Benzinga | Dec 2, 2021 04:19PM EST

Zillow Group Announces Significant Progress On Zillow Offers Inventory Wind-Down And Authorizes $750M Buyback

Zillow Group, Inc. (NASDAQ:Z) today announced it has made significant progress in winding down Zillow Offers inventory and has 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. Zillow Group's Board of Directors has also authorized the repurchase of up to $750 million of its Class A common stock, Class C capital stock or a combination of both.

"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."

The company announced its plan to wind down Zillow Offers operations and provided outlook for Q4 on Nov. 2, 2021. With the current wind-down progress, the company is updating its Q4 2021 Homes segment revenue outlook to a range of $2.3 billion to $2.9 billion from $1.7 billion to $2.1 billion.

"We are pleased with the significant Zillow Offers inventory wind-down progress we've made in such a short time," said Zillow Group CFO Allen Parker. "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."

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 Sept. 30, 2021.

The share repurchase program, which has been approved by Zillow Group's Board of Directors, allows for repurchases of up to $750 million of the Company's 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.