{
  "docId": "019dd923-622c-750b-8b99-74af5c9e9edb",
  "docSlug": "de028a1085e6",
  "documentTitle": "Zillow Group, Inc. (Z)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2024-03-05 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 79,
  "pageCount": 103,
  "prevPage": 78,
  "nextPage": 80,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "dense",
  "nDataPoints": 0,
  "notes": "The slide uses highlighting and underlining to draw attention to specific contractual language changes.",
  "elementsJson": [
    "headline_text",
    "callout_box",
    "paragraph",
    "footnote"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b99-74af5c9e9edb/79",
  "deckHref": "/decks/019dd923-622c-750b-8b99-74af5c9e9edb",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b99-74af5c9e9edb.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b99-74af5c9e9edb#slide-79",
  "components": [
    {
      "bbox": {
        "h": 0.09,
        "w": 0.96,
        "x": 0.02,
        "y": 0.17
      },
      "kind": "callout",
      "text": "Zillow’s language on Flex revenue recognition shows the Company can recognize revenue once Flex leads are sent to agents, despite agents having “generally” two years to close a deal. This could create a scenario where Zillow aggressively pushes out leads to agents in the Flex program, allowing the Company to recognize revenue that is unlikely to come to fruition.",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "77e0b06c-98b3-41d8-9681-ac9a3d0bd84f",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.8,
        "x": 0.1,
        "y": 0.8
      },
      "kind": "callout",
      "text": "Zillow changed the language in its recent 10-K from closed within two years to generally within two years. Does this mean Zillow can pre-book more revenue from the extended timeline?",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e763b39b-38e8-4e0c-b7ce-1a48232dbe7c",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.35,
        "w": 0.96,
        "x": 0.02,
        "y": 0.35
      },
      "kind": "paragraph",
      "text": "“With the Flex model, Premier Agent partners are provided with validated leads at no initial cost and pay a performance advertising fee only when a real estate transaction is closed with one of the leads, generally within two years. With this pricing model, the transaction price represents variable consideration, as the amount to which we expect to be entitled varies based on the number of validated leads that convert into real estate transactions and the value of those transactions. We estimate variable consideration and record revenue as performance obligations, or validated leads, are transferred. We do not believe that a significant reversal in the amount of cumulative revenue recognized will occur once the uncertainty related to the number of transactions closed is subsequently resolved. We record a contract asset for our estimate of the consideration to which we will be entitled when the right to the consideration is conditional. When the right to consideration becomes unconditional, upon the close of a real estate transaction, we reclassify amounts to accounts receivable.”",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "51934737-9665-436f-84fa-dc5b27a22be8",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "With the Flex model, Premier Agent partners are provided with validated leads at no initial cost and pay a performance advertising fee only when a real estate transaction is closed with one of the leads, generally within two years. With this pricing model, the transaction price represents variable consideration, as the amount to which we expect to be entitled varies based on the number of validated leads that convert into real estate transactions and the value of those transactions. We estimate variable consideration and record revenue as performance obligations, or validated leads, are transferred. We do not believe that a significant reversal in the amount of cumulative revenue recognized will occur once the uncertainty related to the number of transactions closed is subsequently resolved. We record a contract asset for our estimate of the consideration to which we will be entitled when the right to the consideration is conditional. When the right to consideration becomes unconditional, upon the close of a real estate transaction, we reclassify amounts to accounts receivable. — Zillow Group 2023 10-K",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd953-536f-7579-baa8-7ba892bf3700",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.3,
        "x": 0.02,
        "y": 0.75
      },
      "kind": "source-note",
      "text": "Note: Underlined items recently added in latest 10-K",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "79213c09-4106-4058-968b-fdc74ef5bf2b",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.65,
        "x": 0.31,
        "y": 0.03
      },
      "kind": "title",
      "text": "Flex Revenue Recognition Policy Gives Zillow Significant Leeway",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "55049c80-fd3a-49f1-9084-0017f60827ee",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.96,
        "x": 0.02,
        "y": 0.28
      },
      "kind": "title",
      "text": "2023 10-K Flex Program Revenue Recognition Language",
      "attrs": null,
      "subkind": "subtitle",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e5277b34-c17a-45e8-be05-533e8ce49155",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [
    {
      "name": "Scenario planning",
      "slug": "scenario-planning",
      "agent": null,
      "layer": "block",
      "matchId": "2ad89738-9db4-480a-8b10-ebfb3e3b2a50",
      "evidence": "keyword-coverage: scenario, uncertainty",
      "confidence": 0.2
    },
    {
      "name": "Authority citation",
      "slug": "authority-citation",
      "agent": null,
      "layer": "slide",
      "matchId": "bef7ff30-41e9-40da-8c21-29682c0deaa2",
      "evidence": "The slide cites a source (Zillow's 10-K) to support its claims about Zillow's revenue recognition policies.",
      "confidence": 0.6
    }
  ],
  "frameworks": [
    {
      "name": "ceo-quote-contradiction",
      "slug": null,
      "matchId": "1629fb93-bc86-45db-a188-1419fc7f3dea",
      "evidence": "Contrasts official 10-K language with analyst interpretation of aggressive revenue recognition.",
      "confidence": 0.8
    }
  ],
  "arcBeats": [],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}