Zillow Group, Inc. Class A Q3 FY2025 earnings call

• Zillow delivered strong Q3 results with revenue growth, EBITDA expansion, and positive GAAP net income.
• Product innovations included virtual staging in Zillow Showcase, Zillow app in ChatGPT, enhancements in Follow Up Boss, and new programs like Zillow Pro and Zillow Preferred.
• For Sale revenue outperformed the broader market, with residential revenue growing 7% and mortgage revenue up 36%.
• Rentals revenue saw significant growth driven by multifamily, with 69,000 multifamily properties on the platform and continued expansion of the 2-sided marketplace.

Total revenue for Q3 2025 was $676 million, a 16% year-over-year increase. For Sale revenue was $488 million, up 10% YOY, with residential revenue at $435 million (7% growth) and mortgage revenue at $53 million (36% growth). Rentals revenue was $174 million, up 41% YOY, with multifamily revenue growing 62% YOY. Rentals revenue comprised 26% of total company revenue in Q3, up from 21% a year ago. The number of multifamily properties on Zillow Rentals reached 69,000 as of the end of Q3, a 47% year-over-year increase.

• Q4 total revenue expected to be between $645 million and $655 million, a 16%-18% year-over-year increase.
• For Sale revenue expected to have high single-digit year-over-year growth in Q4.
• Rentals revenue expected to accelerate in Q4, with growth more than 45% YOY.
• Full year 2025 EBITDA expected between $145 million and $155 million, with mid-teens revenue growth and expanded EBITDA margins.
• 2026 expected to have similar growth and EBITDA margin expansion, with mid-cycle targets of $5 billion in revenue and 45% EBITDA margins in a normalized housing market.

• FTC case related to syndication agreements, but seen as pro-consumer and pro-property manager.
• Proposed merger of Compass and Anywhere, with no immediate concerns to Zillow's business but potential noise around hidden listings.

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 mobile platform shifts, and the strong brand helps as these are additive, not replacement, and AI is being built natively to enhance the transaction experience.

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

A: Jeremy Wacksman stated the syndication agreement with Redfin is pro-consumer and pro-property manager, and the proposed merger doesn't concern Zillow's business, with focus on open, fair, and transparent access for listings.

Q: Bradley Erickson asked about residential business outperformance and Zillow Pro.

A: Jeremy Hofmann explained residential outperformance was due to enhanced markets, Zillow Home Loans growth, and Showcase expansion; Jeremy Wacksman detailed Zillow Pro as a membership bundling tools for agents to scale their businesses.

Q: Nikhil Devnani asked about the impact of Zillow Preferred on share spread and Rentals business strategy.

A: Jeremy Hofmann said Zillow Preferred expands with enhanced markets, and Rentals business is on track with property growth and syndication agreements driving revenue; Jeremy Wacksman added on the broader Rentals marketplace opportunity.

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

A: Jeremy Hofmann discussed drivers of residential revenue growth like enhanced markets, Zillow Home Loans, and Showcase; on headcount, fixed costs are planned to be flat with inflation, and variable costs invested in growth opportunities.

Q: Lloyd Walmsley asked about the funnel between agents and Zillow Home Loans.

A: Jeremy Wacksman said the funnels are interconnected, with high-intent customers using viability tools and then touring homes, making Zillow Home Loans a natural choice for agents.

Q: Dae K. Lee asked about ChatGPT integration impact and Zillow Pro/Preferred monetization.

A: Jeremy Wacksman said ChatGPT is an exposure and vertical experience enabler; Jeremy Hofmann stated Zillow Pro is a step towards the $1 billion mid-cycle target in For Sale but not a major 2026 contributor yet.

Q: Ryan McKeveny asked about Showcase's virtual staging and mortgage funnels.

A: Jeremy Wacksman said AI-powered virtual staging is part of expanding Showcase capabilities, with potential broader application; Jeremy Hofmann explained loan pre-approvals in Follow Up Boss as an efficient way to enhance the mortgage funnel experience.