Good afternoon. My name is Siarah and I'll be your conference operator for today. At this time I would like to welcome everyone to Zillow Group's Fourth Quarter and Full Year 2023 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a Q&A session. Please note this event is being recorded. I would now like to turn the conference over to Bradley Berning, Vice President of Strategic Affairs and Investor Relations. Please go ahead.

Thank you. Good afternoon, and welcome to Zillow Group's fourth quarter and full year 2023 conference call. Joining me today to discuss our results are Zillow Group's Co-Founder and CEO, Rich Barton; COO, Jeremy Wacksman; and CFO Jeremy Hofmann. During today's call, we'll make forward-looking statements about our future performance and operating plans and the housing market based on current expectations and assumptions. These statements are subject to risks and uncertainties and we encourage you to consider the risk factors described in our SEC filings for additional information. We undertake no obligation to update these statements as a result of new information or future events except as required by law. This call is being broadcast on the Internet and is accessible on our Investor Relations website. A recording of the call will be available later today. During the call we will discuss GAAP and non-GAAP measures, including adjusted EBITDA, which we refer to as EBITDA. We encourage you to read our updated investor presentation, shareholder letter, and our 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 over the call to Rich.

Thank you, Siarah. And thanks, Brad. Good afternoon, everyone. Thanks for dialing in for our fourth quarter and full year 2023 results. We are posting great revenue numbers across the whole of our increasingly diversified and growing businesses. Our early cohort of enhanced markets are working, so we are pressing the accelerator on expansion in 2024. I'm also pleased to share that we released an updated investor presentation available on our Investor Relations website to bring them all up to speed on the progress we've made on our growth pillars. We'll kick off the discussion today by walking you through our quarterly results, briefly addressing what's happening in the broader real estate industry, highlighting the opportunity in front of Zillow and then take you through the exciting progress we're making on our journey to innovate and transform the way people buy, sell, finance and rent homes. Starting with our quarterly results, we reported better than expected and accelerated revenue growth with Q4 total revenue of $474 million, up 9% year-over-year. Residential revenue of $349 million increased 3% year-over-year, returning to positive year-over-year growth. During the same timeframe, the broader real estate industry declined by 4%, meaning Zillow's residential revenue outperformed the industry by 700 basis points. As I said, Q4 now marks the sixth consecutive quarter of meaningful outperformance versus the industry. Our ongoing efforts to improve our customer funnel, capture more demand, connect more of that demand to our partner network and focus on conversion, continue to drive impressive results. Rentals also had a strong quarter with accelerating revenue growth, up 37% year-over-year to $93 million. This performance was driven by accelerating multifamily property growth with over 37,000 properties listed across Zillow at the end of Q4 2023. We continue to be the number one most visited rentals platform with average monthly rentals, unique users up double digits year-over-year in Q4. We are well-positioned for future rentals revenue growth which Jeremy Wacksman will discuss in more detail later in the call. We're also making excellent progress in our mortgages push, growing our purchase mortgage origination volume by more than 100% year-over-year in Q4 and further integrating Zillow Home Loans with our Premier Agent partners. Before we dive deeper into all the progress we've made over the last two years, I'd like to give our view of the latest real estate industry goings on. We're monitoring the progress of numerous lawsuits facing several organizations within the industry. Zillow is not a named party in these suits, and we are confident in our ability to meaningfully grow our company in this evolving climate. In November, we laid out our marketplace principles that underlie Zillow's position. We continue to advocate for what we believe is best for consumers and the industry as a whole. First, we believe in our real estate marketplace that is transparent and fair in which consumers and agents have easy and equitable access to listings and information. Second, we believe buyers and sellers deserve independent representation. And finally, we believe consumers should be well-informed on agent compensation and their rights to negotiate. Recently we elaborated on these views on a new webpage advocacy.zillowgroup.com that outlines consumers' real estate rights and how we are working to elevate industry standards on their behalf. This includes efforts to allow better integrated search experiences that can include all listing types in one view, whether for sale by agent, for sale by owner, new construction or for rent, as well as to educate consumers on the potential pitfalls of dual agency, among others. We recently supported legislation in our home state of Washington that requires buyer's agent agreements so that consumers are aware of the services they are buying and who pays. In New York, our StreetEasy and Zillow teams are working with lawmakers and advocates to create much needed transparency for consumers, ensure agents are fairly compensated and open the door for more access and affordability in New York's rental market. Those are just a few examples, but the key takeaway is that we have found a louder and clearer voice championing what's good for consumers, agents and the industry as a whole given legacy practices are being actively debated and negotiated right now. Settlements and court-ordered equitable relief may provide some near-term direction for the industry, and some industry practices will likely be improved. For example, it could become more common to use buyer agent agreements to make fees more transparent and negotiable. But ultimately, we continue to expect industry change to play out over many years. Regardless of the industry debates, Zillow is well-positioned for all weather due to our long history and future of technology innovation driving differentiated products and services which has resulted in a large engaged audience, a beloved brand and a growing diversified business. We believe all roads lead to Zillow. Zooming out from our quarterly results and the latest state of play in the real estate industry, two years ago, we introduced our new growth strategy and broke down the massive Total Addressable Market (TAM) opportunity for Zillow. This quarter, we released a refined and better way to size that opportunity, resulting in a $30 billion accessible TAM of customers already in our funnel and raising their hands to connect. I'll do the math to arrive at this number in a moment and then pass it over to Jeremy Wacksman to talk you through the progress we've made over the last two years. The proof points, the signal, why we are confident in pressing the accelerator on expansion. We are pleased with what we've accomplished since laying out our growth pillars in early 2022. We see this strategy as a continuation of what we've been working on since we founded the company in 2006 with the charge of turning on the lights in real estate. Over the years, we've built engaging and practical products and services designed to empower consumers with data and information, transforming a previously opaque marketplace into the more transparent one we experience today. But turning on the lights only got Zillow and our large audience so far. To effect real change for consumers and open up a much larger opportunity, we needed to focus on digital transformation of the moving experience end-to-end and began our work on the transaction itself. Every one of those moves knows that the process is complicated, time-consuming and expensive. The onus is primarily on the consumer to play the role of project manager and systems integrator to research, shop, select, finance, appraise and close, bringing all these disparate pieces together. It's a labyrinth and it's clear that consumers want and need better. And they'll eventually get it, they always do. So, we set out to build the housing Super App and integrated digital experience wherein all the disparate pieces of the moving process are brought together on one platform, Zillow. Rooted in our original commitment to turn on the lights, Zillow's housing Super App empowers consumers by delivering real estate data and education, a suite of Zillow-owned solutions and a network of best-in-class partners at their fingertips. Well, the housing Super App is here today; it's called Zillow. Zillow is now the container into which we will continually place new features and services that work together seamlessly to solve real customer and partner pain points in their moves. We have tested and iterated the experience over the last two years updating you all along the way. Our growth pillars, which Jeremy Wacksman will talk more about in a moment, serve as a roadmap for the continual upgrades and improvements we are adding to the Zillow experience as we expand our breadth and depth of coverage across more markets. Our opportunity is to take our current small slice of a large Total Addressable Market and grow it into a much bigger piece of the pie. U.S. For Sale Housing represents $2 trillion in total transaction value (TTV). Of that $2 trillion of TTV, there were approximately $162 billion of service fees in 2023 across buy and sell side agent referral fees, mortgage fees and closing fees. Based on survey data, we estimate that 70% of all consumers who transact visit and use Zillow, resulting in a $113 billion Zillow Visitor TAM. Cutting that down to just shoppers who raised their hands on Zillow, meaning they proactively request to connect with one or more of our services, we estimate first, a $16 billion opportunity made up of brokerage referral, mortgage, closing, and other homebuyer related transaction fees associated with those higher intent buyers. This is low-hanging fruit buy-side TAM, not just people visiting our site, but actual buyers actively engaged in seeking to do business with us. Additionally, on the sell-side, we have good line of sight on an estimated $14 billion of sell-side TAM derived from our increasing opportunity to capture more sell-side referral fees and listing marketing budgets from those agents already actively engaged in our funnel. This adds up to a current accessible $30 billion For Sale revenue opportunity with high intent, hand-raising consumers already in Zillow's funnel. Today, we captured $1.5 billion of that $30 billion accessible TAM. That $1.5 billion is our reported 2023 Residential and Mortgages Revenue. Measured as a fraction of TTV we stood at a mere 7 basis points in 2023. Oh, my, so much Blue Ocean. Our position as one of the largest Internet brands in the United States alongside iconic brands such as Facebook, Spotify and Netflix gives us confidence that we have many years of growth into that $30 billion of revenue TAM accessible in our funnel today. Over the last 15 plus years, we've released a constant stream of novel engaging and practical product innovations. We just have great brands created. Zillow Brand has over 60% unaided brand awareness among shoppers, which is rare for a brand to achieve in any category. Okay, that is of course internal survey data, but you can see a good impartial proxy for this strength in our Google search activity where Zillow was searched more on Google than the category term 'real estate', and three times more than our nearest competitor's brand. Further evidence of our brand strength is seen in our traffic composition. About 80% of Zillow's traffic is organic as well as in our app usage, which is more than three times our nearest competitor. We pioneered mobile real estate shopping with our leading iPhone and Android apps. And when Apple first launched the iPad, the Zillow app was highlighted by Steve Jobs on stage at the launch event. Taking things full circle, this month we partnered with Apple once again for the launch of Zillow Immerse on the new Apple Vision Pro to offer mover consumers an interactive and immersive way to explore listing showcase listings with special technology. Try it. It's early, but it's an extraordinary home touring experience. We have been and will continue to be the company that is on the leading edge of utilizing technology to create magic new consumer and agent experiences. So I've laid out a more refined view of the opportunities as we see it, quite large, quite complex, and quite accessible for us. We monetize very little of it today, yet it's in our store. I've also outlined the reasons to believe that Zillow can and will tap this $30 billion accessible TAM. One, we have the leading audience brand and engagement. Two, we have proven technology and product talent that is unrivaled in the real estate industry. Three, we have built an extensive talented and increasingly integrated partner network. And four, we have a strong balance sheet that gives us the flexibility to pursue current and future growth opportunities. For these reasons, we are uniquely well-positioned to transform and re-platform the largest industry in the country. We spent the last two years building the integrated transaction experience and testing it in enhanced markets. Now it's time to press down on the accelerator to increase our breadth of coverage across more markets and our depth of penetration in those markets. We made a great deal of progress in 2023, and we will make more in 2024. Okay, I've talked about our opportunity and our vision for the future of real estate. Now, I will pass the microphone over to our COO, Jeremy Wacksman to give you a more detailed progress report and where we are headed.

Thank you, Rich. And good afternoon, everyone. As Rich said, Zillow's housing Super App is the container into which we are continually adding upgrades and improvements, guided by five for sale growth pillars: touring, financing, seller solutions, enhancing our partner network, and integrating our services. Our for sale growth pillars mark the pathway to meeting our goals of growing customer transaction share from 3% to 6% by the end of 2025 and growing our revenue alongside that transaction share growth. You'll note that we've also added rentals as an additional growth pillar this quarter. We're excited about the opportunities here as our rentals marketplace continues to accelerate and accounted for nearly 20% of Zillow's total revenue in 2023. I'll kick off our growth pillar update with touring. The investments we're making here continue to drive our industry outperformance. When a customer raises her hand to look at a home she has been coveting on Zillow, it's a strong signal of serious intent to transact. As we work to convert more visitors on our site into transactors, the home tour remains a critical focus area for us. Touring has historically been painful for both movers and agents, so we've invested in making the process more seamless than it's ever been. Our real-time touring product powered by ShowingTime is meaningfully improving our ability to connect high intent customers to our premier agent partners. We ended Q4 with our real-time touring product delivering approximately 10% of our total connections. We expect to expand our breadth of coverage by launching additional markets and increase our depth by growing real-time touring to account for approximately 20% of connections by the end of 2024. This is driving a better customer and agent experience with less friction. As we see increased successful connections and more customers working with agents. Equally as important as touring is financing. And as a reminder, approximately 40% of all homebuyers start their journey shopping for a mortgage, and 80% of those buyers don't yet have an agent. Knowing that almost all of these mortgage seekers use Zillow positions us well to build a substantial direct-to-consumer purchase mortgage business that is seamlessly integrated with our extensive premier agent partner network. By integrating Zillow Home Loans with our premier agent partner network, we are creating a better customer experience from the start of the homebuying journey on Zillow to when a customer moves into that brand new home. And it's clear that customers and partners are increasingly enjoying this integrated housing Super App experience. Most notably our efforts are driving purchase mortgage growth. In our original four enhanced markets, we saw our customer adoption rates climb from 6% to 15% over the course of 2023. Since Q1 2023, the percentage of purchase mortgages in which a customer works with a premier agent partner increased from 23% to 53%. All of this success translates to $487 million in purchase loan origination volume this quarter, a more than 100% year-over-year increase despite a very challenging mortgage rate environment. We expect continued mortgage growth as we follow our roadmap through 2025. Expanding integration with premier agent partners, rolling out more enhanced markets, and converting more high intent customers on Zillow. I'll now move on to seller services honing in on listing showcase. Listing showcase elevates agents' brand presence on Zillow and helps them win more listings. Our AI-powered listing showcase also improved the shopper experience through listings that are powered by our homegrown rich media and floor plan technology. This is a unique differentiator in the marketplace and a significant benefit to buyer engagement and experience. We are in the early days of this product having launched in Q3, but it is clear already there is significant demand from listing agents and significant engagement with consumers. Listing showcase listings received 68% more page views, 66% more saves, and 63% more shares. We are actively rolling out listing showcase nationwide with the intermediate-term goal of 5% to 10% listing coverage, which represents a $150 million to $300 million annual revenue opportunity. And we believe there is potential future growth beyond that. Moving onto our next growth pillar update, enhancing our partner network. Our mandate here is simple: help the best agents provide better service to more of our shared customers to grow their businesses and our business. And we are doing this in a few ways. First, we're expanding our enhanced market partners, increasing our depth of coverage in existing markets and our breadth by growing our enhanced market footprint from nine at the end of 2023 to a projected 40 markets by the end of 2024. Second, we're working to deliver the integrated experience between Zillow Home Loans and premier agents. As a result, one in two premier agent partners in our enhanced markets are now introducing their customers to Zillow Home Loans, and that's up from one in five at the end of 2022. Lastly, we are excited to accelerate improvements to Follow Up Boss and make it available to more agents to increase conversion. With the power of Follow Up Boss, our premier agent partners will be better equipped than ever to deliver the best possible customer experience whilst supercharging their businesses. We think these efforts across the board will drive transaction conversion to help close the gap on the vast majority of Zillow connections that transact elsewhere and better tap the $30 billion accessible revenue TAM that Rich walked you through. Moving onto our last for-sale growth pillar update, integrating our services. Doing this requires us to pull together consumer, agent, and loan officer technology in one place, Zillow, to create an end-to-end experience that carries the customer through the entire transaction process with more transparency and ease. It's no small feat, but it's what consumers want and we're in the best-positioned to deliver to them. As evidenced by our performance in our earliest two enhanced markets, Phoenix and Atlanta, our integrated strategy is working to drive customer transaction share gains. Since the beginning of 2022, our customer transaction share has grown more than 80%. Additionally, across our entire set of nine enhanced markets, we are seeing consistent outperformance in connections growth versus the industry. This gives us great confidence to further expand our enhanced markets footprint more rapidly in 2024. As we expand to a projected 40 enhanced markets by the end of 2024, our integration within those markets is going to cover 20% of total Zillow connections by the end of the year. We land in each market with a subset of partner and customer coverage and work to expand our product offerings across the market over time. We are seeing share gains that will move the needle as we roll out more enhanced markets throughout the year into 2025. I'll wrap up with a progress update on rentals. Rentals is a fast-growing business with a big opportunity in front of it. Nearly every homebuyer starts out as a renter, and providing our customers with optionality is as important as ever in a challenging housing market. Today, we have the largest audience of rentals and the most listings in the market with limited marketing spend to date. We're now leveraging our position as traffic leader to grow our multifamily properties, which has accelerated our multifamily revenue growth year over year from 14% in Q4 2022 to 52% in Q4 2023. As we look to serve more of this market and grow revenue, we plan to expand the number of multifamily properties and deliver a superior experience for our rentals partners. Before handing it over to Jeremy Hofmann, I do want to highlight that while we've been building these past few years, we've meaningfully outperformed a challenged housing market. For the full year 2023, Zillow reported over $1.9 billion in revenue, outperforming the real estate industry by 1,600 basis points. I'm grateful to our teams who have been working hard to bring Zillow's housing Super App to life over the last two years, solving real customer pain points with exceptional tech solutions and partners. We are looking forward to continued growth in the years ahead. With that, I will now pass the line over to Jeremy.

Thanks, Jeremy. And hello, everyone. As you've heard from Rich and Jeremy, we are pleased with how we've executed on our strategy, and we are starting to see those efforts show up in our financial results despite the persistently challenging housing macro backdrop. In my comments today, I will cover our Q4 results, our outlook for Q1, some early thoughts on 2024 to help you all understand how we expect the year to play out, as well as the financial philosophy that underpins how we’ll manage the business moving forward. I will start with our Q4 2023 results, which exceeded expectations across the board. Revenue growth accelerated in Q4, up 9% year-over-year to $474 million, which was more than $31 million above the midpoint of our outlook range. Revenue outperformance was driven by acceleration across each of our revenue lines for residential, mortgages and rentals. On a GAAP basis, Q4 net loss was $73 million, representing 15% of our revenue. EBITDA was $69 million for the quarter. When excluding the impact of a $14 million one-time expense related to the partial lease termination of our Seattle office space, EBITDA would have been $83 million, resulting in an 18% EBITDA margin and marking a return to positive year-over-year EBITDA margin expansion. 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. Going a quick deeper, the partial lease termination option for our Seattle office space, which we previewed on our last earnings call, was exercised in December. As a result, we estimate our 2024 facilities costs will decrease by $8 million, and we will release an estimated $37 million in EBITDA expenses in total over the remaining life of the Seattle lease, which more than makes up for this one-time expense impacting our Q4 EBITDA. Returning to more details on the quarter, our Q4 residential revenue of $349 million outperformed our outlook range and revenue growth accelerated to 3% year-over-year. Our residential revenue performance was 700 basis points above the industry decline of 4%, according to data from the National Association of Realtors. We believe our Q4 outperformance was primarily driven by our ongoing investments in our top of funnel and mid funnel experiences that continue to drive improvements in our overall lead volumes. Rentals revenue growth accelerated in Q4 with revenue increasing 37% year-over-year to $93 million, primarily driven by our multifamily revenue, which grew 52% year-over-year in Q4. 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 37,000 multifamily properties as of year-end. Total listings across our entire rentals marketplace were also up 40% year-over-year to an industry-leading 1.7 million listings. Mortgages revenue of $22 million in Q4 returned to positive growth, up 22% year-over-year, with purchase loan origination volume growing 105% year-over-year. We are executing on our mortgage strategy to help more of our customers get financing through Zillow Home Loans. The tools and integration capabilities we have built are creating a bridge between premier agent partners, Zillow Home Loans loan officers, and our buyer customers, which is why we are seeing more than 50% of funded loans across all markets coming from customers working with a premier agent partner. This was a critical puzzle for us to solve before expanding more rapidly in 2024, and we are pleased with the progress to date. EBITDA expenses in Q4 totaled $405 million. Excluding the one-time partial lease termination expense I mentioned earlier, EBITDA expenses would have totaled $391 million, roughly flat sequentially from Q3, and at the low end of our outlook range as a result of our ongoing focus on cost management. Cost of revenue increased $26 million or 29% year-over-year, primarily due to an increase in website development costs as we continue to test and release new products. We ended the year with $2.8 billion in cash and investments, down from $3.3 billion at the end of Q3. This includes the benefit of net cash provided by operating activities, the impact of $88 million in share repurchases during Q4, the impact of $56 million towards convertible debt repurchases below par, and the approximately $400 million closing cash purchase price for Follow Up Boss. Post repurchases of convertible debt in the quarter, we have $1.6 billion of principal outstanding. Before turning the page to 2024, I want to highlight how pleased I am with our execution throughout the entirety of 2023. We accelerated revenue growth from a decrease of 13% year-over-year in Q1 to an increase of 9% year-over-year in Q4. When combining the revenue growth with a disciplined approach to our cost structure, we feel well-positioned entering this year. Turning to our outlook for Q1, I first want to level set on what we expect for existing homes' total transaction value. We estimate total transaction value to be between a decline of 4% to up 1% year-over-year in Q1. With that as a backdrop, we expect total company revenue to be between $495 million to $510 million, implying a year-over-year increase of 7% at the midpoint of our outlook range. We expect residential revenue to be between $365 million to $375 million, up 2% year-over-year at the midpoint of our outlook range. Despite the tough macro existing home sales environment, we expect our residential revenue to outperform the industry in Q1 as our growth pillars begin to contribute to revenue and the investments we have made in our overall funnel continue to deliver benefits. We expect rentals revenue to continue to grow more than 30% year-over-year in Q1 as we benefit from the strength of our execution and favorable industry backdrop driving landlord demand for advertisers. We expect positive growth in mortgages revenue year-over-year in Q1. We plan to expand integration with our premier agent partners in enhanced markets, send more of our mortgage leads to Zillow Home Loans directly, and drive engagement with more consumers on our apps and sites to grow our origination volumes. For Q1, we expect EBITDA to be between $95 million and $105 million, implying a 20% margin at the midpoint of our outlook range. This implies EBITDA expenses will increase from the $391 million in Q4 that excludes the lease termination expense. The increase is being driven by three primary factors: One, we take on a full quarter of operating costs for Follow Up Boss. Two, there is an annual increase in payroll taxes that occurs every Q1. And three, we are staffing up variable headcount for sales, given the growth we expect in 2024 from rentals, listing showcase, and Zillow Home Loans. Moving onto 2024 as a whole, we want to provide some color for how we expect the year to play out based on the information we have today. First, we are currently assuming that the housing market is relatively flat in aggregate for the year. With that as a backdrop, we expect to drive double-digit revenue growth for the full year, implying accelerated year-over-year revenue growth throughout the year from the high single digits in Q1 that I discussed in our outlook. As we increased the breadth and depth of our products and services throughout the year, we expect our growth pillars will drive the vast majority of the revenue growth across our business in 2024. More specifically, in our residential revenue category, we expect continued market outperformance as we expand touring, make top of funnel improvements, integrate Follow Up Boss into our sales motions, and expand the rollout of listing showcase. I will note that we expect the revenue contribution from Follow Up Boss to be a low single digit percentage of our total company revenue in 2024. In rentals, we expect continued strong growth as we increase our multifamily properties and total listings. In mortgages, we expect Zillow Home Loans integration with premier agents and our enhanced market expansion to drive meaningful growth. On the cost side, we believe our fixed investments are at the right level, which should result in our fixed costs growing modestly with inflation and our variable cost growing with or slightly ahead of revenue initially as we ramp up new hires to be fully productive. When combining our expected revenue growth and cost discipline, we expect modest EBITDA margin expansion for the full year. Beyond our revenue and EBITDA expenses, share-based compensation expense is an area of focus for us. We expect the absolute dollars of 2024 share-based compensation expense to be lower than 2023. And we expect to leverage SBC as a percentage of revenue from the combination of lower absolute dollars in SBC expense and projected revenue growth. Stepping back from our Q4 results, Q1 outlook, and 2024 early thoughts, I want to discuss the financial philosophy we have as a company as we execute on our go-forward strategy. As you heard from both Rich and Jeremy, Zillow today is a much different business from what it was several years ago. Our revenue base has diversified to the point where a majority of our revenue is now derived from sources other than buy-side fees. We have growth pillars we are executing against and are excited about with a $30 billion For Sale revenue opportunity accessible in our funnel today. As we continue to execute on our growth pillars while controlling fixed costs and gaining leverage on share-based compensation expense, we expect to deliver operating leverage resulting in strong GAAP profitability over time. Beyond our organic investments, we have made several acquisitions to accelerate our growth pillars. For example, we acquired ShowingTime in 2021, which accelerated our launch of real-time touring. Since then, we have acquired two real estate media businesses. We also acquired Spruce, a tech-enabled title and closing business to add to our housing Super App experience over time. And most recently, we acquired Follow Up Boss to create a best-in-class CRM for our premier agents and the industry. M&A is not our core strategy. However, we will continue to pursue selective opportunities when we find ways to accelerate our growth pillars. Beyond our day-to-day operating philosophy, we have been active in deploying capital over the past several years, returning $1.7 million to shareholders since the beginning of our stock repurchase program in Q4 2021. And we plan to continue to be opportunistic with the program going forward. Last, we remain focused on retiring our outstanding convertible debt. In 2023, we repurchased a total of $58 million in principal of our 2025 notes. We now have $1.6 billion of convertible senior notes which we may opportunistically redeem if they become callable. To close, I'll reiterate what you have heard from us before. 2022 was a year where we re-strategized and reorganized around our housing Super App vision. 2023 was a year for us to release new products and test in various markets, setting us up for more depth and more breadth in 2024 and 2025. We are clearly executing on our strategy and look forward to sharing more updates throughout 2024. And with that, operator, we'll open the line for questions.

Thank you. Our first question today comes from John Campbell with Stephens. Please proceed.

Hey, guys. Good afternoon.

Good afternoon, John.

Regarding share gains, I wanted to start by discussing that topic. You are clearly focused on total real estate revenue, which provides a comparison against the industry. While you aren't explicitly reporting on premier agents, can we delve into that for now? My question is about the growth initiatives you have implemented. Additionally, concerning the flex pricing changes, do you anticipate a similar or even greater level of outperformance compared to the national market for the remainder of the year and possibly into the next year?

Hey, John. This is Jeremy Wacksman. We believe that the share gains reported this quarter in our two most developed markets over the past two years illustrate the direction we expect as we introduce more enhanced markets. These were the markets where we had strong year-over-year data and sufficient time for the cohorts to mature. Additionally, as I mentioned earlier, the nine markets we’re focusing on are demonstrating connection growth that outpaces the industry, which is a positive sign for share gains. This is why we are so confident in expanding from nine markets to forty by the end of 2024. As we deepen our partnerships to provide services to more customers in those areas, you can expect to see similar share gains from the customers and partners we are working with in those markets.

Okay, that's helpful. And then one quick follow-up. I'm sure you guys are bracing for this question, but on the CoStar media blitz, if you will, obviously, spinning, I guess we'll find out soon how much this year, but it seems like a lot. I think the burning question with a lot of investors is, will you guys respond, will this be something that requires you guys maybe up your brand investment spend, maybe if you could talk to that. I know you guys have called out the 80% organic traffic which is pretty important number but maybe if you could just shed some light on that.

Okay, John. This is Rich. To start, I want to emphasize that we are not currently experiencing any impact from this spending or the preparations leading up to it. As Jeremy Hofmann mentioned, our numbers are strong, and our progress towards our growth goals is solid. We're excited about our plan to expand our Super App into new markets, as Jeremy Wacksman discussed. All of this leads to Jeremy Hofmann providing soft guidance for 2024, predicting revenue growth in double digits while considering the competitive landscape. Regarding your specific question about potential changes, we view our marketing strategy quite broadly. Our foundation is rooted in technology and product development, with the customer at the center of our focus. We believe the key aspect of our marketing is the product itself. This approach has historically benefited us, positioning us as leaders in traffic, brand recognition, and engagement, and it has set us apart from competitors in the industry. We're striving to digitize the entire transaction process and re-platform the industry, integrating everything into the Zillow housing Super App. This is a challenging task, but we believe it will ensure our long-term success.

Makes a lot of sense. Thanks for the time, guys.

Your next question comes from Brad Erickson with RBC. Please proceed.

Thanks. First, regarding real-time touring in the markets where you've had a chance to see its effectiveness, I appreciated the chart in the presentation. What would you identify as the main friction points and the timeframe from when an agent starts receiving those new higher quality leads to when they decide to increase their spending? I also have a follow-up question.

Yes, Brad. On real-time touring, it is a mix of eligibility with both the consumer and the agent and the listing, it's like all three things. And so, we're really pleased with how real-time touring has gone and I think you heard earlier, we talked about getting from 10% of connections, currently to 20% by the end of 2024 and that's through a mix of going broader into more markets but also going deeper in those markets with both customers and agents. And then on your specific question on the sort of agent partnering with the buyer, what we tend to find as we talked about this enhanced market strategy is when we start to work with these enhanced partners on the whole basket of services real-time touring, Zillow Home Loans, seller services, increasingly Follow Up Boss, this becomes a much broader conversation around how to help them grow and operate their business better, in service of our customers. And so it is one part of the overall playbook we work with. Of course, it's a really important one, because these are incredibly high value, high intent customers who want to go see a house right now. And so, the feedback on the reception continues to be really positive when they get a chance to work with those buyers. But if you remember, we've talked a lot about how this is a new workflow for those agents as well. And many times they have to build new muscle with their teams, with their team leads, with their individual agents to help service those customers to really provide that delightful experience that we're creating for the customers. So when it works, it's really magical because the consumer gets what they want different from anything else in the industry. But to your point, it really is a new training mechanism which is why we've been so methodical in testing and iterating on it in the markets we've been in.

Got it. And then maybe just a quick follow-up on Follow Up Boss. Can you just give a little more detail there, just kind of on the unlock of the synergies you guys are going after within the PA business. And then just any integration costs for investment embedded there. Any color on that would be great. Thanks.

Yes, maybe I'll start on the strategy, and Jeremy, you can hit cost. This the strategy for Follow Up Boss, as Jeremy Hofmann said, it's really twofold, right? One, it helps make what is already one of the best CRMs in the industry even better, right, giving them oxygen and the ability to accelerate the roadmap of features and services that they have. And then secondly, it's to help introduce Follow Up Boss to more customers. So it's already the most popular CRM with our premier agents. But many of our premier agents don't yet use it, and obviously many agents industry-wide don't yet use it. So helping them grow and attract more agent customers is the second part. When we do both of those things, that rising tide is going to lift all boats, it's going to lift the Zillow transaction boat. Right? Our agents, working with the Zillow customers are going to be able to perform better, be more responsive, satisfy the customer better and convert more, and you'll see that in conversion increases. So that's really the strategy; maybe I'll turn it over to you for costs.

Yes, it's Jeremy Hofmann. I want to emphasize what Jeremy Wacksman just mentioned. It's still early in the process. As I noted in our prepared remarks, we are experiencing the initial quarter of full costs associated with Follow Up Boss and its integration. At this time, I wouldn't say there is any external investment, but I am genuinely pleased with their product roadmap and the potential we have to help them accelerate as we incorporate them into our sales efforts.

Got it. Thanks.

Our next question today comes from Mark Mahaney with Evercore. Please proceed.

I have two questions. This outperformance you mentioned seems to be around 700 basis points compared to the residential market. Initially, you guided for 400 basis points, so could you explain why you've been able to outperform? You've been achieving this for some time, but it seems you exceeded your expectations this quarter. How should we think about your level of outperformance compared to the market as we head into 2024? Also, I want to ask about costs. If you plan to maintain fixed costs at $1.1 billion and have variable costs at $400 million, how long do you anticipate being able to sustain that? You've mentioned this for a while, but it appears you're starting to show some deleverage on the variable costs before gaining leverage. Will that framework continue to hold, allowing you to keep fixed costs at $1.1 billion and variable costs at $400 million while seeking leverage over time?

Yes, it's Jeremy Hofmann. Mark, I'll address your second question first. We're feeling very positive about our cost structure. We believe we can achieve leverage on our fixed cost base over time, and we are currently at the appropriate levels. While we expect it to grow slightly with inflation, we believe these levels are generally suitable, especially considering our targets for customer share gains by year-end 2025. We feel we have made solid investments in our fixed costs. Regarding the variable costs, you're correct that we will gain leverage over time. We see exciting growth opportunities in listings, showcase, and rentals in Zillow Home Loans, and we are hiring sales staff in preparation for that. It will take some time for them to reach full productivity, but we are optimistic about achieving leverage there as well as continuously seeking efficiencies across our entire cost structure. Overall, we feel very positive about that aspect. As for our performance, Q4 met our expectations, and we are really pleased with our overall outperformance throughout 2023. We're not overly concerned with quarterly fluctuations, especially given the fluid nature of the macro environment. However, 2023 was a great year for us with accelerated revenue growth from Q1 to Q4. Our total company revenue outperformed the housing sector by 1,600 basis points, and we've experienced six consecutive quarters of outperformance in the residential segment as well. We anticipate continued success in 2024, with double-digit growth against a relatively stable housing market. Furthermore, we expect to see an acceleration throughout 2024, driven by our growth initiatives as we enter new markets and deepen our presence in existing ones. Looking at our enhanced markets, we plan to expand from 9 to 40, covering 20% of all connections. We expect real-time touring to increase from 10% to 20% of overall connections. Showcase is beginning to sell widely as of January, and we forecast that revenue will increase over the course of the year. Rentals are performing exceptionally well, and we're anticipating over 30% growth again in Q1. Additionally, Zillow Home Loans is set to grow in line with market expansion and increased demand for mortgage leads. Overall, we feel very well-positioned for 2024.

Thank you, Jeremy.

Your next question comes from Ryan McKeveny with Zelman Associates. Please proceed.

Hey, thanks a lot. Congrats on the progress. Curious if you can talk about listing showcase. I guess just reception to date, between what our premier agents and let's call it non-premier agents. And I asked because, within the slide deck and kind of the opportunity ahead of getting to 5% to 10% share of listings, it seems to suggest plenty of opportunity both for premier agents and kind of cross-selling the listing showcase product. And non-premier agents, so anything you can share with us to date, obviously knowing it's small at this point in time, but yeah, how that's going so far and how you think about that balance and opportunity between kind of cross-selling in the PA side of things versus new agents that don't currently partner with Zillow.

Yes, happy to share. You're right, it is early in the listing showcase phase since we just launched it in Q3 and are now expanding nationally. However, we are already seeing strong early signals. The response from agents has been very positive, indicating they see it as a valuable tool for marketing themselves and gaining more listings, as well as promoting listings. This, in turn, enhances the buyer experience, leading to increased engagement through page views, saves, and shares, as illustrated by the data we've provided. We are experiencing success with both premier and non-premier agents in the markets we've entered, and as we expand further, we expect this trend to continue. This gives us optimism about our intermediate-term goal of increasing our share from less than 1% of listings today to 5% to 10% of total active listings in the future, with potential for further growth beyond that. Scaling this business involves addressing significant operational complexities, which our team has been diligently managing, as Jeremy Hofmann mentioned. This has necessitated substantial media investments and careful partner operations, and now we are reaping the rewards as we expand nationwide. While it is still early, we will provide updates as we gather insights from BMO markets with a diverse group of partners. We are very encouraged by the response, the progress we are making, and the opportunity to collaborate with excellent agents, including both established premier agents and those new to working with us. This is an exciting opportunity for the listing showcase, and we are witnessing positive developments.

Thanks. That's helpful. And then one on Zillow Home Loans. So the purchase volume growth kind of speaks for itself. But I think it implies market share wise in the purchase origination business close to a doubling in just the last two quarters of loan. So obviously, good progress there. I guess I'm curious on the comments you made about going from 23% to 53% of customers they are also working with Premier Agent. Is that a combination of the two kinds of connection approaches as you've talked about in the past being property first and financing first, is that kind of a mix of both Premier Agent coming back to you and you going to Premier Agent? And just any commentary on whether it's one of those approaches. Meaningfully driving things or if it's a combination of both, moving in the right direction. Thank you.

Yes, it's a good question. The short answer to your last question is, it's both. And I think the reason why it's both, it's important to remember sort of why mortgage for the customer and for Zillow, right? And yes, we all know 80% of homes are financed with a mortgage, but it is more importantly that 40% of homebuyers start their journey shopping for a mortgage. And so that's why we talk so much about most consumers either want to go see the house and book a tour ideally with real-time touring or they want to figure out what they can afford which Zillow Home Loans can help them with. Ultimately, they need to go through both those experiences, and whichever door they start with, they need to use a great agent and they need to get a mortgage to get the house done. And so it really is a contribution of both those things that's driving that 23% to 53%. And that's why we're so excited about the opportunity to grow and deliver that integration to more customers in more of these enhanced markets as we scale this recipe. And that really does speak to the strong customer acquisition cost advantage, we think we have at Zillow. The majority of those customers, as Rich talked about, are already on Zillow and many of them are already going through one of those doors. And so, helping them understand and get what they need to use more of our services to get the house transaction done, right? That's a great business for us. But ultimately, as Rich said, it's what the consumer wants. It's what they need to be able to buy the house. So that's why we're so excited about mortgage. Yes, you're right, we're seeing over 100% year-over-year growth in purchase mortgage origination volume, and we expect growth to continue in 2024 as we continue to scale the business.

Thanks a lot.

Your next question comes from Tom Champion with Piper Sandler. Please proceed.

Hi, good afternoon. Rentals growth is really strong. And it sounds like multifamily is driving a lot of that. The business has been around for a while. I'm just curious kind of the timing and why now that it's become kind of so large and picked up so much momentum. And just curious if there's any comment on the single room initiatives. I think that was announced recently. Thanks.

Yes, Tom. I'll address both of your questions. The reason for the current momentum is that our rental strategy has been effective for our consumers and partners. We have grown to have the largest audience in our category, attracting the most renters to Zillow Group Properties. With the most listings and a comprehensive inventory, we are solving one of the key challenges renters face. This audience growth and engagement have really contributed to our multifamily growth as we begin collaborating with more multifamily partners to feature their inventory on our platforms. This positions us well for continued growth in rentals moving forward. The significant growth we experienced throughout 2023 is expected to persist into 2024, as Jeremy Hofmann mentioned. Regarding the room for rent initiative, we recently launched a new listing type that allows users to post rooms for rent, which is becoming increasingly common in various rental markets. We are excited about the early results from this initiative, reinforcing our strategy of offering a range of services and experiences for all types of renters. This approach assists renters in navigating their options and benefits our partners, whether they are managing large buildings or individual homes.

Our last question today comes from Ron Josey with Citigroup. Please proceed.

Thank you for taking my question. I have a quick follow-up regarding the rentals. As you think about future growth, is it driven by the increase in multifamily properties, which stands at 37,000, or is it more about the combination of single-family and multifamily offerings? Given your audience, I assume it’s a mix, but I would appreciate any insights on those two areas. Also, Jeremy, you mentioned staffing and headcount in sales, specifically regarding rentals, listing showcase, and Zillow Home Loans. Could you elaborate on the maturity of the current sales team and where you are focusing your investments in these newer areas like rentals, showcase, and Zillow Home Loans? Thank you.

Yes, I'll begin, and you can address staffing later. The short answer is that our growth will come from a combination of sources. Currently, we are seeing significant revenue growth in the multifamily sector, but in alignment with our strategy to have the most comprehensive listings, we are also experiencing growth in smaller inventory and rental management services that our landlords and property managers utilize. We are enthusiastic about both areas of supply, as they contribute to audience growth, engagement, and the overall business. However, in the short term, the multifamily sector is accelerating more quickly. In Q4, this trend was apparent, as it was in Q3, and you can expect this to continue into early next year. As for the various advancements, I’m not sure if you want to continue.

Yes, I can hit that. I mean, I think it's natural at this point, just given the evidence of traction that we have that we should be accelerating growth, and it's across all three of those. They all are doing quite well, but have a lot of opportunity ahead of them and we want to make sure we are well-positioned from a sales staffing perspective to capture that growth.

Thank you for your questions. This will conclude our Q&A session. So I would like to pass the conference over to Rich for any further remarks.

Thanks, Siarah. And thanks everybody for your questions. You've heard today about our tremendous progress that we've made over the past two years on our journey to transform and re-platform this largest of industries. As we look ahead we are pressing down on the accelerator, increasing the breadth and depth of our products and services across more markets as we tap into this $30 billion TAM that's already accessible, already raising their hands for help, already inside our store. We'd like to thank you again for being on this journey with us and we look forward to sharing more progress with you in the months ahead. All right. Have a nice evening.

That will conclude today's conference call. Thank you all for your participation, you may now disconnect your line.