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Zillow Group, Inc. Message Board

surbiton99 9 posts  |  Last Activity: Nov 9, 2015 5:37 PM Member since: Aug 10, 2011
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  • surbiton99 surbiton99 Nov 9, 2015 5:37 PM Flag

    Interesting what Zillow says about Credit Risk for Receivables in 10-Q Filing at end of last week

    "Credit risk with respect to accounts receivable is dispersed due to the large number of customers. Further, our credit risk on accounts receivable is mitigated by the relatively short payment terms that we offer. Collateral is not required for accounts receivable. We maintain an allowance for doubtful accounts such that receivables are stated at net realizable value."

    So how on earth did Bad debt expense increase by 50% in the Quarter? No explanation about that whatseoever !!

  • Reply to

    Zillow disposes of Market Leader for $12M Loss

    by surbiton99 Sep 3, 2015 5:45 PM
    surbiton99 surbiton99 Nov 5, 2015 10:00 PM Flag

    Today's Zillow 10-Q Filing gave details of the Market leader disposal to the Perseus Division of Constellation for $22.7M, of which $17M was paid in cash on September 30, and balance of $5.7M to be paid on December 29 'upon expiration of a holdback period to satisfy any purchase price adjustment and/or indemnification claims'.

    The 10-Q states a Loss on disposal of Market leader of $4.1M based on full $22.7M being paid and net of Assets of $32.685m and liabilities of $6.068M ie net asset valuation of $26.617M. Curious how this relates to Spencer Rascoff comment on 2nd Quarter Earnings Call in August that the 'carrying cost of Market Leader was $35M'. What happened to the balance of $8.4M since the Q2 Earnings Call?

    Whatever the accounting treatment to determine the $4.1M disposal loss the bottom line is Zillow is still at risk for up to $5.7M dues on December 29 so potentially still further bad news related to Market Leader.

  • Reading the Q3 Earnings released yesterday I noticed that Bad Debt expense increased substantially in the 3rd Quarter to$2.414M or 1.366% of revenues compared to $1.605M or 0.057% in 2nd Quarter, and $805K or 0.632% of Revenues in the 1st Quarter.

    This begs the question of whether Zillow are so desperate to sign new business they are getting sloppy on basic credit management, but my understanding was Realtors signing up to the premier Agent program provide a credit card which is charged each month so find it surprising that Bad Debts are such a big issue.

    It also raises the question of 'aggressive' Revenue Recognition where charges are applied to Premier Agents credit cards and subsequently disputed. If that is the case the double entry should be a reduction to Sales Revenue rather than creating a Bad Debt. This is particularly important when Zillow beat revenue consensus of $176.25M by a whisker with revenues of $176.765M. Did the $809K increase in Bad debts from the 2nd quarter help facilitate that estimate beat? Maybe I just being too cynical and its just an unfortunate coincidence. Shame none of the Analysts on the Earnings Call actually ask any searching questions to get to the bottom of issues like this.

  • Reply to

    How Bad will Zillow 3rd Quarter earnings be?

    by surbiton99 Sep 25, 2015 9:21 AM
    surbiton99 surbiton99 Nov 2, 2015 10:31 PM Flag

    Off the top of my head they missed Q1 in 2015 and Q3 in 2013, and I have a feeling there have been other misses too, but when they report on using 'Mickey Mouse' EBITDA rather than GAAP it becomes very irrelevant , especially as they exclude 30% of their revenues from Earnings which are Stock Based Compensation for a handful of executives. You need to understand that Zillow is a very badly run business with zero comprehension of cost management and the stock will eventually represent that perspective as it continues to drop.

  • Reply to

    How Bad will Zillow 3rd Quarter earnings be?

    by surbiton99 Sep 25, 2015 9:21 AM
    surbiton99 surbiton99 Nov 1, 2015 8:51 PM Flag

    So tell us what that is seeing as you seem so confident. My understanding is expectations are disappointing at best.

  • surbiton99 surbiton99 Oct 21, 2015 5:48 AM Flag

    From personal experience the mapping details are not much better than the data. Zillow admitted that there was a "Geo-Mapping error" that located homes on my side of the street in a neighboring city 6 miles away but correctly addressed the homes across the street. Zillow refused to correct or delete a substantially erroneous Zestimate despite the homes on the other side of the street all being valued $100K higher. Not sure what their agenda is in situations like this where they accept the mapping information procured from a 3rd party supplier is wrong BUT still refuse to correct inaccurate Zestimates.

    Now that Zillow claim 72% of all mobile real estate searches are done on Zillow & Trulia it is time the FTC or Dept of Justice introduced some form of regulation to protect homeowners from Zillows failings, with a DoNotZestimate 'Opt Out' as a minimum requirement in the same way as Phone users can opt out of unwanted spam calls by registering with DoNotCall.

  • On 2nd Quarter Earnings Call Zillow said "Our EBITDA for the third quarter is expected to be in the range of $18 million to $19 million". So with Zillow just days from the end of its 3rd Quarter any thoughts on how bad its Earnings will be? What we do know is Zillow had a $23M fire sale disposal of the Market Leader business that Trulia paid $355M just 2 years ago. We know Zillow substantially wrote down the valuation of Market Leader under the vagaries of acquisition accounting so much of the goodwill write off 'vaporised' when Trulia valuation of $2.5Bn was entered in Zillow group accounts with a balance of $1.966Bn.

    On the last earning call Zillow CEO Spencer Rascoff stated that the 'carrying cost' of Market Leader was in range $35M to $37M so with a $23M disposal valuation we can expect at least a further $12M write off in Q3. The big question is how much Trulia audience has dropped? or has Zillow been able to stop the rot? Its noticable that TV Ads have dropped off in the 3rd Quarter so maybe Zillow realise the only way to get costs down is to stop 'ego' projects, as the one big cost they won't cut is Share Based Compensation which increased substantially in Q2. We also know Zillow was cold calling 100,000 Realtors in Q3 to explain implications of integrating Zillow & Trulia accounts so what impact will this distraction have on Revenues? And finally there is the $108M acquisition of DotLoop which may also impact on Zillow earnings.

  • The lack of a Day One Plan for the Market Leader business acquired by Trulia less thatn 2 years ago for $372.7M has cost Zillow shareholders dearly as it announces the sale to Perseus Division of Constellation Software for a mere $23M. Considering Zillow stated on Q2 Earnings Call in August that it jad a $35M 'carrying cost' for Market Leader that means a further $12M loss for Zillow as a minimum in Q3, even though the sale will take place in the 4th Quarter.

  • surbiton99 surbiton99 Sep 3, 2015 5:19 PM Flag

    Zillow Group announced today that it is selling Market Leader to Perseus Division of Constellation Software for $23M cash. That means a 3rd Quarter loss of at least $12M for Zillow based on the advised $35M 'carrying cost' mentioned on the Q2 Earnings Call. With Trulia paying $372.664M just 18 months ago it is an amazing waste of $350M shareholders funds !!!!

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