Core Insights - The individual investor emphasizes a diversified investment approach, incorporating fundamental, technical, and momentum investing strategies to enhance their investment process [1]. Investment Approach - The investor believes in the merits of various investment strategies, including fundamental investing, technical analysis, and momentum investing, to refine their investment process over the years [1]. Purpose of Writing - The intention behind writing on Seeking Alpha is to track the performance of investment ideas and connect with like-minded investors who share similar interests [1].

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Insights - Zillow Group reported Q3 2025 adjusted EPS of 44 cents, missing the Zacks Consensus Estimate of 45 cents, but reflecting a 25.7% year-over-year increase [1][8] - Total revenues reached $676 million, exceeding the Zacks Consensus Estimate of $669 million, and showing a 16.4% year-over-year improvement [1][8] Revenue Breakdown - For-sale revenues increased by 9.9% to $488 million, with residential revenues of $435 million rising 7.4% year over year, supported by growth in agent and software offerings [2] - Mortgage revenues surged 35.9% year over year to $53 million, driven by a 57% increase in purchase loan origination volume to $1.3 billion [2] - Rental revenues grew 41.5% year over year to $174 million, primarily due to a 62% increase in multifamily revenue [3] Cost and Profitability - The adjusted EBITDA margin improved by 200 basis points to 24% of revenues, amounting to $165 million, attributed to strong revenue growth and cost discipline [3] - However, the cost of revenues rose 32.1% year over year to $185 million, influenced by increased lead acquisition costs and ad-serving expenses [4] User Engagement - Online traffic on Zillow's mobile applications and sites increased by 7% year over year, reaching 250 million average monthly unique users, with visits improving by 4% to 2.5 billion [3] Financial Position - Zillow ended Q3 2025 with $1.4 billion in cash and investments, up from $1.2 billion at the end of the previous quarter [5] Future Outlook - For Q4 2025, Zillow expects total revenues between $645-655 million and adjusted EBITDA of $145-155 million, with for-sale revenues projected to grow in the high single digits [6] - Rental revenues are anticipated to rise over 45% year over year, driven by accelerated multifamily revenue growth [7] - For the full year 2025, management projects mid-teens revenue growth and rental revenue growth of around 40% year over year, along with adjusted margin expansion and positive GAAP net income [7]

Core Insights - Zillow reported quarterly earnings of $0.44 per share, slightly missing the Zacks Consensus Estimate of $0.45 per share, but showing an increase from $0.35 per share a year ago, resulting in an earnings surprise of -2.22% [1] - The company achieved revenues of $676 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.05% and reflecting a year-over-year increase from $581 million [2] - Zillow's stock has underperformed the market, losing approximately 3.4% since the beginning of the year, while the S&P 500 has gained 17.2% [3] Earnings Outlook - The future performance of Zillow's stock will largely depend on management's commentary during the earnings call and the revisions of earnings estimates [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.41 on revenues of $645.96 million, and for the current fiscal year, it is $1.67 on revenues of $2.57 billion [7] Industry Context - Zillow operates within the Internet - Services industry, which is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The performance of Zillow's stock may also be influenced by the overall industry outlook, as empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions [5][8]

Financial Data and Key Metrics Changes - Total revenue increased 16% year over year to $676 million in Q3, exceeding the high end of the outlook range [5][26] - EBITDA of $165 million was reported, above the high end of the outlook range, with an EBITDA margin of 24%, expanding more than 200 basis points year over year [6][26] - GAAP net income of $10 million was achieved in Q3, reflecting effective cost management alongside revenue growth [6][27] Business Line Data and Key Metrics Changes - For-sale revenue grew 10% year over year to $488 million, outperforming the broader housing market [27][28] - Residential revenue within for-sale increased 7% to $435 million, with mortgage revenue growing 36% year over year to $53 million [28][29] - Rentals revenue surged 41% year over year to $174 million, driven primarily by a 62% increase in multifamily revenue [19][30] Market Data and Key Metrics Changes - Zillow's apps and sites had 250 million average monthly unique users in Q3, with agents using Zillow products responsible for an estimated 80% of U.S. residential real estate transactions [7][8] - The number of multifamily properties listed on Zillow reached 69,000, nearly double the 35,000 from two years ago [19][30] - Zillow Rentals had 2.5 million average monthly active rental listings, the most in the category [30] Company Strategy and Development Direction - The company is focused on delivering a seamless digital end-to-end experience for consumers and real estate professionals, emphasizing innovation and consumer-first strategies [5][24] - Zillow is expanding its integrated transaction experience, with 34% of connections now going through enhanced markets, aiming for at least 75% [15][36] - The launch of Zillow Pro is expected to enhance agent capabilities and expand the serviceable market [17][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing through external challenges, with a focus on building a transparent, consumer-first marketplace [23][24] - The company anticipates continued revenue growth acceleration in Q4, with rentals revenue expected to increase more than 45% year over year [34][35] - For 2026, management expects similar growth and EBITDA margin expansion as in previous years, planning for a macro housing environment that remains flat [36][63] Other Important Information - The company generated $295 million of free cash flow in the first nine months of 2025, a 28% increase compared to the same period a year ago [32] - Cash and investments at the end of Q3 totaled $1.4 billion, up from $1.2 billion at the end of Q2 [32] - The company has repurchased $2.4 billion in shares at a weighted average price of $48 [32] Q&A Session Summary Question: On the integration of the Zillow app with ChatGPT and its implications - Management views the integration as a significant opportunity, enhancing brand visibility and user experience while leveraging existing traffic [39][40][41] Question: Impact of the FTC suit and potential disruptions from Compass's acquisition of Anywhere - Management believes the syndication of multifamily listings is beneficial for consumers and property managers, and they do not foresee significant disruption from the proposed merger [44][45][46] Question: Performance of the residential business and market dynamics - The residential business outperformed the market, with growth driven by enhanced markets and Zillow Home Loans [48][49] Question: Value unlocks from Zillow Pro and monetization strategy - Zillow Pro is designed to bundle software tools for agents, enhancing their business operations and providing a pathway to Zillow Preferred [50][51] Question: Long-term opportunity with Zillow Preferred and market share - The expansion of Zillow Preferred is expected to drive continued outperformance in both residential and for-sale categories [52][53] Question: Sales strategy for rentals in light of market conditions - Management plans to continue business as usual, confident in the growth trajectory and value proposition for property managers [54][55]

Core Insights - The article discusses the current trends and challenges in the real estate market, highlighting the impact of rising interest rates and inflation on property values and sales [1] Group 1: Market Trends - Rising interest rates have led to a slowdown in home sales, with a reported decrease of 15% year-over-year in some regions [1] - Inflation continues to affect construction costs, resulting in a 10% increase in material prices over the past year [1] Group 2: Investment Opportunities - Despite the challenges, certain markets are showing resilience, particularly in suburban areas where demand remains strong [1] - Real estate investment trusts (REITs) are adapting by focusing on sectors like logistics and healthcare, which are less sensitive to economic fluctuations [1]

Financial Performance - Total revenue for Q3 2025 was $676 million, a 16.3% increase from $581 million in Q3 2024[28] - Gross profit for Q3 2025 reached $491 million, compared to $441 million in Q3 2024, reflecting a 11.4% growth[28] - Net income for Q3 2025 was $10 million, a recovery from a net loss of $20 million in Q3 2024[30] - For Sale revenue from residential properties was $435 million in Q3 2025, up from $405 million in Q3 2024, marking a 7.4% increase[28] - The company reported a loss from operations of $3 million in Q3 2025, an improvement from a loss of $45 million in Q3 2024[28] - Total revenue for the three months ended September 30, 2025, was $676 million, representing a 16% increase from $581 million in the same period of 2024[111] - The net income for the three months ended September 30, 2025, was $10 million, compared to a net loss of $20 million in the same period of 2024[95] - Adjusted EBITDA for the three months ended September 30, 2025 was $165 million, a 30% increase from $127 million in the same period in 2024[137] - Total revenue for the nine months ended September 30, 2025 increased by $247 million, or 15%, to $1.9 billion[133] Assets and Liabilities - Total current assets decreased to $2,119 million as of September 30, 2025, down from $2,334 million at the end of 2024[27] - Total liabilities decreased to $706 million as of September 30, 2025, compared to $981 million at the end of 2024[27] - Shareholders' equity increased to $4,992 million as of September 30, 2025, up from $4,848 million at the end of 2024[27] - Total assets measured at fair value on a recurring basis were $1,695 million as of September 30, 2025, compared to $2,025 million as of December 31, 2024[56] - As of September 30, 2025, outstanding borrowings under master repurchase agreements totaled $272 million, with a maximum borrowing capacity of $600 million[62] Cash Flow and Investments - Net cash provided by operating activities was $296 million for the nine months ended September 30, 2025, compared to $306 million in 2024[34] - Cash, cash equivalents, and restricted cash at the end of the period were $879 million, down from $1,075 million at the end of September 2024[34] - The company reported a net decrease in cash of $206 million during the period, compared to a decrease of $420 million in the prior year[34] - The company repurchased Class A common stock and Class C capital stock totaling $438 million in 2025, compared to $301 million in 2024[34] - The company repurchased 4.7 million shares of Class A common stock and 1.4 million shares of Class C capital stock during the nine months ended September 30, 2025, for an aggregate purchase price of $438 million[187] Revenue Breakdown - Rentals revenue increased by $51 million, or 41%, to $174 million, driven by higher quarterly revenue per average monthly rentals unique visitor[111] - Residential revenue rose by $30 million, or 7%, to $435 million, attributed to increased visits and Residential revenue per visit[115] - Mortgages revenue increased by $14 million, or 36%, to $53 million, due to a rise in mortgage originations revenue from higher total loan origination volume[115] - Total loan origination volume for the three months ended September 30, 2025, was $1,281 million, a 56% increase from $819 million in the same period of 2024[128] Expenses - Total operating expenses for Q3 2025 were $494 million, slightly higher than $486 million in Q3 2024[28] - Cost of revenue increased by $45 million, or 32%, to $185 million for the three months ended September 30, 2025[142] - Sales and marketing expenses rose by $50 million, or 9%, for the nine months ended September 30, 2025, driven by increased headcount-related expenses[152] - Technology and development expenses increased by $17 million, or 4%, for the nine months ended September 30, 2025, primarily due to higher headcount-related expenses[155] - General and administrative expenses decreased by $17 million, or 4%, for the nine months ended September 30, 2025, mainly due to lower headcount-related expenses[158] Shareholder Information - The company authorized a total of $3.5 billion for share repurchases, with $943 million remaining available as of September 30, 2025[73] - The company has authorized up to an additional $1 billion for share repurchases, increasing total cumulative repurchase authorizations to $3.5 billion as of September 30, 2025[187] Market and Economic Conditions - Zillow Group operates in a dynamic industry influenced by economic conditions, interest rates, and housing availability[39] - The company is exposed to market risks, particularly fluctuations in interest rates, which may impact mortgage loan origination volume and associated revenue[195] - Inflationary pressures may lead to increased costs in labor, marketing, and hosting, potentially affecting the company's financial condition[201] Legal and Compliance - The company has not recorded any material accruals related to ongoing legal proceedings as of September 30, 2025, indicating a stable financial position despite potential risks[82] - The company is involved in various legal proceedings, including antitrust and consumer protection claims, which may increase as the business expands[209] - As of September 30, 2025, the company's disclosure controls and procedures were evaluated as effective by the CEO and CFO[203] - No changes in internal control over financial reporting were identified that could materially affect the company's financial reporting[204]

ZILLOW GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in millions, unaudited) | | | | Three Months Ended | | | | Nine Months Ended | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | September 30, | | | | September 30, | | | | | 2025 | | 2024 | | 2025 | | 2024 | | Revenue | $ | 676 | $ | 581 | $ | 1,929 | $ | 1,682 | | Cost of revenue (1) | | 185 | | 140 | | 490 | | 393 | | Gross profit | | 491 | | 441 | | 1,439 | | 1,289 | | Operating expenses: | | | | | | | | | | Sales and marketing (1 ...

Core Insights - An increasing number of individuals are utilizing financing options through Zillow for home purchases [1] - A growing number of property managers are leveraging Zillow for rental listings [1] Group 1 - More people are buying homes using financing through Zillow [1] - More property managers are using the website for rental listings [1]

Core Insights - The U.S. housing market faces challenges from high mortgage rates, affordability issues, and mixed buyer sentiment, yet Opendoor Technologies and Zillow Group are leading digital real estate innovations [1][2] Opendoor Technologies - Opendoor reported $1.6 billion in revenues for Q2 2025, achieving adjusted EBITDA profitability of $23 million, marking its first profitable quarter since 2022 [4] - The company is transitioning to an agent-distributed model, enhancing its reach through the "Key Agent" program and Cash Plus offering, which has doubled customer conversion rates [5][6] - Despite a 63% year-over-year decline in home acquisitions, Opendoor maintains a strong balance sheet with $789 million in cash, allowing for stability during its strategic transition [7] Zillow Group - Zillow's Q2 2025 revenues grew by 15% to $655 million, with significant growth in Rentals (36%) and Mortgage revenue (41%), driven by increased loan originations [10][11] - The company has a strong consumer base, averaging 243 million monthly users, and is enhancing user experience through innovative tools like BuyAbility and AI-supported CRM features [8][9] - Zillow's integrated market strategy is yielding results, with 27% of customer connections flowing through its upgraded experience, aiming for over 35% by year-end [10] Stock Performance - Over the past three months, Opendoor's stock surged by 240.6%, while Zillow's stock fell by 5.8%, reflecting differing investor sentiments towards their respective business models [13] - Opendoor trades at a forward price-to-sales ratio of 1.22X, significantly lower than Zillow's 6.5X, indicating a potential for higher upside if its new model succeeds [14] Earnings Estimates - Opendoor's consensus estimate for 2025 loss per share has improved to 24 cents, with expectations of narrowing losses in 2026 [16] - Zillow's EPS estimate for 2025 is $1.67, reflecting a 21% year-over-year growth, with consistent revenue growth projections for 2025 and 2026 [17] Strategic Outlook - Opendoor's focus on a capital-light, agent-driven model positions it for potential operating leverage as market conditions improve, supported by a new CEO with AI expertise [19] - Zillow's established brand and integrated ecosystem provide a competitive advantage, although its premium valuation limits short-term upside [20]