Z
T2Zillow Group, Inc. Class C
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OverviewZillow Group, Inc. (Z) is a digital real estate company providing platforms for buying, selling, and renting homes across the U.S. Its Q2 2026 revenue was prima
Zillow Group, Inc. (Z) is a digital real estate company providing platforms for buying, selling, and renting homes across the U.S. Its Q2 2026 revenue was primarily from For Sale services, including residential agent advertising and mortgages (~71%), and Rentals (~27%). Zillow serves consumers throughout their housing journey and provides software and marketing tools to real estate professionals and property managers.
Search Keywords Brand Product
- Zillow Premier Agent
- Zillow Home Loans
- Zillow Rentals
- Zillow Preview
- Zillow Showcase
- Follow Up Boss
- dotloop
- StreetEasy
- HotPads
- Trulia
- My Agent
- AI Mode
- Personalized Moving Hub
- Instant Floor Plans
- Zillow Pro
- 3D Home tours
- residential real estate
- housing super app
- AI in real estate
- mortgage origination
- rental marketplace
- agent software
- real estate technology
- integrated transaction experience
Search Keywords Event Phrases
- Zillow Q2 2026 earnings
- Zillow restructuring
Search Keywords Policy Regulatory
- NAR settlement
- real estate commission lawsuits
- What They Do (Plain English & Analogies)
- Zillow Group is like a digital hub for everything related to moving homes. Imagine a single website or app where you can not only browse homes for sale or rent, but also get a loan, connect with a real estate agent, schedule a tour, apply for a rental, and even manage the closing paperwork. For people looking to move, it's a one-stop shop that guides them from their very first thought about a new home to getting the keys. For real estate professionals, it's like a powerful operating system that helps them manage clients, market properties, and streamline their daily tasks, making them more efficient. Zillow aims to be the 'operating system for modern real estate,' leveraging AI to empower both consumers and professionals from end to end.
- Very Brief History
- Zillow Group was established in 2004 and launched its website in February 2006. Over two decades, it has evolved from a disruptive data provider with its Zestimate to a comprehensive 'Housing Super App'. Key milestones include numerous acquisitions like Trulia in 2015, and more recently, Follow Up Boss at the end of 2023, expanding its integrated offerings for consumers and professionals.
- "Street Stereotype"
- Zillow is widely perceived as the core residential-housing intent graph, being the most visited U.S. real estate app and website. Investors and analysts generally view it as a company that owns crucial consumer home-search data, listings, rentals, agent leads, and mortgage information. The market is cautiously bullish on Zillow, recognizing its strong brand, market penetration, and digital infrastructure built during periods of lower interest rates, positioning it well for the accelerating shift towards digital solutions in real estate.
- Subsidiaries On Linked In*
- Zillow Group — Parent company; LinkedIn: zillow-group
- Zillow Rentals — LinkedIn: zillow-rentals
- Trulia — LinkedIn: trulia
- StreetEasy — LinkedIn: streeteasy
- Zillow Closing Services — LinkedIn: zillow-closing-services
- HotPads — LinkedIn: hotpads
- Out East — LinkedIn: out-east
- Follow Up Boss — LinkedIn: follow-up-boss
- ShowingTime — LinkedIn: showingtime
- dotloop — LinkedIn: dotloop
- Zillow Home Loans — LinkedIn: zillow-home-loans
- Customer Sectors & Example Clients
- Zillow Group serves a dual audience: individual consumers and real estate professionals. Consumer segments include homebuyers (often dual-income households, college-educated professionals, median age ~36), sellers (homeowners aged 35-65 with higher net worth), and renters (largest audience by volume, ages 18-40, heavy Gen Z/Millennial representation). Professional customers include real estate agents and teams, brokerages, loan officers, and property managers. While specific client companies are not named in the transcript, Zillow works with "top agents in the country" who rely on Follow Up Boss, and has "more than 100 brokerage partnerships" enabling Zillow Preview. Given its business model, likely clients would include major real estate brokerage firms (e.g., Anywhere Real Estate, RE/MAX, Keller Williams) and large multifamily property management companies (e.g., Greystar, Equity Residential).
- New Customers / Segments They'Re Targeting
- Zillow is actively targeting 'high-intent buyers' through its new Personalized Moving Hub, which organizes the entire moving process and helps identify serious buyers. They are also expanding their reach to agents who may not advertise on Zillow but want a connected system to manage all their clients, including those originating outside the Zillow ecosystem, through the Zillow Pro membership and its 'My Agent' feature. Additionally, 'likely to list' uses predictive AI to flag contacts in an agent's Follow-up Boss database who are showing pre-listing activity, enabling agents to reconnect with past clients who may be ready to sell.
- Supply Chain And Sourcing Geographies
- Zillow Group operates primarily as a digital real estate platform and does not have a traditional physical supply chain for manufacturing or sourcing components. Its 'supply chain' largely involves data acquisition and technology infrastructure. Zillow aggregates residential supply by ingesting data from Multiple Listing Services (MLSs), brokers, property managers, and new construction listings across the United States. Its technology infrastructure relies on various vendors for processing and storing sensitive data, hosting systems, and providing Software-as-a-Service (SaaS) offerings. Therefore, its sourcing is primarily digital data and cloud-based services, with no specific geographic sourcing for physical components mentioned.
- Sales Geographies And Expansion Plans
- Zillow Group currently sells its products and services primarily throughout the United States. Its platforms, including Zillow, Trulia, StreetEasy, and HotPads, provide comprehensive housing inventory across the country. While Zillow did briefly list Canadian properties through a partnership in 2018, the core focus and revenue generation remain within the U.S. Management has not indicated plans to expand sales into new international geographies in the provided transcript. However, Zillow Rentals has become the only real estate platform in Google's Gemini Connected Apps ecosystem, expanding its reach to potential renters wherever they engage with Gemini. Zillow Preview listings will also be syndicated to realtor.com, further expanding visibility within the U.S. market.
- How Key Themes May Help/Hurt
- Zillow is strongly positioned to benefit from the 'Buying a House '26: Residential Brokerages' theme. The theme's bull points, such as AI-driven operational efficiency and enhanced agent productivity, directly align with Zillow's strategy of leveraging AI in products like AI Mode, Follow-up Boss, and internal operations to drive efficiency and innovation. The evolution to integrated 'Housing Super Apps' and multi-solution platforms is precisely Zillow's 'housing super app' strategy, which aims to connect the entire housing journey from curiosity to closing, increasing customer lifetime value and driving higher revenue per connection. Zillow's consistent market outperformance, even in a flat housing market, also aligns with the theme's bull point on strategic market outperformance. However, Zillow is also exposed to the theme's bear points. Persistent macroeconomic headwinds and affordability issues, such as rising mortgage rates, directly impact Zillow's For Sale segment, particularly residential revenue and Zillow Home Loans conversion rates. Regulatory and legal pressures, like the ongoing Sitzer litigation expenses, create financial headwinds. Intense competitive landscape and high marketing/integration costs are also relevant, as Zillow continues to invest in new products and agent solutions while navigating a dynamic market.
3 Main Long-Term Bull Details
- Integrated 'Housing Super App' Strategy and AI Leadership: Zillow's focus on creating a seamless, integrated experience across the entire housing journey, from shopping and touring to financing and agent collaboration, is driving higher conversion rates and deeper platform usage. This strategy, powered by AI across its platform (e.g., AI Mode, Follow-up Boss), leverages two decades of proprietary data to deliver superior consumer and professional experiences, making its platform increasingly indispensable and difficult to replicate.
- Robust Growth in Rentals and Scaling Mortgages: The Rentals segment is a significant growth engine, with Q2 2026 revenue up 31% year-over-year, driven by 42% growth in multifamily revenue and reaching an all-time high of 79,000 multifamily properties. This demonstrates strong ROI for property managers and a clear path to $1 billion+ annual revenue. Simultaneously, Zillow Home Loans is rapidly scaling, with purchase loan origination volume growing 95% year-over-year in Q2, establishing Zillow Home Loans as a top-25 purchase lender in the country with positive unit economics.
- Accelerated Transition to Preferred Model and Enhanced Agent Solutions: Zillow is accelerating its transition to a preferred monetization model, expecting over 75% of connections to be in preferred by the end of 2026, up from 44% at the end of 2025. This model drives significantly higher revenue per connection (23% higher in 2025, expected 35% higher in 2026) by aligning interests with agents and integrating Zillow's suite of tools like Follow-up Boss, Zillow Pro, Zillow Preview, and Zillow Showcase, which empower agents to win more business and serve clients more effectively.
3 Main Long-Term Bear Details
- Persistent Macroeconomic Headwinds and Housing Market Sensitivity: Despite Zillow's outperformance, its business remains sensitive to broader housing market conditions. The purchase mortgage market is now expected to be down low to mid-single digits for the second half of 2026, a decline from prior flat expectations, due to continued pressure on affordability and rising interest rates. This impacts residential revenue growth and Zillow Home Loans conversion rates, creating a headwind to overall growth potential.
- Ongoing Legal and Restructuring Costs: Zillow continues to face legal expenses, with $10 million in Sitzer litigation expenses in Q2 2026. Additionally, the company incurred $36 million in restructuring costs in Q2 and expects an additional $23 million to $28 million in Q3 related to recent cost management actions and role eliminations. These costs create near-term headwinds to EBITDA margins and profitability.
- Revenue Recognition Timing and Seasonal Impacts from Preferred Transition: The acceleration to the preferred monetization model, while strategically beneficial, introduces complexities in revenue recognition. Zillow Home Loans revenue is recognized 6-12 months after a connection, creating a consistent 200-basis-point headwind to for-sale revenue. Furthermore, the preferred model's revenue follows seasonal connection volumes more closely, leading to a 200-300 basis point headwind to year-over-year for-sale revenue growth in Q4, which can make near-term financial performance appear more volatile.
- Competitors And Differentiation
- Zillow's primary competitors include other real estate platforms like realtor.com and potentially Google's local service advertising products, though Zillow states it has seen no impact from the latter. Zillow differentiates itself by being an 'AI-native' company at the core of the transaction, offering an end-to-end integrated experience for consumers and professionals. Key differentiators include: a direct and highly engaged audience (80% of traffic is direct, 2x daily active app users of its closest competitor), proprietary data advantage from deep user engagement (e.g., AI Mode), integrated services like Zillow Home Loans (now a top-25 purchase lender), and a comprehensive suite of agent tools (Follow-up Boss, Zillow Pro, Zillow Preview, Zillow Showcase) that function as an operating system for modern real estate transactions. In rentals, Zillow claims to deliver the highest return on marketing investment for property managers compared to other rental platforms, search, and social media.
- Recent Performance & What The Market'S Focused On
- Zillow Group delivered strong Q2 2026 results, with total revenue of $772 million, up 18% year-over-year, and EBITDA of $176 million, both above the high end of their outlook range. The company reported $118 million in adjusted net income. For Sale revenue grew 14% year-over-year, driven by 7% growth in residential revenue and 75% growth in mortgages revenue. Rentals revenue was up 31% year-over-year. Zillow repurchased $200 million of its stock in Q2 and $826 million year-to-date. The market is focused on the acceleration of Zillow's transition to its preferred monetization model, aiming for over 75% of connections in preferred by year-end 2026. Investors are closely watching the impact of this transition on revenue recognition timing, the shift of revenue from residential to mortgages within the For Sale category, and seasonal patterns, which are expected to create near-term headwinds to residential and for-sale revenue growth in the second half of 2026. The company reaffirmed its full-year 2026 guidance for mid-teens total revenue growth and continued EBITDA margin expansion, despite a revised outlook for a declining purchase mortgage market.
- Revenue Segments And Estimated Mix
- For Sale — Mix: ~71.1%; Source: Q2 2026 transcript; Trend: Increased 14% year-over-year
- Residential (within For Sale) — Mix: ~60.2% (of total revenue); Source: Q2 2026 transcript; Trend: Increased 7% year-over-year
- Mortgages (within For Sale) — Mix: ~10.9% (of total revenue); Source: Q2 2026 transcript; Trend: Increased 75% year-over-year
- Rentals — Mix: ~27.1%; Source: Q2 2026 transcript; Trend: Increased 31% year-over-year, driven by 42% growth in multifamily revenue
- Product Brands
- Zillow
- Zillow Premier Agent
- Zillow Home Loans
- Zillow Rentals
- Zillow New Construction
- Trulia
- StreetEasy
- Out East
- HotPads
- Follow Up Boss
- ShowingTime
- dotloop
- Zillow Closing Services
- Zillow Preview
- Zillow Showcase
- Buyability
- My Agent
- AI Mode
- Personalized Moving Hub
- Instant Floor Plans
- Zillow Pro
- 3D Home tours
Bull / Bear DetailsZillow Group (Z) remains a compelling long-term investment, dominating the U.S. residential real estate market through its integrated 'housing super app' strate
Thesis
Zillow Group (Z) remains a compelling long-term investment, dominating the U.S. residential real estate market through its integrated 'housing super app' strategy. Leveraging AI across its platform, Zillow consistently outperforms a challenging market, driven by accelerated adoption of its high-monetization preferred model, robust growth in rentals, and rapidly scaling, profitable mortgages. This solidifies its position as a leading data and transaction platform. (Updated: 2026-08-14)
Bull case
Zillow's integrated 'housing super app' strategy is driving consistent revenue growth (18% YoY in Q2 2026) and market outperformance, despite a flat housing market. The accelerated transition to the preferred monetization model, targeting over 75% of connections by year-end 2026, is yielding significantly higher revenue per connection (23% in 2025, 35% expected in 2026), enhancing consumer and professional engagement.
Zillow is experiencing robust growth in its Rentals and Mortgages segments. Q2 Rentals revenue grew 31% year-over-year, with multifamily properties reaching an all-time high of 79,000, demonstrating strong ROI for property managers and a clear path to $1 billion+ annual revenue. Mortgages revenue accelerated 75% year-over-year, with Zillow Home Loans now a top-25 purchase lender with positive unit economics.
Zillow's strategic leverage of AI across its platform is a significant advantage. AI Mode, now live for 20% of signed-in users, drives substantially deeper engagement, with users spending 3x longer on Zillow and contacting agents at nearly 3x the rate. AI-powered tools like Smart messages and Likely to List enhance agent productivity, while internal AI adoption enables engineers to ship 30-40% more code, reinforcing Zillow's 'AI-native' competitive edge.
Bear case
The broader housing market faces persistent macroeconomic headwinds, with rising mortgage rates and affordability challenges impacting buyer demand. Zillow revised its outlook for the purchase mortgage originations market to be down low to mid-single digits for H2 2026. While Zillow has outperformed, a prolonged stagnant environment could limit overall growth potential and negatively affect residential revenue.
Zillow is incurring significant near-term restructuring costs, with $36 million recorded in Q2 2026 and an additional $23 million to $28 million expected in Q3 2026, impacting short-term profitability. While these actions aim for long-term efficiency and $75 million in annualized EBITDA savings, they create immediate headwinds to EBITDA margins.
The accelerated transition to the preferred monetization model introduces near-term revenue complexities. This includes a significant shift of revenue recognition from the residential to the mortgages category, a 6-12 month lag in Zillow Home Loans revenue recognition, and different seasonal patterns for preferred revenue. These factors are expected to create headwinds to for-sale revenue growth through Q4 2026 and into H1 2027.
Bull / Bear Case
- Bear Case
- The broader housing market faces persistent macroeconomic headwinds, with rising mortgage rates and affordability challenges impacting buyer demand. Zillow revised its H2 2026 purchase mortgage originations outlook to be down low to mid-single digits, which could limit overall growth potential and negatively affect residential revenue. Significant near-term restructuring costs ($36M in Q2, $23-28M in Q3) and ongoing legal expenses ($10M in Q2) are impacting short-term profitability and creating immediate headwinds to EBITDA margins. The accelerated transition to the preferred model introduces revenue complexities, including a 6-12 month lag in Zillow Home Loans revenue recognition and different seasonal patterns, creating headwinds to for-sale revenue growth through Q4 2026 and into H1 2027.
- Bull Case
- Zillow's integrated 'housing super app' strategy is driving consistent revenue growth (18% YoY in Q2 2026) and market outperformance, despite a flat housing market. The accelerated transition to the preferred monetization model, targeting over 75% of connections by year-end 2026, is yielding significantly higher revenue per connection (expected 35% higher in 2026), enhancing consumer and professional engagement. Robust growth in Rentals (31% YoY) and Mortgages (75% YoY), with Zillow Home Loans now a top-25 lender with positive unit economics, further strengthens the business. Strategic leverage of AI, including AI Mode (live for 20% of users and driving 3x engagement) and AI-powered agent tools, provides a significant competitive advantage and boosts internal productivity, reinforcing Zillow's 'AI-native' edge and path to $1 billion+ annual rentals revenue.
- More Compelling & Why
- Given the current market skepticism reflected in the stock's underperformance post-earnings and a relatively high Price/Sales (P/S) ratio of 4.5x compared to its historical average of 3.0x and industry average of 2.8x, the **Bear Case** is currently more compelling. The strongest argument for this lies in the near-term revenue recognition complexities and macroeconomic headwinds impacting the core housing market, which are creating tangible headwinds to residential revenue and overall growth despite Zillow's strategic progress. My view would flip to Bull if Zillow consistently demonstrates that the higher revenue per connection from the preferred model and the profitability of Zillow Home Loans can fully offset these headwinds, leading to sustained, accelerated top-line growth and margin expansion that justifies its premium valuation.
Key Factors
| Key Factor | Why It Matters | What To Watch | What It Signals | Where/How To Track | Free Alt Data | Paid Alt Data |
|---|---|---|---|---|---|---|
| Rentals Multifamily Properties and Revenue Growth | Rentals is a significant and consistent growth engine for Zillow, with a clear path to $1 billion+ in annual revenue, demonstrating strong ROI for property managers and expanding Zillow's overall funnel. | Total number of multifamily properties on the platform (Q2 2026 was 79,000, up 23% YoY). Year-over-year rentals revenue growth (Q2 2026 was 31%, multifamily revenue up 42%). | Bullish if multifamily properties continue to grow significantly above Q2's 23% YoY rate and rentals revenue growth remains strong (e.g., high 20% range as guided for Q3). Bearish if growth decelerates below expectations. | Zillow Group's quarterly earnings calls and shareholder letters. Next update: Q3 2026 earnings call. | Apartment List Rent Report (monthly), Zumper Rent Report (monthly) for broader rental market trends. | CoStar: Multifamily property listings and occupancy rates |
| Zillow Showcase Adoption Rate | Showcase is a premium product that helps sellers maximize impact and agents win more listings, contributing to residential revenue growth and strengthening Zillow's value proposition for professionals. | Percentage of all new listings using Zillow Showcase (Q2 2026 was 5%). Adoption rate in top-10 markets (currently >10%). | Bullish if Showcase penetration continues to increase steadily above 5% of all new listings and shows strong growth in top markets. Bearish if adoption stagnates or declines. | Zillow Group's quarterly earnings calls and shareholder letters. Next update: Q3 2026 earnings call. | N/A | N/A |
| Acceleration of Preferred Monetization Model | This strategic shift drives higher revenue per connection and better customer outcomes, accelerating Zillow's integrated transaction strategy and expanding its addressable market. It is expected to generate 35% more revenue per connection by the end of 2026. | Percentage of connections in the preferred model. Target: >75% by end of 2026 (up from 61% in Q2 2026). Also, the reported revenue per connection uplift. | Bullish if the percentage of connections in preferred continues to increase steadily towards or beyond 75% by year-end 2026, and if revenue per connection uplift meets or exceeds the 35% target. Bearish if the transition slows or revenue per connection uplift falls short. | Zillow Group's quarterly earnings calls and shareholder letters. Next update: Q3 2026 earnings call (expected late Oct/early Nov 2026). | Industry reports and articles on real estate agent sentiment and adoption of Zillow's partnership models. | |
| Zillow Home Loans Purchase Loan Origination Volume | This is crucial for Zillow's integrated 'housing super app' strategy, signifying increasing adoption of Zillow Home Loans and the platform's ability to capture more of the transaction funnel, with unit economics now positive. | Quarterly purchase loan origination volume (Q2 2026 volume grew 95% YoY). Also, Zillow Home Loans' ranking among purchase lenders (currently top-25). | Bullish if purchase loan origination volume continues to grow at or above Q2's 95% YoY rate, and if Zillow Home Loans improves its ranking among purchase lenders. Bearish if growth decelerates significantly. | Zillow Group's quarterly earnings calls and shareholder letters. Next update: Q3 2026 earnings call. | Mortgage Bankers Association (MBA) weekly applications survey (purchase index) for broader market trends. | CoreLogic: Mortgage origination data by lender |
| AI Mode User Engagement and Rollout | AI Mode is a key product innovation that drives deeper consumer engagement, provides unique personalized context, and strengthens Zillow's proprietary data advantage, leading to higher conversion rates. | Percentage of signed-in users with AI Mode access (currently 20%). Qualitative and quantitative metrics on user engagement (e.g., time spent, homes viewed, searches run, agent contact rate). | Bullish if Zillow announces significant expansion of AI Mode access beyond 20% and reports continued strong positive early signals on user engagement (e.g., 3x engagement rates sustained or improved). Bearish if rollout slows or engagement metrics decline. | Zillow Group's quarterly earnings calls, shareholder letters, and product announcements. Next update: Q3 2026 earnings call. | Google Trends: Search volume for 'Zillow AI Mode' or related AI features. App store reviews mentioning AI features. | Similarweb: Zillow app usage metrics (time spent, sessions per user) |
Key Reported Metrics, Reratings Triggers & ResultsThis metric directly reflects the progress of Zillow's accelerated preferred monetization model, which drives higher revenue per connection and better customer
Upcoming print · 2026-10-29
| Key reported metrics | ||
|---|---|---|
| Metric | Last period | Why it matters |
| Percentage of Connections in Preferred | 61% | This metric directly reflects the progress of Zillow's accelerated preferred monetization model, which drives higher revenue per connection and better customer outcomes. Reaching the >75% target by year-end is critical for future monetization. |
| Rentals Revenue | 31% | Rentals Revenue is a key growth engine for Zillow, with a clear path to $1 billion in annual revenue. Strong performance here demonstrates success in expanding its two-sided marketplace and capturing wallet share from property managers. |
| Mortgages Revenue | 75% | Mortgages Revenue is crucial as Zillow accelerates its integrated transaction strategy, with Zillow Home Loans becoming a top lender. Its rapid growth indicates successful capture of the transaction funnel and increasing adoption of the preferred model. |
Last reported · 2026-08-05
| Key reported metrics | ||
|---|---|---|
| Metric | Last period | Why it matters |
| Mortgages Revenue | 56% | Mortgages Revenue is crucial for Zillow's integrated 'housing super app' strategy. Its rapid growth, driven by purchase loan originations, signifies increasing adoption of Zillow Home Loans and the platform's ability to capture more of the transaction funnel. |
| Rentals Revenue | 42% | Rentals Revenue is a key growth engine, with a clear path to $1 billion in annual revenue. Its strong performance highlights Zillow's success in expanding its two-sided marketplace and capturing wallet share from property managers. |
| Total Revenue | 18% | Total Revenue indicates Zillow's overall business health and growth trajectory. Given the flat housing market, sustained mid-teens growth demonstrates the effectiveness of its diversified strategy and integrated platform. |
Key QuestionsGiven the revised, more challenging outlook for the purchase mortgage market and the significant revenue recognition timing and seasonality headwinds from the a
Given the revised, more challenging outlook for the purchase mortgage market and the significant revenue recognition timing and seasonality headwinds from the accelerated preferred model, can Zillow still achieve its Q3 2026 revenue and EBITDA guidance and remain on track for its full-year 2026 targets?
- Question 2
As Zillow accelerates its transition to the preferred monetization model (targeting >75% by year-end 2026), will the expected 35% higher revenue per connection and continued strong growth in Rentals and Mortgages outweigh the near-term revenue recognition and seasonality headwinds, demonstrating successful execution of its integrated strategy?
- Question 3
Will the strong early engagement and adoption metrics for Zillow's AI-powered features (e.g., AI Mode, Smart messages, Likely to List) and integrated products (e.g., Zillow Pro, Showcase) continue to scale and translate into tangible improvements in conversion rates and overall monetization, validating the 'AI-native' and 'housing super app' strategy?
Earnings Transcript Summary
· 2026Q2 Earnings Call
| 3 Things Management Is Most Focused On | Call Takeaway & Tone | Prior Quarter'S Y/Y Growth By Segment | 3 Things Analysts Most Pressed On (And Mgmt Responses) | Revenue Segments |
|---|---|---|---|---|
| 3 Things Management Is Most Focused On1. **Accelerating the integrated transaction strategy and preferred monetization model:** Management is focused on moving faster to transition more connections to the preferred model, aiming for over 75% by the end of 2026, as it drives higher revenue per connection and better customer outcomes. 2. **Leveraging AI to enhance consumer and agent experiences:** Zillow is investing in AI Mode for consumers, which shows significantly higher engagement, and AI-powered tools like Smart messages and Likely to List for agents within Follow-up Boss, to deepen engagement and drive transactions. 3. **Driving operational efficiency and disciplined cost structure:** Management announced a restructuring to eliminate roles, aiming for $75 million in annualized EBITDA cost savings, to ensure the company can move faster, operate more efficiently, and achieve a more sustainable cost structure without impacting growth bets. | Call Takeaway & ToneThe overall takeaway of the call is that Zillow Group delivered strong Q2 2026 results, outperforming a flat housing market through consistent execution of its integrated 'housing super app' strategy. Management is confidently accelerating the transition to its preferred monetization model, leveraging AI across its platform, and implementing disciplined cost management to drive future growth and profitability. The tone was confident and positive, emphasizing the durability of their business model, significant growth opportunities in rentals and mortgages, and strategic advantages gained through AI integration, despite macroeconomic headwinds and ongoing legal considerations. | Prior Quarter'S Y/Y Growth By SegmentIn Q1 2026, total revenue increased 18% year-over-year. For Sale revenue grew 12% year-over-year. Residential revenue (within For Sale) grew 8% year-over-year. Mortgages revenue (within For Sale) increased 56% year-over-year. Rentals revenue was up 42% year-over-year, driven by 57% growth in multifamily revenue. | 3 Things Analysts Most Pressed On (And Mgmt Responses)1. **Leadership changes (Jeremy Hofmann as COO and CFO) and broader strategy implications:** Analysts questioned if this signaled a strategy change. Management responded that there is "no change in strategy" and it's about strengthening the leadership team for the road ahead, leveraging Jeremy Hofmann's deep involvement in strategy and operations over the past nine years to move with greater coordination and speed. 2. **Elimination of roles/restructuring and its timing/impact on growth bets:** Analysts asked why now for the restructuring. Management stated that they "do not expect any impact to our growth bets" and the actions were taken to find opportunities to move faster and for continued cost discipline, aiming to get leaner and operate with more efficiency. 3. **Impact of Google's local service advertising product and ongoing legal cases:** Analysts inquired about any impact from Google's expanded real estate advertising and the overall legal picture. Management responded that they are "not seeing any impact" from Google due to Zillow's direct audience (80% of traffic) and differentiated experience, and that legal cases are "not impacting our business either" because they are focused on delivering products and services consumers and professionals want. | Revenue SegmentsTotal revenue grew 18% year over year to $772 million. For Sale revenue increased 14% year over year to $549 million. Within For Sale, residential revenue grew 7% year over year to $465 million, and mortgages revenue accelerated to 75% year over year growth to $84 million. Rentals revenue was up 31% year over year to $209 million, driven by 42% growth in multifamily revenue. |
· 2026Q1 Earnings Call
| 3 Things Management Is Most Focused On | Call Takeaway & Tone | Prior Quarter'S Y/Y Growth By Segment | 3 Things Analysts Most Pressed On (And Mgmt Responses) | Revenue Segments |
|---|---|---|---|---|
| 3 Things Management Is Most Focused On1. **Connecting the entire housing journey into one integrated experience**: Management is focused on making moving easier for consumers and professionals by integrating shopping, touring, financing, agent collaboration, and closing for For Sale, and search, tours, applications, leases, and payments for rentals. This integration is seen as the driver for better outcomes and growth. 2. **Leveraging AI to accelerate strategy**: Zillow is emphasizing its unique position to lead real estate in the AI era due to its advantages in content (comprehensive housing inventory, rich media), context (deep consumer intent data across the transaction lifecycle), and integration (spanning the core of the transaction). They are embedding AI throughout consumer products, professional tools, and internal operations to drive efficiency and innovation. 3. **Driving sustainable profitability and outperforming the market**: Management highlighted consistent execution, revenue growth, net income, and margin expansion, even against a flat housing market. They are focused on achieving full-year goals, with structural drivers and cost levers in place to accelerate margins in the back half of 2026, demonstrating the durability of their multi-year strategy. | Call Takeaway & ToneThe overall takeaway of the call is that Zillow Group delivered strong Q1 2026 results, outperforming a flat housing market through consistent execution of its integrated 'housing super app' strategy. The tone was confident and positive, emphasizing the durability of their business model, the significant growth opportunities in rentals and mortgages, and the strategic advantage gained through AI integration across their platform. Management expressed conviction in achieving full-year goals and continued margin expansion, highlighting their control over their path despite macro conditions. | Prior Quarter'S Y/Y Growth By SegmentIn Q4 2025, total revenue grew 18% year-over-year. For Sale revenue increased 11% year-over-year. Residential revenue grew 8% year-over-year. Mortgages revenue increased 39% year-over-year. Rentals revenue surged 45% year-over-year, with multifamily revenue growing 63% year-over-year. | 3 Things Analysts Most Pressed On (And Mgmt Responses)1. **Zillow Preview and Realtor.com collaboration**: Analysts inquired about early learnings, reception, and the strategy behind the Realtor.com partnership. Management responded that the response to Preview has exceeded expectations, with over 60 brokerage partners in two months, and that the Realtor.com collaboration is a 'win-win' extending visibility to two of the most visited platforms, increasing value for sellers, buyers, and agents. 2. **EBITDA guidance and confidence in back-half margin ramp**: Analysts pressed on the Q2 EBITDA guidance and the factors supporting confidence in margin expansion later in the year. Management explained that Q2 includes $20 million in incremental legal costs and $16 million in increased advertising spend. For the back half, they are confident due to structural revenue drivers, leveraging fixed costs, decelerating variable expense growth (as rentals investment slows), reduced legal expenses post-FTC trial, and a more typical seasonal advertising spend pattern. 3. **Rentals growth outlook and competitive environment**: Analysts asked about the continued strength in rentals, especially multifamily, given tougher comps in the back half, and the broader competitive landscape. Management stated they expect continued strong growth, with full-year rentals revenue growth of approximately 30% even after lapping Redfin-related acceleration. They emphasized the differentiated strategy of aggregating supply (multifamily and long-tail rentals), the compelling value proposition for consumers and advertisers, and the significant ROI for property managers, seeing green lights ahead for growth beyond the $1 billion target. | Revenue SegmentsTotal revenue increased 18% year-over-year. For Sale revenue grew 12% year-over-year. Residential revenue (within For Sale) grew 8% year-over-year. Mortgages revenue (within For Sale) increased 56% year-over-year. Rentals revenue was up 42% year-over-year, driven by 57% growth in multifamily revenue. |
Transcript Tidbits
| About Expanding Eligible Market | About Competition | About The Broader Industry | Where Things Are Headed | Updates On Theme | Broader Themes Emerging | Bullish-Leaning Quotes (Short) | Bearish-Leaning Quotes (Short) | Hiring |
|---|---|---|---|---|---|---|---|---|
| About Expanding Eligible MarketZillow is expanding its reach, being the only large company in its category to consistently expand its real estate audience over the past 7 quarters. Its AI Mode is now live for about 20% of signed-in users, and the company launched a new personalized moving hub earlier this summer. Zillow Home Loans has become a top-25 purchase lender in the country. The company is expanding its product suite with Zillow Preview, which now has over 100 brokerage partnerships and will be syndicated to realtor.com. Zillow Showcase is now on about 5% of all new listings. Follow-up Boss, a CRM, saw 138,000 monthly-active users in Q2, up 21% year-over-year. Zillow Pro, a new premium membership, was launched nationwide last month to help agents manage all clients. In rentals, Zillow reached an all-time high of 79,000 multi-family properties and 2.8 million average monthly active rental listings in Q2. Zillow Rentals also became the only real estate platform in Google's Gemini Connected Apps ecosystem. The company is accelerating its transition to the preferred monetization model, aiming for more than 75% of connections in preferred by the end of 2026, up from 44% at the end of 2025. | About CompetitionZillow maintains a strong competitive position with more than 2x as many daily active app users as its next closest competitor, and 80% of its traffic comes directly to its apps and sites. Zillow is the only large company in the category to consistently expand its reach with the real estate audience over the past 7 quarters. The company's proprietary data advantage from repeated engagement is difficult to replicate and differentiates it from horizontal LLMs and other real estate companies. Zillow Preview listings will be syndicated to realtor.com, the second most visited real estate platform. Property managers report that Zillow delivers the highest return on marketing investment in the rentals category, outperforming other rental platforms, search, and social media. Zillow has not seen any impact from Google's expanded local service advertising product in real estate, attributing this to its direct audience and differentiated experience. | About The Broader IndustryThe broader housing market saw a decline overall in Q2 amid rising mortgage rates, with the purchase mortgage market being flat compared to a year ago. Zillow consistently outperformed industry total transaction volume for three consecutive years, even as industry growth remained essentially flat. The company's Q2 for sale revenue growth of 14% year-over-year outperformed the estimated flat industry purchase mortgage origination volume and the 6% real estate total transaction value growth, despite a 600-basis-point headwind from the purchase mortgage industry. Affordability challenges continue to disproportionately impact mortgage buyers compared to cash buyers. Zillow now anticipates the purchase mortgage originations market will be down low to mid-single digits for the second half of 2026, a revision from its prior expectation of flat, due to continued pressure on affordability and rising interest rates. | Where Things Are HeadedZillow is on track to achieve its full-year goals for 2026, aiming for mid-teens total revenue growth and continued EBITDA margin expansion, with a range of $2.92 billion to $2.96 billion in total revenue and $730 million to $760 million in EBITDA. The company expects to launch instant floor plans later this year, aiming to make rich media the future standard for listings. Zillow is making progress toward its $1 billion incremental revenue opportunity in for sale and sees a clear path to $1 billion and beyond in annual rentals revenue. The company restructured parts of its organization and eliminated roles to move faster, operate more efficiently, and achieve a more sustainable cost structure. Zillow Home Loans aims to become one of the biggest purchase lenders in the country, with unit economics expected to generate profits similar to preferred agent partner referral fees. The company expects year-over-year EBITDA cost growth in Q4 to be in the mid-single digits, setting it up for margin expansion in Q4 and 2027. | Updates On ThemeResidential | Broader Themes EmergingA broader theme emerging is the rapid adoption and integration of AI to transform internal company operations and enhance productivity, with Zillow's engineers shipping 30% to 40% more code per engineer at the same or higher quality, indicating increased efficiency and velocity in product development. | Bullish-Leaning Quotes (Short)Q2 was another quarter of strong results that demonstrate our consistent execution and the durability of our strategy. Zillow is the only large company in the category to consistently expand its reach with the real estate audience over the past 7 quarters. Zillow Home Loans is now a top-25 purchase lender in the country. Rentals is 1 of our most compelling growth opportunities with a clear path to a $1 billion and beyond in annual rentals revenue. We are on track to hit our 2026 and mid cycle targets, underpinned by a strong growth strategy and a disciplined cost structure that allows us to grow profits faster than revenue. | Bearish-Leaning Quotes (Short)The broader housing market, which saw a decline overall amid the rise in mortgage rates. Affordability challenges continue to have a larger impact on mortgage buyers than cash buyers. We are assuming the purchase mortgage originations market will be down low to mid single digits. We see continued pressure on affordability having a larger impact on mortgage buyers than the overall market, as interest rates have continued to rise since their lows in early Mark. We recorded $36 million of restructuring costs in Q2, and we expect to record an additional $23 million to $28 million of restructuring costs in Q3 associated with these actions. | HiringZillow restructured parts of its organization, eliminating approximately 7% of employees to move faster, operate more efficiently, and achieve a more sustainable cost structure. This is expected to generate $75 million of annualized EBITDA cost savings from Q2 run rates, and an aggregate of $140 million including reductions from previously planned headcount growth. The company recorded $36 million in restructuring costs in Q2 and expects an additional $23 million to $28 million in Q3. Jeremy Hofmann has been appointed to an expanded role as Chief Operating Officer and Chief Financial Officer. Jun Choo, former COO, is stepping down to focus on his health and will serve in an advisory capacity. Sandy Knight has been welcomed in a new role as Chief Legal and Policy Officer. |
| About Expanding Eligible Market | About Competition | About The Broader Industry | Where Things Are Headed | Updates On Theme | Broader Themes Emerging | Bullish-Leaning Quotes (Short) | Bearish-Leaning Quotes (Short) | Hiring |
|---|---|---|---|---|---|---|---|---|
| About Expanding Eligible MarketZillow is expanding its eligible market by integrating the entire housing journey, supporting both consumers and professionals. This includes connecting shopping, touring, financing, agent collaboration, and closing for consumers, as well as providing agent software tools. In rentals, it spans search, tours, applications, leases, and payments. The company is expanding its enhanced markets, which accounted for 49% of connections in Q1, up from 44% in Q4, targeting at least 75%. Zillow Preview, a new pre-market listing product, has expanded from 5 initial brokerage partners to over 60, and a collaboration with realtor.com extends its visibility across the two most visited real estate platforms. Zillow Pro, a connected system for agents, is in beta with over 12,000 agents and is on track for a broader nationwide rollout in the second half of the year. In rentals, Zillow reached an all-time high of 76,000 multifamily properties, up from 55,000 a year ago, and had 2.7 million average monthly active rental listings in Q1. | About CompetitionZillow maintains a strong competitive position, with roughly 80% of its traffic coming directly and more than twice the daily active app users of its next closest competitor. The company is the only large player in its category that has increased its real estate audience reach over the past six quarters, according to Comscore. The Zillow Preview collaboration with realtor.com extends visibility across the two most visited real estate platforms, increasing value and demand for Preview listings. Property managers view Zillow as delivering the highest return on marketing investment in the rentals category, surpassing other rental platforms, search, and social options. | About The Broader IndustryThe broader housing market remained essentially flat in Q1 2026, impacted by worse-than-expected weather and interest rate volatility. The real estate industry grew 2% as reported by NAR, with purchase mortgage origination volume declining 1% year-over-year. Zillow anticipates the housing market will continue to be effectively flat. The industry is characterized by structural complexity, high-dollar, high-stakes, and personal transactions, involving hundreds of thousands of brokers across several hundred MLSs and 1.5 million real estate agents. | Where Things Are HeadedZillow is on track to achieve its full-year goals for 2026, aiming for mid-teens total revenue growth, approximately 30% growth in rentals revenue, and continued EBITDA margin expansion. The company plans to expand access to its consumer-facing AI mode experience this year. Rich media, including Zillow 3D home tours and interactive floor plans, is expected to become the standard for listings. Follow Up Boss is evolving into an AI-powered workflow engine for agents. Zillow Pro is slated for a broader nationwide rollout in the second half of the year, reinforcing Zillow's role as a long-term partner for real estate professionals. The company has a clear path toward an incremental mid-cycle revenue target of $1 billion or more in annual rentals revenue. Zillow Home Loans aims to become one of the biggest purchase mortgage originators in the country. Legal expenses are expected to be less of a headwind to margins in the second half of the year as the FTC trial progresses. | Updates On ThemeZillow's | Broader Themes EmergingA broader theme emerging is the rapid adoption and integration of AI to transform internal company operations and enhance productivity. Zillow is rapidly becoming an 'AI-native company,' with engineers shipping 40% more code per engineer at the same or higher quality, and product and design teams prototyping faster. Employees are using AI to reinvent and streamline workflows, channeling productivity gains into building more and faster. | Bullish-Leaning Quotes (Short)Q1 was another quarter of consistent execution and continued momentum across our business. We once again outperformed the broader housing market, which stayed essentially flat. Our revenue has consistently outperformed industry total transaction value for more than 3 years now. Zillow Home Loans is now a top 25 purchase lender. Rentals continues to be one of our most exciting growth stories. Our engineers are shipping 40% more code per engineer at the same or higher quality. We are on track toward achieving our full year goals, and we are in control of our own path. | Bearish-Leaning Quotes (Short)broader housing market, which stayed essentially flat amid worse-than-expected weather and interest rate volatility. Market-based pricing revenue continues to decline as we transition the majority of our agent-related activity to our preferred partners. legal expenses will be an approximately 200 basis point headwind to EBITDA margins in the first half of 2026. MVP lags a bit because of that agent sentiment. | HiringZillow is continuing to invest in loan officers for Zillow Home Loans during the first half of 2026, having grown loan officer count by about 40% in the previous year while improving productivity by 11%. The company is also investing in rentals during the first half of 2026, with a slower pace expected in the second half. Internally, Zillow is becoming an AI-native company, with engineers shipping 40% more code per engineer at the same or higher quality, and product and design teams prototyping faster. Employees are using AI to reinvent and streamline their workflows, channeling productivity gains directly back into building more and faster. |
Notes
| Date | Comment | Comment Type | Comment Sentiment | Link | Price Reaction |
|---|---|---|---|---|---|
| 2026-05-06 | Zillow's Q1 2026 revenue rose 18% and EBITDA beat expectations, driven by strong rentals and mortgages, and AI integration. Despite positive results and reaffirmed full-year guidance, the stock fell 4.85% (t+2 days). This market skepticism likely stemmed from Q2 EBITDA guidance missing analyst expectations due to higher legal and advertising costs, overshadowing the strong Q1 performance. | Earnings Transcript | Negative | -4.85% (vs SPY: -6.76%) | |
| 2026-08-05 | Zillow reported strong Q2 2026 results with 18% revenue growth, driven by accelerated preferred model adoption and robust Rentals/Mortgages. AI integration is deepening engagement. Despite reaffirmed full-year guidance, the stock fell 7.86% (underperforming SPY). This negative market reaction likely stemmed from a revised macro outlook, near-term revenue recognition headwinds from the preferred transition, and restructuring costs, contradicting the company's positive messaging. | Earnings Transcript | Mixed | -7.86% (vs SPY: -8.28%) |
Upcoming Events
| Catalyst ID | Estimated Timing | Estimated Date Start | Estimated Date End | Catalyst | Why It Matters | Ticker Or Theme Specific | Transcript Date | Source Type |
|---|---|---|---|---|---|---|---|---|
| Z_5014aca7 | Later this summer | 2026-08-15 | 2026-09-22 | Zillow Preview listings to be syndicated to realtor.com. | This expands pre-market exposure for sellers and agents to the second most visited real estate platform, enhancing the value proposition of Zillow Preview and driving adoption. | Ticker | 2026-08-05 | earnings_transcript |
| Z_968413c8 | in Q1 2027 | 2027-01-01 | 2027-03-31 | Reversal of the seasonal decline in preferred revenue. | This will turn a Q4 2026 headwind into a positive impact on year-over-year for-sale revenue growth in Q1 2027, improving reported financial performance. | Ticker | 2026-08-05 | earnings_transcript |
| Z_f472416b | Later this year | 2026-10-01 | 2026-12-31 | Launch of instant floor plans, allowing photographers, sellers, and agents to capture a 3D floor plan right from their smartphone. | This innovation reduces friction and cost for rich media, aiming to make 3D home tours a standard on listings, thereby enhancing buyer experience and engagement. | Ticker | 2026-08-05 | earnings_transcript |