measures, including adjusted EBITDA, which we referred 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 reconciliation.

Brad Berning: Historical non-GAAP financial measures, we will now open the call with remarks, followed by live Q&A and with that I will turn the call over to rich.

Richard N. Barton: Brad, good afternoon and good evening for those on the East Coast. Thanks for dialing in to hear our first quarter 2024 results. We saw strong revenue numbers that flowed through to the bottom line, helping us outperform our outlook on revenue and EBITDA as we successfully executed on our growth strategy. We continue to upgrade and scale our housing super app. And we've seen further proof points in our enhanced markets that support a continued push on both breadth of market coverage and depth of penetration within those markets for our integrated digital moving solutions for consumers, their agents, and their loan originators.

Richard N. Barton: Thanks, Brad good afternoon, and good evening for those on the East Coast.

Richard N. Barton: For dialing into our first quarter 2024 results.

Richard N. Barton: We saw strong revenue numbers that flowed through to the bottom line, helping us outperform our outlook on revenue and EBITDA as we successfully execute on our growth strategy.

Richard N. Barton: We continue to upgrade and scale our housing Super App.

Richard N. Barton: And we've seen further proof points in our enhanced markets that support our continued push on both breadth of market coverage and depth of penetration within those markets.

Richard N. Barton: Our integrated digital movie solutions for consumers their agents and their loan officers.

Richard N. Barton: Today, I'll remind you about what makes Zillow different and what makes me so confident in our growth plan. Jeremy Wacksman will then give a progress report on our growth pillars with a deep dive into our burgeoning rental business. Next, Jeremy Hofmann will discuss the numbers in more detail. And then we'll open things up for Q&A.

Richard N. Barton: Today, I'll remind us about what makes <unk> different and.

Richard N. Barton: And what makes me so confident in our growth plan.

Richard N. Barton: Jeremy Wacksman will then give a progress report on our growth pillars with a deep dive into our burgeoning rentals business.

Jeremy Wacksman: Next to Jeremie Hoffman will discuss the numbers in more detail.

Speaker Change: And then we'll open things up for Q&A.

Richard N. Barton: Beginning with our quarterly results, we reported better than expected revenue growth across all lines; Q1 revenue of $529 million grew 13% year over year. Total revenue growth once again outperformed the residential real estate market. Rentals continued their strong growth with $97 million in revenue in Q1, up 31% year-over-year, to continue to grow our multifamily property count to 40,000 properties at the end of the quarter, up from 37,000 at the end of December.

Speaker Change: Beginning with our quarterly results, we reported better than expected revenue growth across the business.

Jeremy Wacksman: Q1 revenue of $529 million grew 13% year over year.

Speaker Change: Total revenue growth once again outperformed the residential real estate market.

Jeremy Hofmann: Rentals continued its strong growth with $97 million in revenue in Q1 up 31% year over year.

Jeremy Hofmann: We continue to grow our multifamily property count with 40000 properties at the end of the quarter up from 37000 at the end of December.

Richard N. Barton: We are well positioned for future rental revenue growth, as we detail in our new investor relations deck, which is a deep dive into our rental business. We publish this new deck along with earnings today, and we'll discuss it in more detail later in this call. In an ongoing tough rate environment, we also continued to make strong progress in mortgages, with Q1 revenue of $31 million, up 19% year over year, and purchase mortgage origination volume growing more than 130% year over year.

Jeremy Hofmann: We are well positioned for future rentals revenue growth as we detail in our new Investor relations deck that is a deep dive on our rentals business.

Jeremy Hofmann: We published this new deck, along with earnings today, and we will discuss it in more detail later in this call.

Jeremie Hoffman: And an ongoing tough rate environment. We also continued to make strong progress in mortgages with Q1 revenue of $31 million up 19% year over year and purchase mortgage origination volume growing more than 130% year over year.

Richard N. Barton: So, in a hostile housing market and a noisy industry environment, why is Zillow outperforming? The simple answer is that Zillow is wholly focused on solving real consumer problems with software. In a giant industry that has historically had very little R&D investment, digitally replatforming and integrating a huge disparate local industry where transactions are relatively infrequent is an audacious undertaking that no other company is really even attempting. We are advantaged primarily because we are a product and technology company first and are able to attract and retain especially talented people who know how to build, market, and support great software products.

Jeremie Hoffman: So in a hostile housing market in a noisy industry environment why is zillow outperforming.

Jeremie Hoffman: The simple answer is that Zillow is wholly focused on solving real consumer problems with software.

Jeremie Hoffman: In a giant industry that has historically had very little R&D investment.

Jeremie Hoffman: Digitally re platforming and integrating a huge disparate local industry, where transactions are relatively infrequent is an audacious undertaking.

Jeremie Hoffman: No other company is really even attempting.

Jeremie Hoffman: We are advantaged, primarily because we are a product and technology company first and are able to attract and retain the especially talented people who know how to build the market and support great software products.

Richard N. Barton: This enables us to focus completely on delighting our consumers and their valued partners in pursuit of the dream of using technology to make moving simple and joyful. Our product prowess over the years has put Zillow in the enviable position of having a large, engaged audience who come to us organically, an audience who love, trust, and rely on our brand. This product-led organic marketing growth story is rare, but it is common for the Great Ones. Those are the products and brands we admire.

Jeremie Hoffman: This enables us to focus completely on delighting, our consumers and their valued partners in pursuit of the dream of using technology to make moving simple and joyful.

Jeremie Hoffman: Our product prowess over the years has put zillow in the enviable position of having a large engaged audience, who come to us organically and audience, who love trust and rely on our brands.

Jeremie Hoffman: This product led organic marketing growth story is rare.

Jeremie Hoffman: But it is common for the great ones.

Jeremie Hoffman: Those are the products and brands, we admire the most.

Richard N. Barton: Attracting a large organic audience has also given Zillow the space to experiment with business models. Those who have followed us for a long time know how aggressive and innovative we have been methodically converting our sticky audience into revenue. We have built a substantial, growing, diverse, and EBITDA profitable business, yet we still monetize only a small share of our audience. Our massive unconverted audience will drive years of growth ahead for Zillow as we grow into our rightful transaction, continue to adjust our business models, and add and integrate new business lines. We have been pro-consumer, practical, and nimble, and we will continue to be so.

Jeremie Hoffman: Attracting a large organic audience has also given us the space to experiment with business models.

Jeremie Hoffman: Those who followed us for a long time know how aggressive and innovative we have been methodically converting our sticky audience into revenue.

Jeremie Hoffman: We have built a substantial growing diverse and EBITDA profitable business that we still monetize only a small share of our audience.

Jeremie Hoffman: Our massive unconverted audience will drive years of growth ahead for Zillow as we grow into our rightful transaction share.

Jeremie Hoffman: To adjust our business models and add and integrate new business lines.

Jeremie Hoffman: We have been pro consumer practical and nimble and we will continue to be so.

Richard N. Barton: The first era of Zillow involved amassing a large, organic, engaged consumer audience for whom we were providing valuable information via great sites and apps. Several years ago, we realized that our dream of digitizing the move and accessing the really big TAM in the category would involve getting much more directly involved in the transaction itself, applying software to every step of the work. Refreshing our partner network to those who are higher performing and interested in automation and scale, and building out or acquiring key components of the move process ourselves, all the way from listing photography and creation through tour booking, agent workflow, pre-approval, mortgage origination, document routing, and closing, end to end.

Jeremie Hoffman: The first era of Zillow involved amassing a large organic engaged consumer audience for whom we were providing valuable information by a great sites and apps.

Jeremie Hoffman: Several years ago, we realized that our dream of digitizing the move and accessing the really big Tam in the category.

Jeremie Hoffman: Would involve getting much more directly involved in the transaction itself.

Jeremie Hoffman: Applying software to every step of the workflow.

Jeremie Hoffman: Refreshing our partner network to those who are higher performing and interested in automation and scale and.

Jeremie Hoffman: And building out or acquiring key components of the move process ourselves all the way from listings photography and creation through tour booking agent workflow preapproval mortgage origination document routing and closing.

Jeremie Hoffman: And to end.

Richard N. Barton: To serve as an aspirational and consumer-focused North Star, we created a product strategy that we called the Zillow Housing Super App, an experience that would integrate the whole of the complex, scary, expensive moving process. The Zillow Super App is working well.

Jeremie Hoffman: To serve as an aspirational and consumer focused north star, we created a product strategy that we call. The Zillow housing Super App experience that would integrate the whole of the complex scary expensive moving process.

Jeremie Hoffman: The Zyla Super App is working well.

Richard N. Barton: Jeremy Wacksman will soon walk you through a detailed report of our growth pillars, but we see very good progress across the board on each pillar: Touring, Financing, Seller Solutions, Enhancing Our Partner Network, Integration, and Rental. Amidst all of the fear, speculation, and noise, a steady focus on execution is what's working for us, delivering for our customers and partners. In terms of the noise, though, let me give some color commentary on what has transpired since our last quarterly call. The long-running class action suit against NAR and select brokerages thankfully reached a proposed settlement in mid-March, and the judge, just last week, granted preliminary approval of that settlement.

Jeremie Hoffman: Jeremy Wacksman will soon walk you through a detailed report of our growth pillars, but we see very good progress across the board on each pillar.

Jeremie Hoffman: Turing financing seller solutions, enhancing our partner network integration and rentals.

Jeremie Hoffman: Amidst all of the fear speculation and noise a steady focus on execution is what's working for us delivering for our customers and partners.

Jeremie Hoffman: In terms of the noise, though let me give some color commentary on what has transpired since our last quarterly call.

Jeremie Hoffman: The long running class action suit against <unk> and select Brokerages Thankfully arrived at a proposed settlement in mid March and the judge just last week granted preliminary approval of that settlement.

Richard N. Barton: The substance of the settlement is what we characterized as a very reasonable middle path forward for the industry, where commissions are negotiated and communicated between sellers and buyers, and both parties are better educated. This is a positive evolutionary step for the industry. It is not a revolution, as some who believe they might profit from chaos and disruption are proclaiming.

Jeremie Hoffman: The substance of the settlement is what we characterized as a very reasonable middle path forward for the industry.

Jeremie Hoffman: Where commissions are negotiated and communicated between sellers and buyers and both parties are better educated.

Jeremie Hoffman: This is a positive evolutionary step for the industry.

Jeremie Hoffman: It is not a revolution as some who believe they might profit from chaos and disruption are proclaiming.

Richard N. Barton: Clear and negotiable compensation fits quite well with our published Consumer Advocacy Marketplace Principles of free access to listings, independent representation, and negotiable compensation as outlined at advocacy.zillowgroup.com. There will continue to be sensational-seeming news surrounding this settlement, no doubt, given there remain several steps in having NAR and the industry put the settlement requirements into practice. And real estate is generally a hot topic for hot takes, given it is a $2-3 trillion industry employing millions of people in all 50 states and is most Americans' most valuable and most cherished asset. Zillow is well positioned to assist with and benefit from this evolution. So why do we expect to benefit from this evolution? For three reasons. First,

Jeremie Hoffman: Clear and negotiable compensation fits quite well with our published consumer advocacy marketplace principles of free access to listings.

Jeremie Hoffman: Independent representation and negotiable compensation as outlined at advocacy Dot Zillow group Dot com.

Jeremie Hoffman: There will continue to be sensational seeming news surrounding the settlement no doubt.

Jeremie Hoffman: Given there remains several steps and having <unk> in the industry put the settlement requirements into practice and real estate is generally a hot topic for hotcakes given it is a two to three trillion dollar industry employing millions of people in all 50 States and is most Americans most valuable and most cherished asset.

Jeremie Hoffman: However, zillow is well.

Jeremie Hoffman: Well positioned to assist with and benefit from this evolution.

Jeremie Hoffman: So why do we expect to benefit from this evolution.

Jeremie Hoffman: For three reasons.

Jeremie Hoffman: First.

Richard N. Barton: We have the most and highest intent customers in residential. Zillow is the most trusted brand with the largest, most engaged audience. This is a hard-earned position that we built over the past eight years, and our top of funnel advantage today has never been stronger. Zillow is searched more on Google than the category term real estate and three times more than the next brand in the category. 80% of our traffic is organic, and our app usage is more than three times that of anyone else in the category.

Jeremie Hoffman: We have the most and highest intent customers in residential real estate.

Jeremie Hoffman: <unk> is the most trusted brand with the largest most engaged audience.

Jeremie Hoffman: This is a hard earned a position that we built over the past 18 years.

Jeremie Hoffman: And our top of funnel advantage today has never been stronger.

Jeremie Hoffman: So Louis search tomorrow on Google than the category term real estate and three times more than the next brand and the category.

Jeremie Hoffman: 80% of our traffic is organic and our App usage has more than three times anyone else in the category.

Richard N. Barton: We have more than 217 million average monthly unique users across the Zillow ecosystem of absent sites and 109 million total unique visitors, according to ComScore, a third-party data tracker that allows for comparison across. We've built and maintained such a strong brand position because of our relentless focus on delivering exceptional tech innovations and customer experience, which we believe are our most important. Regardless of how the industry evolves, our brand and audience will thrive.

Jeremie Hoffman: We have more than 217 million average monthly unique users across the zillow ecosystem of apps and sites and 109 million total unique visitors. According to Comscore, a third party data trucker that allows for comparison across sites.

Jeremie Hoffman: We've built and maintained such a strong brand position because of our relentless focus on delivering exceptional tech innovations and customer experiences, which we believe are our most important investments.

Jeremie Hoffman: Regardless of how the industry evolves, our brand and audience will thrive.

Richard N. Barton: The second reason we expect to benefit from the industry's evolution is that we work with the most productive agents in real estate. Of the approximately 1.5 million real estate license holders, many handle only one or two transactions a year.

Jeremie Hoffman: The second reason, we expect to benefit from the industry evolution.

Jeremie Hoffman: We work with the most productive agents in real estate.

Jeremie Hoffman: Of the approximately $1 5 million real estate license holders, many handle only one or two transactions a year.

Richard N. Barton: These are not our premier agent partners. 80% of all real estate transactions across the US are done by the top 20% of agents or teams. And today, nearly four in five Zillow Premier Agent Partners fall into that top tier. Since 2015, we have shrunk our active partner base by roughly 60%, while at the same time, our premier agent revenue has grown by more than 2.5%. Orienting our business around the best agent teams, those who provide superior customer experiences, have proven ability to scale, and make the most money to invest alongside us, positions us well for potential shifts within the profession. If and as more hobbyist agents drop out of the industry, the outsized beneficiaries of this shift to professionalism will be our premier agent partners. Third, reason we benefit.

Jeremie Hoffman: These are not our premier agent partners.

Jeremie Hoffman: 80% of all real estate transactions across the U S are done by the top 20% of agents or teams and today nearly four and five Zillow Premier agent partners fall into that top tier.

Jeremie Hoffman: Since 2015, we have shrunk our active partner base by roughly 60% while at the same time, our premier agent revenue has grown by more than two five times.

Jeremie Hoffman: Orienting our business around the best agent teams, those who provides superior customer experiences have proven ability to scale and make the most money to invest alongside us positions us well for potential shifts within the profession.

Jeremie Hoffman: If and to as more hobbyist agents drop out of the industry. The outsized beneficiaries of this shift to professionalism will be our premier agent partners.

Jeremie Hoffman: Third reason we benefit.

Richard N. Barton: Zillow provides exceptional technology to make agents more efficient at their jobs and do more transactions. Zillow is the leading product innovator with features like real-time touring, listing showcase, and a digital pre-approval pilot launching within the next couple of weeks that will further delight customers and create high-intent, real buyer connections for our premier agent partners. Additionally, we have invested heavily in foundational industry software solutions like our follow up boss CRM, showing time touring software, our showcase 3D home technology, Aereo real estate photographer SaaS, and dot loop document signing and rev.

Jeremie Hoffman: Zillow provides exceptional technology to make agents more efficient at their jobs and do more transactions.

Jeremie Hoffman: <unk> is the leading product innovator with features like real time touring listing showcase.

Jeremie Hoffman: And a digital pre approval pilot launching within the next couple of weeks that will further delight customers and create high intent real buyer connections for our Premier agent partners.

Jeremie Hoffman: Additionally, we have invested heavily in broad adoption foundational industry software solutions like our follow up boss CRM showing time touring software our showcase <unk> home technology area real estate photography, SaaS and Dot loop document signing and routing.

Richard N. Barton: Over the past 10 years, between our own tech and dev budget and the acquisition capital we've deployed for industry software, we've spent $4.3 billion cumulatively investing in technology for the real agents who work with our high intent customers and use our industry software tools are the best positioned to accelerate their share in every version of an industry evolution. So, the short answer for why Zillow benefits from the evolutionary changes we see coming from the NAR settlement. We have the most and highest intent customers in real.

Jeremie Hoffman: Over the past 10 years between our own tech and Dev budget and the acquisition capital we've deployed for industry software.

Jeremie Hoffman: We have spent $4 3 billion cumulatively investing in technology for the real estate industry.

Jeremie Hoffman: Agents, who work with our high intent customers and use our industry software tools are the best positioned to accelerate their share in every version of an industry evolution from here.

Jeremie Hoffman: So the short answer for why is the benefits from the evolutionary changes, we see coming from the <unk> settlement.

Jeremie Hoffman: We have the most and highest intent customers and real estate.

Jeremie Hoffman: We work with the most productive agents in.

Jeremie Hoffman: We provide them exceptional technology to make their lives more efficient.

Richard N. Barton: We work with the most productive agents, and we provide them with exceptional technology to make their lives better. Before handing it to Jeremy Wacksman, let me repeat this for the whole of the great Zillow team in front of our investors. I'm impressed with the results you are achieving through your focused and relentless innovation for customers and partners in pursuit of a seamless, digital, and joyful moving experience for all. We are all in a really tough housing market and a distracting industry environment. Yet our hands are steady on the wheel as we drive Zillow's business and the industry forward. Okay, Jeremy?

Jeremie Hoffman: Before handing it to Jeremy Wacksman, let me repeat for the whole of the great Zillow team in front of our investors.

Jeremy Wacksman: I'm impressed with the results you are achieving in your focused and relentless innovation for customers and partners in pursuit of a seamless digital and joyful moving experience for all.

Jeremie Hoffman: We are all in a really tough housing market and a distracting industry environment. Our hands are steady on the wheel as we drive the <unk> business and the industry forward.

Jeremy: Okay Jeremy.

Jeremy Wacksman: Thank you, Rich, and good afternoon, everyone. It's been an exciting few years at Zillow, and we're pleased with the progress we're making on our strategy to transform the way people buy, sell, rent, and finance homes. Since 2022, we've been building the Integrated Transaction Experience and testing it in our Enhanced Marketplace. Now we are pressing on the accelerator to increase our breadth of coverage across more markets and our depth of penetration in those markets as we drive towards sustainable profitable growth.

Jeremy: Thank you rich and good afternoon, everyone.

Jeremy: It's been an exciting few years at Zillow and we're pleased with the progress we're making on our strategy to transform the way people buy sell rent and finance homes.

Jeremy: Since 2022, we've been building the integrated transaction experience and testing it in our enhanced markets.

Jeremy: Now we are pressing on the accelerator to increase our breadth of coverage across more markets and our depth of penetration in those markets as we drive towards sustainable profitable growth.

Jeremy Wacksman: Zillow's Housing Super App is the container into which we're continually adding updates and improvements, guided by five pillars of sale growth: touring, financing, seller solutions, enhancing our partner network, and integrating our service. Our four sale growth pillars mark the pathway to meeting our goals to grow customer transaction share from 3% to 6% by the end of 2025 and grow our revenue alongside that transaction share. I'll kick off our growth pillar update with TORING and how we are integrating the anticipated rule changes coming from the NAR settlement into our customer experience. Touring is a critical focus area for us for two reasons. First, historically, the process of booking a home tour has been burdensome.

Jeremy: So all those housing Super App is the container into which we're continually adding updates and improvements guided by five four sales growth pillars touring financing seller solutions, enhancing our partner network and integrating our services.

Jeremy: Our for sale growth pillars, Mark the pathway to meeting our goals to grow customer transaction share from 3% to 6% by the end of 2025 and grow our revenue alongside that transaction share growth.

Jeremy Wacksman: Second, when a customer raises their hand to tour a home they've been looking at on Zillow, it's a strong signal of a serious intent to transact. Our touring products, powered by ShowingTime, are meaningfully improving our ability to connect high-intent customers to our premier agent. As you may recall, TORIN connections convert at 3x the rate of other actions on Zillow.

Jeremy: I'll kick off our growth pillar update with Turing and how we are integrating the anticipated rule changes coming from the <unk> settlement into our customer experience.

Jeremy: Turing is a critical focus area for us for two reasons first historically the process of booking at home tour has been burdensome second when a customer raises their hand, it to our home they've been looking at on Zillow. It's a strong signal of a serious intent to transact.

Jeremy: Our Turing products powered by showing time are meaningfully improving our ability to connect high intent customers to our premier agent partners.

Jeremy: As you may recall touring connections convert at three extra rate of other actions on Zillow.

Jeremy Wacksman: We're pleased to share that real-time touring is rolling out to additional 34 markets by the end of May, which will bring us to a total of 124 markets. As we outlined in February, as we expand real-time touring, we expect it will account for approximately 20% of connections by the end of the year, and we are on track to deliver. One key provision of the proposed NAR settlement calls for more prominence of buyer-agent agreements introduced at the time of the physical tour.

Jeremy: We're pleased to share that real time touring is rolling out to an additional 34 markets by the end of May.

Jeremy: Which will bring us to a total of 124 markets as.

Jeremy: As we outlined in February as we expand real time touring we expect it will account for approximately 20% of connections by the end of the year and we are on track to deliver.

Jeremy: One key provision of the proposed <unk> settlement calls for more prominence of buyer agent agreements introduced at the time of the physical tour.

Jeremy Wacksman: Such agreements can help educate buyers about what services they're paying for, which is a good thing, and they have the added benefit of helping identify high-intent buyers. In fact, we've been advocating for these agreements in our home state of Washington and across the country.

Jeremy: Such agreements can help educate buyers about what services, they're paying for which is a good thing and they have the added benefit of helping identify high intent buyers.

Jeremy: In fact, we've been advocating for these agreements in our home state of Washington, and across the country by facilitating the use of consumer friendly agreements earlier in the funnel, we see an opportunity to improve conversion rates.

Jeremy Wacksman: By facilitating the use of consumer-friendly agreements earlier in the funnel, we see an opportunity to improve conversion rates. As an example, in Connecticut, where buyer agency agreements are required before taking a buyer on a tour, we've observed 20% higher conversion rates compared to our national average. We are testing buyer agreement product flows now within Zillow. And just this week, we launched a pilot of a consumer-friendly buyer agreement and our touring experience with a few hundred premier agent partners.

Jeremy: As an example in Connecticut, where buyer agency agreements are required before taking a buyer on a tour, we've observed 20% higher conversion rates compared to our national average.

Jeremy: We are testing buyer agreement product flows now within Zillow and just this week, we launched a pilot of a consumer friendly buyer agreement in our touring experience with a few hundred Premier agent partners.

Jeremy Wacksman: Offering solutions digitally on Zillow is a natural and logical addition to the end-to-end experience we're providing customers and agencies. Meanwhile, we are also enabling nearly limitless virtual touring that will continually get closer and closer to reality with our proprietary technology powering 3D home tours and showcase. Leveling up physical touring alongside our investment in virtual touring is a great combination for the industry, benefiting all participants.

Jeremy: Offering solutions digitally on Zillow is a natural and logical addition to the end to end experience, we're providing customers and agents.

Jeremy: Meanwhile, we are also enabling nearly limitless virtual touring that will continually get closer and closer to reality with our proprietary technology powering <unk> home tours and showcase listings.

Jeremy: Leveling up physical touring alongside our investment in virtual touring is a great combination for the industry benefiting all participants.

Jeremy Wacksman: I'll now move on to financing, another critical focus area for us because serving more high-intent customers with financing drives conversion and increases our addressable market. By integrating Zillow Home Loans with our Premier Agent Partner Network, we are providing a more seamless experience for customers, agents, and loan officers. Our efforts to integrate financing throughout the customer journey have accelerated purchase mortgage growth, with $601 million in purchase loan origination volume in Q1, a more than 130% year-over-year increase, despite a persistently challenging mortgage rate environment.

Jeremy: I'll now move on to financing another critical focus area for us because serving more high intent customers with financing drives conversion and increases our addressable market.

Jeremy: By integrating Zillow home loans with our Premier agent partner network, we are providing a more seamless experience for customers agents and loan officers.

Jeremy: Our efforts to integrate financing throughout the customer journey have accelerated purchase mortgage growth with $601 million in purchase loan origination volume in Q1, a more than 130% year over year increase despite a persistently challenging mortgage rate environment.

Jeremy Wacksman: We expect continued purchase mortgage growth as we expand integration with Premier Agent Partners and roll out more enhanced markets. Across the combined 13 enhanced markets we had at the end of Q1, Zillow Home Loans continues to see double-digit adoption rates, which contributes to growing revenue per transaction year over year. These signals reinforce our confidence that our strategy is working.

Jeremy: We expect continued purchase mortgage growth as we expand integration with Premier agent partners and rollout more enhanced markets.

Jeremy: Across the combined 13 enhanced markets. We had at the end of Q1 Zillow home loans continues to see double digit adoption rates, which contributes to growing revenue per transaction year over year.

Jeremy: These signals reinforced our confidence that our strategy is working and I'm pleased to share that this month, we are expanding to a total of 19 enhanced markets and we are on track to reach our target of 40 by the end of the year.

Jeremy Wacksman: And I'm pleased to share that this month we are expanding to a total of 19 enhanced markets, and we are on track to reach our target of 40 by the end of the year. On the sell side of the transaction, we continue to ramp up solutions that not only make selling a home easier but also create real value for sellers and their agents. I'll spend a minute on listing showcase specifically. Listing Showcase is our AI-powered product that elevates agents' brand presence on Zillow and provides a better shopper experience through our homegrown, rich media, and floor plan technology.

Jeremy: On the sell side of the transaction, we continue to ramp up solutions that not only makes selling a home easier, but also create real value for sellers and their agents I'll spend a minute on listing showcase specifically.

Jeremy: Listing showcase is our AI powered product that elevates agents brand presence on Zillow and provides a better shopper experience through our homegrown rich media and Floorplan technology.

Jeremy Wacksman: It's unlike anything else available today. We continue to be excited about Listings Showcase and the progress we are making across the country. Showcase listings drive higher engagement on Zillow compared to similar non-showcase listings. More views, more shares, and more safety. But even more importantly, homes that list with Showcase are selling faster and for more money. Showcase listings typically sell for 2% more than similar non-Showcase listings on Zillow, a bonus of $9,000 on the average home. Homes listed with Showcase are also 20% more likely to secure an accepted offer within 14 days.

Jeremy: It's unlike anything else available today.

Jeremy: We continue to be excited about listing showcase in the progress we are making across the country.

Jeremy: Showcase listings drive higher engagement on zillow compared to similar non showcase listings more views more shares and more saves, but even more importantly homes that list with showcase our selling faster and for more money.

Jeremy: Showcase listings typically sell for 2% more than similar non showcase listings on zillow.

Jeremy: Bonus of $9000 on the average home.

Jeremy: Homes lets say with showcase our also 20% more likely to secure an accepted offer within 14 days.

Jeremy Wacksman: What's more, we've observed that agents who use Listing Showcase are winning 20% more listings, making it an attractive offering for real estate professionals. Listing Showcase is currently available to agents in every market, and we are actively working to reach 5 to 10% listing coverage, which represents a $150 to $300 million annual revenue opportunity, and we believe there is potential for future growth beyond that. We are working to increase engagement with the best agents on both sides of the transaction, which leads me to our next growth pillar update, enhancing our partner network.

Jeremy: What's more we've observed that agents, who use lifting showcase our winning 20% more listings, making it an attractive offering for real estate professionals.

Jeremy: Listings showcases currently available to agents in every market and we are actively working to reach 5% to 10% listing coverage, which represents a $150 million to $300 million annual revenue opportunity and we believe there is potential for future growth beyond that.

Jeremy: We are working to increase engagement with the best agents on both sides of the transaction, which leads me to our next growth pillar update enhancing our partner network.

Jeremy Wacksman: As Rich highlighted earlier, Premier Agent Partners represent the best of the industry, and we help them provide even better service to our shared customers to grow both their business and ours. We're excited that we continue to see transaction share gains across our 13 enhanced markets on a revenue per total transaction dollar basis. And now, a couple of quarters after we closed our acquisition of FollowUpBoss, we're even more excited about the opportunity for further conversion gains from here.

Jeremy: As rich highlighted earlier Premier agent partners represent the best of the industry and we help them provide even better service to our shared customers to grow both their business and ours.

Jeremy: We're excited that we continue to see transaction share gains across our 13 enhanced markets on a revenue per total transaction dollar basis and now a couple of quarters. After we closed our acquisition of follow up box, we're even more excited about the opportunity for further conversion gains from here.

Jeremy Wacksman: In addition to our five growth pillars, I want to turn a spotlight on rent. Rentals is a fast-growing business that represents nearly one-fifth of our total revenue with a lot of opportunity in front of it. To bring our great progress in rentals out of the shadow of our first sale efforts, we've released a standalone investor presentation that provides a better understanding of what we've built, where we are headed, and why we are so well positioned to build a comprehensive two-sided marketplace that is unlike anything else in the industry today.

Jeremy: In addition to our five for sale growth pillars, I want to turn to spotlight onto rentals rentals is a fast growing business that represents nearly one fifth of our total revenue with a lot of opportunity in front of it.

Jeremy: To bring our great progress in rentals out of the Shadow of our first sale efforts, we've released a standalone investor presentation that provides a better understanding of what we felt where we are headed and why we are so well positioned to build a comprehensive two sided marketplace that is unlike anything else in the industry today.

Jeremy Wacksman: Like we do with all parts of Zillow, we start our rental journey from the perspective of the consumer, in this case, the 17 million annual renters in the US, which is three times more movers than on the for sale side. When renters search for a rental, they want the process to be enjoyable, trustworthy, and easy. But instead, it's fragmented and frustrating.

Jeremy: Like we do with all parts of Zillow, we start our rentals journey from the perspective of the consumer in this case, the 17 million annual renters in the U S, which is three times more movers then on the for sale side.

Jeremy: When renter search for a rental they want the process to be enjoyable trustworthy and easy, but instead, it's fragmented and frustrating.

Jeremy Wacksman: That's because no single platform provides a comprehensive marketplace with anywhere near complete coverage of available rental inventory. There is no MLS for rental properties. This forces renters to shop across different platforms, each with varying levels of accuracy, transparency, and selection, and encounter dead ends when searching for a property. That fragmentation is the big problem and the big opportunity; renters and property managers want and need one centralized place where they can see all the rental listings. This is an incredibly simple and obvious concept, but an incredibly hard challenge.

Jeremy: That's because no single platform provides a comprehensive marketplace with anywhere near complete coverage of available rental inventory.

Jeremy: There is no MLS for rentals.

Jeremy: This forces renters to shop across different platforms, each with varying levels of accuracy transparency and selection and encountered that ends when searching for inventory.

Jeremy: That fragmentation is the big problem.

Speaker Change: And the big opportunity.

Jeremy: Renters and property managers want and need one centralized place where they can see all the rental listings available.

Jeremy: This is an incredibly simple and obvious concept, but an incredibly hard challenge.

Jeremy Wacksman: It's a challenge Zillow is best positioned to solve because of our success over many years of building great products for our massive audience of movers on the sale. The early years of Zillow Rentals made clear that our customers wanted to come to us to shop for rent. So in 2018, we turned our focus and ramped up our investment to build it out and create the richest, most complete rental market. We started with long-tail rentals, which we define as less than 25 units, but primarily comprise single-family homes because data and interest in single-family homes was a core strength of. Because these properties were hard to find, this offered an opportunity for us to build a unique inventory asset.

Jeremy: It's a challenge Zillow is best positioned to solve because of our success over many years of building great products for our massive audience of movers on the for sale side.

Jeremy: The early years of Zillow rentals made clear that our customers wanted to come to us to shop for rentals.

Jeremy: In 2018, we turned our focus and ramped up our investment to build it out and create the richest most complete rentals marketplace.

Jeremy: We started with long tail rentals, which we define as less than 25 units, but primarily comprised of single family homes, because data and interest in single family was a core strength of zone.

Jeremy: Because these properties were hard to find this offered an opportunity for us to build a unique inventory asset.

Jeremy Wacksman: It may also come as a surprise to you, but long-tail rentals are actually the majority of inventory in the rental market. Long-tail rentals are a classic go-to-market problem. Small, fragmented, and low-cost. You simply cannot efficiently deploy a Salesforce to go out and find all the supplies.

Jeremy: It may also comment a surprise to you, but long tail rentals are actually the majority of inventory in the rentals market.

Jeremy: Long tail rentals are a classic go to market problem small fragmented and local you simply cannot efficiently deploy our sales force to go out and find all the supply.

Jeremy Wacksman: Because Zillow was already the most trusted name in residential real estate, many of these long-tail property managers were already familiar with us and were asking for these solutions. Many of them may only own one or two homes. So they're looking for a product that gets their listings in front of the most potential tenants and makes renting out their properties easy. Today, our long-tail product experience is unmatched. On Zillow, renters can search, book tours, apply for properties, sign a lease and pay their rent securely, and apply for renters insurance.

Jeremy: Because zillow was already the most trusted name in residential real estate. Many of these long tail property managers were already familiar with us and asking for these solutions.

Jeremy: Many of them may only own one or two humps. So theyre looking for a product that gets their listings in front of the most potential tenants and makes renting out their properties easier.

Jeremy: Today, our long tail product experience is unmatched on Zillow renters can search book tours apply for properties sign a lease and pay their rent securely and apply for renters insurance.

Jeremy Wacksman: Similarly, long-tail property managers on Zillow can list, book tours, screen applicants, create leases, sign them electronically, and collect rent. It's a true end-to-end solution that's highly useful to both renters and property managers alike.

Jeremy: Similarly long tail property managers on Zillow can list book tours screen applicants create leases signed them electronically and collect rent payments.

Jeremy: As a true end to end solution that is highly useful to both renters and property managers alike.

Jeremy Wacksman: These investments in great products starting in 2018 powered Zillow to the top of the traffic ranking in rentals and made us the preferred brand for rental properties. Today, Zillow is the most searched rental marketplace, according to Google Trends, searched nearly one and a half times more than the next company in the category.

Jeremy: These investments in great products, starting in 2018 powered zillow to the top traffic ranking in rentals and made us the preferred brand for renters.

Jeremy: Today Cielo is the most search rentals marketplace. According to Google trends search nearly one five times more than the next company in the category and we have the leading rentals traffic with very limited marketing spend.

Jeremy Wacksman: And we have the leading rental traffic with very limited marketing. After our success in Longtail, in 2022, we turned our attention to the more commodity supply sub-segment of rentals, multifamily, and big apartment buildings with 25 or more units. This is the easier-to-reach segment investors have historically thought of as the rental category, with professional property managers who have marketing and software budgets to help them acquire renters and manage buildings. Since we turned our focus to the multifamily space, we have driven a 30% compounded annual growth rate in our multifamily properties, from 27,000 to 40,000 at the end of Q1, and a more than 30% CAGR in our multifamily revenue on the back of just 15 million total marketing dollars spent on Zillow rental.

Jeremy: After our success in long tail in 2022, we turned our attention to the more commodity supply subsegment of rentals multifamily big apartment buildings with 25 or more units.

Jeremy: This is the easier to reach segment investors have historically thought of as the rentals category with professional property managers, who have marketing and software budgets to help them acquire renters and managed buildings.

Jeremy: Since we turned our focus to the multifamily space, we have driven a 30% compounded annual growth rate in our multifamily properties from 27000 to 40000 at the end of Q1 and a more than 30% CAGR in our multifamily revenue on the back of just $15 million total marketing dollars spent on Zillow rentals.

Jeremy Wacksman: Combining unique long-tail listings with more commodity multifamily listings allows consumers a more seamless experience where they can see all types of available rental listings in one place, and gives Zillow a highly differentiated rental marketplace experience in which we are now ramping up our investment. In addition, many movers are dual-track shopping, shopping for a home to buy while also considering their rental options. Zillow's integrated shopping experience and singular brand are excelling. As it stands today, we estimate that Zillow has more than 50% of all rental listings in the country, more than any other site, and many of them are unique to Zillow, but that still accounts for only 60% of all long tail listings and 35% of multifamily listings across the country.

Jeremy: Combining unique long tail lifting with more commodity multifamily listings allows consumers a more seamless experience where they can see all types of available rental listings in one place and gives <unk> a highly differentiated rentals marketplace experience and which we are now ramping up our investments.

Jeremy: In addition, many movers are dual track shopping shopping for a home to buy while also considering their rental options <unk> integrated shopping experience and singular brand XL here.

Jeremy: As it stands today, we estimate that Zillow has more than 50% of all rental listings in the country more than any other site and many of them are unique to zillo, but thats still accounts for only 60% of all long tail listings and 35% of multifamily listings across the country.

Jeremy Wacksman: So we are investing in our rental business, products, services, and sales to drive further growth. For example, in March, we entered into a strategic partnership with Realtor.com to provide all the multifamily listings on their site, and we recently launched our first national marketing campaign after a successful pilot last year in a few markets, which tested well to grow our audience. As with other parts of our business, 2024 is a year to scale up our breadth and depth in rental properties to drive continued growth in listings, both long-tail and, importantly, multifamily.

Jeremy: So we are investing in our rentals products services and sales to drive further growth.

Jeremy: For example in March we entered into a strategic partnership with realtor Dot com to provide all the multifamily listings on their site and we recently launched our first national marketing campaign. After a successful pilot last year in a few markets, which tested well to grow our audience.

Jeremy: As with other parts of our business 2024 is a year to scale up our breadth and depth in rental to drive continued growth in listings, both long tail and importantly multifamily.

Jeremy Wacksman: With the largest audience of renters on the market, a 42% revenue CAGR since 2015, and a billion-dollar-plus revenue opportunity in front of us, Zillow Rentals is digitally organizing a large, fragmented, local marketplace highly valued by all. One quarter into the year, we are pleased with our execution and controlling what we can against a noisy external backdrop. And with that, I will now pass the microphone to Jeremy Hoffman, who will provide a closer look at our results.

Jeremy: With the largest audience of renters on the market.

Jeremy: 42% revenue CAGR since 2015, and a $1 billion plus revenue opportunity in front of us Zillow rentals is digitally organizing a large fragmented local marketplace highly valued by all participants.

Jeremy: One quarter into the year, we are pleased with our execution and controlling what we can against a noisy external backdrop and with that I will now pass the microphone to Jeremy Hoffman, who will provide a closer look at our results.

Jeremy Hofmann: Thanks, Jeremy. And hello, everyone.

Jeremy Hofmann: Thanks, Jeremy and Hello, everyone as you heard from Rick and Jeremy We are pleased with how we are executing on our strategy and our results. Once again demonstrate that our strategy is working well.

Jeremy Hofmann: As you heard from Rick and Jeremy, we are pleased with how we are executing on our strategy, and our results once again demonstrate that our strategy is working well. I will start with our Q1 2024 results, which exceeded expectations across the business for revenue and even revenue growth accelerated in Q1, up 13% year over year to $529 million, which was $26 million above the midpoint of our outlook. The broader residential real estate industry grew 4% in the quarter, according to data from NAR, meaning that we outperformed the category by 900 basis points. Each of our revenue categories across residential, mortgages, and rentals contributed to our outperformance. On a gap basis, our Q1 net loss was $23 million, representing 4% of our revenue.

Jeremy Hofmann: I will start with our Q1, 2024 results, which exceeded expectations across the business for revenue and EBITDA.

Jeremy Hofmann: Revenue growth accelerated in Q1 up 13% year over year to $529 million, which was $26 million above the midpoint of our outlook range.

Jeremy Hofmann: The broader residential real estate industry grew 4% in the quarter. According to data from <unk>, meaning that we outperformed the category by 900 basis points.

Jeremy Hofmann: Each of our revenue categories across residential mortgages and rentals contributed to our outperformance.

Jeremy Hofmann: On a GAAP basis Q1, net loss was $23 million, representing 4% of our revenue each.

Jeremy Hofmann: EBITDA was $125 million for the quarter, resulting in a 24% EBITDA margin, a year-over-year margin expansion of 200 basis points. The combination of our revenue outperformance and effective cost management delivered the improved year-over-year EBITDA results, despite a macro housing environment that remains. Our Q1 residential revenue of $393 million outperformed our outlook range, and revenue growth accelerated to 9% year-over-year. Premier Agent benefited from the ongoing investments in our top and mid-funnel experiences that drove improvements in our overall connection.

Jeremy Hofmann: EBITDA was $125 million for the quarter, resulting in a 24% EBITA margin a year over year margin expansion of 200 basis points.

Jeremy Hofmann: The combination of our revenue outperformance and effective cost management delivered the improved year over year EBITDA results. Despite a macro housing environment that remains constrained.

Jeremy Hofmann: Our Q1 residential revenue of $393 million outperformed our outlook range and revenue growth accelerated to 9% year over year.

Jeremy Hofmann: Premier agent benefited from the ongoing investments in our top and mid funnel experiences that drove improvements in our overall connection rates.

Jeremy Hofmann: Additionally, our growth was driven by accelerating growth in our new construction business, growth in showing time plus as we began our nationwide rollout of listing showcase with additional contributions from follow-up bosses. Rentals revenue grew 31% year over year in Q1 to $97 million, primarily driven by our multifamily revenue, which grew 46% year over year. Our rental strategy is working well, and our team is executing on growing the number of multifamily properties on our apps and sites, which reached an all-time high of 40,000 multifamily properties as of the end of Q1. Total listings across our entire rental marketplace were up 20% year-over-year to an industry-leading 1.8 million listings in March.

Jeremy Hofmann: Additionally, our growth was driven by accelerating growth in our new construction business growth and showing time plus as we began our nationwide rollout of listing showcase with additional contributions from follow up loss.

Jeremy Hofmann: Rentals revenue grew 31% year over year in Q1 to $97 million.

Jeremy Hofmann: Primarily driven by our multifamily revenue, which grew 46% year over year.

Jeremy Hofmann: Our rental strategy is working well and our team is executing and growing the number of multifamily properties on our apps and sites, which reached an all time high of 40000 multifamily properties as of the end of Q1.

Jeremy Hofmann: Total listings across our entire rentals marketplace, we're up 20% year over year to an industry, leading $1 8 million listings in March.

Jeremy Hofmann: Mortgage's revenue of $31 million in Q1 was up 19% year-over-year, with purchase loan origination volume growing more than 130% year-over-year to $601 million. Our mortgage strategy is to help more of our customers get financing through Zillow home loans, which continues to drive our growing share of purchase originations, even in a difficult macroeconomic environment, evidenced by total industry purchase loan originations being down 10% year over year per our internal data. EBITDA expenses in Q1 totaled $404 million, flat sequentially from Q4, and at the midpoint of our implied outlook range, as a result of our ongoing focus on cost, Cost of revenue, which is included in EBITDA expenses, increased $31 million, or 34% year over year, primarily due to an increase in website development costs as we continued to test and release new products, as well as increases in mortgage loan processing costs due to higher purchase loan origination volume.

Jeremy Hofmann: Mortgages revenue of $31 million in Q1 was up 19% year over year with purchase loan origination volume growing more than 130% year over year to $601 million.

Jeremy Hofmann: Our mortgage strategy is to help more of our customers get financing through Zillow home loans, which continues to drive our growing share of purchase originations even in a difficult macroeconomic environment evidenced by total industry purchased loan originations being down 10% year over year per our internal data.

Jeremy Hofmann: EBITDA expenses in Q1 totaled $404 million flat.

Jeremy Hofmann: Sequentially from Q4 and at the midpoint of our implied outlook range as a result of our ongoing focus on cost management.

Jeremy Hofmann: Cost of revenue, which is included in EBITDA expenses increased $31 million or 34% year over year, primarily due to an increase in website development costs as we continued to test and release new products as well as increases in mortgage loan processing cost due to higher purchase loan origination volume.

Jeremy Hofmann: We ended Q1 with $2.9 billion of cash and investments, up from $2.8 billion at the end of Q4, primarily driven by net cash provided by operating. As of the end of Q1, we had $1.6 billion of outstanding convertible debt.

Jeremy Hofmann: We ended Q1 with $2 9 billion of cash and investments up from $2 $8 billion at the end of Q4, primarily driven by net cash provided by operating activities.

Jeremy Hofmann: As of the end of Q1, we had $1 6 billion of outstanding convertible debt.

Jeremy Hofmann: We repurchased $9 million of shares during Q1, and we were opportunistic in the month of April, repurchasing an additional 2.1 million shares for $91 million. Collectively, we have repurchased a total of $100 million of shares this year. Turning to our outlook for Q2, we estimate the residential real estate industry's total transaction value will be roughly flat year-over-year, which is down sequentially from the We expect total company revenue to be between $525 million and $540 million, implying a year-over-year increase of 5% at the midpoint of our outlook.

Jeremy Hofmann: We repurchased $9 million of shares during Q1, and we were opportunistic in the month of April repurchasing, an additional $2 1 million shares for $91 million.

Jeremy Hofmann: Collectively we have repurchased a total of $100 million of shares year to date.

Jeremy Hofmann: Turning to our outlook for Q2, we estimate the residential real estate industry total transaction value will be roughly flat year over year, which is down sequentially from the 4% year over year growth we saw in Q1.

Jeremy Hofmann: We expect total company revenue to be between $525 million and $540 million.

Jeremy Hofmann: Implying a year over year increase of 5% at the midpoint of our outlook range for.

Jeremy Hofmann: For residential, we expect revenue to be between $372 million and $382 million. Our residential revenue outlook for Q2 is down sequentially based on two headwinds. The first is that first-time homebuyer activity has underperformed the overall mortgage buyer market year to date. A good indicator of first-time homebuyer activity is the MBA's FHA Mortgage Purchase Application Index. Because our customer base leans toward first-time homebuyers, this is an index we watch closely. However, over the past six weeks, we have seen this index underperform the overall mortgage purchase index by over 800 basis points.

Jeremy Hofmann: For residential we expect revenue to be between $372 million $382 million.

Jeremy Hofmann: Our residential revenue outlook for Q2 is down sequentially based on two headwinds. The first is that first time homebuyer activity has underperformed the overall mortgage buyer market year to date.

Jeremy Hofmann: A good indicator of first time homebuyer activity is the Nba's FHA mortgage purchase application index.

Jeremy Hofmann: Because our customer base leans towards first time homebuyers. This is an index we watch closely.

Jeremy Hofmann: Over the past six weeks, we have seen the index underperformed the overall mortgage purchase index by over 800 basis points.

Jeremy Hofmann: The second is recent moves in interest rates. We have seen some headwinds as premier agent partners take a wait-and-see approach as interest rates have spiked by more than 50 basis points over the last few weeks, and first-time homebuyers are a lower percentage of the overall homebuyer. Moving to rentals.

Jeremy Hofmann: The second is recent moves in interest rates, we have seen some headwinds as premier agent partners take a wait and see approach as interest rates have spiked by more than 50 basis points over the last few weeks and first time homebuyers are a lower percentage of the overall home buying mix.

Jeremy Hofmann: We expect our rental revenue to grow in the mid 20% range year over year as we continue to benefit from the strength of our execution, a favorable industry backdrop driving property manager demand for advertising, and the launch of our first national rental brand awareness campaign. Within rental, we expect multifamily revenue to grow faster than the overall business. As we add more properties, sell more subscription packages, and benefit from the investments we are making in our renter, For mortgages, we expect accelerated year-over-year revenue growth in the high 20% range.

Jeremy Hofmann: Moving to rentals, we expect our rentals revenue to grow in the mid 20% range year over year as we continue to benefit from the strength of our execution a favorable industry backdrop driving property manager demand for advertising and the launch of our first national rentals brand awareness campaign.

Jeremy Hofmann: Within rentals, we expect multifamily revenue to grow faster than the overall business as we add more properties sell more subscription packages and benefit from the investments we are making in our renter experience for mortgages, we expect accelerated year over year revenue growth in the high 20% range, we remain on track to further integrate <unk>.

Jeremy Hofmann: We remain on track to further integrate Premier Agent and Zillow Home Loans with our planned enhanced market expansion. As capacity is built within these enhanced markets, we expect to send more of our mortgage leads to Zillow Home Loans directly, as well as drive engagement with more consumers on our apps and sites to grow our origination volume. We expect origination revenue to become both a larger portion of mortgage revenue and a larger driver of the categories revenue growth going forward as a result.

Jeremy Hofmann: Your agent and Zillow home loans with our planned enhanced market expansion.

Jeremy Hofmann: As capacity is built within these enhanced markets, we expect to send more of our mortgage leads to zillow home loans directly as well as drive engagement with more consumers on our apps and sites to grow our origination volumes.

Jeremy Hofmann: We expect origination revenue to become both a larger portion of mortgages revenue and a larger driver of the categories revenue growth going forward as a result.

Jeremy Hofmann: For Q2, we expect EBITDA to be between $85 million and $100 million, equating to a 17% margin at the midpoint of our outlook. This implies EBITDA expenses will increase from $404 million in Q1 to an estimated $440 million in Q2, which is what we expected in our full-year plan.

Jeremy Hofmann: For Q2, we expect EBITDA to be between $85 million and $100 million <unk>.

Jeremy Hofmann: Waiting to a 17% margin at the midpoint of our outlook range. This implies EBITDA expenses will increase from $404 million in Q1 to an estimated $440 million in Q2, which is what we expected in our full year plan rough.

Jeremy Hofmann: Roughly 85% of the increase is being driven by a combination of a seasonal uptick in our brand marketing spend and increased marketing spend to accelerate our rental growth strategy. The balance of the increase is coming from staffing a variable headcount for sales, given the growth we expect in rental, listing showcase, and Zillow home loans throughout 2020. Moving on to the full year, I want to reiterate that we expect double-digit revenue growth for 2024, primarily driven by our growth pillars, with modest EBITDA margin expansion for the year. Our renounced rental brand campaign is something we had factored in when we initially provided this framework in February.

Jeremy Hofmann: Roughly 85% of the increase is being driven by a combination of a seasonal uptick in our brand marketing spend and increased marketing spend to accelerate our rentals growth strategy.

Jeremy Hofmann: The balance of the increase is coming from staffing a variable head count for sales given the growth we expect in rentals listing showcase and Zillow home loans throughout 2024.

Jeremy Hofmann: Moving onto the full year I want to reiterate that we expect double digit revenue growth for 2024, primarily driven by our growth pillars with modest EBITDA margin expansion for the year.

Jeremy Hofmann: Our announced rentals brand campaign is something we had factored in when we initially provided this framework in February.

Jeremy Hofmann: Based on our Q1 results and our expected Q2 performance, we expect to outpace our internal plan for both revenue and EBITDA in the first half of 2024. On the cost side, we continue to believe our fixed investments are at the right level, which should result in our fixed costs growing modestly with inflation and our variable costs growing ahead of revenue initially as we ramp up new hires to be fully productive. Advertising spend is a lever we treat as separate and distinct from the rest of the cost base and one we will pull depending on the growth opportunities we see in front of us.

Jeremy Hofmann: Based on our Q1 results and our expected Q2 performance, we expect to outpace our internal plan for both revenue and EBITDA in the first half of 2024.

Jeremy Hofmann: On the cost side, we continue to believe our fixed investments are at the right level, which should result in our fixed costs growing modestly with inflation and our variable costs growing ahead of revenue initially.

Jeremy Hofmann: As we ramp up new hires to be fully productive.

Jeremy Hofmann: Advertising spend as a lever we treat a separate and distinct from the rest of the cost base and one we will pull depending on the growth opportunities, we see in front of us.

Jeremy Hofmann: Clearly, rentals is an opportunity we think deserves amplified marketing dollars, and we are excited about what the campaign will bring for our future groups. To close, it is clear we are executing on our strategy. We are seeing growth across residential, rental, and mortuary. We are also seeing great results from our growth pillars and our enhanced markets, which will continue to roll out throughout. We are on track to grow revenue by double digits and expand markets, all against a macro backdrop that is worse than many forecasts. And with that, Operator, we'll open up the line for questions.

Jeremy Hofmann: Clearly rentals as an opportunity we think deserves amplified marketing dollars and we are excited about what the campaign will bring for our future growth.

Jeremy Hofmann: To close it is clear we are executing on our strategy. We are seeing growth across residential rentals and mortgages. We are also seeing great results from our growth pillars, and our enhanced markets that will continue to roll out throughout this year. We are on track to grow revenue double digits and expand margins all against a macro.

Jeremy Hofmann: Back drop that is worse than many forecasted.

Speaker Change: And with that operator, we will open up the line for questions.

Elliot: Thank you. At this time, I would like to remind everyone that in order to ask a question, press star then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Our first question comes from Brad Erickson with RBC. Your line is open. Please go ahead. Yeah.

Speaker Change: Thank you.

Speaker Change: I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.

Speaker Change: We'll pause for just a moment to compile the Q&A roster.

Speaker Change: Our first question comes from Brad Erickson with RBC. Your line is open. Please go ahead.

Brad Erickson: Yeah, thanks. I guess two for me. One, you know, obviously sounds like the residential business has slowed down here. You mentioned the full-year guide, though, hasn't really changed, so I guess a steeper second half ramp implied. Clearly, you guys are investing in rental cars, and that was baked in, but, you know, relative to last quarter, maybe just talk about your confidence in that second half ramp and, besides rental cars, what else is kind of dictating that confidence in maintaining the guide?

Brad Erickson: Yes. Thanks.

Brad Erickson: Two for me one obviously it sounds like the residential business has slowed down here.

Brad Erickson: You mentioned the full year guide, though hasnt really changed.

Brad Erickson: Steeper second half ramp implied clearly you guys are investing in rental and that was baked in but I think relative to last quarter, maybe just talk about your confidence in that second half ramp and besides rentals, what else is kind of instructing that confidence on maintaining the guidance.

Jeremy Hofmann: Yeah, thanks, Brad. This is Jeremy Hoffman.

Brad Erickson: Yeah, Thanks, Brad as Jeremy Hoffman I'll take that one.

Jeremy Hofmann: I think similar to what we've said in the past we don't over focus on quarter to quarter fluctuations just given how fluid macro has been and will continue to be.

Jeremy Hofmann: I'll take that one. Similar to what we've said in the past, we don't over focus on quarter-to-quarter fluctuations, just given how fluid macro has been and will continue to be. What gives us confidence is that we're outperforming our internal plan. We expect to do so with what we guided for the second quarter and expect to do so for the first half of the year on both revenue and EBITDA.

Jeremy Hofmann: What gives us confidence is we're outperforming our internal plan, we expect to do so with what we guided for the second quarter and expect to do so for the first half of the year on both revenue and EBITDA and when I look at our strategy and what we're executing across we feel really confident that the second half is going to accelerate and we will grow double digits.

Jeremy Hofmann: And when I look at our strategy and what we're executing across, we feel really confident that the second half is going to accelerate and will grow double digits against the flat housing market. And that comes from a few factors.

Jeremy Hofmann: Against the flattish housing market and that comes from a few factors. So I think first more contributions from our enhanced markets will come in the second half as they come online and that's all back half weighted.

Jeremy Hofmann: So, I think first, more contributions from our enhanced markets will come in the 2nd half as they come online, and that's all back half weighted. We're seeing continued share gains and positive signals in the 13 enhanced markets to date. Jeremy hit that earlier.

Jeremy Hofmann: We're seeing continued share gains and positive signals in the 13 enhanced markets to date, Jeremy hit that earlier, but across revenue per total transaction value and customer adoption rate. So we feel good there mortgages, we expect to continue to accelerate showcases rolling out nationwide in accelerating and then obviously rentals is growing quite nicely and we expect that to continue.

Jeremy Hofmann: But across revenue per total transaction value and customer adoption rate, so we feel good about mortgages. We expect to continue to accelerate showcases rolling out nationwide and accelerate. And then obviously, rental is growing quite nicely, and we expect that to continue as well. So that gives us the confidence around the reacceleration that we expect to see in the 2nd half.

Jeremy Hofmann: You as well so that's what gives us the confidence around the re acceleration that we expect to see in the second half.

Jeremy Wacksman: Got it, that's helpful. And then, on the regulatory front, specifically around the buyer's agreement, you mentioned that arrangement and the product you announced yesterday, leading to maybe higher conversion rates. I think there's some investor concern out there where there's still going to be some friction, maybe higher up in the funnel. Can you kind of talk about how you manage that part of it and maybe why it's not a headwind relative to kind of how the old way used to work? Thanks.

Speaker Change: Got it that's helpful. And then just secondarily on the regulatory front.

Speaker Change: Specifically around the buyers agreement you mentioned.

Jeremy Hofmann: That arrangement and the product you announced I guess it was yesterday, leading maybe higher conversion rates I think there's some some investor concern out there where theres still going to be some friction maybe higher up in the funnel can you kind of talk about how you manage that part of it and maybe why it's not a headwind relative to kind of how the old way used to work. Thanks.

Jeremy Wacksman: Yeah, hey, Brad, it's Jeremy Waxman. Yeah, as I said earlier, I mean, we see this as a great opportunity. What we're testing is post-connection, right? So after a consumer has already requested or, in the real-time touring case, booked a tour, can we help educate them and provide them with a really consumer-friendly digital education agreement? And we see that as better educating the customer and also expectation-setting the customer for when they meet the agent as to what to expect from the agent, both in that initial relationship but also in what they might expect in a buyer agency agreement generally.

Jeremy Wacksman: Yeah, Hey, Brian Jeremy Wacksman.

Jeremy Wacksman: As I said earlier I mean, we see this as a great opportunity.

Jeremy Wacksman: What we're testing is post connection right. So after a consumer has already requested or in a real time touring case book Detour can we help educate them and provide them a really consumer friendly digital.

Jeremy Wacksman: Education agreement and we see that as better educating the customer and also expectation setting the customer for when they meet the agent as what to expect from the agent both in that initial relationship it and what they might expect in a buyer agency agreement generally.

Jeremy Wacksman: And any time we can help educate a customer, that typically leads to a higher-quality customer for our agents. We've seen that as we've built things like tour and real-time touring. And as I gave the example earlier, in states that have been using agreements earlier in the funnel, you typically see higher conversion rates. The Connecticut example is a good one. It's, you know 90% of buyers are using buyer's agents, and the conversion rates are higher.

Jeremy Wacksman: Anytime we can help educate a customer that typically leads to a higher quality customer for our agents. We've seen that as we've built things like touring and real time Tory again I gave the example earlier.

Jeremy Wacksman: In states that have been using agreements earlier in the funnel that you typically see higher conversion rates that Connecticut example is a good one it's 90% of buyers are using buyers' agents and the conversion rates are higher so I think an important.

Jeremy Wacksman: So I think it's important to, you know, frame it in the context of this being down in the funnel. Once a customer has already raised their hand, really declared their intent, we've worked with them to make sure we're getting them to the right place.

Jeremy Wacksman: Frame it in the context of this is down in the funnel once a customer has already raised their hand really declared their intent we've worked with them to make sure were getting them to the right place they've had this magical book a tour experience and they're getting ready to go and this is in addition.

Jeremy Wacksman: <unk> education opportunity, it's not friction.

Jeremy Wacksman: Got it. That's helpful. Thanks.

Speaker Change: Got it thats helpful. Thanks.

John Campbell: We now turn to John Campbell with Stephens. Your line is open, please go ahead.

Jeremy Wacksman: We now turn to John Campbell with Stephens. Your line is open. Please go ahead.

John Campbell: Hey guys, good afternoon. Just back to the new Zillow Touring Agreement. That's a pretty clever development. Congratulations on getting that to market.

John Campbell: Hey, guys good afternoon.

Jeremy Wacksman: I want to touch on two items related to that. First, if there are agents that are unwilling to adopt that new Touring Agreement, will those agents simply lose the ability to get tour requests through showing time? And then, secondly, just more broadly, how important do you feel the role of touring is for your journey of moving from 3% of transactions to 6%?

John Campbell: Just back to the new Zillow Turing agreement, that's that's pretty clever development congrats on getting that to market I wanted to touch on two items related to that so first if if there are agents that are unwilling to adopt that new agreement will those agents simply lose the ability to get tour request through showing time and then secondly, just more broadly how important do you feel.

Jeremy Wacksman: The role of Turing is for your for your journey of moving from 3% of transactions the six.

Jeremy Wacksman: Yeah, this is Jeremy. I'll hit both.

Jeremy: Yes. This is Jeremy.

Jeremy: Both.

Jeremy: It's optional right. So it's not something that Zillow is required to do that's why I said, we see it as opportunity.

Speaker Change: <unk> step at some point in the experienced the agent is going to have a <unk>.

Jeremy: Conversation with the customer about services and start agreement and a relationship we're trying to help facilitate that.

Jeremy: Expect any falloff for friction because it isn't optional.

Jeremy Wacksman: It's optional, right? So it's not something that Zillow is required to do. That's why I said we see it as an opportunity. It's an educational step. At some point in the experience, the agent is going to have a conversation with the customer about services and start an agreement and a relationship. We're trying to help facilitate that. So we don't expect any fall-off or friction because it is an optional experience.

Jeremy: Now that said, we're prototyping and testing we will learn a lot as we work with our first couple of hundred agent partners and customers and we will iterate from there. So and then to your second question, we see touring as.

Jeremy Wacksman: That said, we're prototyping and testing. We'll learn a lot as we work with our first couple hundred agent partners and customers, and we'll iterate from there. So and then to your second question, we see touring as, again, as we've talked about for a while, it's the number one thing customers want to do. It's why we're so excited about it. It's why it's one of our growth pillars and one of the drivers of the performance gains we've seen in our enhanced markets to date and the overall share gains we expect to see as we roll out to more markets.

Jeremy: Again, as we've talked about for a while it's the number one thing customers want to do it.

Jeremy: Why we're so excited about it it's why it's one of our growth pillars and one of the drivers of the performance gains we've seen in our enhanced markets to date and the overall share gains we expect to see.

Jeremy: As we rollout to more markets. Both that is both physical touring which we've talked about here and.

Jeremy Wacksman: That is both physical touring, which we've talked about here, and virtual touring, right? So getting customers a deeper sense of home, helping them figure out what they want to go see in person, helps higher quality customers be more educated and informed when they raise their hand. That helps our agents win more of those customers when they meet them and drive transaction share. So we're excited about the opportunity that the changes, the evolution Rich talked about, will provide. This is one of the first ways in which we're trying to leverage technology and help make those marriages between consumers and agents happen.

Jeremy: Virtual touring right, so getting customers a deeper sense of home, helping them figure out what they want to go see in person helps higher quality customers be more educated informed when they raise their hand that helps our agents win more of those customers when they need them and drive transactions here. So.

Jeremy: We're excited about the opportunity that that.

Jeremy: Changes the evolution Richard talked about provide this is one of the first ways in which we're trying to leverage and help.

Jeremy: Make those marriages between consumers and agents happen.

Jeremy Wacksman: Okay, that's helpful. And then one more to tack on here on Matterport. I mean, obviously, it looks like it's heading to one of your competitors. I know you're not going to probably comment on the pending transaction or maybe what that RippleTech calls the market, but maybe if you could just talk about your own 3D tour capabilities and how you feel that stacks up.

Speaker Change: Okay. That's helpful. And then one more to tack on here on matter Port I mean, obviously it looks like it's heading to one of your competitors I know youre probably comment on pending.

Speaker Change: Transaction or maybe what that ripple effect caused for the market, but maybe if you could just talk to your your own tour capabilities and how you feel about stacks up.

Jeremy Wacksman: Yeah, um, we're really excited about our own homegrown 3D tech. We're excited about virtual touring generally, you know. We support Matterport today, it's a small percentage of listings today, and our 3D technology is on a small percentage of listings today, and that virtual touring capability is going to continue to grow as consumers discover and love it, and as we all improve our own technologies. So we're really happy with our homegrown effort.

Jeremy: Yeah.

Jeremy: We we are really excited about our own homegrown <unk>. We're excited about virtual touring generally we support matter for today, it's a small percentage of listings today in our <unk> technology is on a small percentage of listening today in that virtual touring capability is going to continue to grow as consumers discover love it and as we all improve our.

Jeremy: One technologies, so we're really happy with our homegrown effort and as you know that is what powers lifting showcase in all of the really unique interactive floor plan AI generated listings I talked about earlier that drive a ton more buyer engagement and are helping listings go pending.

Jeremy Wacksman: And as you know, that is what powers listing showcase and all of the really unique, interactive floor plan AI generated listings I talked about earlier that drive a ton more buyer engagement and are helping listings go pending and sell faster and sell for more money. So we love the investment that we're making here. And we really see this as where the consumer experience is going, but it's early, and all of us are small, and retraining the consumer to allow more touring in the virtual world, we think complements the physical touring investments we're making. Again, back to the earlier conversation, helping consumers find what they want to buy, helping them dream and shop more online in our app, and getting them into the hands of our great agent partners.

Jeremy Wacksman: And sell faster and sell for more money. So we love the investment that we're making here and we really see this is where the consumer experiences going but it's early and all of US are are small.

Jeremy Wacksman: And retraining the consumer to allow more touring and the virtual world. We think complements the physical touring investments, we're making again back to the earlier conversation, helping consumers find what they want to buy helping them dream and shop more online and in our app and getting them into the hands of our great agent partners.

Jeremy Wacksman: Makes sense. Thanks for taking our questions, guys.

Speaker Change: Makes sense, thanks for taking my questions guys.

Jeremy: Sure.

Ronald Josey: We now turn to Ron Josey with Citigroup. Your line is open, please go ahead.

Jeremy: We now turn to Ron Josey with Citigroup. Your line is open. Please go ahead.

Ronald Josey: All right, thanks for taking the question. Rich, I wanted to ask about the rental business, only because clearly it's a big strategic priority and the deck was very helpful. We're on a $400 million run rate currently, and I think the view is to get to that billion if I read the deck correctly in revenue. So I wanted to maybe focus more on multifamily growth, and we talked about, I think, 35% penetration of those that are available properties to 40,000 properties today.

Ronald Josey: Alright, Thanks for taking the question rich I wanted to ask on the rental business only because clearly it's a big strategic priority in the deck was very helpful for the $400 million run rate currently and I think the view is to get to that $1 billion. If I read that correctly in revenue. So I wanted to maybe focus more on multifamily growth, we talked about I think 35% penetration.

Ronald Josey: Of the.

Ronald Josey: Of those that are available property used to 40000 properties today.

Ronald Josey: Talk to us about the life cycle for getting these multifamily properties onto the platform, the importance of rentals for first-time buyers, and then maybe, as a quick follow-up to that, how rentals, it's been a big business for Zillow for a while, create a deeper relationship with Zillow and, recall, the entire housing process of a person.

Rich: Talk to us about the lifecycle for getting these multifamily properties on to the platform.

Jeremy: Portance two rentals for first time buyers.

Ronald Josey: Maybe just a quick follow up to that.

Jeremy: How rentals.

Ronald Josey: It's been a big business for a while it's a deeper relationship with zillow over call. It the entire housing process of of a person.

Jeremy Hofmann: I have a quick follow up.

Richard N. Barton: Hey Ron, Guys, maybe I'll start out with a little bit of a strategy answer. And then Jeremy Waxman, maybe maybe talk about, or Jeremy Hoffman talk about the multifamily question that Ron asked. Yeah, we really love the rental play, as you know, Ron. It is a textbook example of a two-sided digital marketplace opportunity. It's the kind of opportunity that our board director, Bill Gurley, who many of you know.

Speaker Change: Hey, Ron.

Speaker Change: Guys, maybe I'll start out with a little bit of a strategy answer and.

Jeremy Wacksman: And then Jeremy Wacksman, maybe maybe talk about.

Richard N. Barton: Jeremy I often talk about the multifamily question that Ron asked.

Speaker Change: Yes, we are.

Richard N. Barton: I really love the rentals play as you as you know Ron.

Richard N. Barton: It is a textbook example of a two sided digital marketplace opportunity.

Richard N. Barton: It's the kind of opportunity that are our board director Bill Gurley, who many of you know who is.

Richard N. Barton: Who's really a thought leader on digital marketplaces would really would really love, you know? It turns out that I've been involved in, intimately involved in building several kinds of successful digital marketplaces since the dawn of the Internet as well. And it makes me excited. Let me just take you through.

Richard N. Barton: Really a thought leader on digital marketplaces would really would really love.

Richard N. Barton: It turns out that I've been involved.

Richard N. Barton: Intimate intimately involved in building several kind of <unk>.

Richard N. Barton: Social and digital marketplaces since the dawn of the Internet as well and it makes me excited so let me just tick through why.

Richard N. Barton: Why? One, it's hyper-fragmented and locally distributed inventory on the supply side of the market. Likewise, it's really fragmented on the renter side of the market. Also, there is volatile pricing and volatile availability, which promotes market monitoring, so there is high engagement from both sides of the marketplace. Additionally, you know, there is heavy shopper interest in content, as both practical and for entertainment as part of the shopping process, which lends itself well to a digital marketplace.

Richard N. Barton: One, it's hyper fragmented and locally distributed inventory on the supply side of the marketplace.

Richard N. Barton: Likewise, it's really fragmented on the renter the demand side of the marketplace.

Richard N. Barton: Also there is volatile pricing and volatile availability, which promotes market monitoring so high engagement from both sides of the marketplace.

Richard N. Barton: Additionally, there.

Richard N. Barton: There is heavy shopper interest in content.

Richard N. Barton: It's a very high gross margin, which we all as investors love. And finally, marketplaces have a positive network effect, which is that more supply begets more demand, which begets more supply. So, we're seeing all of those things in action here in our rental marketplace. We knew from the beginning that acquiring demand at a really reasonable price, basically near zero marginal expense, is key to making these kinds of marketplaces work, and that keeping the supply side inventory acquisition costs very low is going to be key as well. And we feel very good about both of those. On the demand side, it's pretty simple.

Richard N. Barton: As both practical and for entertainment as part of the shopping process, which lends itself well to a digital marketplace to very high gross margin, which we all as investors love and finally marketplaces have a positive network effect, which is more supply, but gets more demand, which begets more supply. So we are seeing.

Richard N. Barton: All of those things in in.

Richard N. Barton: In action here in our in our rental marketplace.

Richard N. Barton: New from the beginning that that acquiring demand at a really reasonable price basically near zero marginal expense is key to making these kinds of marketplaces work and that keeping the supply side inventory acquisition costs very low was going to be key as well and we feel very good.

Richard N. Barton: On on both of those on the demand side, it's pretty simple Zillow rentals has kind of ridden along in lovely hotels of the greater Zillow with our 200 million plus monthly uniques and a lots of them also interested in.

Richard N. Barton: Zillow Rentals has kind of ridden the long and lovely coattails of the greater Zillow, you know, with our 200 million monthly unique visitors, and lots of them are also interested in buying a home as well as renting. So we've been able to leverage that. And on the supply side, it took us many years of toiling in the dark in the long tail, where most of the rental inventory is in single-family homes in the long tail.

Richard N. Barton: Buying a home as well as renting so we've been able to leverage that and on the supply side. It took us many years of kind of totally in the dark in the long tail, where most of the rental inventory is in single family homes in the lung and the long tail.

Richard N. Barton: But now, after toiling for many years, we estimate we have about 60% of those, and they're unique. These are almost all listings that will only show up inside of Zillow Rentals, which is fantastic. So more recently, I'll hand it off to Jeremy here, we turned our guns to the kind of more obvious and more commodity apartments in tall buildings in cities market, you know, the multifamily market. This is the market segment with real marketing budgets and professional managers.

Richard N. Barton: But now after toiling for many years, we estimate we have about 60% of those and they are unique.

Jeremy: These are almost all listings that will only be showing up in <unk>.

Jeremy: <unk> Zillow rentals, which is fantastic.

Richard N. Barton: So more recently I'll hand, it off to Jeremy here, we turned our guns to the kind of more obvious and more commodity apartments in tall buildings and cities market the multifamily market.

Jeremy: This is the market segment with real marketing budgets and professional managers. We have 40000 buildings now its growing really rapidly we love that.

Richard N. Barton: We have 40,000 buildings now, and it's growing really rapidly. We love that. Why don't I conclude by saying, yeah, we've got the supply side, the expense of the supply side nailed, and the inventory now kind of lit up. And we've certainly got the demand side in a terrific spot. And we're, you know, I'm personally excited to begin to really lean into this. Jeremy, do you want to chat a bit about multifamily?

Jeremy: Why don't I.

Jeremy: So I'll conclude by saying, yes, we've got the supply the expense of the supply side.

Richard N. Barton: Mailed in the in the inventory now kind of lit up and we've certainly got the demand side in a terrific spot and we're I'm personally excited to begin to really lean lean into this Jeremy you want to chat a bit about the multifamily yes, I mean I think the answer is.

Jeremy Wacksman: Multifamily? Yeah, I mean, I think the answer is similar to the framework you gave around it being a two-sided marketplace. We have been building the overall organic traffic and listings for the renter experience, and that's driven the demand side broadly. Now we're focusing in on increasing demand, more specifically in multifamily, and you're seeing that both in our partnership with Realtor.com and in our advertising campaign following a really successful test last year, and that's on the demand side of Rich's two-sided marketplace, and then the supply side is bringing those high-in So it is really about the flywheel Rich talked about, and it's just the focus on multifamily on both the demand side and the supply side that we're now turning more focus and energy to.

Jeremy Wacksman: The framework you gave around it being a two sided marketplace. We have been building the overall organic traffic and listings for the renter experience and that's driven the demand side broadly now were focusing in on increasing demand more specifically in multifamily and youre seeing that both in our partnership with realtor Dot com.

Jeremy Wacksman: And in our advertising campaign following a really successful tests last year and that's on the demand side of riches two sided marketplace in on the supply side is bringing those high intent renters.

Jeremy Wacksman: To the professionals, which talked about and increasing our sales efforts.

Jeremy Wacksman: To go help those folks connect with our renters and get there.

Jeremy Wacksman: Get what they need from their advertising dollars. So it is really about.

Jeremy Wacksman: The flywheel rich talked about and it's just a focus in our multifamily on both the demand side and the supply side that we're now turning more focus and energy too.

Jeremy Wacksman: That's great. Thank you, Rich. Thank you, Jeremy. I'll go back on the queue for another question.

Speaker Change: That's great. Thank you rich. Thank you Jeremy I'll go back in the queue for another question.

Mark Stephen Mahaney: We now turn to Mark Mahaney with Evercore ISI. Your line is open, please go ahead.

Jeremy Wacksman: Thanks, Ron we announcements a mark mahaney with Evercore ISI. Your line is open. Please go ahead.

Mark Stephen Mahaney: Okay, let me try a few, please. In the Q2 guide, you don't have this kind of outpacing of the real estate industry's total transaction value that you've had pretty consistently for a while. Maybe you've covered this before, but if not, could you please go through that? Why wouldn't you outpace?

Mark Stephen Mahaney: Okay, Let me try a few please.

Mark Stephen Mahaney: Q2 guide you don't have this kind of outpacing the real estate industry total transaction value that you've had pretty consistently for a while maybe you covered this before but if not could you. Please go through that what why wouldn't you outpace and then on the.

Jeremy Hofmann: And then on the showcase new listings, can you just talk about what kind of traction you're seeing with that? I know you covered a little bit in the shareholder letter, but the reactions you've had to the pricing models that you rolled out at the beginning of the year. Thank you very much.

Mark Stephen Mahaney: On the showcase new listings.

Jeremy Hofmann: You just talk about what kind of traction you're seeing with that or no you covered a little bit in the shareholder letter, but reactions you've had to the pricing models that you rolled out at the beginning of the year. Thank you very much.

Jeremy Hofmann: Yeah, thanks, Mark. It's Jeremy Hoffman. I'll take the first one on the guide.

Jeremy Hofmann: Yeah, Thanks, Mark it's Jeremy out, but I'll take the first one on the guide yes, we called out a few factors that are headwinds right. Now one is first time homebuyers are just struggling in this market and we lean that way. So we're feeling that a bit and then additionally, just when rates spike like this as quickly as they did.

Jeremy Hofmann: Over the past few weeks, our Premier agent partners, just tend to be in a more of a wait and see environment. So we're feeling both of those at the moment. This is not dissimilar from what we felt this time two years ago, where.

Jeremy Hofmann: Yeah, we call that a few factors that are headwinds right now. One is that first time homebuyers are just struggling in this market. And we lean that way, so we're feeling that a bit. And additionally, just when rates spike like this, as quickly as they did over the past few weeks, our premier agent partners just tend to be in more of a wait and see environment. So we're feeling both of those at the moment. This is not dissimilar from what we felt this time two years ago, where PA partners took a bit of a wait and see approach when rates spiked. And then, ultimately, we worked through it.

Jeremy Hofmann: <unk> partners took a bit of a wait and see approach when rates spiked and then ultimately we worked through it so like I said earlier not necessarily too.

Jeremy Hofmann: To focus on the quarter to quarter fluctuations and just reiterating that we think revenue reaccelerate in the back half of the year to get us to that double digits revenue growth against a flattish housing market. We continue to feel good there for a variety of reasons just the way that we're executing across residential mortgages showcase and.

Jeremy Hofmann: Rentals as well.

Jeremy Hofmann: So, like I said earlier, not necessarily to focus on the quarter to quarter fluctuations, but just reiterating that we think revenue reaccelerates in the back half of the year to get us that double-digit revenue growth against the flattish housing market. We continue to feel good there for a variety of reasons, just the way that we're executing across residential mortgages, showcase, and rentals as well. And then Jeremy, maybe I'll pass this to you.

Speaker Change: And then Jeremy maybe I'll pass I can hit.

Jeremy: Listing showcase.

Jeremy Wacksman: Yeah, I can hit the listing showcase. Yeah, I mean, as I said earlier, we're really excited that the increased engagement from the offering in more locations is bringing us a really good product-market fit, both with, we knew with buyers, but we're now seeing with sellers and with sellers agents. And that's why we're so excited about the intermediate term goal we've talked to you all about and getting ourselves to five to 10% total active listings. Because then we think there's potentially more to do once this gets to that.

Jeremy: Yes, I mean as I said earlier, we're really excited that the increased engagement from the.

Jeremy Wacksman: Buyers continues right so more page views saves in shares as we get showcase out there more and more we're also now seeing.

Jeremy Wacksman: Seller benefit, which I talked about so homes are selling faster, 20% more likely to accept an offer in 2014 days and theyre selling for more money, 2% more money.

Jeremy Wacksman: And most importantly agents, who are using with listing showcase our winning more listings.

Jeremy Wacksman: So all of that says to us that as we've been rolling this out and scaling it up and offering more locations. We're seeing a really good product market fit both with we knew with buyers. We're now seeing with sellers and with sellers agents and Thats why we are.

Jeremy Wacksman: So excited about the intermediate term goal, we've talked to you about in getting our getting ourselves to 5% to 10% total active listings.

Jeremy Wacksman: Because then we think there is potentially more to do once this gets to that stage.

Jeremy Wacksman: Do you have markets where that coverage is materially higher, like a lead market where it's materially higher than five to ten percent?

Speaker Change: Do you have markets, where that coverage is materially higher like a lead market, where its materially higher than 5% to 10%.

Jeremy Wacksman: Not yet. I mean, you know, we've talked to you all about it for a while now, but it's important. Remember, it's only been live for a couple quarters, and it's only been live nationally since February. So, you know, the team has grown, as Jeremy talked about, we have staffed up sales folks to start to hit more coverage and talk to agents in more places. But, you know, as much as we're excited about as much as we see a really exciting product here, it is still really early in our journey.

Speaker Change: Not yet I mean, we've talked to you all about it for a while now but it's important to remember its only been live for a couple of quarters and it's only been live nationally since since February so.

Jeremy Wacksman: Team has grown as Jeremy talked about we have staffed up sales.

Jeremy Wacksman: Sales folks to start to hit more coverage and talked to agents in more places.

Jeremy Wacksman: But as much as we're excited about as much as we see a really exciting product here.

Jeremy Wacksman: It is still really early in our journey.

Jeremy Wacksman: Okay, thank you, Jeremy. Thank you, Jeremy.

Speaker Change: Okay. Thank you Jeremy Thank you Jeremy.

Ryan McKeveny: We now turn to Ryan McKeveny with Zelman and Associates. Your line is open. Please go ahead.

Jeremy Wacksman: We now turn to Ryan <unk> with Zelman and Associates. Your line is open. Please go ahead.

Ryan McKeveny: Yeah.

Ryan McKeveny: Thank you very much. On follow-up, boss, you mentioned in the letter being even more excited about the opportunity for conversion gains. I guess if you can provide kind of two sides of an update. One would just be, you know, initial receptiveness and maybe retention of legacy follow-up boss customers post the acquisition. And then secondarily, I know it's only been a handful of months, but where does integration stand with the PA business and anything to call out about any benefits to conversion rates thus far? Or is that more, you know, opportunity as we move forward? Thank you.

Ryan McKeveny: Thank you very much.

Ryan McKeveny: Follow up boss, you mentioned in the letter being even even more excited about the opportunity for conversion gains.

Ryan McKeveny: I guess, if you can provide kind of <unk>.

Ryan McKeveny: Two sides of an update one would just be.

Ryan McKeveny: Initial receptiveness and maybe retention of legacy follow up lost customers.

Ryan McKeveny: Post the acquisition and then secondarily.

Ryan McKeveny: I know, it's only been a handful of months, but where does integration stand with the business and anything to call out about any benefits to conversion rates, thus far or is that more opportunity as we move forward. Thank you.

Jeremy Wacksman: Yeah, thanks, Ryan. I think on initial reception, we've been really pleased with the retention of the core customers of Follow Boss as we've gotten through the closing and integration and started to work together now for a couple quarters. And we're really pleased to just see the continued positive agent feedback on the Follow-Up Boss product. I still get anecdotes all the time talking to agents about how much they love it and how much they're excited about our ability to help the Follow-Up Boss team grow and invest more in this team-focused CRM that they've built their business on. So we continue to be pleased with the post-close, post-acquisition performance of the Follow-Up Boss agent base. And then on your second question, I would say there is still a lot of opportunity.

Speaker Change: Yes, Thanks Ryan.

Ryan McKeveny: I think on.

Jeremy Wacksman: On.

Jeremy Wacksman: Initial reception, we've been really pleased.

Jeremy Wacksman: With the retention of.

Jeremy Wacksman: The core customers of follow up boss as we've gotten through closing and integration and starting to work together now for a couple of quarters.

Jeremy Wacksman: And we're really pleased to just see the <unk>.

Jeremy Wacksman: <unk> positive agent feedback on the follow up vast product.

Jeremy Wacksman: I still get anecdotes, all the time talking to agents about how much they love it and how much they're excited about our ability to help the followup off team grow and invest more in this team focus CRM that they've built their business on so we continue to be pleased with.

Jeremy Wacksman: The post close post acquisition performance of the follow boss agent base.

Jeremy Wacksman: And then on your second question.

Jeremy Wacksman: I would say, it's still a lot of opportunity I mean, I think you heard both me and Jeremy can talk about in the prepared remarks.

Jeremy Wacksman: I mean, I think you heard both me and Jeremy talk about in the prepared remarks, they're starting to ship things for all advertising partners, or sorry, all agent partners. And we're also starting to think about ways to help premier agent partners use Follow-Up Boss to better convert their business, both their Zillow customers and their entire customer base. So not too much more to share in terms of the roadmap, but a whole lot of excited folks internally in both the Follow-Up Boss team and our Zillow consumer and Zillow agent teams ideating and working together on, you know, how can we help our agents use technology to convert more customers and deliver better service? And we see a long road ahead for that initiative.

Jeremy Wacksman: They're starting to ship things for all advertising partners are sorry, all agent partners and we're also starting to think about ways to help.

Jeremy Wacksman: Premier agent partners used follow a boss to better convert their business, both theres other customers, but their entire customers. So not too much more to share in terms of roadmap, but a whole lot of excited folks internally and both the follow up boss team and our Zillow consumer and Zillow agent teams.

Jeremy Wacksman: And working together on how can we help our agents you use technology to convert more customers and deliver better service and we see a long road ahead for for that initiative.

Ryan McKeveny: Got it. That's very helpful. Thank you.

Jeremy Wacksman: Got it that's very helpful. Thank you and then just to follow up on the <unk> revenue guide in residential in the comment about some partners, taking a wait and see approach.

Ryan McKeveny: I guess, if I step back.

Ryan McKeveny: There's the industry noise related to all the litigation and everything that's going on.

Ryan McKeveny: And then just to follow up on the 2Q revenue guide for residential and the comment about some partners taking the wait and see approach. I guess if I step back, you know, there's the industry noise related to all the litigation and everything that's going on. There's noise on the competitive side of things, neither of which seem to be kind of the called out headwinds. So maybe just help us. Think through that disaggregation of the headwinds in a bit more detail.

Ryan McKeveny: There is noise on the competitive side of things.

Ryan McKeveny: Neither of which seem to be kind of called out headwinds. So maybe just help us think.

Ryan McKeveny: Through that disaggregation of the headwinds in a bit more detail like is there any.

Ryan McKeveny: Like, is there any change on the margin coming from, you know, competitive slash industry types of dynamics, or at this point in time, is the best estimation that it's largely kind of macro-related factors at this point in time? Thank you.

Ryan McKeveny: <unk> on the margin coming from.

Ryan McKeveny: Competitive slash industry types of dynamics or at this point in time.

Ryan McKeveny: The best.

Ryan McKeveny: Estimation that it's largely kind of macro related factors at this point in time. Thank you.

Jeremy Hofmann: Yeah, thanks Ryan. It's Jeremy Hoffman.

Ryan McKeveny: Yes, Thanks, Ryan, It's Jeremy Hoffman I think.

Jeremy Hofmann: We monitor our sales funnel really really closely and we have software that sits over top of it monitoring agent calls an agent sentiment and just telling us what they are hearing and the situation right. Now is just it's a temporary rate shock.

Jeremy Hofmann: I think, you know, we monitor our sales funnel really, really closely, and we have software that sits over top of it, monitoring agent calls and agent sentiment and just telling us, you know, what they're hearing. And the situation right now is just, you know, a temporary rate shock. We've been through that before. It happened in the spring of 2022, and we know how to navigate through it.

Jeremy Hofmann: We've been through that before it happened in the.

Jeremy Hofmann: The spring of 2022, and we know how to navigate through it we want to be there for our partners.

Jeremy Hofmann: This time and not necessarily going to push too hard as a result of that.

Jeremy Hofmann: We want to be there for our partners during this time and, you know, not necessarily going to push too hard as a result of that. And then, with respect to NAR and competitiveness, we're just not seeing that in any data that we see. We just don't see impact from either of those. So, it really has been much more macro-related and macro in a way that we think is navigable. And again, coming back to the full year, we just continue to feel quite good about the ability to accelerate revenue over the course of the year and, you know, let us get through the quarter to quarter fluctuations just given how fluid macro is.

Jeremy Hofmann: And then with respect to Nord and competitive we're just not seeing that in any data that we see we just don't see impact from either of those so it really has been much more macro related and macro in a way that we think is navigable and again coming back to the full year. We just continue to feel quite good about the ability to accelerate revenue.

Jeremy Hofmann: Over the course of the year end.

Jeremy Hofmann: Let us get through the quarter to quarter fluctuations, just given how fluid macros.

Speaker Change: Okay, great. Thank you very much.

Bradley Erickson: We now turn to Chris Kunterich with UBS. Your line is open, please go ahead. All right, thanks.

Bradley Erickson: Okay, great. Thank you very much. We now turn to Chris Kunterich with UBS. Your line is open, please go ahead. All right, thanks for taking the question, two parts on the rental business just as we think about this billion dollar plus opportunity.

Chris: We now turn to Chris country Rich with UBS. Your line is open. Please go ahead.

Bradley Erickson: Alright, thanks for taking the question.

Bradley Erickson: Two parter on the rental business just as we think about the $1 billion plus opportunity for rentals last quarter you'd frame listing showcases kind of a medium term $150 million to $300 million opportunity should we be thinking about this also as a medium term or is this more of a kind of a.

Bradley Erickson: Of a longer term opportunity and second part of the question would be just as we think about the pace of rental growth and 24, how should we be thinking about pricing.

Bradley Erickson: A lever you could potentially Paul thanks.

Jeremy Hofmann: Yeah, I'll take it. It's Jeremy Hoffman.

Bradley Erickson: Yes, I'll take it as Jeremy Hoffman I think on the $1 billion plus opportunity I think the keyword. There is sustainable we think it's a sustainable $1 billion plus opportunity and we've built the business that.

Jeremy Hofmann: I think on the billion dollar plus opportunity, I think the key word there is sustainable. We think it's a sustainable billion dollar plus opportunity. And we've built the business that way. Rich walked through a bunch of why we like the strategy so much, but we also like it as a, you know, multi-decade type opportunity. So with respect to timing, we're not going to commit to anything there.

Jeremy Hofmann: That way rich walked through a bunch of why we like the strategy. So much but we also like it as a.

Jeremy Hofmann: Multi decade type opportunity set with respect to timing, we're not going to commit to anything there. We just believe there is a lot more for us to do and we think what we're building is differentiated versus anybody else and we have an opportunity to be.

Jeremy Hofmann: We just believe there's a lot more for us to do, and we think what we're building is differentiated compared to anybody else. And we have an opportunity to be the place where all renters come and all property managers come as well, whether that's in the single family or multifamily category. That's what we think the opportunity is, and it's done under one brand, Zillow, right? That's already known for housing, so that's what we're focused on.

Jeremy Hofmann: The place where all renters come in all property managers come as well, whether that's in the single family or multifamily category, That's where we think the opportunity is and it's Don under one brand Zillow right that's already known for housing.

Jeremy Hofmann: So that's what we're focused on I just want to give you a sense for what we see over time.

Jeremy Hofmann: Just want to give you a sense of what we'll see over time. And then, secondly, for 2024 for rental properties, you know, the goal is really to keep adding more and more properties and bringing more demand alongside. So we think of it as more of an effort that way than, you know, pushing on price. It's really, we just see a pretty substantial opportunity in front of us, and we want to make sure we continue to add properties in the way that we have been, and then also bring in the consumer demand to satisfy those properties.

Jeremy Hofmann: And then secondly on 'twenty 'twenty four for rentals.

Jeremy Hofmann: The goal is really.

Jeremy Hofmann: Keep adding more and more properties and bringing more demand alongside so we think of it as more of an effort that way then pushing.

Jeremy Hofmann: Pushing on price, it's really we just see a pretty substantial opportunity in front of us and we want to make sure. We continue to add properties at the way that we have in and then also bringing the consumer demand to satisfy those properties. So the organic efforts that we have the realtor dot com partnership which went live today and then this national marketing campaign that campaign.

Jeremy Hofmann: So, you know, the organic efforts that we have, the realtor.com partnership, which went live today, and then this national marketing campaign we're quite excited about as well, all in the vein of, you know, how do we make sure we build something really sustainable over time? And we think we're on that path.

Jeremy Hofmann: Excited about as well all in the vein of how do we make sure we build something really sustainable.

Jeremy Hofmann: Over time, and we think we're on that path.

Speaker Change: Got it thank you very much.

Daley: Our final question today comes from Daley with J.P. Morgan. Your line is open. Please go ahead.

Jeremy Hofmann: Our final question today comes from Jay Lee with Jpmorgan. Your line is open. Please go ahead.

Daley: Great. Thanks for taking the question, Akshu. So back to the NAR settlement, I mean, is this something that your partners are anticipating having a meaningful disruption around the time of implementation, or could this be more of a change that takes a while for you guys to see?

Daley: Great. Thanks for taking the question.

Daley: Solomon.

Daley: I mean, there's just something about Florida partners, anticipating having a meaningful disruption around the time of implementation.

Daley: With this being more of a change that takes a while for you guys can see.

Jeremy Wacksman: This is Jeremy. I can hit that.

Daley: This is Jeremy I can hit that I think.

Jeremy: No I think as rich outlined earlier.

Jeremy Wacksman: I mean, I think, no, I think, as Rich outlined earlier, we don't see a ton of revolutionary change here. We see more evolutionary change that results in more educated and more transparent consumers, which we see as leading to higher quality, higher intent leads and connections for our partners. And I think we're already seeing that start to play out in the early innings, you know, after all the news is cleared about how partners are processing connections and how they're learning to work with those consumers.

Speaker Change: We don't see.

Jeremy Wacksman: Yes.

Jeremy Wacksman: Ton a revolutionary change here, we see more evolutionary change that results in more educated and more transparent consumers, which we see as leading to higher quality higher intent leads and connections for our partners.

Jeremy Wacksman: And I think we're seeing that already start to play out in the early.

Jeremy Wacksman: Earnings after all the news is cleared.

Jeremy Wacksman: <unk> partners are processing connections and how they are learning to work with with those consumers and as I talked about just take our touring.

Jeremy Wacksman: And as I talked about, just take our touring pilot here as an example of, you know, leaning in on consumer education in a consumer-friendly way to help them understand what they're going to be dealing with. And in the states that have been doing that, you know, we still see fairly ubiquitous, independent representation and higher conversion rates. So, you know, as folks like us and others roll out more bundled agreements, again, back to our principles, we think a more educated consumer who can understand what they're getting from the representation that they choose and understand that the compensation is fair and negotiable and can be negotiated, that leads to a better conversation with professionals.

Jeremy Wacksman: Pilot here as an example of <unk>.

Jeremy Wacksman: Meaning in on consumer education in a consumer friendly way to help them understand what theyre going to be dealing with and in the states that have been doing that scene.

Jeremy Wacksman: <unk>.

Jeremy Wacksman: Fairly ubiquitous independent representation and higher conversion rates so.

Jeremy Wacksman: As folks like us and others rollout more buy side agreements again back to our principles. We think a more educated consumer who can understand what they're getting from their representation that they choose and understand that the competition is fair and negotiable and can be negotiated that leads to a better conversation with professionals and we think that leads to.

Jeremy Wacksman: And we think that leads to our professionals, which, as Ruth talked about, are a small subset of the most productive agents, winning more business. And so, you know, we see that anecdotally today, and we see that in some of the states that are further ahead on this today. And we expect to see that continue as more folks roll out changes to deal with the evolution.

Jeremy Wacksman: Who are professionals, which as rich talked about are a small subset of the most productive agents winning more business.

Jeremy Wacksman: So we see that anecdotally today, and we see that in some of the states that we're further ahead on this today and we expect to see that continue as more folks rollout changes to deal with the evolution.

Jeremy Hofmann: And as a follow-up, I don't know if you addressed this, but what's driving the first-time homebuyer activity on their performance? I mean, is this related to the mortgage rate hike, or is there something else happening? And those are QQI and Zoom activities at these levels.

Speaker Change: Got it and as a follow up I don't know if it was just us.

Jeremy Hofmann: What's driving the first time homebuyer activity on their performance.

Jeremy Hofmann: And then just related to the mortgage rate hikes or is there something else happening.

Jeremy Hofmann: Just your volume assume activity at these levels.

Jeremy Hofmann: Yeah, I think it's Jeremy Hoffman, just to make sure I heard it. Yeah, I mean, really. It is the rate shock that we felt. It's less about the absolute interest rate level; it's more the shock. And when rates spike by 50 basis points over a couple of weeks, you know, first-time home buyers are the folks that feel that the most, and they're underperforming pretty significantly. We don't expect that to be for forever, but it is a temporary thing. And as a result, it's a bit of a headwind for us, but one that we think we can navigate through.

Speaker Change: Yes, I think it is.

Jeremy Hofmann: Jeremy Hoffman just to make sure I heard it.

Jeremy Hofmann: All right, I understand. Thank you.

Jeremy Hofmann: Yes, I mean really it is the rate shock that we felt it's less about the absolute.

Jeremy Hofmann: Interest rate level, it's more of the shock.

Jeremy Hofmann: And when rates spiked by 50 basis points over a couple of week period first time homebuyers and the folks that feel that the most and theyre underperforming pretty significantly we don't expect that to be for forever, but it is a temporal thing and as a result.

Jeremy Hofmann: A bit of a headwind for us, but one that we think we can navigate through pretty seamlessly.

Speaker Change: Alright. Thank.

Speaker Change: Thank you.

Richard N. Barton: This concludes the allotted time for questions. I'll now turn the call back over to Rich Barton for any closing remarks.

Jeremy Hofmann: This completes the allotted time for questions I'll now turn the call back over to rich Barton for any closing remarks.

Elliot: All right, thanks, everybody. Hey, look, it's noisy out there, and there is a lot of confusion, and there's a lot of distractions. And I'll tell you, we're calm. We're driving forward. We're putting up numbers. The product is getting better and better. And we have a long road ahead of us because of all of this incredible kind of pent up potential transaction energy that lives inside of our wonderful marketplace. So, you know, it's noisy, but we're feeling really good. Thanks for being on the road with us. We'll talk to you soon.

Richard N. Barton: Alright, thanks, everybody.

Elliot: Hey look it's it's noisy out there and there is a lot of confusion and Theres a lot of distraction.

Elliot: And I'll tell you.

Elliot: Recall, we're driving forward, we're putting up numbers.

Elliot: The product is getting better and better.

Elliot: And we have a long road ahead of us because of all of this incredible.

Elliot: Pent up potential transaction energy that lives inside of our wonderful marketplace. So.

Elliot: It's noisy, but we're feeling really good thanks for being on the road with US we will talk to you soon.

Elliot: This concludes today's conference call. You may now disconnect. ? Outro Music ?

Speaker Change: This concludes today's conference call you may now disconnect.

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Elliot: Okay.