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Z
Zillow Group
Earnings
Z | Earnings Review
Zillow Group, Inc. | 2026 Q1 reported May 6, 2026 AMC | Analysis date: May 7, 2026 | Daloopa company_id 226
Revenue Beat
+0.4%
$708M vs ~$705M Street; +18.4% YoY — accelerated from +13% Q4'25
Adj EBITDA Beat
+8.1%
$182M vs ~$168M Street; margin 25.7% (+13 bps); above high end of company outlook
GAAP EPS Beat
+~2x
$0.19 vs ~$0.09 Street; first quarter EPS streak break — SBC -16%, share count -16M YoY
Q2'26 EBITDA Guide
~17-18% MISS
$150-165M (mid $157.5M) vs ~$191M Street; ex-$20M legal still ~$10M below — drives ~8% sell-off
Beat-and-guide-down: a clean Q1 print obscured by a Q2 EBITDA guide ~17-18% below Street, driving an ~8% sell-off. Q1 revenue $708M (+18.4% YoY, accel from +13% Q4'25) modestly beat ~$705M. Adj EBITDA $182M (+19% YoY) beat ~$168M by +8.1%, with margin 25.7% (+13 bps) above the high end of company outlook. GAAP EPS $0.19 (vs $0.03 PY) was ~2x consensus and broke a 4-quarter EPS-miss streak (SBC -16%, share count 256M→240M). Segment momentum: Rentals $183M +42% YoY (76K multifamily props, +38% YoY); Mortgages $64M +56% YoY (purchase originations +96% to $1.5B, top-25 lender); Residential $450M reaccelerated to +7.9%. Enhanced Markets at 49% of connections (up from 44% in Q4'25, target 75%+); Showcase 4.3% of new listings (up from 3.7%); Zillow Preview signed 60+ brokerages in 7 weeks — Realtor.com partnership announced as direct response to Compass Private Exclusives. Q2'26 guide is the print's wound: Revenue $750-765M in line with $760.9M consensus, but Adj EBITDA $150-165M (mid $157.5M) is ~17-18% below ~$191M Street. Q2 margin compresses to ~21% (vs Q1 26%) on $20M YoY legal step-up (FTC trial), $16M YoY pulled-forward ad spend, and continued 1H variable-cost intensity. FY26 framework reaffirmed: mid-teens revenue growth, 2H margin expansion, SBC down >15% (vs prior >10%). Tone shift: first quarter in the 4-call sequence where mgmt is defending a guide rather than beating/raising. Housing assumption walked back: Q4'25 cautious optimism on affordability removed — "we're not planning for [housing] to get any better." Capital return loud: $626M Q1 buyback (≈ all of FY25); $1.3B authorization remaining. Watch: (1) FTC trial timeline (200 bps margin headwind 1H, fading 2H); (2) Enhanced Markets 75% target; (3) Preview vs Compass/Rocket-Redfin competitive dynamic; (4) Mortgages volume-vs-revenue gap (96% vol vs 56% rev growth); (5) 2H margin recovery delivery.
Key Metrics Trends
| Metric | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 |
|---|---|---|---|---|---|---|---|---|---|
| Residential revenue ($M) | $393M | $409M | $405M | $387M | $417M | $434M | $435M | $418M | $450M |
| Residential revenue ($M) YoY % | - | - | - | - | +6.1% | +6.1% | +7.4% | +8.0% | +7.9% |
| Rentals revenue ($M) | $97M | $117M | $123M | $116M | $129M | $159M | $174M | $168M | $183M |
| Rentals revenue ($M) YoY % | - | - | - | - | +33.0% | +35.9% | +41.5% | +44.8% | +41.9% |
| Mortgages revenue ($M) | $31M | $34M | $39M | $41M | $41M | $48M | $53M | $57M | $64M |
| Mortgages revenue ($M) YoY % | - | - | - | - | +32.3% | +41.2% | +35.9% | +39.0% | +56.1% |
| Total revenue ($M) | $529M | $572M | $581M | $554M | $598M | $655M | $676M | $654M | $708M |
| Total revenue ($M) YoY % | - | - | - | - | +13.0% | +14.5% | +16.4% | +18.1% | +18.4% |
| Adj EBITDA ($M) | $125M | $134M | $127M | $112M | $153M | $155M | $165M | $149M | $182M |
| Adj EBITDA ($M) YoY % | - | - | - | - | +22.4% | +15.7% | +29.9% | +33.0% | +19.0% |
| Adj EBITDA margin % | 23.6% | 23.4% | 21.9% | 20.2% | 25.6% | 23.7% | 24.4% | 22.8% | 25.7% |
| Adj EBITDA margin % YoY chg (bps) | - | - | - | - | +200 | +30 | +250 | +260 | +10 |
| GAAP net income ($M) | $-23M | $-17M | $-20M | $-52M | $8M | $2M | $10M | $3M | $46M |
| GAAP net income ($M) YoY % | - | - | - | - | -134.8% | -111.8% | -150.0% | -105.8% | +475.0% |
| Diluted EPS ($) | $-0.10 | $-0.07 | $-0.08 | $-0.22 | $0.03 | $0.01 | $0.04 | $0.01 | $0.19 |
| Diluted EPS ($) YoY % | - | - | - | - | -130.0% | -114.3% | -150.0% | -104.5% | +533.3% |
_Trajectory: cycle-high acceleration on growth + first-time GAAP profitability inflection. Total revenue 8 straight quarters of double-digit growth (13.0% → 18.4%), accelerating in the back half. 2026Q1 is the cycle high on every dimension: revenue $708M, Adj EBITDA $182M at 25.7% margin, EPS $0.19 (+533% YoY). GAAP profitability inflection in 2025Q1 — Z turned from quarterly losses to positive EPS, scaling to $0.19 in 2026Q1. Mix shift: Rentals (+42%) and Mortgages (+56%) accelerating; Residential (largest segment) plateaued in +6-8% band — primary governor on overall growth. Operating leverage confirmed: Adj EBITDA growth (+19% Q1'26) running ahead of revenue growth (+18%); 2025FY first profitable year ($23M GAAP NI, $0.09 EPS, $420M adj FCF). The Q2 guide-down is a 1H phasing issue (FTC legal $20M + ad pull-forward $16M); FY26 framework reaffirmed at mid-teens revenue + margin expansion._
Beat/Miss
Guidance
Catalysts
Street Q&A
Contradictions
Read-Throughs
This Quarter vs Consensus
| Metric | Consensus | Actual | Variance | Read |
|---|---|---|---|---|
| Revenue | ~$705M | $708M | +$3M / +0.4% | Beat — near high end of guide |
| Adj EBITDA | ~$168M | $182M | +$14M / +8.1% | Beat — above high end of outlook |
| GAAP EPS | ~$0.09 | $0.19 | +$0.10 / ~2x | Beat — broke EPS-miss streak |
| Mortgages revenue | +~40% guide | +56% YoY | +1,600 bps | Beat — purchase orig +96% |
| Rentals revenue | — | +42% YoY | — | Beat — multifamily 76K (+38%) |
| Residential revenue | Sell-side ~+9% | +8% YoY | -100 bps | Slight miss vs sell-side, in line with company outlook |
| Q2'26 Revenue guide mid | $760.9M | $757.5M ($750-765M) | -$3.4M / -0.4% | In line |
| Q2'26 Adj EBITDA guide mid | ~$191M | $157.5M ($150-165M) | -$33.5M / -17.5% | MISS — drives sell-off |
| L4Q rev beat rate | — | 4/4 = 100% | — | Consistent Beater |
| L4Q EBITDA beat rate | — | 4/4 = 100% | — | Consistent Beater |
| L8Q rev beat rate | — | ~8/8 = 100% | — | Consistent Beater |
| L8Q EBITDA beat rate | — | ~8/8 = 100% | — | Above guide high end every Q since Q2'24 |
| L8Q Adj EPS beat rate | — | 3/8 | — | Recurring single-cent EPS misses pre-Q1'26 |
Pattern: Consistent revenue & EBITDA beater; EPS miss streak broken in Q1'26 via SBC reduction + share count. Revenue and EBITDA beat 8/8 L8Q with EBITDA above guide high end every quarter since Q2'24. Adj EPS however missed 5/8 L8Q (single-cent misses 2024Q4, 2025Q1, 2025Q3, 2025Q4) on legal/SBC pressure — Q1'26 was the streak break: SBC -16%, buyback drove share count from 256M to 240M, EBITDA flow-through to EPS. Mgmt explanation: macro was *worse* than expected (industry +2%, purchase mortgage origination -1% YoY); Zillow outperformed via Mortgages conversion, Rentals wallet share, Enhanced Markets 49% of connections. Residential MVP lag attributed to weak agent sentiment heading into spring. EBITDA beat from $526M opex vs $535-540M guide. Stock weakness on print is Q2 guide-driven, not print-driven.
Guidance Deep Dive
| Metric | Prior Guide / Trend | New Guide Range | New Guide Mid | Street Pre-Print | vs Prior | vs Street |
|---|---|---|---|---|---|---|
| Q2'26 Revenue ($M) | n/a (1Q forward) | $750-765M | $757.5M | $760.9M | n/a | -$3.4M / -0.4% |
| Q2'26 Revenue YoY | — | +15% – +17% | +16% | — | — | In line with FY framework |
| Q2'26 Adj EBITDA ($M) | n/a (1Q forward) | $150-165M | $157.5M | ~$191M | n/a | -$33.5M / -17.5% |
| Q2'26 EBITDA ex-legal step-up ($M) | — | $170-185M | $177.5M | — | — | -$13.5M / -7% |
| Q2'26 Implied EBITDA margin % | 26% Q1'26 actual | ~21% | — | — | -500 bps QoQ | $20M legal + $16M ad pull-forward |
| FY26 Revenue Growth | Mid-teens | Mid-teens | Mid-teens | — | Reaffirmed | — |
| FY26 Rentals Growth | ~+30% | ~+30% | +30% | — | Reaffirmed | — |
| FY26 Margin Trajectory | Continued expansion | Continued expansion (2H ramp) | — | — | Reaffirmed | — |
| FY26 SBC % of Revenue | >10% YoY decline | >15% YoY decline | — | — | Tightened down | — |
| FY26 Mortgages — purchase originations | Top 25 lender | One of the biggest | — | — | Ambition raised | — |
| Housing market assumption | Cautious optimism (Q4'25) | Flat — no recovery | — | — | Walked back | Aligns with NAR cut from +14% to +4% |
| FY26 Buyback authorization | — | $1.3B remaining | — | — | $626M Q1 deployed | ~all of FY25 in 1Q |
Tone: first defensive quarter in the 4-call sequence. Trajectory: Q2'25/Q3'25 confident execution → Q4'25 cautiously optimistic on affordability → Q1'26 defending Q2 guide. CFO Hofmann walked through a 4-driver bridge to support 2H margin ramp: (1) fixed cost leverage, (2) variable cost normalization, (3) FTC trial completion, (4) ad seasonality. Quality of the Q2 miss is mostly 1H phasing: $20M YoY legal step-up (FTC trial), $16M YoY pulled-forward ad spend, continued variable cost intensity in Rentals/ZHL hiring. Even ex-legal, $170-185M is ~$10M below Street — suggests Street had under-modeled ad pull-forward. FY26 framework reaffirmed: mid-teens revenue + 2H margin expansion + SBC down >15%. Risk caveats: macro housing flat (no recovery assumed); FTC trial accelerated timeline; agent sentiment soft heading into spring (governs MVP/Residential momentum). Bright spot: Mortgages ambition raised from "top 25" to "one of the biggest purchase mortgage originators"; Showcase + Preview gaining traction; capital return signal loud ($626M buyback at "market dislocation").
Upcoming Catalysts
| # | Catalyst | Timing | What to Watch | Read |
|---|---|---|---|---|
| 1 | Enhanced Markets 75% target | Through FY26 (currently 49% of connections) | Quarterly bps gain (Q1: +500 bps QoQ from 44%) | Most visible quarterly driver |
| 2 | Zillow Home Loans purchase orig +96% | Through FY26 | Volume vs revenue gap to narrow; top-25 → one of biggest | Mortgages segment scaling |
| 3 | Showcase % of new listings | FY26 (4.3% currently, target 5-10%) | Enterprise broker deal cadence; agent uptake; pricing power | High-margin growth wedge |
| 4 | Zillow Preview vs Compass/Rocket-Redfin | Through FY26 | 60+ brokerages in 7 weeks; Realtor.com partnership; FTC trial outcome | Competitive moat |
| 5 | FTC trial on Zillow-Redfin rentals deal | Accelerated timeline; resolves 1H'26 | ~200 bps margin headwind in 1H, fading 2H | Resolution = margin tailwind |
| 6 | Rentals: 76K multifamily / 140-150K TAM | Through FY26 | Multifamily property growth (+38% YoY); $1B+ target | Largest growth engine |
| 7 | 2H margin expansion (~21% Q2 → ~26%+) | 2H'26 | Variable cost normalization; FTC trial completion; ad seasonality | Required to validate FY framework |
| 8 | AI Mode (5% audience → wider rollout) | FY26 | Engagement / conversion lift; product feedback | Engagement upside |
| 9 | Zillow Pro nationwide rollout (12K agents in beta) | 2H'26 | Agent satisfaction; conversion on connections | Premier Agent productivity |
| 10 | Capital allocation: $626M Q1 buyback / $1.3B remaining | Ongoing | Pace at "market dislocation" prices; M&A optionality | Aggressive — broke prior "selective" framing |
| 11 | Rocket-Redfin competitive integration | 2026-2027 | 1-in-6 US mortgages; embedded mortgage in Redfin app | Central competitive threat |
| 12 | Compass lawsuit dropped (March 2026) | Resolved | Validates Preview model; overhang removed | Sentiment positive |
| 13 | NAR settlement / MLS rules | Ongoing | Fragmented MLS rules; commission disclosure | Industry uncertainty |
| 14 | Housing macro — flat assumed | FY26 | NAR cut FY26 home sales forecast +14% → +4%; affordability frozen | No upside in base case |
| 15 | Q2 print — August 2026 | Aug 2026 | Revenue $750-765M; legal-adjusted EBITDA $170-185M; 2H margin guide | Confirms 2H ramp |
Street Q&A
| # | Analyst (Firm) | Topic | Mgmt Response | Quality |
|---|---|---|---|---|
| 1 | Multiple analysts (Zelman, Citi, RBC, BNP, Jefferies, Bernstein) | Q1 print and macro setup | Mgmt: industry +2%, purchase mortgage orig -1%; Z outperformed via Mortgages conversion, Rentals wallet share, Enhanced Markets 49% of connections. | Well Answered — quantified |
| 2 | Multiple analysts | Rentals — 76K multifamily, $1B target trajectory | Multifamily 76K (+38% YoY); 36M monthly rentals uniques; targeting Google/Meta ad wallet via new managed paid-social on IG/FB/TikTok. | Well Answered — segment specifics |
| 3 | Multiple analysts | Residential / Enhanced Markets — 49% → 75% | Enhanced Markets at 49% (vs 44% Q4); progress on track; commitment to 75%+ "intermediate term" (no time frame). | Well Answered |
| 4 | Multiple analysts | Mortgages — origination growth, ambition | Purchase orig +96% YoY to $1.5B (top-25); ambition raised from "top 25" to "one of the biggest purchase mortgage originators in the country." | Well Answered — ambition raised |
| 5 | Multiple analysts | AI Mode / platform rollout | AI Mode at 5% audience; expanding through year; Zillow Pro in beta with 12K agents, nationwide 2H'26. | Well Answered |
| 6 | Multiple analysts | Capital allocation / margins / 2H margin ramp | $626M Q1 buyback at "market dislocation"; $1.3B remaining. Margin path: $20M legal + $16M ad pull-forward + variable cost normalize → 2H ramp from 21% → 26%+. | Well Answered — explicit bridge |
| 7 | Colantuoni (Jefferies) | Q2 Residential deceleration — quantify MVP drag | Mgmt attributed to weak agent sentiment heading into spring; did NOT quantify the MVP drag. | Partial — qualitative only |
| 8 | Multiple analysts | Zillow Preview — Compass response | 60+ brokerages in 7 weeks + Realtor.com partnership announced; positions both as "public" alternative to private listing networks. | Well Answered — competitive framing |
| 9 | Multiple analysts | FY26 framework | Mid-teens revenue, ~30% Rentals, continued margin expansion, SBC down >15% (vs prior >10%). | Well Answered — tightened SBC |
| 10 | Multiple analysts | Showcase % of listings target | Q1'26 at 4.3% of new listings (vs 3.7% Q4); enterprise broker deals signed; long-term target 5-10% of total active listings. | Well Answered — denominator clarified |
| 11 | (Not asked) | FTC trial specifics / cost / outcome scenarios | Not pressed by analysts; only quantified through $20M Q2 legal step-up framing. | Blind spot |
| 12 | (Not asked) | $626M Q1 buyback vs cash drawdown | Not pressed; mgmt noted "market dislocation" prices. | Blind spot |
Contradictions
| # | Topic | Severity | Statement A | Statement B | Why it's a tension |
|---|---|---|---|---|---|
| 1 | Buyback pace vs prior "selective" framing | Medium — soft contradiction | Q2'25 prepared remarks: "more selective in our share repurchases" for rest of 2025. | Q1'26: $626M Q1 alone (≈ all of FY25's $670M). | Mgmt reframed in Q3'25 as "opportunistic" citing market dislocation. Not a contradiction in framework but a clear pace inflection investors should note. |
| 2 | Showcase target denominator drift | Low — framing inconsistency | Q2/Q3'25: target "5-10% of all listings" / "of listings" | Q4'25: "total active listings"; reported metric always % of new listings (4.3% Q1'26 vs 3.7% Q4'25). | Stock vs flow inconsistency. New listings ≠ total active listings; investors comparing to 5-10% target should adjust for denominator. |
| 3 | Housing outlook tonal shift | Medium — material walk-back | Q4'25: "share of median household income spent on a newly purchased home returned to 32% ... we expect further improvement will drive a broader housing market recovery over time" | Q1'26: "we're not planning for [housing] to get any better." | Material reset of macro framing. NAR cut FY26 home sales forecast from +14% to +4% in same period. Removes housing recovery as a Z 2026 thesis driver. |
| 4 | Enhanced Markets target timeline | Low — re-framing | Q2'25: 75% target was "mid-cycle" | Q4'25/Q1'26: "intermediate-term, no time frame" | Re-framing of when 75% is achieved. Q1'26 actual at 49% — on the right glide path but pace clarification missing. |
| 5 | Mortgages volume-vs-revenue growth gap | Low — execution detail | Mgmt: "will narrow over time" | Actual: gap widened — 96% origination growth vs 56% revenue growth in Q1'26 | Take rate / monetization lag persists. Volume monetization should narrow as cohorts mature. |
Indirect Read-Throughs
| Name | Relationship | What Z signaled | Read-through |
|---|---|---|---|
| Realtor.com / News Corp (NWSA) | Public listings partner | New Preview collaboration — positions both as "public" alternative to private listing networks; 60+ brokerages signed in 7 weeks | POSITIVE — meaningful tailwind |
| Compass (COMP) | Direct competitor (Private Exclusives) | Wacksman: "only benefit of private is a benefit for brokerage that hides listings for their own gains." Lawsuit dropped March 2026 | NEGATIVE — direct shot at Private Exclusives model |
| CoStar (CSGP) | Rentals competitor (Apartments.com / Homes.com) | Z claims best ROI vs "apartment-focused sites"; 76K multifamily props (+38% YoY); 36M monthly rentals uniques | NEGATIVE — rentals share take |
| Redfin / Rocket Companies (RKT) | Mortgage + listings competitor | Redfin partnership confirmed intact (rentals); Rocket-Redfin embedded mortgage in app = central competitive threat; Z purchase orig +96% YoY | MIXED — partnership intact, competitive threat building |
| Google (GOOGL) | Search advertising peer/supplier | Z explicitly targeting search ad wallet share for multifamily | NEGATIVE — long-term substitute |
| Meta (META) | Social ad supplier/peer | New April managed paid-social product on IG/FB/TikTok — Z managed buyer of Meta inventory | POSITIVE near-term ad spend; long-term substitute |
| Opendoor (OPEN) / Offerpad (OPAD) | iBuyer peers | Notably absent — Z firmly off iBuying | Neutral — strategic divergence |
| Anywhere Real Estate (HOUS) | Brokerage peer | Brokerages signing onto Preview; agent sentiment soft heading into spring | Mixed — agent sentiment pressure |
| NAR (industry) | Macro KPI | NAR cut FY26 home sales forecast from +14% to +4%; Z modeling flat market | Macro overhang |
| Zillow Home Loans / Mortgage industry | Macro signal | Z purchase orig +96% YoY in -1% industry purchase-orig environment | NEGATIVE for incumbent mortgage lenders (RKT, UWM, COOP) |
| FTC trial (regulator) | Legal/regulatory | Accelerated timeline; ~$20M Q2 legal headwind; ~200 bps 1H margin drag fading 2H | Resolution = margin tailwind |
| Compass lawsuit dropped (March 2026) | Legal | Validates Preview model; overhang removed | Sentiment positive |
| Tractor Supply / Home Depot (HD) | Adjacent housing demand | Not directly mentioned but flat housing market signal | Cautious for housing-discretionary spend |
Data sourced from Daloopa. Document search is currently in beta; transcript and filing snippets may vary.