Core Insights - Zillow Group reported Q4 2025 adjusted EPS of 39 cents, missing the Zacks Consensus Estimate of 42 cents, but showing significant year-over-year growth [1][8] - Total revenues reached $654 million, exceeding the Zacks Consensus Estimate of $649.8 million, and reflecting an 18.1% year-over-year increase [1][2] Revenue Breakdown - For-sale revenues in Q4 increased by 11% to $475 million, with residential revenues growing 8% year over year to $418 million, supported by agent and software offerings [3] - Mortgage revenues surged 39% year over year to $57 million, driven by a 67% increase in purchase loan origination volume to $1.5 billion [3] - Rental revenues grew 44.8% year over year to $168 million, primarily due to a 63% increase in multifamily revenue [4] Cost and Expenses - Total select operating expenses and cost of revenues rose 7% year over year to $665 million, attributed to higher lead acquisition costs and legal expenses [5] - Adjusted EBITDA margin improved by 260 basis points to 23% of revenues, amounting to $149 million, due to effective cost management [4] Balance Sheet and Share Repurchase - Zillow ended Q4 2025 with $1.3 billion in cash and investments, a decrease from $1.4 billion in the previous quarter [6] - The company repurchased 3.4 million shares for $232 million during the fourth quarter [6] 2026 Outlook - For Q1 2026, Zillow anticipates total revenues between $700-710 million and adjusted EBITDA of $160 to $175 million [7] - For-sale revenues are expected to slightly exceed the 11% growth achieved in Q4 2025, with rental revenues projected to rise around 40% year over year [7][10] - Management forecasts mid-teens revenue growth and adjusted EBITDA margin expansion for 2026 [10]

Market Performance and User Engagement - Zillow's Zestimate feature had a median error rate of 1.8% for homes listed for sale and 7.2% for off-market homes in 2025[30]. - Zillow Rentals had 2.4 million average monthly active rental listings in 2025, a 44% increase compared to December 31, 2024[31]. - Zillow's Enhanced Market experience delivered over 40% increase in leads to agent partners by the end of 2025[31]. - The Zillow Group portfolio attracted 259 million unique users in July 2025 and approximately 9.6 billion visits throughout the year[33]. - Zillow Rentals ranked 1 in partner satisfaction for return on marketing investment in its category[34]. - Zillow Rentals has an average of 2.4 million monthly active rental listings, including 72,000 multifamily properties, and attracted 33 million unique visitors per month in 2025[36]. Financial Performance and Growth Potential - Zillow's total addressable market includes transaction fees from residential real estate transactions and rentals marketplace, indicating significant growth potential[35]. - The total addressable market (TAM) for the residential real estate industry is estimated at $202 billion, with significant contributions from transaction fees, mortgage origination revenue, and rental advertising spend[37]. - In 2025, approximately 4.8 million homes were sold in the U.S., with over $1.3 trillion in purchase mortgage origination volume[41]. - The company reported GAAP profitability in 2025, with revenue growth outpacing cost growth, positioning it for sustainable profitable growth[36]. - Residential revenue accounted for 66% of total revenue for the year ended December 31, 2025, while rentals revenue accounted for 24% of total revenue, representing 39% growth compared to the year ended December 31, 2024[81]. Operational Challenges and Risks - The business is impacted by low housing inventory, elevated mortgage interest rates, and inflationary conditions, which have affected demand for products and services[71]. - The company may face significant operating losses and may not be able to sustain or increase revenue growth or profitability over the long term[72]. - Changes in industry practices due to the NAR Settlement may alter how commissions are negotiated and could impact financial performance[75]. - The company relies on third-party services for critical business functions, and any disruption could lead to significant losses[70]. - The ability to attract and retain real estate partners is crucial, as spending reductions could adversely affect financial results[78]. - The company is subject to regulatory scrutiny and potential litigation, which could disrupt operations and harm reputation[72]. - Future changes in pricing or lead delivery methodologies may negatively impact revenue opportunities and partner spending[84]. - The company may not be able to maintain relationships with real estate listing providers, which could limit access to essential data[85]. - The business is exposed to risks related to economic conditions, including recessionary pressures and changes in consumer confidence[79]. Cybersecurity and Data Privacy - The company is subject to various cybersecurity threats, including ransomware attacks, which could disrupt operations and lead to significant losses[122]. - The company relies on various vendors for processing and storing sensitive data, which introduces cybersecurity risks and vulnerabilities, potentially harming business operations and financial condition[124]. - Security incidents could disrupt the company's ability to provide services, leading to unauthorized access or loss of sensitive data, which may adversely affect customer trust and engagement[125]. - The company faces challenges in proactively addressing evolving cybersecurity threats, which could result in undetected vulnerabilities being exploited[127]. - The company is subject to various data privacy obligations, including the Payment Card Industry Data Security Standard (PCI DSS), with potential penalties ranging from $5,000 to $100,000 per month for noncompliance[179]. - The company may be adversely affected if it fails to comply with data privacy laws, leading to significant fines, penalties, and reputational harm[182]. Strategic Initiatives and Future Opportunities - Zillow aims to explore additional opportunities in home insurance, home renovation services, moving services, and home appraisal services[38]. - The company has invested over 83,000 hours in employee training and development through its internal platforms in 2025[55]. - The company has acquired Enchant, LLC, d/b/a Follow Up Boss in December 2023, indicating ongoing strategic acquisitions to enhance its business[108]. - The company’s fraud detection processes may not fully prevent fraudulent activities, which could harm its reputation and business results[110]. - Continuous innovation in products and services is necessary to meet customer expectations; failure to do so may result in customer dissatisfaction and loss of market share[92]. Intellectual Property and Compliance - Zillow's intellectual property is critical to its success, and failure to protect it adequately could harm brand value and financial condition, especially regarding proprietary technologies like the Zestimate home valuation model[150]. - The company may face costly intellectual property disputes, which could require significant resources to defend and potentially harm business operations and financial results[155]. - Regulatory scrutiny of AI and automated underwriting practices may impact Zillow's ability to adapt its business and maintain compliance, affecting financial condition and operations[166]. - Zillow holds multiple real estate brokerage licenses and must comply with various local, state, and federal regulations to maintain these licenses, which could increase operational costs[167]. Financial Structure and Capital Management - As of December 31, 2025, the company had an accumulated deficit of $1.9 billion, indicating significant past operating losses[188]. - The company has a maximum borrowing capacity of $600 million from mortgage credit facilities as of December 31, 2025, and entered into a $500 million Revolving Credit Facility in January 2026, none of which has been drawn yet[192]. - The company may face increased costs in the future as it continues to invest in business development, including expansion of Zillow Home Loans, product and service development, and technology infrastructure[191]. - The company expects fluctuations in results of operations due to various factors, including seasonal variances in home sales and economic conditions[203]. - The company may issue additional equity or securities convertible into equity, which could have a dilutive effect on existing shareholders[215].

Core Insights - Zillow Group reported strong financial performance in Q4 and full-year fiscal 2025, achieving all stated financial targets and entering 2026 with momentum [4][3] Financial Performance - Q4 total revenue increased 18% year-over-year to $654 million, with EBITDA of $149 million and a margin of 23%, up 260 basis points from the previous year [3][7] - For the full year 2025, total revenue grew 16%, with EBITDA margins expanding by nearly 200 basis points year-over-year, and GAAP net income reported at $23 million [2][4] Segment Performance - The For Sale segment generated $475 million in Q4 revenue, up 11% year-over-year, with residential revenue at $418 million, up 8% [1][6] - Rentals revenue surged 45% year-over-year to $168 million in Q4, now comprising 26% of total revenue, with multifamily revenue increasing 63% [11][12] Growth Drivers - Growth in the For Sale segment was driven by agent offerings and software products, while Rentals benefited from a comprehensive marketplace strategy [1][12] - Mortgages revenue rose 39% year-over-year in Q4 to $57 million, with purchase loan origination volume growing 67% [7][6] Strategic Initiatives - Zillow is focusing on building "Enhanced Markets" to connect buyers, agents, and loan officers, with 44% of connections in Q4 coming from this initiative [8][12] - The company is also enhancing user engagement through tools like BuyAbility, which enrolled 3.6 million users [9][12] Outlook - For Q1 2026, Zillow guided total revenue of $700 million to $710 million, expecting mid-teens revenue growth for the full year, including approximately 30% growth in Rentals [5][20] - The company anticipates continued EBITDA margin expansion despite elevated legal expenses impacting margins in the near term [5][20]

Financial Data and Key Metrics Changes - In Q4 2025, total revenue increased by 18% year-over-year to $654 million, near the top end of the outlook range [24] - Full-year 2025 total revenue grew by 16%, consistent with the mid-teens growth outlook [30] - EBITDA for Q4 was $149 million, with a margin of 23%, up 260 basis points year-over-year [24] - Full-year 2025 EBITDA grew by 25% year-over-year, with a net income margin expansion of 990 basis points [30][32] Business Line Data and Key Metrics Changes - For Sale revenue grew by 11% year-over-year in Q4 to $475 million, with residential revenue up 8% and mortgages revenue up 39% [25][27] - Rentals revenue in Q4 was $168 million, accelerating to 45% year-over-year growth, driven by a 63% increase in multifamily revenue [28][29] - For Sale revenue for the full year reached $1.9 billion, up 9% from 2024, while Rentals revenue totaled $630 million, up 39% from 2024 [10][30] Market Data and Key Metrics Changes - Zillow's share of rental listings increased to 63% in 2025, up from 54% in 2024 [21] - Average monthly unique visitors for Zillow Rentals reached 31 million in Q4 [20] - The housing market grew by 3% in 2025, while Zillow's revenue outperformed the market by 1,300 basis points [30] Company Strategy and Development Direction - The company is focused on integrating and digitizing the real estate transaction process to improve consumer experiences and professional productivity [6][11] - Zillow Pro, a new offering, aims to help agents manage their entire business and improve lead conversion [71] - The strategy emphasizes building a comprehensive marketplace for rentals and modernizing the rental transaction process [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and does not expect legal challenges to materially impact financial performance [22][66] - The company anticipates continued growth in 2026, with mid-teens revenue growth expected and a focus on enhancing the rental business [36][38] - Management highlighted improvements in affordability in the housing market, which could drive broader recovery over time [39] Other Important Information - The company reported $23 million of GAAP net income for the full year, achieving full-year profitability [10] - Share-based compensation expense decreased by 13% year-over-year, contributing to net income growth [32][42] - The company repurchased $670 million of shares throughout 2025, returning $1.1 billion to shareholders [34][35] Q&A Session Summary Question: Can you elaborate on rental trends and opportunities? - Management indicated that the growth in rentals is due to a unique strategy focused on organizing various types of supply, including long-tail listings, which drives audience engagement and revenue growth [46][47] Question: How do you view the impact of recent industry consolidation? - Management does not expect any risk or impact from industry consolidation, as the majority of sellers and agents prefer broad exposure for their listings [55][56] Question: Is there any change in approach due to legal challenges? - Management confirmed that there are no expected changes to the business strategy due to ongoing legal challenges, maintaining confidence in their long-term approach [66][67] Question: What is the status of Zillow Pro and its impact on lead conversion? - Zillow Pro is currently in beta testing, with plans for nationwide expansion in the second half of the year, aimed at improving agent efficiency and conversion rates [71][72]

Financial Data and Key Metrics Changes - In Q4 2025, total revenue increased by 18% year-over-year, reaching $654 million, near the top end of the outlook range [24][35] - Full-year 2025 total revenue grew by 16%, consistent with the mid-teens growth outlook [30] - EBITDA for Q4 was $149 million, with a margin of 23%, up 260 basis points year-over-year [24][30] - The company reported $23 million of GAAP net income for the full year, achieving full-year profitability [10][24] Business Line Data and Key Metrics Changes - For Sale revenue grew by 11% year-over-year in Q4 to $475 million, with residential revenue up 8% and mortgages revenue up 39% [10][25] - Rentals revenue in Q4 was $168 million, up 45% year-over-year, driven by a 63% increase in multifamily revenue [10][27] - For Sale revenue for the full year reached $1.9 billion, up 9% from 2024 [10][11] Market Data and Key Metrics Changes - Zillow Rentals had an average of 2.5 million monthly active rental listings in Q4, with a market share increase to 63% from 54% in 2024 [19][20] - The company attracted 31 million average monthly unique visitors in Q4, reinforcing its position as the preferred platform for renters [20] Company Strategy and Development Direction - Zillow is focused on integrating and digitizing the real estate transaction process, enhancing customer experiences and improving productivity for real estate professionals [6][11] - The company aims to achieve a $1 billion incremental revenue target in For Sale, supported by continuous improvements in customer experiences and growth in Enhanced Markets [12][21] - Zillow Pro, a new offering for agents, is expected to enhance lead conversion and agent adoption of CRM tools [16][67] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and does not expect legal challenges to materially impact financial positions or long-term strategies [22][62] - The company anticipates continued growth across its business, with mid-teens revenue growth expected for 2026 and approximately 30% growth in rentals [35][37] - Management highlighted improvements in housing affordability as a positive indicator for future market recovery [38] Other Important Information - The company repurchased $670 million of shares throughout 2025, returning a total of $1.1 billion to shareholders [33][34] - Legal expenses were noted as a factor impacting EBITDA margins, with expectations of elevated legal costs in 2026 [36][70] Q&A Session Summary Question: Can you elaborate on rental trends and opportunities? - Management indicated that the growth in rentals is driven by a unique strategy focused on organizing various types of supply, leading to increased audience engagement and revenue growth [45][46] Question: How do you view the impact of recent industry consolidation? - Management does not expect any significant risk or impact from industry consolidation, as the majority of sellers and agents prefer broad exposure for listings [52][53] Question: Will legal challenges affect Zillow's business strategy? - Management confirmed that no meaningful changes to the business strategy are expected due to legal challenges, maintaining confidence in their approach [62][63] Question: What is the status of Zillow Pro and its impact on lead conversion? - Zillow Pro is currently in beta testing, with plans for nationwide expansion in the second half of the year, expected to enhance agent efficiency and conversion rates [66][67]

Financial Data and Key Metrics Changes - In Q4 2025, total revenue increased by 18% year-over-year to $654 million, near the top end of the outlook range [25] - Full-year 2025 total revenue grew by 16%, consistent with the mid-teens growth outlook [31] - EBITDA for Q4 was $149 million, with a margin of 23%, up 260 basis points year-over-year [25] - Full-year 2025 EBITDA grew by 25% year-over-year, with net income margin expanding by 990 basis points [31][33] Business Line Data and Key Metrics Changes - For Sale revenue grew by 11% year-over-year in Q4 to $475 million, with residential revenue up 8% and mortgages revenue up 39% [26][10] - Rentals revenue in Q4 was $168 million, growing 45% year-over-year, driven by a 63% increase in multifamily revenue [27][10] - For Sale revenue for the full year reached $1.9 billion, up 9% from 2024, while Rentals revenue for the full year was $630 million, up 39% [10][31] Market Data and Key Metrics Changes - Zillow's share of rental listings increased to 63% in 2025, up from 54% in 2024 [18] - Zillow Rentals attracted 31 million average monthly unique visitors in Q4, indicating strong audience engagement [19] - The housing market grew by 3% in 2025, with Zillow outperforming the market by 1,300 basis points [31] Company Strategy and Development Direction - The company is focused on integrating and digitizing the real estate transaction process, enhancing customer experiences and improving productivity for real estate professionals [7][9] - Zillow Pro, a new offering, aims to help agents manage their entire business and improve lead conversion [72] - The strategy emphasizes building a comprehensive marketplace for rentals and modernizing the rental transaction process [18][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and does not expect legal challenges to materially impact financial performance [22][66] - The company anticipates continued revenue growth in 2026, with mid-teens growth expected across the business [38] - Management noted improvements in housing affordability, which could lead to a broader market recovery over time [39] Other Important Information - The company reported $23 million of GAAP net income for the full year, achieving full-year profitability [10] - Share-based compensation expense decreased by 13% year-over-year, contributing to net income growth [33] - The company ended 2025 with $1.3 billion in cash and investments, and secured a $500 million revolving credit facility [35] Q&A Session Summary Question: Can you elaborate on rental trends and opportunities in multifamily? - Management indicated that the growth in rentals is due to their unique strategy of organizing various types of supply, which drives audience engagement and revenue growth [45][46] Question: How do you view the impact of recent industry consolidation on your business? - Management does not expect any risk or impact from industry consolidation, as the majority of sellers and agents prefer broad exposure [55][56] Question: Is there any change in approach to Zillow's business strategy due to legal challenges? - Management confirmed that there are no expected changes to the business strategy and remains confident in their positions [66] Question: What is the status of Zillow Pro and its impact on lead conversion? - Zillow Pro is currently in beta testing, with plans for nationwide expansion in the second half of the year, aimed at improving agent efficiency and conversion [71][72]

Core Insights - Zillow continued to outperform investor expectations in the fourth quarter despite facing various court cases throughout the year [1] Company Performance - The company managed to exceed investor expectations in the fourth quarter, indicating strong operational performance [1]

The home-listing site posted a quarterly profit of $3 million, compared with a loss of $52 million a year earlier. ...

Reported Consolidated Results ZILLOW GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in millions, unaudited) | | | | December 31, | | | --- | --- | --- | --- | --- | | | | 2025 | | 2024 | | Assets | | | | | | Current assets: | | | | | | Cash and cash equivalents | $ | 768 | $ | 1,082 | | Short-term investments | | 527 | | 776 | | Accounts receivable, net | | 149 | | 104 | | Mortgage loans held for sale | | 386 | | 159 | | Prepaid expenses and other current assets | | 287 | | 210 | | Restricted cash | | 5 ...

Core Insights - Zillow Group reported strong financial results for Q4 and full-year 2025, achieving all full-year financial targets, including positive net income, while gaining market share in both For Sale and Rentals [1] - The company’s Q4 revenue increased by 18% year-over-year to $654 million, and full-year 2025 revenue rose by 16% to $2.6 billion, outperforming the residential real estate industry by significant margins [1][2] - Zillow's CEO highlighted the company's unique position to drive growth through innovative technology and a deeply engaged audience, celebrating 20 years of operation [1] Financial Performance - Q4 2025 For Sale revenue was $475 million, an 11% increase year-over-year, while Mortgages revenue surged by 39% to $57 million due to a 67% rise in purchase loan origination volume to $1.5 billion [1] - Residential revenue for Q4 2025 reached $418 million, up 8% year-over-year, benefiting from growth in agent and software offerings [1] - Adjusted EBITDA for Q4 was $149 million, representing a 33% increase from $112 million in Q4 2024, with an Adjusted EBITDA margin of 23% [1][3] Market Position - The residential real estate industry grew by 3% in Q4 and for the full year 2025, indicating Zillow outperformed the industry by 1,500 basis points in Q4 and 1,300 basis points for the full year [1] - Zillow's traffic to its apps and sites increased by 8% year-over-year to 221 million average monthly unique users, with visits up 2% to 2.1 billion [3] Non-GAAP Financial Measures - Adjusted net income for Q4 was $98 million, compared to $68 million in Q4 2024, with diluted adjusted net income per share rising to $0.39 from $0.27 [3] - Adjusted free cash flow for Q4 was $125 million, up from $78 million in Q4 2024, indicating strong cash generation capabilities [3][5]