Zillow Group makes ‘significant progress’ on Zillow Offers inventory wind-down | ZDNet
Zillow Group said today it has made “significant progress” in winding down its Zillow Offers inventory and has either sold, is under contract to sell or has reached agreement on disposition terms for more than 50% of the homes it expected to resell during the entire wind-down process.
“We are pleased with the progress of our wind-down efforts and recognize that no longer operating Zillow Offers will allow us to have a more capital-efficient balance sheet and business moving forward,” said Zillow Group co-founder and CEO Rich Barton. “With that, we see today as an opportune time to announce a share repurchase program and reduce the cash balance we built up to support Zillow Offers,” Barton added.
The company announced its plan to wind down Zillow Offers operations and provided outlook for its fourth quarter on November 2. With the current wind-down progress, Zillow is updating its fourth quarter Homes segment revenue outlook to between $2.3 billion and $2.9 billion, up from between $1.7 billion and $2.1 billion. “We will continue to be disciplined in our inventory wind-down strategy and evaluate a variety of options to best optimize net cash flows to the company,” said Zillow Group CFO Allen Parker.
The company continues to expect the net impact of the Zillow Offers wind-down of inventory (including inventory losses), operating costs and restructuring costs in the aggregate, to be at least cash-flow neutral, including after repaying all Zillow Offers secured debt, which was $2.9 billion as of September 30, the company said.
In addition, Zillow said its board of directors authorized the repurchase of up to $750 million of its Class A common stock, Class C capital stock or a combination of both. The timing and actual number of shares repurchased will be determined by management depending on a variety of factors, including stock price, trading volume, market conditions and other general business considerations, Zillow said.
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