Z — Zillow Group, Inc. Class C

Zillow Group Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Total Revenue: $676 million, up 16% year-over-year, exceeding expectations.
• For Sale Revenue: $488 million, a 10% increase year-over-year, outperforming the broader housing market.
• Rentals Revenue: $174 million, up 41% year-over-year, driven by a 62% increase in multifamily revenue.
• EBITDA: $165 million, representing a margin of 24%, up over 200 basis points year-over-year.
• GAAP Net Income: $10 million in Q3.
• Free Cash Flow: $295 million generated in the first nine months of 2025, a 28% increase year-over-year.
• Cash and Investments: $1.4 billion at the end of Q3.

2. Strategic Updates and Business Highlights

• Zillow is focusing on enhancing the consumer experience through innovations like virtual staging and the Zillow app integration with ChatGPT, which aims to simplify home searches.
• The company reported strong engagement with 250 million average monthly unique users.
• The Zillow Showcase product gained traction, now representing 3.2% of all new listings, up from 2.5% last quarter.
• The launch of Zillow Pro aims to provide agents with a comprehensive suite of tools to enhance their service offerings and improve their business efficiency.
• The company continues to expand its multifamily property listings, reaching 69,000, nearly double from two years ago.

3. Forward Guidance and Outlook

• Q4 Revenue Guidance: Expected between $645 million and $655 million, indicating a year-over-year increase of 16% to 18%.
• For Sale Revenue Growth: Anticipated in the high single digits for Q4.
• Rentals Revenue Growth: Expected to accelerate to over 45% year-over-year in Q4.
• Full Year 2025 Outlook: Continuing to target mid-teens revenue growth, expanding EBITDA margins, and positive net income.
• 2026 Expectations: Similar growth and EBITDA margin expansion anticipated, with a focus on maintaining a disciplined cost structure.

4. Bad News, Challenges, or Points of Concern

• The housing market remains challenging, with macroeconomic uncertainties impacting consumer behavior.
• Competitive pressures exist, particularly with potential disruptions from industry mergers and regulatory scrutiny (e.g., FTC cases).
• The company acknowledges external noise affecting market conditions but remains confident in its execution and strategy.

5. Notable Q&A Insights

• AI Integration: The integration with ChatGPT is seen as an opportunity to enhance user engagement and expand market reach, with the potential for increased traffic and brand awareness.
• Zillow Pro and Preferred Programs: While Zillow Preferred is expected to drive significant revenue, Zillow Pro is viewed as a longer-term investment with limited immediate revenue contribution.
• Market Dynamics: The company is confident in its ability to outperform the market, citing strong performance in enhanced markets and the integration of Zillow Home Loans.
• Rental Strategy: The business remains focused on expanding its two-sided marketplace for rentals, with strong growth expected to continue in 2026 despite potential regulatory challenges.

Overall, Zillow Group demonstrated solid financial performance in Q3 2025, driven by strategic innovations and effective cost management, while navigating a challenging housing market landscape.