Zillow Group, Inc. Class C Q4 FY2025 earnings call

Jeremy Wacksman noted Q4 capped a year of strong execution with excellent results across the business and achievement of full-year profitability. Zillow Group has a 20-year history of product innovation. In for sale, they're creating a more connected experience, with 44% of connections in Q4 coming through enhanced markets. They've made improvements like with Zillow Home Loans, Follow-up Boss, and Zillow Showcase. In rentals, they're building a comprehensive marketplace and modernizing the rental transaction, with 63% share of rental listings and strong revenue growth. Jeremy Hofmann discussed Q4 and full-year financial results, cost management, and outlook for Q1 and full year 2026, including revenue growth, EBITDA margin expansion, and strategic investments.

In Q4 2025, total revenue increased 18% year over year to $654 million. For sale revenue grew 11% year over year in Q4 to $475 million, with residential revenue up 8% and mortgages revenue up 39%. Rentals revenue was $168 million in Q4, up 45% year over year, driven by 63% growth in multifamily revenue. For full year 2025, total revenue grew 16%, for sale revenue was $1.9 billion (up 9% from 2024), and rentals revenue reached $630 million (up 39% from 2024).

For Q1 2026, total revenue is expected to be between $700 million and $710 million, implying 18% year-over-year increase at midpoint. For sale revenue growth in Q1 is expected to be in line to slightly better than Q4, with rentals revenue growth around 40% year over year. EBITDA is expected to be between $160 million and $175 million. For full year 2026, mid-teens revenue growth is expected, with approximately 30% revenue growth in rentals. Expect continued EBITDA margin expansion, share-based compensation expense down more than 10% year over year, and progress towards mid-cycle targets.

Legal matters were mentioned, but management is confident they won't have a material impact on financial position or long-term strategy. Elevated legal expenses are a factor affecting EBITDA margins in the near term.

Q: Nicholas Jones asked about rental trends and AI.

A: Jeremy Wacksman and Jeremy Hofmann discussed rental trends driven by meeting renter and advertiser needs, and AI as an ingredient in building the vertical.

Q: Bradley Berning asked about industry consolidation and RESPA case.

A: Jeremy Wacksman said no risk from consolidation and no adverse effects from RESPA case on ZHL and enhanced market strategy.

Q: Ronald Josey asked about legal challenges and revenue framework.

A: Jeremy Wacksman said no change in strategy due to legal challenges, and Jeremy Hofmann discussed revenue guidance.

Q: John Colantuoni asked about Zillow Pro and guidance transition.

A: Jeremy Wacksman discussed Zillow Pro beta and early learnings, Jeremy Hofmann said guidance is to be close to the pin.

Q: Mark Mahaney asked about enhanced markets and Zillow Pro contribution.

A: Jeremy Wacksman discussed enhanced markets progress and Jeremy Hofmann said Zillow Pro not a big financial contributor in 2026.

Q: Nikhil Devnani asked about margins.

A: Jeremy Hofmann discussed margin expansion expectations.

Q: Trevor Young asked about mortgages EBITDA and EBITDA cadence.

A: Jeremy Hofmann discussed mortgages opportunity and EBITDA cadence.

Q: Dae Lee asked about macro and expenses.

A: Jeremy Hofmann discussed affordability and expense framework.

Q: Lloyd Walmsley asked about listing standards and enhanced markets leads.

A: Jeremy Wacksman discussed listing standards enforcement and Jeremy Hofmann discussed enhanced markets leads.

Q: Daniel Kurnos asked about marketing in 2026.

A: Jeremy Wacksman discussed opportunistic marketing spend in 2026