Zillow Group, Inc. Class C Q3 FY2025 earnings call

• Zillow delivered strong Q3 results with revenue growth, EBITDA margin expansion, and positive GAAP net income. • Product innovations included Zillow app in ChatGPT, AI-powered virtual staging on Showcase, enhancements in Follow Up Boss, and the launch of Zillow Pro. • Progress in enhanced markets with 34% of connections coming through the enhanced market experience, up from 27% last quarter. • Multifamily revenue growth with 69,000 multifamily properties listed on Zillow, and Zillow Rentals ranking #1 in partner satisfaction for return on marketing investment.

Total revenue for Q3 2025 was $676 million, a 16% year-over-year increase. For Sale revenue was $488 million, up 10% year-over-year. Within For Sale, residential revenue was $435 million, up 7%, and mortgages revenue was $53 million, up 36%. Rentals revenue was $174 million, a 41% year-over-year increase, with multifamily revenue growing 62% year-over-year. Rentals revenue comprised 26% of total company revenue in Q3, up from 21% a year ago.

• Q4 total revenue expected to be between $645 million and $655 million, implying a 16%-18% year-over-year increase. • For Sale revenue expected to have high single-digit year-over-year growth in Q4. • Rentals revenue growth to accelerate more than 45% year-over-year in Q4. • Full-year 2025 targets mid-teens revenue growth, expanding EBITDA margins, and positive GAAP net income. • Expect 2026 to have similar growth and EBITDA margin expansion as the past two years, with mid-cycle targets of $5 billion in revenue and 45% EBITDA margins in a normalized housing market.

Q: Ron Josey asked about the opportunities and risks of being a first mover on newer platforms like ChatGPT and balancing current traffic with new doorways.

A: Jeremy Wacksman responded that it's a pure opportunity, similar to previous platform shifts like mobile, and that the strong brand helps leverage these new opportunities.

Q: Daniel Kurnos inquired about the FTC suit and proposed merger.

A: Jeremy Wacksman stated the Redfin syndication is pro-consumer and pro-property manager, and the proposed merger doesn't concern Zillow's business as they advocate for open and transparent access.

Q: Bradley Erickson asked about residential business outperformance and Q4 guidance.

A: Jeremy Hofmann explained residential business outperformed the market, and Q4 guidance reflects continued growth despite market challenges.

Q: Nikhil Devnani asked about Zillow Preferred's impact on share spread.

A: Jeremy Hofmann said Zillow Preferred expansion aligns with enhanced market growth and expects continued outperformance.

Q: Thomas Champion asked about components of residential revenue and headcount investment.

A: Jeremy Hofmann detailed drivers of residential revenue growth and mentioned similar cost and revenue growth planning for 2026.

Q: Lloyd Walmsley asked about the mortgage funnel.

A: Jeremy Wacksman explained the funnel is integrated, with consumers using viability calculators and working with agents/loan officers.

Q: Dae Lee asked about ChatGPT integration and Zillow Pro's monetization.

A: Jeremy Wacksman and Jeremy Hofmann discussed early stages of ChatGPT integration and Zillow Pro's rollout with limited 2026 contribution.

Q: Ryan McKeveny asked about Showcase and virtual staging.

A: Jeremy Wacksman talked about Showcase's growth, AI-powered virtual staging, and its broader application potential.