Zillow Group — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated revenue increased 7% year-over-year to $724 million for the three months ended September 30, 2026, compared to $676 million in Q3 2025.
• Net loss was $158 million (22% net loss margin) in Q3 2026, compared to net income of $10 million in Q3 2025; diluted net loss per share was $0.70 versus $0.04 in the prior year period.
• Adjusted net income was $124 million in Q3 2026, up from $113 million in Q3 2025; diluted adjusted net income per share was $0.55 compared to $0.44.
• Adjusted EBITDA was $182 million in Q3 2026, up from $165 million in Q3 2025, with an adjusted EBITDA margin of 25% (24% in Q3 2025).
• Gross profit was $516 million in Q3 2026 (71% of revenue) compared to $491 million (73% of revenue) in Q3 2025.
• Net cash provided by operating activities was $162 million in Q3 2026, compared to $105 million in Q3 2025.
• Adjusted free cash flow was $46 million in Q3 2026, down from $107 million in Q3 2025.
• Cash and investments totaled $707 million at the end of Q3 2026.
• For the nine months ended September 30, 2026, total revenue was $2,204 million (14% increase YoY), adjusted EBITDA was $556 million, and adjusted net income was $387 million.

Business Segments and Product Lines:

• Total For Sale revenue was flat year-over-year at $489 million in Q3 2026.
• Residential revenue within For Sale declined 4% year-over-year to $419 million in Q3 2026, attributed to higher-than-expected mortgage rates pressuring transaction volume.
• Mortgages revenue increased 32% year-over-year to $70 million in Q3 2026, driven by a 55% increase in purchase loan origination volume to $2.0 billion.
• Rentals revenue increased 26% year-over-year to $220 million in Q3 2026, primarily driven by multifamily revenue growing 35% year-over-year.
• Other revenue was $15 million in Q3 2026, up 7% from $14 million in Q3 2025.
• For the nine months ended September 30, 2026, For Sale revenue grew 9% to $1,552 million, Rentals revenue grew 32% to $612 million, and Mortgages revenue grew 54% to $218 million.

Market and Competitive Landscape:

• Zillow reported 215 million average monthly unique users in Q3 2026, down 3% year-over-year, with 2.3 billion visits, down 5% year-over-year.
• According to Comscore, Zillow captured 77% of average monthly unique visitors in the real estate category in Q3 2026.
• The residential real estate industry grew by 1% in Q3 2026, while Zillow's revenue grew 7%.
• The National Association of Realtors estimates Q3 purchase mortgage origination volume for the industry was down 4% year-over-year.

Risks and Challenges:

• The company cites a weaker-than-anticipated housing environment and higher-than-expected mortgage rates as factors pressuring housing transaction volume.
• Forward-looking statements highlight risks including economic health, inflation, interest rates, housing affordability, labor shortages, and supply chain issues.
• Risks include the ability to maintain relationships with real estate partners, listing data providers, and compliance with rules from the National Association of REALTORS® and multiple listing services.
• The company faces risks related to antitrust litigation brought by the FTC and state attorneys general, as well as the ZO securities class action settlement.
• Operational risks include cybersecurity, data privacy, service disruptions, and the ability to fund mortgage loan originations.

Management Commentary and Tone:

• CEO Jeremy Wacksman stated that Q3 highlighted Zillow's durability, noting the company grew revenue and outperformed the real estate category during one of the toughest housing markets in a generation.
• Management attributed performance to the company's brand, audience engagement, value to partners, and strong growth levers across a well-diversified business.
• The company expressed a goal to build a faster, easier, and more affordable moving experience for renters, buyers, and sellers.

Other Key Points:

• Adjusted financial measures (Adjusted EBITDA, Adjusted net income) exclude the impact of the $165 million ZO securities class action settlement, net of expected insurance recoveries.
• Adjusted EBITDA and Adjusted net income also exclude FTC Matter litigation costs, which management determined were nonrecurring, infrequent, or unusual.
• The company revised Adjusted EBITDA and Adjusted net income for the three months ended March 31, 2026, to conform to the current period presentation regarding FTC Matter litigation costs.
• Adjusted free cash flow excludes the initial payment in connection with the Redfin rentals partnership, considered a one-time nonrecurring cash flow.
• The company hosts a live webcast to discuss results and provides a shareholder letter on its Investor Relations website.