Zillow Outpaced Housing Market as Mortgage Volume Jumped
Second-quarter revenue reached $772 million, exceeding the high end of Zillow’s outlook.
Zillow Group (ZG), the online real-estate marketplace, increased quarterly revenue 18% year over year, three times the residential real estate industry’s growth rate.
The gains came as Zillow shifted more customer connections to its Preferred model, lifting revenue per connection while redirecting part of the For Sale revenue mix from Residential to Mortgages. Average monthly unique users and visits each declined 2%, showing that the revenue increase came despite lower audience traffic.
Revenue rose to $772 million, while adjusted diluted earnings increased to $0.52 a share from $0.40 a year earlier. Zillow recorded a GAAP net loss of $4 million, or $0.02 a share, compared with income of $0.01 a share a year earlier.
For Sale revenue increased 14% to $549 million. Residential revenue grew 7% to $465 million as Preferred, Showcase, New Construction and agent software gains were partly offset by lower Market-Based Pricing revenue.
Mortgage revenue climbed 75% to $84 million as purchase-loan origination volume nearly doubled to $2.2 billion, substantially outpacing a roughly flat purchase-mortgage market. Rentals revenue rose 31%, driven by 42% multifamily growth, while the number of multifamily properties advertising on Zillow reached a record 79,000.
Adjusted EBITDA was $176 million, above the high end of Zillow’s outlook, for a 23% margin. The company revised first-quarter adjusted EBITDA to $198 million by excluding $16 million of nonrecurring legal expenses tied to the Federal Trade Commission.
Preferred covered 61% of Zillow connections, up from 44% at the end of 2024, and the company now plans to exceed 75% by year-end. Zillow expects Preferred’s revenue advantage over legacy advertising to widen to 35% per connection by the end of 2026.
The transition is expected to reduce fourth-quarter For Sale revenue growth by 200 to 300 basis points before the seasonal effect reverses in the first quarter of 2025. Zillow repurchased $200 million of shares during the quarter and eliminated roles immediately before the earnings release to lower costs and improve operating efficiency.