I think you heard both me and Jeremy talk about in the prepared remarks. They’re starting to ship things for all advertising partners or, sorry, all agent partners. And we’re also starting to think about ways to help from your agent partners use Follow Up Boss to better convert their business, both their Zillow customers but their entire customers. So not too much more to share in terms of roadmap, but a whole lot of excited folks internally in both the Follow Up Boss team and our Zillow consumer and Zillow agent teams ideating and working together on how can we help our agents use technology to convert more customers and deliver better service. And we see a long road ahead for that initiative.
Ryan McKeveny: Got it. That’s very helpful. Thank you. And then just to follow up on the 2Q revenue guide in residential and the comment about some partners taking a wait-and-see approach. I guess if I step back, there’s the industry noise related to all the litigation and everything that’s going on. There’s noise on the competitive side of things, neither of which seem to be kind of the called-out headwinds. So maybe just help us think through that disaggregation of the headwinds in a bit more detail, like, is there any change on the margin coming from competitive/industry types of dynamics or at this point in time is the best estimation that it’s largely kind of macro-related factors at this point in time? Thank you.
Jeremy Hofmann: Yeah. Thanks, Ryan. It’s Jeremy Hofmann. I think we monitor our sales funnel really, really closely, and we have software that sits over top of it, monitoring agent calls and agent sentiment and just telling us what they’re hearing. And the situation right now is just — it’s a temporary rate shock. We’ve been through that before. It happened in the spring of 2022, and we know how to navigate through it. We want to be there for our partners during this time, and not necessarily going to push too hard as a result of that. And then with respect to NAR and competitive, we’re just not seeing that in any data that we see. We just don’t see impact from either of those. So it really has been much more macro-related and macro in a way that we think is navigable.
And again, coming back to the full year, we just continue to feel quite good about the ability to accelerate revenue over the course of the year and let us get through the quarter-to-quarter fluctuations, just given how fluid the macro is.
Ryan McKeveny: Okay. Great. Thank you very much.
Operator: We now turn to Chris Kuntarich with UBS. Your line is open. Please go ahead.
Chris Kuntarich: Great. Thanks for taking the question. Two-parter on the Rentals business. Just as we think about this billion-dollar-plus opportunity for Rentals, last quarter, you’d frame Listing Showcase as kind of a medium-term, $150 million to $300 million opportunity. Should we be thinking about this also as a medium-term, or is this more of a kind of a longer-term opportunity? And second part of the question would be, just as we think about the pace of Rentals’ growth in ’24, how should we be thinking about pricing as a lever you could potentially pull? Thanks.
Jeremy Hofmann: Yeah. I’ll take it. It’s Jeremy Hofmann. I think on the billion-dollar-plus opportunity, I think the key word there is sustainable. We think it’s a sustainable billion-dollar plus opportunity and we’ve built the business that way. Rich walked through a bunch of why we like the strategy so much, but we also like it as a multi-decade type opportunity. So with respect to timing, we’re not going to commit to anything there. We just believe there’s a lot more for us to do. And we think what we’re building is differentiated versus anybody else. And we have an opportunity to be the place where all renters come and all property managers come as well, whether that’s in the single-family or multifamily category. That’s what we think the opportunity is.
And it’s done under one brand, Zillow, right, that’s already known for housing. So that’s what we’re focused on. Just want to give you a sense for what we see over time. And then secondly, on 2024 for Rentals, the goal is really keep adding more and more properties and bringing more demand alongside. So we think of it as more of an effort that way than pushing on price. It’s really we just see a pretty substantial opportunity in front of us and we want to make sure we continue to add properties at the way that we have been and then also bringing the consumer demand to satisfy those properties. So the organic efforts that we have, the Realtor.com partnership, which went live today, and then this national marketing campaign, we’re quite excited about as well.
All in the vein of how do we make sure we build something really sustainable over time? And we think we’re on that path.
Chris Kuntarich: Got it. Thank you very much.
Operator: Our final question today comes from Dae Lee with JP Morgan. Your line is open. Please go ahead.
Dae K Lee: Great. Thanks for taking the questions. I have two. So back to the NAR settlement, I mean, is this something that your partners are anticipating having a meaningful disruption around the time of implementation or could this be more of a change that takes a while for you guys to see?
Jeremy Wacksman: This is Jeremy. I can hit that. I mean, I think, no, I think as Rich outlined earlier, we don’t see a ton of revolutionary change here. We see more evolutionary change that results in more educated and more transparent consumers, which we see as leading to higher quality, higher intent leads and connections for our partners. And I think we’re seeing that already start to play out in the early innings after all the news is cleared of how partners are processing connections and how they’re learning to work with those consumers. And as I talked about, just take our Touring pilot here as an example of leaning in on consumer education in a consumer friendly way to help them understand what they’re going to be dealing with.
And in the states that have been doing that, we’re seeing still fairly ubiquitous independent representation and higher conversion rates. So as folks like us and others roll out more buy-side agreements, again, back to our principles, we think a more educated consumer who can understand what they’re getting from their representation that they choose and understanding that the compensation is fair and negotiable and can be negotiated, that leads to a better conversation with professionals. And we think that leads to our professionals, which as Rich talked about are a small subset of the most productive agents winning more business. And so, we see that anecdotally today and we see that in some of the states that we’re further ahead on this today and we expect to see that continue as more folks rollout changes to deal with the evolution.
Dae K Lee: Got it. And as a follow-up, I don’t know if you addressed this, but like what’s driving the first-time homebuyer activity underperformance? I mean, is it just related to the mortgage rate hike or is there something else happening? And those are 2Q, I assume activities at these levels?
Jeremy Hofmann: Yeah. It’s Jeremy Hofmann, just to make sure I heard it. Yeah, I mean, really it is the rate shock that we felt. It’s less about the absolute interest rate level, it’s more the shock. And when rates spike by 50 basis points over a couple of week period, first-time homebuyers are the folks that feel that the most, and they’re underperforming pretty significantly. We don’t expect that to be forever, but it is a temporal thing. And as a result, it’s a bit of a headwind for us, but one that we think we can navigate through pretty seamlessly.
Dae K Lee: All right. Understand. Thank you.
Operator: This completes the allotted time for questions. I’ll now turn the call back over to Rich Barton for any closing remarks.
Richard Barton: All right. Thanks, everybody. Hey, look, it’s noisy out there and there is a lot of confusion and there’s a lot of distraction. And I’ll tell you, we’re calm. We’re driving forward. We’re putting up numbers. The product is getting better and better. And we have a long road ahead of us because of all of this incredible kind of pent-up potential transaction energy that lives inside of our wonderful marketplace. So you know, it’s noisy, but we’re feeling really good. Thanks for being on the road with us. We’ll talk to you soon.
Operator: This concludes today’s conference call. You may now disconnect.
