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] - Total revenue for the three months ended September 30, 2025, was $676 million, an increase of 16% compared to $581 million for the same period in 2024[111] - 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] Revenue Breakdown - 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] - 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 in 2024[128] Expenses and Costs - 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] - Cost of revenue increased by $97 million, or 25%, for the nine months ended September 30, 2025, primarily due to increases in lead acquisition costs and depreciation expenses[146] - Sales and marketing expenses rose by $50 million, or 9%, for the nine months ended September 30, 2025, driven by increases in 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 headcount-related expenses[155] 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] - 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] Cash Flow - Net cash provided by operating activities was $296 million for the nine months ended September 30, 2025, slightly down from $306 million in 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] - Adjusted free cash flow for the nine months ended September 30, 2025, was $295 million, compared to $231 million in the prior year[168] Share Repurchase and Equity - The company repurchased $438 million of Class A common stock and Class C capital stock during the nine months ended September 30, 2025[34] - Share repurchase authorizations increased to $3.5 billion, with $943 million remaining available for future repurchases as of September 30, 2025[73] - 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] Legal and Regulatory Matters - The company is involved in various legal proceedings, but management does not believe these will have a material effect on its financial position as of September 30, 2025[82] - The company is involved in various legal proceedings, including antitrust and intellectual property claims, which may increase as the business expands[209] Market Conditions and Risks - The company operates in a dynamic industry with significant risks including economic stability, interest rates, and regulatory changes[39] - Inflationary pressures have adversely impacted the number of transactions and demand for the company's services, affecting overall revenue[200] - Inflationary pressures may lead to increased costs in labor, marketing, and hosting, potentially affecting the company's financial condition[201] Miscellaneous - The company recorded an increase in unrecognized compensation cost related to unvested option awards totaling $197 million as of September 30, 2025[77] - The company does not maintain a significant balance of foreign currency, thus a 10% fluctuation in exchange rates is not expected to materially impact operations[202] - As of September 30, 2025, the company's disclosure controls and procedures were evaluated as effective by the CEO and CFO[203]
Zillow Group(ZG) - 2025 Q3 - Quarterly Report