ZILLOW GROUP INC
For the period ended Sep 30, 2024. Filed Nov 6, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 6, 2024
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Share-Based Awards
Note 10. Share-Based Awards
In addition to the option awards and restricted stock units typically granted under the 2020 Plan which vest quarterly over four years, during the first quarter of 2023, the Compensation Committee of the Board approved option and restricted stock unit awards granted under the 2020 Plan in connection with the 2022 annual review cycle that vest quarterly over three years. The exercisability terms of these equity awards are otherwise consistent with the terms of the option awards and restricted stock units typically granted under the 2020 Plan. For additional information regarding our share-based awards, see Note 14 in the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Option Awards
The following table summarizes option award activity for the nine months ended September 30, 2024:
| Numberof SharesSubject toExistingOptions (in thousands) | Weighted-AverageExercisePrice PerShare | Weighted-AverageRemainingContractualLife (in years) | AggregateIntrinsicValue(in millions) | |
|---|---|---|---|---|
| Outstanding at January 1, 2024 | 32,524 | $44.18 | 6.9 | $495 |
| Granted | 3,311 | 55.16 | ||
| Exercised | (2,517) | 38.11 | ||
| Forfeited or canceled | (553) | 44.24 | ||
| Outstanding at September 30, 2024 | 32,765 | 45.75 | 6.4 | 639 |
| Vested and exercisable at September 30, 2024 | 22,601 | 45.06 | 5.5 | 465 |
The following assumptions were used to determine the fair value of option awards granted for the periods presented:
| Three Months EndedSeptember 30, | Nine Months EndedSeptember 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| Expected volatility | 55% | 62% | 55% - 61% | 55% - 62% |
| Risk-free interest rate | 3.74% | 4.34% | 3.74% - 4.50% | 3.75% - 4.34% |
| Weighted-average expected life | 5.5 years | 5.3 years | 5.5 - 6.8 years | 5.3 - 6.5 years |
| Weighted-average fair value of options granted | $30.96 | $27.26 | $31.80 | $24.06 |
As of September 30, 2024, there was a total of $270 million in unrecognized compensation cost related to unvested option awards.
Restricted Stock Units
The following table summarizes activity for restricted stock units for the nine months ended September 30, 2024:
| RestrictedStock Units (in thousands) | Weighted-Average Grant Date Fair Value | |
|---|---|---|
| Unvested outstanding at January 1, 2024 | 12,038 | $45.42 |
| Granted | 6,868 | 55.18 |
| Vested | (4,967) | 47.47 |
| Forfeited | (878) | 47.87 |
| Unvested outstanding at September 30, 2024 | 13,061 | 49.61 |
As of September 30, 2024, there was a total of $603 million in unrecognized compensation cost related to unvested restricted stock units.
Share-Based Compensation Expense
The following table presents the effects of share-based compensation expense in our condensed consolidated statements of operations during the periods presented (in millions):
| Three Months EndedSeptember 30, | Nine Months EndedSeptember 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| Cost of revenue | $3 | $4 | $11 | $12 |
| Sales and marketing | 19 | 18 | 57 | 53 |
| Technology and development | 40 | 42 | 124 | 123 |
| General and administrative | 46 | 45 | 137 | 154 |
| Total share-based compensation | $108 | $109 | $329 | $342 |
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