Zillow Group, Inc. Class A Q1 FY2026 earnings call

• Q1 was a quarter of consistent execution with revenue near high end of outlook and EBITDA above outlook. Strategy is to connect the entire housing journey. • For Sale: Integration improves outcomes; buyability tool has 4.3 million users, purchase loan origination volume grew 96% to $1.5 billion, Zillow Preview and Showcase are marketing tools for sellers, Zillow Pro is in beta. • Rentals: Building a comprehensive 2-sided marketplace; reached 76,000 multifamily properties, attracted 36 million unique visitors, launched tools like total monthly price feature and paid social product. • AI: Debuted consumer-facing AI mode experience with early encouraging signals, using AI to accelerate strategy across products and internally.

Total revenue increased 18% year-over-year in Q1 to $708 million. For Sale revenue grew 12% year-over-year to $514 million, with residential revenue up 8% to $450 million and mortgages revenue up 56% to $64 million. Rentals revenue was up 42% year-over-year to $183 million, driven by 57% growth in multifamily revenue. For Sale's residential revenue growth was due to expansion of Zillow Preferred, Zillow Showcase, and new construction; mortgages revenue growth was from accelerated purchase loan origination volume. Rentals growth was from more properties on the platform and best-in-class ROI for property managers.

• Q2 outlook: Total revenue expected $750M - $765M, For Sale revenue similar to Q1 with mid-single-digit residential growth, rentals revenue ~30% growth, EBITDA $150M - $165M. • Full year 2026: Mid-teens total revenue growth, ~30% rentals revenue growth, EBITDA margin expansion; share-based compensation expense expected down >15% year-over-year; variable cost growth to trend with revenue growth by year-end; advertising spend to accelerate consumer awareness with modest growth.

Q: Dig in on Preview, reception, uptake, and relationship with realtor.com.

A: Preview response more than expected, 60+ broker partners, collaboration with realtor.com extends visibility of pre-market inventory.

Q: On EBITDA guidance, cost control for margin ramp.

A: Q2 legal costs up $20M, advertising spend up $16M; back half margin expansion due to leveraging fixed costs, variable expense deceleration, less legal headwind, advertising seasonal pattern.

Q: Rentals outlook, competitive environment, AI mode lessons.

A: Rentals to continue strong growth, back half growth upper 20%; AI mode early, users having deeper conversations, higher intent customers.

Q: Resi back half confidence, mortgage margin.

A: Back half resi mid-single-digit growth, enhanced markets strategy intact; mortgage business growing, margin to improve with scale.

Q: Rentals product velocity, consumer behavior visibility.

A: Rentals posture not changing, long runway for growth; Zillow provides context across transaction, helps build best AI platform.

Q: Resi revenue growth slowdown, Preview agent/seller responses.

A: Q2 slowdown due to agent sentiment; Preview desired as public market better, strong support from brokers/agents.

Q: 2026 residential improvement, mid-teens guide.

A: Housing flat, mid-teens guide from mid-single-digit resi growth, For Sale and rentals growth