Zillow Group, Inc. Class A Q2 FY2025 earnings call

Jeremy Wacksman noted strong Q2 results with double-digit revenue growth and positive net income. Zillow is building an integrated housing super app, gaining share in For Sale and Rentals. In For Sale, they're executing on an enhanced market strategy with 27% of connections through the enhanced market experience, aiming for 75% long-term. Features like BuyAbility, Offer Insights, and Zillow Home Loans product suite are enhancing the transaction experience. In Rentals, they're building a comprehensive 2-sided marketplace, with partnerships expanding distribution, and tools like AI Assist improving the rental experience. Jeremy Hofmann discussed Q2 financials, EBITDA margin, and outlook for Q3 and full year 2025, including expectations for revenue growth, EBITDA, and margin expansion.

Total revenue in Q2 was up 15% year-over-year to $655 million. For Sale revenue grew 9% year-over-year to $482 million, with residential revenue up 6% to $434 million and mortgages revenue up 41% to $48 million. Rentals revenue was $159 million with growth accelerating to 36% year-over-year, driven by multifamily revenue growth of 56% and property count growth of 45% to 64,000. Zillow Rentals had 2.4 million active rental listings, the most in the category, and 36 million average monthly rental unique visitors in Q2.

Q2 2025 revenue was above expectations at $655 million. For Q3, total revenue is expected to be between $663 million and $673 million, implying 14% to 16% year-over-year growth. For Sale revenue growth in Q3 is expected to be similar to Q2, with residential revenue in mid-single-digit range and mortgages category in high 20% range. Rentals revenue growth is expected to accelerate in Q3, increasing more than 40% year-over-year. For full year 2025, now expecting mid-teens revenue growth at the higher end of previous outlook, with Rentals revenue growth approximately 40% and continued margin expansion.

Q: Ron Josey asked about Rentals business insights, growth drivers, and confidence.

A: Jeremy Wacksman and Jeremy Hofmann discussed Rentals strategy, large property manager partnerships, distribution through partnerships like Redfin, and growth expectations.

Q: Bradley Erickson asked about resi rev growth drivers and Redfin contribution to Rentals.

A: Jeremy Hofmann discussed For Sale growth drivers over time and Redfin partnership's impact on Rentals.

Q: Ryan McKeveny asked about Zillow Showcase monetization and new construction marketplace.

A: Jeremy Wacksman and Jeremy Hofmann talked about Showcase being part of overall revenue opportunity and new construction business performance.

Q: John Colantuoni asked about variable expenses investment and Redfin partnership incrementality.

A: Jeremy Hofmann discussed variable cost investments in Rentals and Zillow Home Loans, and Redfin partnership's distribution and upsell opportunity.

Q: Trevor Young asked about Redfin being dollar accretive in 2H.

A: Jeremy Hofmann said Redfin is dollar accretive in 3Q and second half.

Q: Jeffrey Seiner asked about broader real estate market assumptions and agent ecosystem influence.

A: Jeremy Wacksman discussed housing market challenges and regulatory listing standard adoption.

Q: Thomas Champion asked about Enhanced Markets progress and mortgage trend.

A: Jeremy Wacksman talked about Enhanced Markets progress towards 35% connections by year-end and Jeremy Hofmann discussed mortgage revenue growth outlook.

Q: Dae Lee asked about rental wallet share and Enhanced Markets progress.

A: Jeremy Wacksman and Jeremy Hofmann discussed rental wallet share growth potential and Enhanced Markets connection percentage progress.

Q: Stephen Sheldon asked about Zillow Showcase monetization and housing backdrop impact.

A: Jeremy Wacksman talked about Showcase as part of residential revenue and its benefits in different market environments.

Q: Andrew Boone asked about AI and automation on the platform.

A: Jeremy Wacksman discussed AI's potential to rewire the real estate industry and its impact on consumer and professional experiences.