Select Historical Segment Data
The following table sets forth historical revenue, net loss, income (loss) before income taxes, and Adjusted EBITDA assuming we had three reportable segments for each of the periods presented (in thousands, unaudited):
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Year Ended December 31, 2018 |
| | March 31, 2018 | | June 30, 2018 | | September 30, 2018 | | December 31, 2018 | |
| Revenue: | | | | | | | | | |
| IMT Segment: | | | | | | | | | |
| Premier Agent | $ | 213,732 |
| | $ | 230,885 |
| | $ | 232,703 |
| | $ | 221,012 |
| | $ | 898,332 |
|
| Rentals | 29,063 |
| | 33,288 |
| | 37,319 |
| | 34,917 |
| | 134,587 |
|
| Other | 38,061 |
| | 41,768 |
| | 43,616 |
| | 44,779 |
| | 168,224 |
|
| Total IMT segment revenue | 280,856 |
| | 305,941 |
| | 313,638 |
| | 300,708 |
| | 1,201,143 |
|
| Homes segment | — |
| | — |
| | 11,018 |
| | 41,347 |
| | 52,365 |
|
| Mortgages segment | 19,023 |
| | 19,305 |
| | 18,438 |
| | 23,280 |
| | 80,046 |
|
| Total revenue | $ | 299,879 |
| | $ | 325,246 |
| | $ | 343,094 |
| | $ | 365,335 |
| | $ | 1,333,554 |
|
| | | | | | | | | | |
| Net loss | $ | (18,591 | ) | | $ | (3,093 | ) | | $ | (492 | ) | | $ | (97,682 | ) | | $ | (119,858 | ) |
| Income (loss) before income taxes: | | | | | | | | | |
| IMT segment | $ | (6,616 | ) | | $ | 110 |
| | $ | 6,322 |
| | $ | (57,454 | ) | | $ | (57,638 | ) |
| Homes segment | (4,390 | ) | | (10,061 | ) | | (16,428 | ) | | (28,812 | ) | | (59,691 | ) |
| Mortgages segment | (358 | ) | | 356 |
| | (623 | ) | | (13,086 | ) | | (13,711 | ) |
| Adjusted EBITDA*: | | | | | | | | | |
| IMT segment | $ | 46,683 |
| | $ | 59,718 |
| | $ | 75,363 |
| | $ | 58,261 |
| | $ | 240,025 |
|
| Homes segment | (3,513 | ) | | (8,352 | ) | | (13,409 | ) | | (23,186 | ) | | (48,460 | ) |
| Mortgages segment | 3,140 |
| | 4,634 |
| | 4,211 |
| | (2,718 | ) | | 9,267 |
|
| Total Adjusted EBITDA | $ | 46,310 |
| | $ | 56,000 |
| | $ | 66,165 |
| | $ | 32,357 |
| | $ | 200,832 |
|
| * Adjusted EBITDA is a non-GAAP financial measure; it is not calculated or presented in accordance with U.S. generally accepted accounting principles, or GAAP. See below under “Use of Non-GAAP Financial Measures” for more information regarding our presentation of Adjusted EBITDA and for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, which is net loss on a consolidated basis and income (loss) before income taxes for each segment, for each of the periods presented. |
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding our financial results, this Exhibit 99.1 includes references to Adjusted EBITDA on both a consolidated basis and for each segment, which are non-GAAP financial measures. We have provided a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, which is net loss on a consolidated basis and income (loss) before income taxes for each segment, within this Exhibit 99.1.
Adjusted EBITDA is a key metric used by our management and board of directors to measure operating performance and trends and to prepare and approve our annual budget. The exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis.
Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
| |
| ▪ | Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; |
| |
| ▪ | Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; |
| |
| ▪ | Adjusted EBITDA does not consider the potentially dilutive impact of share-based compensation; |
| |
| ▪ | Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; |
| |
| ▪ | Adjusted EBITDA does not reflect impairment costs; |
| |
| ▪ | Adjusted EBITDA does not reflect acquisition-related costs; |
| |
| ▪ | Adjusted EBITDA does not reflect interest expense or other income; |
| |
| ▪ | Adjusted EBITDA does not reflect income taxes; and |
| |
| ▪ | Other companies, including companies in our own industry, may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. |
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net loss and income (loss) before income taxes and our other GAAP results.
Adjusted EBITDA
The following tables set forth a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, which is net loss on a consolidated basis and income (loss) before income taxes for each segment, for each of the periods presented (in thousands, unaudited):
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
March 31, 2018 |
| | IMT | | Homes | | Mortgages | | Corporate Items (2) | | Consolidated |
| Reconciliation of Adjusted EBITDA to Net Loss and Loss Before Income Taxes: | | | | | | | | | |
| Net loss (1) | N/A |
| | N/A |
| | N/A |
| | N/A |
| | $ | (18,591 | ) |
| Income tax expense (1) | N/A |
| | N/A |
| | N/A |
| | N/A |
| | 2,600 |
|
| Loss before income taxes | $ | (6,616 | ) | | $ | (4,390 | ) | | $ | (358 | ) | | $ | (4,627 | ) | | $ | (15,991 | ) |
| Other income | — |
| | — |
| | — |
| | (2,446 | ) | | (2,446 | ) |
| Depreciation and amortization expense | 25,465 |
| | 59 |
| | 1,382 |
| | — |
| | 26,906 |
|
| Share-based compensation expense | 27,807 |
| | 818 |
| | 2,116 |
| | — |
| | 30,741 |
|
| Acquisition-related costs | 27 |
| | — |
| | — |
| | — |
| | 27 |
|
| Interest expense | — |
| | — |
| | — |
| | 7,073 |
| | 7,073 |
|
| Adjusted EBITDA | $ | 46,683 |
| | $ | (3,513 | ) | | $ | 3,140 |
| | $ | — |
| | $ | 46,310 |
|
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, 2018 |
| | IMT | | Homes | | Mortgages | | Corporate Items (2) | | Consolidated |
| Reconciliation of Adjusted EBITDA to Net Loss and Income (Loss) Before Income Taxes: | | | | | | | | | |
| Net loss (1) | N/A |
| | N/A |
| | N/A |
| | N/A |
| | $ | (3,093 | ) |
| Income tax benefit (1) | N/A |
| | N/A |
| | N/A |
| | N/A |
| | (10,600 | ) |
| Income (loss) before income taxes | $ | 110 |
| | $ | (10,061 | ) | | $ | 356 |
| | $ | (4,098 | ) | | $ | (13,693 | ) |
| Other income | — |
| | — |
| | — |
| | (3,089 | ) | | (3,089 | ) |
| Depreciation and amortization expense | 24,650 |
| | 181 |
| | 1,189 |
| | — |
| | 26,020 |
|
| Share-based compensation expense | 34,958 |
| | 1,528 |
| | 2,457 |
| | — |
| | 38,943 |
|
| Acquisition-related costs | — |
| | — |
| | 632 |
| | — |
| | 632 |
|
| Interest expense | — |
| | — |
| | — |
| | 7,187 |
| | 7,187 |
|
| Adjusted EBITDA | $ | 59,718 |
| | $ | (8,352 | ) | | $ | 4,634 |
| | $ | — |
| | $ | 56,000 |
|
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
September 30, 2018 |
| | IMT | | Homes | | Mortgages | | Corporate Items (2) | | Consolidated |
| Reconciliation of Adjusted EBITDA to Net Loss and Income (Loss) Before Income Taxes: | | | | | | | | | |
| Net loss (1) | N/A |
| | N/A |
| | N/A |
| | N/A |
| | $ | (492 | ) |
| Income tax benefit (1) | N/A |
| | N/A |
| | N/A |
| | N/A |
| | (14,700 | ) |
| Income (loss) before income taxes | $ | 6,322 |
| | $ | (16,428 | ) | | $ | (623 | ) | | $ | (4,463 | ) | | $ | (15,192 | ) |
| Other income | — |
| | — |
| | — |
| | (7,773 | ) | | (7,773 | ) |
| Depreciation and amortization expense | 22,053 |
| | 368 |
| | 954 |
| | — |
| | 23,375 |
|
| Share-based compensation expense | 36,988 |
| | 2,219 |
| | 2,475 |
| | — |
| | 41,682 |
|
| Impairment costs | 10,000 |
| | — |
| | — |
| | — |
| | 10,000 |
|
| Acquisition-related costs | — |
| | — |
| | 1,405 |
| | — |
| | 1,405 |
|
| Interest expense | — |
| | 432 |
| | — |
| | 12,236 |
| | 12,668 |
|
| Adjusted EBITDA | $ | 75,363 |
| | $ | (13,409 | ) | | $ | 4,211 |
| | $ | — |
| | $ | 66,165 |
|
|
| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
December 31, 2018 |
| | IMT | | Homes | | Mortgages | | Corporate Items (2) | | Consolidated |
| Reconciliation of Adjusted EBITDA to Net Loss and Loss Before Income Taxes: | | | | | | | | | |
| Net loss (1) | N/A |
| | N/A |
| | N/A |
| | N/A |
| | $ | (97,682 | ) |
| Income tax benefit (1) | N/A |
| | N/A |
| | N/A |
| | N/A |
| | (8,402 | ) |
| Loss before income taxes | $ | (57,454 | ) | | $ | (28,812 | ) | | $ | (13,086 | ) | | $ | (6,732 | ) | | $ | (106,084 | ) |
| Other income | — |
| | — |
| | (244 | ) | | (5,718 | ) | | (5,962 | ) |
| Depreciation and amortization expense | 19,064 |
| | 715 |
| | 3,311 |
| | — |
| | 23,090 |
|
| Share-based compensation expense | 31,651 |
| | 3,166 |
| | 2,901 |
| | — |
| | 37,718 |
|
| Impairment costs | 65,000 |
| | — |
| | 4,000 |
| | — |
| | 69,000 |
|
| Acquisition-related costs | — |
| | — |
| | 268 |
| | — |
| | 268 |
|
| Interest expense | — |
| | 1,745 |
| | 132 |
| | 12,450 |
| | 14,327 |
|
| Adjusted EBITDA | $ | 58,261 |
| | $ | (23,186 | ) | | $ | (2,718 | ) | | $ | — |
| | $ | 32,357 |
|
|
| | | | | | | | | | | | | | | | | | | |
| | Year Ended
December 31, 2018 |
| | IMT | | Homes | | Mortgages | | Corporate Items (2) | | Consolidated |
| Reconciliation of Adjusted EBITDA to Net Loss and Loss Before Income Taxes: | | | | | | | | | |
| Net loss (1) | N/A |
| | N/A |
| | N/A |
| | N/A |
| | $ | (119,858 | ) |
| Income tax benefit (1) | N/A |
| | N/A |
| | N/A |
| | N/A |
| | (31,102 | ) |
| Loss before income taxes | $ | (57,638 | ) | | $ | (59,691 | ) | | $ | (13,711 | ) | | $ | (19,920 | ) | | $ | (150,960 | ) |
| Other income | — |
| | — |
| | (244 | ) | | (19,026 | ) | | (19,270 | ) |
| Depreciation and amortization expense | 91,232 |
| | 1,323 |
| | 6,836 |
| | — |
| | 99,391 |
|
| Share-based compensation expense | 131,404 |
| | 7,731 |
| | 9,949 |
| | — |
| | 149,084 |
|
| Impairment costs | 75,000 |
| | — |
| | 4,000 |
| | — |
| | 79,000 |
|
| Acquisition-related costs | 27 |
| | — |
| | 2,305 |
| | — |
| | 2,332 |
|
| Interest expense | — |
| | 2,177 |
| | 132 |
| | 38,946 |
| | 41,255 |
|
| Adjusted EBITDA | $ | 240,025 |
| | $ | (48,460 | ) | | $ | 9,267 |
| | $ | — |
| | $ | 200,832 |
|
(1) We use income (loss) before income taxes as our profitability measure in making operating decisions and assessing the performance of our segments, therefore, net loss and income tax (benefit) expense are calculated and presented only on a consolidated basis within our financial statements.
(2) Certain corporate items are not directly attributable to any of our segments, including interest income earned on our short-term investments included in Other income and interest costs on our convertible senior notes included in interest expense.
