Zillow Group (NASDAQ:Z) reported fourth-quarter and full-year fiscal 2025 results that management said reflected “strong execution” and continued progress on its strategy to integrate more of the moving process across buying, selling, renting, and financing. CEO Jeremy Wacksman said the company achieved all of its stated financial targets for the year, including full-year profitability, and entered 2026 with momentum.
Q4 and full-year financial performance
In the fourth quarter, Zillow said total revenue increased 18% year-over-year to $654 million, near the top end of its outlook range. CFO Jeremy Hofmann said the company generated EBITDA of $149 million, near the midpoint of its outlook, with an EBITDA margin of 23%, up 260 basis points from a year earlier. Hofmann added that Zillow reported positive GAAP net income in Q4 and for the full year.
For Sale: Enhanced Markets, software, and mortgage growth
Zillow’s For Sale segment delivered $475 million of revenue in Q4, up 11% year-over-year. Hofmann said that growth was roughly 800 basis points above the 3% residential real estate industry growth reported by the National Association of Realtors (NAR). Within For Sale, residential revenue was $418 million, up 8% year-over-year, driven primarily by agent and software offerings and Zillow’s new construction marketplace. Management highlighted agent offerings including Zillow Preferred, Market-Based Pricing, and Zillow Showcase, as well as software products such as Follow Up Boss, Dotloop, and ShowingTime.
Mortgages revenue rose 39% year-over-year in Q4 to $57 million, which Hofmann said exceeded the company’s outlook for approximately 20% growth. He attributed the outperformance to “better-than-expected conversion rates” from customers in Zillow’s mortgage funnel. Purchase loan origination volume grew 67% year-over-year in Q4, and Wacksman said Zillow Home Loans has averaged double-digit adoption in Enhanced Markets.
For the full year, Zillow reported $1.9 billion of For Sale revenue, up 9% from 2024, including 7% residential revenue growth and 37% mortgages revenue growth. Wacksman said the business has outpaced broader transaction trends over a multi-year period, noting that over the last three years For Sale revenue grew 16% while existing home sales declined 19%.
Management emphasized the ongoing build-out of “Enhanced Markets,” where Zillow aims to connect buyers, agents, and loan officers in a more coordinated experience. Wacksman said 44% of Zillow’s connections in Q4 came through Enhanced Markets, up from 21% a year earlier, and reiterated an intermediate target of at least 75%. He said the constraints on expanding further are operational, including scaling, training partner teams, maintaining partner capacity and quality, and adding Zillow Home Loans loan officers.
The company also discussed product initiatives intended to improve engagement and conversion:
- BuyAbility: Wacksman said the affordability and pre-shopping tool enrolled 3.6 million users, up from 2.9 million at the end of Q3, and has been more tightly integrated with Zillow Home Loans and Follow Up Boss.
- AI-enabled agent communication: Zillow said Follow Up Boss “smart messages” expanded from a pilot to a nationwide feature, with agents sending more than 7 million AI-powered messages in 2025. Management said early tests of messaging inside the Zillow app (powered by Follow Up Boss) increased communication frequency between consumers and agents.
- Zillow Showcase: Wacksman said the immersive listing product appeared on 3.7% of new listings in Q4, up from 1.7% a year earlier, with “significant room to expand.”
Rentals: accelerating growth and expanding supply
Zillow’s Rentals segment remained a standout growth driver. Q4 Rentals revenue increased 45% year-over-year to $168 million and comprised 26% of total revenue, up from 21% a year ago, according to Hofmann. The company said Q4 multifamily revenue rose 63% year-over-year.
Wacksman said Zillow’s rentals strategy is to build a comprehensive, two-sided marketplace that includes both multifamily and “long-tail” inventory such as single-family rentals, while also modernizing the rental transaction through tools such as portable applications, leases, payments, and rent reporting to build credit. In Q4, Zillow reported 2.5 million average monthly active rental listings and 31 million average monthly unique visitors to Zillow Rentals. The company estimated its share of rental listings rose to 63% in 2025 from 54% in 2024.
Hofmann said the number of multifamily properties (defined as 25+ unit buildings) on Zillow’s apps and sites increased 44% year-over-year, reaching 72,000 properties at the end of Q4, up from 50,000 at the end of 2024. Management attributed growth to product-market fit with property managers and sales execution to win new properties and drive upgrades to more comprehensive packages.
For the full year, Rentals revenue was $630 million, up 39% year-over-year, with multifamily revenue up 58%.
Costs, legal expense headwinds, and capital returns
Hofmann said Q4 EBITDA expenses were $505 million, slightly above outlook due to higher-than-expected legal expenses. He said total fixed costs were flat year-over-year in Q4, while revenue grew 18%, and share-based compensation expense fell 20% year-over-year in the quarter. For the full year, Zillow held EBITDA fixed costs to approximately $1 billion, with fixed costs declining to 41% of revenue from 44% in 2024. Share-based compensation expense was $390 million in 2025, down 13% year-over-year; management said it expects share-based compensation to decline more than 10% in 2026.
On capital allocation, Zillow said it retired the remaining $419 million of convertible debt in Q2 and repurchased $670 million of shares in 2025, contributing to $1.1 billion of cash returned to shareholders in aggregate for the year. Hofmann said total share repurchases through 2025 were $2.6 billion at a weighted average share price of $50, and the year-end share count was down 2 million shares from the end of 2024. Zillow generated $420 million of free cash flow in 2025, up 36% year-over-year, and ended the year with $1.3 billion of cash and investments. The company also secured a $500 million revolving credit facility.
Wacksman briefly addressed legal matters in the news, stating the company was confident in its positions and did not expect the matters to have a material impact on Zillow’s financial position or long-term strategy. Hofmann said legal expenses are expected to remain elevated into 2026, creating a margin headwind, including an estimated 200 basis-point year-over-year headwind to EBITDA margin in Q1 and roughly 100 basis points for full-year 2026.
Outlook and strategic priorities for 2026
For Q1, Zillow guided total revenue of $700 million to $710 million, implying 18% year-over-year growth at the midpoint. The company expects For Sale revenue growth to be in line to slightly better than Q4, with residential revenue growth in the high single digits and mortgages revenue growth of approximately 40%. Zillow expects Rentals revenue growth of approximately 40% year-over-year in Q1.
Zillow guided Q1 EBITDA of $160 million to $175 million, implying a 24% margin at the midpoint. Hofmann said sequentially higher EBITDA expenses reflect seasonal payroll taxes, lead acquisition costs related to the Redfin syndication agreement, continued hiring in rental sales and Zillow Home Loans, and elevated legal expenses.
For full-year 2026, Zillow expects mid-teens revenue growth, including approximately 30% revenue growth in Rentals. Management said it expects continued EBITDA margin expansion as fixed costs are leveraged, while variable costs may grow ahead of revenue in the first half of 2026 and trend toward in-line growth in the second half. Hofmann said Zillow is planning for the for-sale environment to “bounce along the bottom,” while noting affordability improved, with the share of median household income spent on a newly purchased home returning to 32% in December, down from 38% in 2023.
Management also discussed Zillow Pro, a new membership bundle for agents that includes Follow Up Boss, premium profiles, branding, expanded “My Agent,” and AI-powered tools. Wacksman said Zillow Pro is in beta and the company plans to expand nationwide in the second half of the year. Hofmann said Zillow Pro is not expected to be a meaningful financial contributor in 2026, characterizing the year as focused on learning and adoption; revenue would be recorded within residential.
In Q&A, Wacksman also said the company does not expect industry consolidation or private listing networks to meaningfully impact Zillow, describing the number of affected listings as “1% or less.” He added Zillow is already enforcing its listing access standards and said enforcement is largely driven by educating agents on trade-offs around exposure.
About Zillow Group (NASDAQ:Z)
Zillow Group, Inc is an online real estate marketplace company that operates a portfolio of consumer-facing websites and mobile apps designed to connect buyers, sellers, renters, homeowners and real estate professionals. The company’s platforms aggregate property listings, rental listings, and related information to help users search for homes, estimate property values and connect with agents and service providers. Zillow generates revenue primarily through advertising and lead-generation services for real estate professionals, property managers and mortgage lenders.
Key products and services include the Zillow and Trulia consumer websites and apps, which provide searchable listings, photos, neighborhood data and the company’s automated home valuation tool known as the “Zestimate.” Zillow also offers a rentals marketplace, a mortgage marketplace and tools for home buying and selling such as Zillow Premier Agent for agent advertising and leads, as well as ancillary services designed to support transactions, including closing and title-related offerings.
