Zillow Group NASDAQ: Z executives said the company began 2026 with “consistent execution and continued momentum,” posting first-quarter revenue near the high end of its outlook range and adjusted EBITDA above guidance despite what management described as a largely flat housing market and tougher-than-expected winter weather and interest-rate volatility.
CEO Jeremy Wacksman said Zillow’s strategy is to “make moving easier by connecting the entire housing journey into one integrated experience,” spanning shopping, touring, financing and closing in the for-sale market and search through payments in rentals. Wacksman added that roughly 80% of Zillow’s traffic comes directly to its platforms and that Zillow has “more than 2x the daily active app users” of its next closest competitor.
First-quarter results and profitability
CFO Jeremy Hofmann reported first-quarter revenue of $708 million, up 18% year-over-year. Adjusted EBITDA totaled $182 million, above the high end of the company’s outlook range, for an EBITDA margin of 26% that was flat year-over-year. Hofmann said that excluding $11 million of incremental year-over-year legal costs, EBITDA would have been $193 million, representing a 27% margin and 160 basis points of expansion.
Zillow posted net income of $46 million, with a net income margin of 6%, which Hofmann said was up more than 500 basis points from a year earlier. Diluted earnings were $0.19 per share, compared with $0.03 a year ago. Free cash flow was $127 million, up 44% year-over-year. Share-based compensation expense declined 16% year-over-year, and Hofmann said the company is now guiding for share-based compensation to be down more than 15% for the full year, compared with prior guidance of down more than 10%.
For-sale business: residential, mortgages, and product integration
In the for-sale segment, Wacksman said revenue grew 12% year-over-year in Q1 to $514 million, including 8% growth in residential revenue and 56% growth in mortgages revenue. Hofmann specified that residential revenue was $450 million and mortgages revenue was $64 million.
Hofmann said the majority of residential growth came from Zillow Preferred, “primarily driven by the expansion of connections alongside our enhanced markets growth and strong conversion for our preferred partners.” He added that Zillow Showcase, agent software tools and new construction also contributed, while market-based pricing revenue continues to decline as Zillow transitions more agent-related activity to preferred partners.
On mortgages, Wacksman said purchase loan origination volume rose 96% year-over-year to a record $1.5 billion, and Zillow Home Loans is now a top 25 purchase lender. Hofmann said mortgages revenue growth exceeded Zillow’s outlook for 40% growth due to better-than-expected conversion rates from customers in the pipeline, and he noted that as the business scales, the gap between origination volume growth and mortgages revenue growth is expected to narrow.
Wacksman highlighted several initiatives aimed at integrating Zillow’s ecosystem, including BuyAbility, which he said had enrolled 4.3 million users by the end of Q1 (up from 3.6 million at the end of 2025), and a “Shop with Pre-approval” feature now available across the platform. He also pointed to “My Agent,” which allows buyers to designate an agent they are working with, and threaded messaging that enables buyers, agents and loan officers to communicate in one place.
Zillow Preview and Showcase: early adoption and broader distribution
Wacksman also focused on Zillow Preview, a pre-market listing product announced seven weeks prior to the call. He said Zillow launched Preview with five brokerage partners and has since added “more than 60 brokerages,” describing agent demand as significant as Zillow onboards participants.
During Q&A, Wacksman told Zelman & Associates’ Ryan McKeveny that early response “has been more than we expected.” He described Zillow’s new collaboration with realtor.com as “a win-win,” saying it extends Preview listings across “two of the most visited real estate platforms in the country,” which management believes will increase the value and demand for pre-market inventory. Wacksman said the product remains in early days but added, “Hard to believe we’ve made this much progress in just the first two months.”
Wacksman also reiterated the company’s view that broad public exposure benefits sellers and buyers more than private listing networks. Responding to a question from Jefferies’ John Colantuoni about how Preview compares with alternatives, Wacksman said, “Public is better than private,” arguing that broad exposure supports faster sales and higher prices.
For Zillow Showcase, Wacksman said Showcase listings provide immersive experiences—such as interactive floor plans, 3D tours, virtual staging, and SkyTour—and that Showcase was used on 4.3% of new listings in Q1, up from 3.7% in Q4. He also said enterprise agreements with large brokers and franchisors are contributing to adoption.
Rentals: multifamily growth and path to $1 billion
Rentals revenue rose 42% year-over-year in Q1 to $183 million, with multifamily revenue up 57%, according to Hofmann. Wacksman said Zillow reached an all-time high of 76,000 multifamily properties on the platform at the end of Q1, up from 55,000 a year earlier, and reported 2.7 million average monthly active rental listings in Q1 and 36 million average monthly unique visitors.
Management repeatedly emphasized what Hofmann called the “growth algorithm” in rentals: “Add more properties, deliver best in class ROI, and capture more wallet share.” Hofmann said the company sees “a clear path to $1 billion or more in annual rentals revenue,” and Wacksman added that the $1 billion target is “not the end state,” citing runway in multifamily penetration and opportunities across long-tail and single-family rental listings.
Zillow also highlighted new tools for property managers, including a Total Monthly Price feature, and, launched in April, a live analytics dashboard and a paid social product that promotes listings on Instagram, Facebook, and TikTok “fully built and managed by Zillow,” with the dashboard intended to identify units needing more traffic and then increase reach through social channels.
AI initiatives and internal productivity
Wacksman said Zillow is using AI to accelerate its strategy, describing three long-term advantages: “content, context, and integration.” He said Zillow’s consumer-facing “AI mode” is currently live for about 5% of its audience and will expand this year as Zillow tests and refines the experience. Wacksman said early signals show users in AI mode are having “deeper, more substantive conversations” and that Zillow is seeing “more actionable engagement as a result.”
He also said Zillow is embedding AI into professional tools, including Follow Up Boss, and into internal operations, claiming engineers are “shipping 40% more code per engineer at the same or higher quality,” while product and design teams are prototyping and launching features faster.
Capital return, liquidity, and outlook
Hofmann said Zillow ended Q1 with $788 million of cash and investments, down from $1.3 billion at the end of 2025, after repurchasing $626 million of stock during the quarter. Diluted shares outstanding declined to 240 million at quarter end from 256 million a year earlier. Zillow had about $1.3 billion remaining under its existing repurchase authorizations and $500 million available on an undrawn revolving credit facility, for total liquidity of about $1.3 billion.
For the second quarter, Zillow guided to revenue of $750 million to $765 million, implying about 16% year-over-year growth at the midpoint. The company expects for-sale revenue growth similar to Q1, with mid-single-digit residential growth and mortgages growth at similar levels to Q1, and expects rentals revenue growth of about 30% year-over-year.
Zillow guided to Q2 EBITDA of $150 million to $165 million and EBITDA expenses of $600 million, including about $20 million of incremental legal expenses and about $16 million of incremental advertising spend compared with a year ago. Excluding the incremental legal costs, Zillow said it would expect EBITDA of about $170 million to $185 million, implying relatively flat year-over-year margins.
For the full year 2026, management reiterated expectations for mid-teens total revenue growth, about 30% rentals revenue growth, and EBITDA margin expansion, with Hofmann pointing to anticipated margin improvement in the back half of the year driven by fixed-cost leverage, decelerating variable costs, reduced legal expense headwinds after the FTC trial, and a more typical seasonal pattern for advertising after heavier Q2 spend tied to planned product launches.
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.
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