ZG — Zillow Group, Inc. Class A

Zillow Group (ZG) Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Total Revenue: $676 million, up 16% year-over-year, exceeding guidance.
• For Sale Revenue: $488 million, a 10% increase year-over-year.
• Residential Revenue: $435 million, up 7% year-over-year.
• Mortgage Revenue: $53 million, a 36% increase year-over-year.
• Rentals Revenue: $174 million, up 41% year-over-year, driven by a 62% increase in multifamily revenue.
• EBITDA: $165 million, representing a 24% margin, up more than 200 basis points year-over-year.
• GAAP Net Income: $10 million.
• 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

• Continued momentum in both For Sale and Rentals operations, with a focus on consumer-centric innovations.
• Launched new features including virtual staging in Zillow Showcase and integration of the Zillow app within ChatGPT.
• Enhanced user experience through tools like BuyAbility and improved messaging systems for buyers and agents.
• Zillow Showcase adoption increased to 3.2% of all new listings, up from 2.5% last quarter.
• Zillow Pro and Zillow Preferred programs are expected to enhance agent engagement and drive future revenue growth.

3. Forward Guidance and Outlook

• Q4 Revenue Guidance: Expected between $645 million and $655 million, implying a year-over-year increase of 16% to 18%.
• For Sale Revenue Growth: Anticipated high single digits for Q4, with mortgage revenue growth around 20%.
• Rentals Revenue Growth: Expected to accelerate to over 45% year-over-year in Q4.
• Full Year 2025 Outlook: Continuing to expect mid-teens revenue growth, expanding EBITDA margins, and positive net income.

4. Bad News, Challenges, or Points of Concern

• The overall housing market remains challenging, with macroeconomic uncertainties impacting performance.
• Concerns regarding potential regulatory impacts from the FTC lawsuit and its implications for the multifamily syndication agreements.
• Competitive pressures from other real estate platforms, particularly regarding agent marketing strategies and hidden listings.

5. Notable Q&A Insights

• AI Integration: The partnership with OpenAI for ChatGPT is viewed as an opportunity to enhance consumer engagement and transaction experiences, with the expectation that it will complement existing traffic rather than replace it.
• Zillow Pro and Preferred Programs: The rollout of these programs is seen as a way to enhance agent capabilities and drive revenue, but significant contributions are not expected until 2026.
• Market Dynamics: Zillow continues to outperform the broader market, with a focus on maintaining growth in both For Sale and Rentals despite external challenges.
• Operational Efficiency: The company is focused on maintaining cost discipline, with fixed costs expected to remain flat while investing in growth areas.

Overall, Zillow Group reported a strong Q3 2025, driven by effective execution of its strategic initiatives, though it remains cautious about external market conditions and regulatory challenges.