Zillow Group Inc
(MIL:1ZGU)
€
28.2
(0%)
Market Cap: 7.20 Bil
Enterprise Value: 6.89 Bil
PE Ratio: 143.20
PB Ratio: 1.86
GF Score: 42/100 
Q2 2026 Zillow Group Inc Earnings Call Transcript
Aug 05, 2026 / 09:00PM GMT
Release Date Price:
€28.2
Key Points
Positve
- Zillow Group Inc (Z) delivered strong Q2 2026 results with total revenue growth of 18% year-over-year, exceeding the high end of its outlook, and EBITDA of $176 million, also above expectations.
- The company's AI Mode is showing promising early engagement metrics, with users spending over three times longer on Zillow, viewing more than twice as many homes, and contacting agents at nearly three times the rate compared to non-AI Mode users.
- Zillow Home Loans is scaling effectively, becoming a TOP25 purchase lender with purchase loan origination volume growing 95% year-over-year in Q2, and the company expects per-loan economics to eventually match preferred agent referral fee profits.
- Rentals revenue grew 31% year-over-year in Q2, driven by a 42% increase in multifamily revenue, with the company seeing strong adoption and ROI for property managers, positioning it well for its $1 billion-plus revenue target.
- The company is accelerating its transition to the preferred monetization model, which generates 23% more revenue per connection than the legacy advertising model, and expects this to increase to 35% by the end of 2026.
- Zillow Group Inc (Z) continues to outperform the broader housing market, with for-sale revenue growing 14% year-over-year in Q2 despite a flat purchase mortgage market, and the company has added $287 million in incremental for-sale revenue since the start of 2025.
- The company is executing on cost discipline, with a restructuring expected to generate $75 million in annualized EBITDA savings and a 24% year-over-year reduction in share-based compensation expense in Q2.
- Zillow's brand and audience engagement remain strong, with 80% of traffic coming directly to its apps and sites, and it is the only large company in the category to consistently expand its real estate audience over the past seven quarters.
- New products like Zillow Preview and Showcase are gaining traction, with Showcase now on 5% of new listings and agents using it winning 35% more listings, while Preview has over 100 brokerage partnerships.
- The company maintains a strong liquidity position with $1.2 billion in total liquidity, allowing for continued share buybacks and investment in growth initiatives.
Negative
- Zillow Group Inc (Z) faces a challenging macro environment, with the purchase mortgage market expected to decline low to mid-single-digits in 2026, down from prior expectations of flat, due to rising interest rates and affordability pressures.
- The acceleration to the preferred monetization model creates significant near-term revenue headwinds, including a 200-300 basis point impact on for-sale revenue growth in Q4 due to seasonality and timing of revenue recognition.
- Residential revenue growth is expected to be flat year-over-year in Q3, with a 600-700 basis point shift from residential to mortgages revenue category, and this shift is expected to accelerate to 700-800 basis points in Q4.
- The company reported a net loss of $4 million in Q2, despite strong adjusted net income, and incurred $36 million in restructuring costs related to the elimination of approximately 7% of employees.
- Zillow Group Inc (Z) is facing ongoing legal challenges, including an FTC matter with litigation expenses of $10 million in Q2, and a court date later this month, which could create uncertainty.
- The transition to preferred is creating a timing lag in revenue recognition, with Zillow Home Loans revenue recognized six to 12 months after a connection, resulting in a consistent 200 basis point headwind to for-sale revenue.
- The company's Q3 revenue outlook of $745 million to $760 million implies a slowdown in growth to approximately 11% year-over-year, down from 18% in Q2, reflecting the impact of the preferred transition and macro headwinds.
- Higher mortgage rates are expected to impact conversion rates for Zillow Home Loans in Q4, adding to the challenges in the mortgage segment.
- The restructuring and leadership changes, including the departure of COO June Chu, may create operational disruption and uncertainty, though the company emphasizes no impact on growth bets.
- Despite strong overall performance, the company's for-sale revenue growth is expected to face 400-600 basis points of headwind in Q4 from the combination of seasonality and timing of revenue recognition, which could pressure near-term results.
Operator
Hello and welcome to Zillow Group's second quarter 2026 financial results call.
We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question-and-answer session.
Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Brad, you may begin.
Unidentified Company Representative
Thank you. Good afternoon and welcome to Zillow Group's quarterly earnings call. Joining me today to discuss our results are Zillow Group's CEO, Jeremy Waxman, as well as COO and CFO, Jeremy Hoffman.
During today's call, we will make forward-looking statements about our future performance and operating plans based on current expectations and assumptions.
These statements are subject to risks and uncertainties, and we encourage you to consider the risk factors described in our SEC filings for additional information. We undertake no obligation to update these statements as a result of new information or future
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