Group 1 - The article discusses a positive outlook on Zillow Group (NASDAQ: ZG), with a recommendation to buy based on expectations of achieving FY 2029 EBITDA guidance [1] - The author emphasizes a fundamentals-based approach to value investing, focusing on companies with long-term durability and robust balance sheets rather than just low multiples [1] - There is a recognition of the risks involved in investing in successful companies, particularly the importance of valuation, while also noting that in some cases, the potential for growth may outweigh immediate price concerns [1]

Core Insights - Zillow Group, Inc. reported mixed second-quarter 2025 results, with net income missing the Zacks Consensus Estimate but revenues exceeding expectations, driven by strong customer engagement and brand positioning in the residential real estate sector [1][2][3] Financial Performance - Net income for the quarter was $2 million or 1 cent per share, a significant improvement from a net loss of $17 million or 7 cents per share in the prior-year quarter, primarily due to solid top-line growth [2] - Quarterly revenues increased to $655 million from $572 million in the year-ago quarter, surpassing the Zacks Consensus Estimate of $647 million, with residential revenues rising 6% to $434 million [3][8] - The Mortgages segment generated $48 million in revenues, up from $34 million a year earlier, driven by a 48% increase in purchase loan origination [4] - Rental revenues surged 36% to $159 million, primarily due to a 56% year-over-year growth in multifamily revenues [4] Profitability Metrics - Gross profit for the quarter was $489 million, compared to $442 million in the prior-year quarter, reflecting healthy revenue growth across all segments [5] - Operating expenses rose to $500 million from $480 million in the prior-year quarter, while adjusted EBITDA increased to $155 million from $134 million a year ago, supported by higher revenues and cost discipline [5] Cash Flow and Liquidity - In the first half of 2025, Zillow generated $191 million in cash from operating activities, up from $135 million in the prior-year period, with $587 million in cash and cash equivalents as of June 30, 2025 [6] Future Outlook - For Q3 2025, Zillow expects total revenues in the range of $663-$673 million and total adjusted EBITDA between $150 million and $160 million, with Mortgages' revenues projected to grow approximately 20% year-over-year [9] - The company anticipates low to mid-teens revenue growth for 2025, with continued adjusted EBITDA margin expansion and positive GAAP net income forecasted [10]

Core Insights - Zillow Group reported Q2 2025 adjusted EPS of 40 cents, missing the Zacks Consensus Estimate of 44 cents, but reflecting a 2.6% year-over-year increase [1] - Total revenues reached $655 million, exceeding the Zacks Consensus Estimate of $646.6 million, and showing a 14.5% year-over-year improvement [2] Revenue Breakdown - For-sale revenues increased by 8.8% to $482 million, with residential revenues at $434 million, up 6.1% year over year, driven by growth in agent and software offerings [3] - Mortgage revenues surged 41.2% year over year to $48 million, supported by a 48% increase in purchase loan origination volume to $1.1 billion [3] - Rental revenues grew 35.9% year over year to $159 million, with multifamily revenue growth of 56% [4] Cost and Margin Analysis - Adjusted EBITDA margin improved by 100 basis points year over year to 24%, amounting to $155 million, due to effective cost management and revenue growth [4] - Sales and marketing expenses rose 10.2% year over year to $226 million, attributed to higher personnel and marketing costs [5] - Cost of revenues increased by 27.7% year over year to $166 million, driven by higher lead acquisition costs [5] Balance Sheet and Outlook - Zillow ended Q2 2025 with $1.2 billion in cash and investments, down from $1.6 billion in the previous quarter [6] - For Q3 2025, total revenues are expected to range between $663-673 million, with adjusted EBITDA projected between $150 and $160 million [6] - For-sale revenues are anticipated to grow similarly to Q2, with rental revenues expected to increase by over 40% year over year [7][8]

Core Insights - Zillow Group reported $655 million in revenue for Q2 2025, a year-over-year increase of 14.5% [1] - The EPS for the same period was $0.40, slightly up from $0.39 a year ago, but below the consensus estimate of $0.44, resulting in a -9.09% EPS surprise [1] - The revenue exceeded the Zacks Consensus Estimate of $646.56 million by +1.31% [1] Financial Performance Metrics - Average Monthly Unique Users for mobile applications and websites were 243 million, slightly below the estimate of 243.97 million [4] - Total visits to mobile applications and websites reached 2.59 billion, surpassing the average estimate of 2.51 billion [4] - Revenue from Mortgages was $48 million, exceeding the average estimate of $44.39 million, representing a year-over-year increase of +41.2% [4] - Revenue from Residential properties was $434 million, slightly above the estimated $429.91 million, reflecting a +6.1% year-over-year change [4] - Revenue from Other sources was $14 million, compared to the average estimate of $13.79 million, marking a +16.7% year-over-year increase [4] - Revenue from Rentals was $159 million, in line with the average estimate of $159.51 million, showing a +35.9% year-over-year change [4] Stock Performance - Zillow's shares have returned +12.8% over the past month, outperforming the Zacks S&P 500 composite's +0.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Company Performance - Zillow Group reported quarterly earnings of $0.4 per share, missing the Zacks Consensus Estimate of $0.44 per share, representing an earnings surprise of -9.09% [1] - The company posted revenues of $655 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.31%, compared to year-ago revenues of $572 million [2] - Over the last four quarters, Zillow has surpassed consensus revenue estimates four times, but has only exceeded consensus EPS estimates once [2] Stock Movement and Outlook - Zillow shares have increased approximately 11.9% since the beginning of the year, outperforming the S&P 500's gain of 7.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.48 on revenues of $671.26 million, and for the current fiscal year, it is $1.76 on revenues of $2.57 billion [7] Industry Context - The Financial - Mortgage & Related Services industry, to which Zillow belongs, is currently in the bottom 9% of the Zacks industry rankings, indicating potential challenges ahead [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Zillow's stock performance [5] - The Zacks Rank for Zillow is currently 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6]

Financial Data and Key Metrics Changes - Total revenue for Q2 increased by 15% year over year, reaching $655 million, exceeding expectations [11][33] - EBITDA for Q2 was $155 million, representing a margin of 24%, with trailing twelve-month EBITDA growing 26% year over year [34][46] - The company reported its second consecutive quarter of positive GAAP net income [35][46] Business Line Data and Key Metrics Changes - For sale revenue grew by 9% year over year to $482 million, outpacing the residential real estate industry growth of 2% [35][36] - Residential revenue increased by 6% year over year to $434 million, driven by agent and software offerings [36] - Mortgages revenue surged by 41% year over year to $48 million, with purchase loan origination volume growing 48% to $1.1 billion [37] - Rentals revenue accelerated to 36% year over year, reaching $159 million, primarily driven by multifamily revenue growth of 56% [38][39] Market Data and Key Metrics Changes - Zillow Rentals had 2.4 million active rental listings, the most in the category, with multifamily properties increasing by 45% year over year [27][38] - Average monthly unique visitors for rentals reached 36 million in Q2, indicating strong audience growth [30][38] Company Strategy and Development Direction - The company is focused on building a comprehensive two-sided marketplace for rentals and modernizing the transaction experience for renters and property managers [24][30] - Zillow aims to enhance its housing super app to streamline residential real estate transactions, emphasizing a tech-enabled and integrated experience [12][23] - The company is on track to achieve mid-teens revenue growth for the full year 2025, with a focus on expanding EBITDA margins and positive net income [12][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow despite a challenging housing market, which is expected to remain flat [43][104] - The company anticipates continued growth in rentals revenue, projecting over 40% year-over-year growth in Q3 [44][57] - Management highlighted the importance of innovation and consumer-focused products to drive long-term growth [14][46] Other Important Information - The company ended Q2 with $1.2 billion in cash and investments, down from $1.6 billion at the end of Q1, primarily due to share repurchases and the settlement of convertible notes [41] - The Redfin partnership is expected to be accretive to EBITDA, contributing positively to the overall business [45][97] Q&A Session Summary Question: Insights on the rentals business and growth confidence - Management highlighted the strength of the rentals strategy, with 2.4 million active listings and a focus on modernizing the transaction experience for renters and property managers [49][51] Question: Factors driving faster residential revenue growth - Management attributed the outperformance to enhanced market execution, increased adoption of Zillow Home Loans, and growth in new construction [60][62] Question: Contribution from Redfin partnership - Management noted that the Redfin partnership enhances distribution and leads, providing access to a larger addressable market and driving growth in the rentals business [66][68] Question: Variable expenses and investment areas - Management indicated that variable costs are expected to grow ahead of revenue in 2025, primarily due to investments in rentals and Zillow Home Loans [83][86] Question: Broader real estate market assumptions - Management is not assuming significant help from the macro environment and plans to grow through current market challenges [102][104]

Financial Data and Key Metrics Changes - Total revenue increased by 15% year over year to $655 million, exceeding expectations [32][41] - EBITDA for Q2 was $155 million, representing a margin of 24% [32][42] - Positive GAAP net income reported for the second consecutive quarter [33][40] Business Line Data and Key Metrics Changes - For Sale revenue grew by 9% year over year to $482 million, outpacing the residential real estate industry growth of 2% [33][34] - Residential revenue increased by 6% year over year to $434 million [34] - Mortgages revenue surged by 41% year over year to $48 million, with purchase loan origination volume growing by 48% to $1.1 billion [35][36] - Rentals revenue reached $159 million, accelerating to 36% year over year growth, driven primarily by multifamily revenue growth of 56% [36][37] Market Data and Key Metrics Changes - Zillow Rentals had 2.4 million active rental listings, the most in the category, with multifamily properties increasing by 45% year over year [25][37] - Average monthly unique visitors for rentals reached 36 million in Q2 [29][37] Company Strategy and Development Direction - The company is focused on building a comprehensive two-sided marketplace for rentals and modernizing the transaction experience for renters and property managers [23][28] - Continued investment in technology and innovative products to enhance the user experience and streamline transactions [12][14] - The goal is to achieve a billion-dollar incremental revenue opportunity through enhanced market strategies [13][43] Management's Comments on Operating Environment and Future Outlook - Management expects mid-teens revenue growth for the full year 2025, with continued margin expansion and positive net income [11][43] - The housing market is expected to remain challenging, but the company plans to grow through strategic execution and product innovation [106][108] Other Important Information - The company ended Q2 with $1.2 billion in cash and investments, down from $1.6 billion at the end of Q1, primarily due to share repurchases [40] - The Redfin partnership is expected to be accretive to EBITDA and enhance the overall rental business [42][100] Q&A Session Summary Question: Insights on the rentals business and growth expectations - Management highlighted the strength of the rentals strategy, with 2.4 million active listings and a focus on modernizing the transaction experience for renters and property managers [50][51] - Confidence in accelerating growth in the second half of the year was emphasized, driven by strong partner satisfaction and inventory availability [52][54] Question: Change in residential revenue growth compared to the market - Management noted that the outperformance in residential revenue growth was due to effective execution in enhanced markets and the expansion of Zillow Home Loans [63][64] Question: Contribution from the Redfin partnership - The Redfin partnership is expected to enhance distribution and lead generation, contributing positively to the overall rentals business [68][91] Question: Variable expenses and investment areas - Management indicated that variable costs are expected to grow ahead of revenue in 2025, primarily due to investments in rentals and Zillow Home Loans [88][89] Question: Broader real estate market assumptions - The company is not assuming significant relief from the macro environment and plans to grow through strategic execution despite market challenges [106][108]

PART I – FINANCIAL INFORMATION [Glossary of Terms](index=4&type=section&id=GLOSSARY%20OF%20TERMS) This section provides definitions for key abbreviations, acronyms, and common terms used throughout the Quarterly Report on Form 10-Q to ensure clarity and consistent understanding of the company's financial and operational disclosures Glossary of Terms | Abbreviation, Acronym or Common Term | Definition | | :---------------------------------- | :--------- | | Zillow Group, "the Company," "we," "us" and "our" | Refers to Zillow Group, Inc. | | 2024 Notes | 0.75% Convertible Senior Notes fully settled in September 2024 | | 2025 Notes | 2.75% Convertible Senior Notes fully settled in May 2025 | | 2026 Notes | 1.375% Convertible Senior Notes fully settled in December 2024 | | Board | Board of Directors of Zillow Group, Inc. | | Exchange Act | Securities Exchange Act of 1934, as amended | | FASB | Financial Accounting Standards Board | | GAAP | Generally accepted accounting principles in the United States | | IRLC | Interest rate lock commitment | | Lenders | UBS AG, JPMorgan Chase Bank, N.A., Bank of Montreal, and Bank of Nova Scotia | | MBS | Mortgage-backed security | | MLS | Multiple Listing Service | | NAR | National Association of REALTORS® | | Repurchase Authorizations | A series of authorizations from the Board to repurchase Class A common stock, Class C capital stock, convertible senior notes, or a combination thereof | | SEC | United States Securities and Exchange Commission | | SOFR | Secured Overnight Financing Rate | | TTV | Total Transaction Value for the residential real estate industry | [Note Regarding Forward-Looking Statements](index=5&type=section&id=NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section cautions readers that the report contains forward-looking statements based on management's beliefs and assumptions, which are subject to various risks, uncertainties, and assumptions that could cause actual results to differ materially from those projected - Forward-looking statements are subject to numerous risks, uncertainties, and assumptions, including those related to the economy, real estate industry health, advertising management, regulatory compliance, innovation, mortgage operations, natural disasters, security, litigation, workforce, acquisitions, third-party reliance, intellectual property, and compliance with laws[16](index=16&type=chunk) - The company operates in a competitive and rapidly changing environment, making it impossible to predict all risks or assess the full effect of all factors on its business[17](index=17&type=chunk) - Readers should not rely on forward-looking statements as predictions of future events, and the company does not guarantee that future results or events will be achieved[18](index=18&type=chunk) [Note Regarding Industry and Market Data](index=6&type=section&id=NOTE%20REGARDING%20INDUSTRY%20AND%20MARKET%20DATA) This section clarifies that the market and industry data presented in the report are based on the company's internal estimates and research, as well as independent third-party sources - Market and industry data in the report are based on internal estimates and research, as well as independent industry publications and third-party statistical information[21](index=21&type=chunk) - The company has not independently verified data from third-party sources nor validated their underlying economic assumptions[21](index=21&type=chunk) [Where You Can Find More Information](index=6&type=section&id=WHERE%20YOU%20CAN%20FIND%20MORE%20INFORMATION) This section directs investors to Zillow Group's SEC filings and investor relations website for more information, and lists additional channels through which the company may disclose material financial information - Zillow Group's SEC filings (10-K, 10-Q, 8-K) are available free of charge on the 'Investors' section of its website (www.zillowgroup.com)[23](index=23&type=chunk) - The company uses press releases, SEC filings, public conference calls, webcasts, and its Investor Relations Site, Blog, X Account, and LinkedIn Account to disclose material financial information[24](index=24&type=chunk)[25](index=25&type=chunk) [Item 1. Financial Statements (unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Zillow Group's unaudited condensed consolidated financial statements, including the balance sheets, statements of operations, comprehensive income (loss), shareholders' equity, and cash flows, along with detailed notes explaining the accounting policies and specific financial line items for the periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents Zillow Group's condensed consolidated balance sheets, detailing assets, liabilities, and shareholders' equity as of June 30, 2025, and December 31, 2024 | Assets (in millions) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | Cash and cash equivalents | $587 | $1,082 | | Short-term investments | $571 | $776 | | Total current assets | $1,821 | $2,334 | | Total assets | $5,416 | $5,829 | | Liabilities (in millions) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Borrowings under credit facilities | $230 | $145 | | Convertible senior notes | $— | $418 | | Total current liabilities | $546 | $831 | | Total liabilities | $670 | $981 | | Shareholders' Equity (in millions) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Total shareholders' equity | $4,746 | $4,848 | | Total liabilities and shareholders' equity | $5,416 | $5,829 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents Zillow Group's condensed consolidated statements of operations, detailing revenue, gross profit, and net income (loss) for the three and six months ended June 30, 2025 and 2024 | Metric (in millions, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $655 | $572 | $1,253 | $1,101 | | Gross profit | $489 | $442 | $948 | $848 | | Loss from operations | $(11) | $(38) | $(20) | $(83) | | Net income (loss) | $2 | $(17) | $10 | $(40) | | Basic net income (loss) per share | $0.01 | $(0.07) | $0.04 | $(0.17) | | Diluted net income (loss) per share | $0.01 | $(0.07) | $0.04 | $(0.17) | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section presents Zillow Group's condensed consolidated statements of comprehensive income (loss), including net income (loss) and other comprehensive income (loss) for the three and six months ended June 30, 2025 and 2024 | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $2 | $(17) | $10 | $(40) | | Other comprehensive income (loss) | $1 | $— | $4 | $(6) | | Comprehensive income (loss) | $3 | $(17) | $14 | $(46) | [Condensed Consolidated Statements of Shareholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) This section presents Zillow Group's condensed consolidated statements of shareholders' equity, detailing changes in capital, accumulated deficit, and comprehensive income for the periods ended June 30, 2025 and 2024 | Shareholder Equity (in millions) | Balance at April 1, 2025 | Balance at June 30, 2025 | Balance at April 1, 2024 | Balance at June 30, 2024 | | :------------------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Additional Paid-In Capital | $6,628 | $6,617 | $6,469 | $6,322 | | Accumulated Deficit | $(1,874) | $(1,872) | $(1,793) | $(1,810) | | Accumulated Other Comprehensive Income (Loss) | $— | $1 | $(11) | $(11) | | Total Shareholders' Equity | $4,754 | $4,746 | $4,665 | $4,501 | | Shareholder Equity (in millions) | Balance at January 1, 2025 | Balance at June 30, 2025 | Balance at January 1, 2024 | Balance at June 30, 2024 | | :------------------------------- | :------------------------- | :----------------------- | :------------------------- | :----------------------- | | Additional Paid-In Capital | $6,733 | $6,617 | $6,301 | $6,322 | | Accumulated Deficit | $(1,882) | $(1,872) | $(1,770) | $(1,810) | | Accumulated Other Comprehensive Income (Loss) | $(3) | $1 | $(5) | $(11) | | Total Shareholders' Equity | $4,848 | $4,746 | $4,526 | $4,501 | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents Zillow Group's condensed consolidated statements of cash flows, detailing net cash from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | Cash Flow Data (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $191 | $135 | | Net cash provided by (used in) investing activities | $25 | $(207) | | Net cash used in financing activities | $(709) | $(240) | | Net decrease in cash, cash equivalents and restricted cash | $(493) | $(312) | | Cash, cash equivalents and restricted cash at end of period | $592 | $1,183 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to Zillow Group's condensed consolidated financial statements, explaining accounting policies, financial instruments, and other critical disclosures [Note 1. Organization and Description of Business](index=13&type=section&id=Note%201.%20Organization%20and%20Description%20of%20Business) Zillow Group is a real estate technology company focused on reimagining real estate through digital solutions, professional connections, and streamlined buying, selling, financing, and renting experiences - Zillow Group aims to make home a reality for more people by connecting them with digital solutions, real estate professionals, and easier buying, selling, financing, and renting experiences[38](index=38&type=chunk) - The company's portfolio includes Zillow Premier Agent, Zillow Home Loans, Zillow Rentals, Trulia, StreetEasy, HotPads, Out East, and marketing software solutions like ShowingTime+, Spruce, and Follow Up Boss[39](index=39&type=chunk) - Significant risks and uncertainties include the health of the economy and U.S. residential real estate industry, industry changes from lawsuits/settlements, policy changes, ability to manage advertising and partner relationships, compliance with NAR/MLS rules, and ability to grow mortgage operations[40](index=40&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=14&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the basis of presentation for the condensed consolidated financial statements, confirming their preparation in conformity with GAAP and SEC rules for interim reporting - The condensed consolidated financial statements are prepared in conformity with **GAAP** and **SEC rules** for interim financial reporting, with certain information condensed or omitted[41](index=41&type=chunk) - Management makes estimates, judgments, and assumptions that affect reported amounts, with potential material differences between estimates and actual results, especially given housing market and broader economic health[43](index=43&type=chunk) - New **FASB guidance** on income tax rate reconciliation (effective after Dec 15, 2024) is expected to result in additional disclosures but no material impact, while guidance on cost and expense disclosures (effective after Dec 15, 2026) is still being evaluated for its impact[44](index=44&type=chunk)[45](index=45&type=chunk) [Note 3. Financial Instruments](index=14&type=section&id=Note%203.%20Financial%20Instruments) This note details the company's financial instruments, including fair value measurement methodologies for various assets and liabilities like cash equivalents, short-term investments, mortgage loans held for sale, forward contracts, and contingent consideration - Fair value measurements are categorized into **Level 1** (quoted market prices), **Level 2** (observable market-based inputs), and **Level 3** (unobservable inputs)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk)[52](index=52&type=chunk) - Contingent consideration for the Follow Up Boss acquisition is estimated using a Monte Carlo simulation, considering performance metric probabilities, with **$33 million** paid during the six months ended June 30, 2025[49](index=49&type=chunk) IRLCs Pull-Through Rates | IRLCs Pull-Through Rates | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Range | 60% - 100% | 47% - 100% | | Weighted-average | 80% | 82% | IRLCs (in millions) | IRLCs (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Balance, beginning of the period | $7 | $5 | $4 | $3 | | Issuances | $24 | $11 | $45 | $23 | | Transfers | $(22) | $(12) | $(40) | $(22) | | Balance, end of period | $9 | $4 | $9 | $4 | Notional Amounts of Economic Hedging Instruments (in millions) | Notional Amounts of Economic Hedging Instruments (in millions) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------------------- | :------------ | :---------------- | | IRLCs | $402 | $217 | | Forward contracts | $499 | $300 | Assets and Liabilities Measured at Fair Value (in millions) | Assets Measured at Fair Value (in millions) | June 30, 2025 (Estimated Fair Market Value) | December 31, 2024 (Estimated Fair Market Value) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Cash | $22 | $13 | | Cash equivalents | $565 | $1,069 | | Short-term investments | $571 | $776 | | Mortgage origination-related | $259 | $164 | | Restricted cash | $5 | $3 | | Total assets measured at fair value | $1,422 | $2,025 | | Liabilities Measured at Fair Value (in millions) | June 30, 2025 (Estimated Fair Market Value) | December 31, 2024 (Estimated Fair Market Value) | | :------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Mortgage origination-related | $3 | $— | | Contingent consideration | $61 | $91 | | Total liabilities measured at fair value | $64 | $91 | [Note 4. Property and Equipment, Net](index=18&type=section&id=Note%204.%20Property%20and%20Equipment,%20Net) This note provides a detailed breakdown of Zillow Group's property and equipment, net, including website development costs, leasehold improvements, and computer equipment Property and Equipment, Net (in millions) | Property and Equipment, Net (in millions) | June 30, 2025 | December 31, 2024 | | :-------------------------------------- | :------------ | :---------------- | | Website development costs | $597 | $564 | | Leasehold improvements | $32 | $45 | | Computer equipment | $17 | $18 | | Office equipment, furniture and fixtures | $12 | $16 | | Construction-in-progress | $4 | $— | | Property and equipment | $662 | $643 | | Less: accumulated amortization and depreciation | $(289) | $(283) | | Property and equipment, net | $373 | $360 | - Depreciation expense for property and equipment (excluding website development costs) was **$3 million** for Q2 2025 (down from **$4 million** in Q2 2024) and **$7 million** for YTD 2025 (down from **$8 million** in YTD 2024)[57](index=57&type=chunk) - Capitalized website development costs were **$51 million** for Q2 2025 (down from **$54 million** in Q2 2024) and **$99 million** for YTD 2025 (down from **$106 million** in YTD 2024) Amortization expense for website development costs was **$42 million** for Q2 2025 (up from **$36 million** in Q2 2024) and **$83 million** for YTD 2025 (up from **$69 million** in YTD 2024)[58](index=58&type=chunk) [Note 5. Intangible Assets, Net](index=18&type=section&id=Note%205.%20Intangible%20Assets,%20Net) This note provides a breakdown of Zillow Group's intangible assets, net, including customer relationships, software, and developed technology, highlighting a significant increase in customer relationships due to a new partnership with Redfin Intangible Assets, Net (in millions) | Intangible Assets, Net (in millions) | June 30, 2025 (Net) | December 31, 2024 (Net) | | :----------------------------------- | :------------------ | :---------------------- | | Customer relationships | $155 | $65 | | Software | $66 | $62 | | Developed technology | $38 | $51 | | Trade names and trademarks | $20 | $22 | | Purchased content | $6 | $7 | | Total | $285 | $207 | - On February 6, 2025, Zillow entered a partnership with Redfin, becoming the exclusive provider of multifamily rental listings on Redfin's sites, involving a **$100 million** payment included in customer relationships, amortized over nine years[60](index=60&type=chunk) - Amortization expense for intangible assets was **$22 million** for Q2 2025 (up from **$19 million** in Q2 2024) and **$42 million** for YTD 2025 (up from **$38 million** in YTD 2024) No impairment costs were recorded[61](index=61&type=chunk) Estimated Future Amortization Expense (in millions) | Estimated Future Amortization Expense (in millions) | Amount | | :-------------------------------------------------- | :----- | | Remainder of 2025 | $42 | | 2026 | $70 | | 2027 | $59 | | 2028 | $35 | | 2029 | $28 | | Thereafter | $59 | | Total future amortization expense | $293 | [Note 6. Debt](index=19&type=section&id=Note%206.%20Debt) This note details Zillow Group's debt, primarily consisting of master repurchase agreements for Zillow Home Loans and the settlement of convertible senior notes Debt Carrying Values (in millions) | Debt Carrying Values (in millions) | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Master repurchase agreements | $230 | $145 | | 2025 Notes | $— | $418 | | Total debt | $230 | $563 | Credit Facilities (Master Repurchase Agreements) | Credit Facilities (Master Repurchase Agreements) | Maturity Date | Maximum Borrowing Capacity (in millions) | Borrowings Outstanding (in millions) | Available Borrowing Capacity (in millions) | Weighted-Average Interest Rate | | :----------------------------------------------- | :------------ | :--------------------------------------- | :----------------------------------- | :----------------------------------------- | :----------------------------- | | JPMorgan Chase Bank, N.A. | April 28, 2026 | $200 | $92 | $108 | 6.05% | | UBS AG | September 5, 2025 | $150 | $74 | $76 | 6.05% | | Bank of Montreal | February 26, 2026 | $150 | $64 | $86 | 6.02% | | Bank of Nova Scotia | June 8, 2026 | $100 | $— | $100 | —% | | Total | | $600 | $230 | $370 | | - The **2025 Notes** matured on May 15, 2025, with the remaining **$419 million** principal settled via **$425 million** cash payments (including interest) and a nominal issuance of Class C capital stock[71](index=71&type=chunk) Interest Expense (in millions) | Interest Expense (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | 2026 Notes | $— | $2 | $— | $4 | | 2025 Notes | $1 | $3 | $5 | $7 | | 2024 Notes | $— | $2 | $— | $4 | | Total | $1 | $7 | $5 | $15 | [Note 7. Income Taxes](index=21&type=section&id=Note%207.%20Income%20Taxes) This note discusses Zillow Group's income tax position, including the impact of newly enacted tax law changes, the valuation allowance against deferred tax assets, and accumulated tax losses - The 'One Big Beautiful Bill' enacted on July 4, 2025, provides significant U.S. tax law changes, including permanent **100% bonus depreciation** and expensing of domestic research costs; the company is evaluating its impact[75](index=75&type=chunk) - A valuation allowance has been provided against net deferred tax assets, but there's a reasonable possibility that a significant portion of this allowance against U.S. net deferred tax assets may no longer be required within the next several years[76](index=76&type=chunk)[165](index=165&type=chunk) - As of December 31, 2024, the company had accumulated federal tax losses of approximately **$1.3 billion** and state tax losses of approximately **$66 million** (tax effected)[76](index=76&type=chunk) - Income tax expense was not material for the three or six months ended June 30, 2025 or 2024[77](index=77&type=chunk) [Note 8. Share Repurchase Authorizations](index=21&type=section&id=Note%208.%20Share%20Repurchase%20Authorizations) This note details the Board's authorizations for share repurchases, including an additional **$1.0 billion** authorization on May 2, 2025, increasing the total cumulative authorization to **$3.5 billion** - On May 2, 2025, the Board authorized an additional **$1.0 billion** for repurchases of Class A common stock, Class C capital stock, or a combination, increasing total cumulative Repurchase Authorizations to **$3.5 billion**[78](index=78&type=chunk) - As of June 30, 2025, **$981 million** remained available for future stock repurchases[78](index=78&type=chunk) Share Repurchase Activity (in millions, except shares in thousands and per share) | Share Repurchase Activity (in millions, except shares in thousands and per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Class A common stock shares repurchased (thousands) | 1,784 | 981 | 4,244 | 1,100 | | Class C capital stock shares repurchased (thousands) | 522 | 5,904 | 1,401 | 5,996 | | Weighted-average price per Class A share | $65.04 | $41.92 | $70.09 | $42.26 | | Weighted-average price per Class C share | $65.03 | $42.41 | $73.19 | $42.45 | | Total purchase price (Class A) | $116 | $41 | $297 | $46 | | Total purchase price (Class C) | $34 | $251 | $103 | $255 | [Note 9. Share-Based Awards](index=22&type=section&id=Note%209.%20Share-Based%20Awards) This note provides details on Zillow Group's share-based compensation, including option awards and restricted stock units (RSUs), summarizing activity for these awards, assumptions for fair value, and unrecognized compensation costs Option Award Activity (six months ended June 30, 2025) | Option Award Activity (six months ended June 30, 2025) | Number of Shares Subject to Existing Options (in thousands) | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (in years) | Aggregate Intrinsic Value (in millions) | | :------------------------------------- | :---------------------------------------- | :-------------------------------------- | :------------------------------------- | :------------------------------------ | | Outstanding at January 1, 2025 | 29,941 | $46.58 | 6.3 | $861 | | Granted | 2,183 | $75.95 | | | | Exercised | (1,320) | $41.47 | | | | Forfeited or canceled | (313) | $51.70 | | | | Outstanding at June 30, 2025 | 30,491 | $48.86 | 6.1 | $701 | | Vested and exercisable at June 30, 2025 | 22,470 | $46.49 | 5.2 | $571 | Option Award Fair Value Assumptions | Option Award Fair Value Assumptions | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Expected volatility | 59% | 59% | 59% - 60% | 57% - 61% | | Risk-free interest rate | 3.92% | 4.50% | 3.92% - 4.17% | 4.14% - 4.50% | | Weighted-average expected life | 5.5 years | 5.5 years | 5.3 - 6.8 years | 5.5 - 6.8 years | | Weighted-average fair value of options granted | $37.18 | $29.69 | $43.17 | $31.93 | - As of June 30, 2025, there was **$228 million** in unrecognized compensation cost related to unvested option awards[81](index=81&type=chunk) Restricted Stock Units Activity (six months ended June 30, 2025) | Restricted Stock Units Activity (six months ended June 30, 2025) | Restricted Stock Units (in thousands) | Weighted Average Grant Date Fair Value | | :------------------------------------------------ | :------------------------------------ | :------------------------------------- | | Unvested outstanding at January 1, 2025 | 11,729 | $50.31 | | Granted | 4,302 | $75.73 | | Vested | (2,967) | $50.90 | | Forfeited | (606) | $52.92 | | Unvested outstanding at June 30, 2025 | 12,458 | $58.82 | - As of June 30, 2025, there was **$680 million** in unrecognized compensation cost related to unvested restricted stock units[82](index=82&type=chunk) Share-Based Compensation Expense (in millions) | Share-Based Compensation Expense (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenue | $3 | $4 | $6 | $8 | | Sales and marketing | $19 | $20 | $37 | $38 | | Technology and development | $40 | $42 | $78 | $84 | | General and administrative | $37 | $47 | $75 | $91 | | Total share-based compensation | $99 | $113 | $196 | $221 | [Note 10. Net Income (Loss) Per Share](index=23&type=section&id=Note%2010.%20Net%20Income%20(Loss)%20Per%20Share) This note provides the reconciliation of the denominators used in calculating basic and diluted net income (loss) per share, and lists the Class C capital stock equivalents that were excluded due to their antidilutive effect Denominators for EPS Calculation (in thousands) | Denominators for EPS Calculation (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Denominator for basic calculation | 241,083 | 233,453 | 241,667 | 234,074 | | Effect of dilutive securities: | | | | | | Option awards | 7,649 | — | 8,653 | — | | Unvested restricted stock units | 2,933 | — | 3,596 | — | | Denominator for dilutive calculation | 251,665 | 233,453 | 253,916 | 234,074 | Excluded Antidilutive Class C Capital Stock Equivalents (in thousands) | Excluded Antidilutive Class C Capital Stock Equivalents (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Weighted-average Class C capital stock option awards outstanding | 3,344 | 19,091 | 3,478 | 20,935 | | Weighted-average Class C capital stock restricted stock units outstanding | 4,145 | 14,877 | 2,844 | 13,776 | | Weighted-average Class C capital stock issuable upon conversion of notes | 3,084 | 32,410 | 4,652 | 32,697 | | Total Class C capital stock equivalents | 10,573 | 66,378 | 10,974 | 67,408 | [Note 11. Commitments and Contingencies](index=24&type=section&id=Note%2011.%20Commitments%20and%20Contingencies) This note outlines Zillow Group's purchase commitments and ongoing legal proceedings, detailing non-cancelable purchase obligations and providing updates on significant lawsuits Purchase Commitments (in millions) | Purchase Commitments (in millions) | Amount | | :------------------------------- | :----- | | Remainder of 2025 | $99 | | 2026 | $117 | | 2027 | $67 | | 2028 | $1 | | Total future purchase commitments | $284 | - The company is involved in legal proceedings, including a patent infringement lawsuit by IBM, a federal securities class action suit regarding Zillow Offers, and shareholder derivative suits related to Zillow Offers wind-down[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) - For certain legal cases, management is unable to provide a meaningful estimate of possible loss due to preliminary stages, unspecified damages, or complex legal issues, but does not believe outcomes will materially affect financial position, results of operations, or cash flow[86](index=86&type=chunk)[90](index=90&type=chunk) [Note 12. Revenue and Contract Balances](index=25&type=section&id=Note%2012.%20Revenue%20and%20Contract%20Balances) This note describes Zillow Group's revenue recognition policy, which involves satisfying performance obligations by transferring control of products or services, and provides details on contract assets and deferred revenue - Revenue is recognized when performance obligations are satisfied by transferring control of promised products or services to customers, in an amount reflecting expected consideration[92](index=92&type=chunk) - Contract assets totaled **$201 million** as of June 30, 2025, up from **$157 million** as of December 31, 2024, with an average remaining recognition period of five months for the Premier Agent Flex offering[93](index=93&type=chunk) - For Q2 2025, **$53 million** of the **$70 million** opening deferred revenue balance was recognized as revenue For YTD 2025, **$53 million** of the **$62 million** opening deferred revenue balance was recognized[94](index=94&type=chunk)[95](index=95&type=chunk) [Note 13. Segment Information](index=26&type=section&id=Note%2013.%20Segment%20Information) This note presents a table summarizing Zillow Group's significant expense categories that are included in its reported measure of segment profitability, providing a breakdown of costs such as headcount-related expenses, share-based compensation, depreciation, marketing, and direct product costs Significant Expense Categories (in millions) | Significant Expense Categories (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $655 | $572 | $1,253 | $1,101 | | Headcount-related expenses, excluding share-based compensation | $298 | $272 | $586 | $536 | | Share-based compensation | $99 | $113 | $196 | $221 | | Depreciation and amortization | $67 | $59 | $132 | $115 | | Marketing and advertising costs | $64 | $58 | $107 | $88 | | Direct product and service costs | $73 | $44 | $123 | $87 | | Third-party professional service fees | $19 | $20 | $36 | $40 | | Facility expenses | $7 | $8 | $14 | $16 | | Impairment costs | $— | $— | $— | $6 | | Other items | $39 | $36 | $79 | $75 | | Loss from operations | $(11) | $(38) | $(20) | $(83) | | Loss on extinguishment of debt | $— | $(1) | $— | $(1) | | Other income, net | $18 | $34 | $40 | $67 | | Interest expense | $(5) | $(10) | $(10) | $(19) | | Income tax expense | $— | $(2) | $— | $(4) | | Net income (loss) | $2 | $(17) | $10 | $(40) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Zillow Group's financial condition and results of operations, discussing business overview, housing market health, revenue performance by category, key metrics, and detailed analysis of operating results, liquidity, capital resources, and critical accounting estimates for the periods ended June 30, 2025, and 2024 [Overview of our Business](index=27&type=section&id=Overview%20of%20our%20Business) This section provides an overview of Zillow Group's business, highlighting its mission to simplify real estate transactions and its diverse portfolio of brands and solutions - Zillow Group aims to make home a reality for more people by connecting them with digital solutions, real estate professionals, and easier buying, selling, financing, and renting experiences[98](index=98&type=chunk) - The company's portfolio includes Zillow Premier Agent, Zillow Home Loans, Zillow Rentals, Trulia, StreetEasy, HotPads, Out East, and marketing software solutions like ShowingTime+, Spruce, and Follow Up Boss[99](index=99&type=chunk) - As of June 30, 2025, Zillow Group had **6,944 employees**, an increase from **6,856 employees** as of December 31, 2024[100](index=100&type=chunk) [Health of Housing Market](index=27&type=section&id=Health%20of%20Housing%20Market) This section discusses the impact of housing market conditions, including inventory, interest rates, and home prices, on Zillow Group's financial performance and revenue growth - The company's financial performance is impacted by the health of the housing market, driven by low housing inventory, elevated and volatile mortgage interest rates, changes in rental inventory/occupancy, home price fluctuations, and inflationary conditions[101](index=101&type=chunk) - **Total Transaction Value (TTV)** for the residential real estate industry increased **2%** for Q2 2025 and **4%** for YTD 2025 compared to the prior year periods[101](index=101&type=chunk) - Zillow Group's total revenue growth for Q2 and YTD 2025 exceeded industry performance, reflecting investments in business growth[101](index=101&type=chunk) [Revenue Overview](index=27&type=section&id=Revenue%20Overview) This section outlines Zillow Group's revenue classification into Residential, Mortgages, Rentals, and Other categories, detailing the primary sources of income within each segment - Revenue is classified into four categories: Residential, Mortgages, Rentals, and Other 'For Sale revenue' combines Residential and Mortgages[102](index=102&type=chunk) - Residential revenue includes Premier Agent (market-based pricing and Flex models), new construction advertising, and business technology solutions like ShowingTime+, dotloop, Zillow Showcase, StreetEasy offerings, and Follow Up Boss CRM[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) - Mortgages revenue primarily comes from mortgage originations through Zillow Home Loans and advertising sold to mortgage professionals[109](index=109&type=chunk) - Rentals revenue includes advertising and tools for property managers (cost-per-lead, lease, listing, impression, or fixed fee) and revenue from rental applications[110](index=110&type=chunk) - Other revenue primarily consists of display advertising[111](index=111&type=chunk) [Financial Overview](index=29&type=section&id=Financial%20Overview) This section provides a high-level summary of Zillow Group's financial performance, highlighting total revenue and gross profit growth for the second quarter of 2025 - Total revenue increased **15%** to **$655 million** for Q2 2025, up from **$572 million** in Q2 2024[112](index=112&type=chunk) - Rentals revenue increased **$42 million**, or **36%**, to **$159 million** in Q2 2025, driven by increases in quarterly revenue per average monthly rentals unique visitor and average monthly rentals unique visitors[112](index=112&type=chunk) - Gross profit increased **11%** to **$489 million** for Q2 2025, up from **$442 million** in Q2 2024[113](index=113&type=chunk) [Key Metrics](index=29&type=section&id=Key%20Metrics) This section presents key performance indicators used to evaluate Zillow Group's operational success, including visits, unique users, For Sale revenue per TTV, and loan origination volume [Visits](index=29&type=section&id=Visits) Visits are a key indicator of consumer engagement with Zillow Group's mobile applications and websites, which correlates with product usage and demand for advertising services - A visit is defined as a group of interactions by users with Zillow, Trulia, and StreetEasy mobile applications and websites, with a single user potentially generating multiple visits[117](index=117&type=chunk) - Zillow and StreetEasy measure visits using an internal tool, while Trulia uses Adobe Analytics StreetEasy transitioned from Google's Universal Analytics to an internal tool in July 2024[118](index=118&type=chunk)[119](index=119&type=chunk) Visits (in millions) | Visits (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change (YoY) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change (YoY) | | :------------------- | :------------------------------- | :------------------------------- | :------------- | :----------------------------- | :----------------------------- | :------------- | | Visits | 2,590 | 2,495 | 4% | 4,944 | 4,811 | 3% | [Unique Users](index=30&type=section&id=Unique%20Users) Measuring unique users is crucial for Zillow Group as it reflects the company's ability to connect consumers with real estate professionals and services, directly impacting revenue generation from advertisements and transactions - A unique user is counted the first time an individual accesses a mobile application or website using a specific device/browser within a calendar month[121](index=121&type=chunk) - Zillow, StreetEasy, and HotPads use an internal measurement tool for unique users, while Trulia uses Adobe Analytics StreetEasy and HotPads transitioned to the internal tool from Google's Universal Analytics in July 2024[122](index=122&type=chunk)[124](index=124&type=chunk) Average Monthly Unique Users (in millions) | Average Monthly Unique Users (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change (YoY) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change (YoY) | | :--------------------------------------- | :------------------------------- | :------------------------------- | :------------- | :----------------------------- | :----------------------------- | :------------- | | Average monthly unique users | 243 | 231 | 5% | 235 | 224 | 5% | [For Sale Revenue Per Total Transaction Value](index=31&type=section&id=For%20Sale%20Revenue%20Per%20Total%20Transaction%20Value) This metric assesses Zillow Group's 'For Sale' revenue performance relative to the overall residential real estate industry's Total Transaction Value (TTV) - For Sale revenue per TTV measures the company's ability to connect and convert buyers/sellers and grow revenue per customer transaction relative to the residential real estate industry[125](index=125&type=chunk) - TTV is calculated as the number of existing residential homes sold multiplied by the average sales price, and the metric is presented on a trailing twelve-month basis due to seasonality[126](index=126&type=chunk) For Sale Revenue Per TTV | For Sale Revenue Per TTV | Twelve Months Ended June 30, 2025 | Twelve Months Ended June 30, 2024 | % Change | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | :------- | | For Sale revenue (in millions) | $1,812 | $1,624 | 12% | | Total Transaction Value (in trillions) | $1.8 | $1.6 | 6% | | For Sale revenue per Total Transaction Value (in basis points) | 10.3 | 9.8 | 5% | [Loan Origination Volume](index=31&type=section&id=Loan%20Origination%20Volume) Loan origination volume is a key metric for Zillow Home Loans, directly impacting Mortgages revenue, representing the total value of mortgage loans closed through Zillow Home Loans - Loan origination volume measures the success of Zillow Home Loans' mortgage origination operations and directly impacts Mortgages revenue[128](index=128&type=chunk) Loan Origination Volume (in millions) | Loan Origination Volume (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change (YoY) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change (YoY) | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------- | :----------------------------- | :----------------------------- | :------------- | | Purchase loan origination volume | $1,116 | $756 | 48% | $1,907 | $1,357 | 41% | | Refinance loan origination volume | $10 | $3 | 233% | $15 | $8 | 88% | | Total loan origination volume | $1,126 | $759 | 48% | $1,922 | $1,365 | 41% | - The increase in total loan origination volume was primarily driven by continued growth in Zillow Home Loans purchase loan originations, aligning with strategic priorities[129](index=129&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of Zillow Group's financial performance, including revenue, adjusted EBITDA, and various cost and expense categories for the reported periods [Revenue](index=32&type=section&id=Revenue) Zillow Group's total revenue increased significantly for both the three and six months ended June 30, 2025, primarily driven by strong growth in Rentals and Mortgages revenue, alongside a steady increase in Residential revenue Revenue (in millions) | Revenue (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :-------------------- | :------------------------------- | :------------------------------- | :------- | :------- | :----------------------------- | :----------------------------- | :------- | :------- | | Residential | $434 | $409 | $25 | 6% | $851 | $802 | $49 | 6% | | Mortgages | $48 | $34 | $14 | 41% | $89 | $65 | $24 | 37% | | Total For Sale revenue | $482 | $443 | $39 | 9% | $940 | $867 | $73 | 8% | | Rentals | $159 | $117 | $42 | 36% | $288 | $214 | $74 | 35% | | Other | $14 | $12 | $2 | 17% | $25 | $20 | $5 | 25% | | Total revenue | $655 | $572 | $83 | 15% | $1,253 | $1,101 | $152 | 14% | - Rentals revenue increased **36%** for Q2 2025 and **35%** for YTD 2025, primarily due to a **21%** (Q2) and **18%** (YTD) increase in quarterly revenue per average monthly rentals unique visitor, driven by growth in multifamily property listings and a **13%** (Q2) and **14%** (YTD) increase in average monthly rentals unique visitors[132](index=132&type=chunk)[134](index=134&type=chunk) - Residential revenue increased **6%** for both Q2 and YTD 2025, driven by a **4%** (Q2) and **3%** (YTD) increase in visits and an increase in Residential revenue per visit, primarily from ShowingTime+ adoption and growth in Premier Agent and new construction revenue[136](index=136&type=chunk)[137](index=137&type=chunk) - Mortgages revenue increased **41%** for Q2 2025 and **37%** for YTD 2025, driven by a **48%** (Q2) and **41%** (YTD) increase in total loan origination volume and a **5%** (Q2) and **8%** (YTD) increase in gain on sale margin[136](index=136&type=chunk)[137](index=137&type=chunk) [Adjusted EBITDA](index=34&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA, a non-GAAP financial measure, is used by management and the Board to assess operating performance and trends, reflecting improved operating performance for Q2 and YTD 2025 Adjusted EBITDA (in millions) | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :------------------- | :------------------------------- | :------------------------------- | :------- | :------- | :----------------------------- | :----------------------------- | :------- | :------- | | Net income (loss) | $2 | $(17) | $19 | 112% | $10 | $(40) | $50 | 125% | | Adjusted EBITDA | $155 | $134 | $21 | 16% | $308 | $259 | $49 | 19% | - **Adjusted EBITDA** is a key metric for management and the Board to measure operating performance and trends, with the exclusion of certain expenses facilitating period-to-period comparisons[139](index=139&type=chunk) - Limitations of Adjusted EBITDA include not reflecting working capital changes, dilutive impact of share-based compensation, cash capital expenditure requirements, impairment costs, loss on debt extinguishment, interest expense, other income, or income taxes[140](index=140&type=chunk)[141](index=141&type=chunk) Adjusted EBITDA Reconciliation (in millions) | Adjusted EBITDA Reconciliation (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $2 | $(17) | $10 | $(40) | | Income taxes | $— | $2 | $— | $4 | | Other income, net | $(18) | $(34) | $(40) | $(67) | | Depreciation and amortization | $67 | $59 | $132 | $115 | | Share-based compensation | $99 | $113 | $196 | $221 | | Impairment costs | $— | $— | $— | $6 | | Loss on extinguishment of debt | $— | $1 | $— | $1 | | Interest expense | $5 | $10 | $10 | $19 | | Adjusted EBITDA | $155 | $134 | $308 | $259 | [Costs and Expenses, Gross Profit and Other Items](index=35&type=section&id=Costs%20and%20Expenses,%20Gross%20Profit%20and%20Other%20Items) This section provides a summary of changes in Zillow Group's cost of revenue, gross profit, and operating expenses, highlighting the overall trends and percentage changes for the three and six months ended June 30, 2025, compared to the prior year Costs and Expenses (in millions) | Costs and Expenses (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :------------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | :----------------------------- | :----------------------------- | :------- | :------- | | Cost of revenue | $166 | $130 | $36 | 28% | $305 | $253 | $52 | 21% | | Gross profit | $489 | $442 | $47 | 11% | $948 | $848 | $100 | 12% | | Sales and marketing | $226 | $205 | $21 | 10% | $424 | $371 | $53 | 14% | | Technology and development | $153 | $144 | $9 | 6% | $302 | $291 | $11 | 4% | | General and administrative | $121 | $131 | $(10) | (8)% | $242 | $263 | $(21) | (8)% | | Total operating expenses | $500 | $480 | $20 | 4% | $968 | $931 | $37 | 4% | | Loss on extinguishment of debt | $— | $1 | $(1) | (100)% | $— | $1 | $(1) | (100)% | | Other income, net | $18 | $34 | $(16) | (47)% | $40 | $67 | $(27) | (40)% | | Interest expense | $5 | $10 | $(5) | (50)% | $10 | $19 | $(9) | (47)% | | Income tax expense | $— | $2 | $(2) | (100)% | $— | $4 | $(4) | (100)% | [Cost of Revenue](index=36&type=section&id=Cost%20of%20Revenue) Cost of revenue increased significantly for both the three and six months ended June 30, 2025, primarily driven by higher lead acquisition costs associated with the Redfin rentals partnership, increased depreciation and amortization of website development costs, and higher ad serving costs - Cost of revenue includes expenses for operating mobile applications/websites, headcount, revenue-sharing, depreciation, amortization of website development/intangible assets, credit card fees, ad serving, and direct mortgage origination costs[146](index=146&type=chunk) - For Q2 2025, cost of revenue increased **$36 million** (**28%**), primarily due to **$20 million** in lead acquisition costs (Redfin partnership), **$5 million** in depreciation/amortization, and **$5 million** in ad serving costs[147](index=147&type=chunk) - For YTD 2025, cost of revenue increased **$52 million** (**21%**), primarily due to **$25 million** in lead acquisition costs (Redfin partnership), **$13 million** in depreciation/amortization, and **$6 million** in ad serving costs[148](index=148&type=chunk) - The company expects cost of revenue to increase in absolute dollars for the three months ending September 30, 2025, driven by higher direct product and service costs, including increased lead acquisition costs from the Redfin partnership[147](index=147&type=chunk) [Gross Profit](index=37&type=section&id=Gross%20Profit) Gross profit increased for both the three and six months ended June 30, 2025, driven by higher revenue, though gross margin decreased slightly due to increased lead acquisition costs from the Redfin rentals partnership - Gross profit increased by **$47 million** (**11%**) for Q2 2025 and **$100 million** (**12%**) for YTD 2025, primarily due to increased revenue[150](index=150&type=chunk)[151](index=151&type=chunk) - Total gross margin decreased from **77%** to **75%** for Q2 2025 and from **77%** to **76%** for YTD 2025, primarily due to increased lead acquisition costs from the Redfin rentals partnership[150](index=150&type=chunk)[151](index=151&type=chunk) [Sales and Marketing](index=37&type=section&id=Sales%20and%20Marketing) Sales and marketing expenses increased for both the three and six months ended June 30, 2025, primarily driven by higher headcount-related expenses and increased marketing and advertising costs to support rentals marketplace growth - Sales and marketing expenses increased **$21 million** (**10%**) for Q2 2025, driven by **$12 million** in headcount-related expenses (including share-based compensation) and **$6 million** in marketing/advertising costs for the rentals marketplace[153](index=153&type=chunk) - Sales and marketing expenses increased **$53 million** (**14%**) for YTD 2025, driven by **$28 million** in headcount-related expenses and **$18 million** in marketing/advertising costs for the rentals marketplace[154](index=154&type=chunk) [Technology and Development](index=37&type=section&id=Technology%20and%20Development) Technology and development expenses increased for both the three and six months ended June 30, 2025, primarily due to increased headcount-related expenses as the company invests in product development, and higher software and hardware costs - Technology and development expenses increased **$9 million** (**6%**) for Q2 2025, driven by **$6 million** in headcount-related expenses (including share-based compensation) and **$2 million** in software/hardware costs[156](index=156&type=chunk) - Technology and development expenses increased **$11 million** (**4%**) for YTD 2025, driven by **$6 million** in headcount-related expenses and **$4 million** in software/hardware costs[157](index=157&type=chunk) [General and Administrative](index=38&type=section&id=General%20and%20Administrative) General and administrative expenses decreased for both the three and six months ended June 30, 2025, primarily due to lower headcount-related expenses, influenced by prior equity award actions, and reduced third-party professional service fees - General and administrative expenses decreased **$10 million** (**8%**) for Q2 2025, primarily due to **$7 million** in headcount-related expenses (impacted by August 2022 equity awards) and **$2 million** in third-party professional service fees[159](index=159&type=chunk) - General and administrative expenses decreased **$21 million** (**8%**) for YTD 2025, primarily due to **$13 million** in headcount-related expenses, **$6 million** in third-party professional service fees, and **$3 million** in facility expenses[160](index=160&type=chunk) [Other Income, net](index=38&type=section&id=Other%20Income,%20net) Other income, net, primarily consisting of interest income, decreased for both the three and six months ended June 30, 2025, mainly due to lower interest income on investments following the settlement of convertible senior notes - Other income, net, primarily interest income, decreased **$16 million** for Q2 2025 and **$27 million** for YTD 2025[161](index=161&type=chunk) - The decrease was primarily driven by lower interest income on investments due to a decrease in investment balances after the settlement of the 2024, 2025, and 2026 Notes[161](index=161&type=chunk) [Interest Expense](index=38&type=section&id=Interest%20Expense) Interest expense decreased for both the three and six months ended June 30, 2025, primarily due to the settlement of the 2024, 2025, and 2026 Convertible Senior Notes - Interest expense decreased **$5 million** for Q2 2025 and **$9 million** for YTD 2025[163](index=163&type=chunk) - The decrease was primarily due to the settlement of the 2024, 2025, and 2026 Notes[163](index=163&type=chunk) [Income Taxes](index=38&type=section&id=Income%20Taxes) Income tax expense was not material for the reported periods, and the company is evaluating the impact of newly enacted tax law changes while maintaining a valuation allowance against net deferred tax assets - The 'One Big Beautiful Bill' enacted on July 4, 2025, provides significant U.S. tax law changes, which the company is currently evaluating for impact[164](index=164&type=chunk) - A valuation allowance is provided against net deferred tax assets, but there's a reasonable possibility that a significant portion of this allowance against U.S. net deferred tax assets may no longer be required within the next several years[165](index=165&type=chunk) - Income tax expense was not material for the three and six month periods ended June 30, 2025 or 2024[166](index=166&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes Zillow Group's financial liquidity and capital management, including sources of funds, cash flow activities, debt obligations, and share repurchase programs [Sources of Liquidity](index=39&type=section&id=Sources%20of%20Liquidity) Zillow Group's primary sources of liquidity are cash flows from operations, debt financing, and equity offerings, with current resources believed sufficient to meet capital requirements - Primary sources of liquidity and capital are cash flows from operations, debt financing, and equity offerings[167](index=167&type=chunk) - As of June 30, 2025, cash, cash equivalents, investments, and restricted cash totaled **$1.2 billion**, down from **$1.9 billion** as of December 31, 2024[168](index=168&type=chunk) - The company believes current liquidity sources are sufficient for ongoing operating activities, working capital, capital expenditures, strategic acquisitions, and other capital requirements for at least the next 12 months[169](index=169&type=chunk) - Zillow Group and its subsidiaries were in compliance with all debt covenants as of June 30, 2025[168](index=168&type=chunk) [Summarized Cash Flow Information](index=39&type=section&id=Summarized%20Cash%20Flow%20Information) This section provides a summary of Zillow Group's cash flow activities for the six months ended June 30, 2025, and 2024, highlighting net cash provided by operating activities, and net cash used in investing and financing activities Cash Flow Data (in millions) | Cash Flow Data (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $191 | $135 | | Net cash provided by (used in) investing activities | $25 | $(207) | | Net cash used in financing activities | $(709) | $(240) | [Cash Flows Provided By Operating Activities](index=39&type=section&id=Cash%20Flows%20Provided%20By%20Operating%20Activities) Net cash provided by operating activities increased to **$191 million** for the six months ended June 30, 2025, driven by net income and non-cash adjustments, partially offset by changes in operating assets and liabilities - Net cash provided by operating activities was **$191 million** for YTD 2025, up from **$135 million** for YTD 2024[172](index=172&type=chunk)[173](index=173&type=chunk) - For YTD 2025, operating cash flow was driven by **$10 million** net income, adjusted by **$196 million** share-based compensation and **$132 million** depreciation/amortization[172](index=172&type=chunk) - Changes in operating assets and liabilities decreased net cash by **$152 million** for YTD 2025, primarily due to a **$91 million** increase in mortgage loans held for sale and a **$47 million** increase in accounts receivable[172](index=172&type=chunk) [Cash Flows Provided By (Used In) Investing Activities](index=40&type=section&id=Cash%20Flows%20Provided%20By%20(Used%20In)%20Investing%20Activities) Net cash provided by investing activities was **$25 million** for the six months ended June 30, 2025, a significant improvement from net cash used in the prior year, primarily due to net proceeds from investments - Net cash provided by investing activities was **$25 million** for YTD 2025, compared to net cash used of **$207 million** for YTD 2024[175](index=175&type=chunk)[176](index=176&type=chunk) - For YTD 2025, this was primarily due to **$213 million** of net proceeds from maturities and sales of investments, partially offset by **$188 million** of purchases of property/equipment and intangible assets, including a **$100 million** payment for the Redfin partnership[175](index=175&type=chunk) [Cash Flows Used In Financing Activities](index=40&type=section&id=Cash%20Flows%20Used%20In%20Financing%20Activities) Net cash used in financing activities increased to **$709 million** for the six months ended June 30, 2025, primarily driven by the settlement of the 2025 Notes, significant share repurchases, and contingent consideration payments - Net cash used in financing activities was **$709 million** for YTD 2025, up from **$240 million** for YTD 2024[178](index=178&type=chunk)[179](index=179&type=chunk) - For YTD 2025, this was primarily due to **$419 million** for 2025 Notes settlement, **$400 million** for share repurchases, and **$30 million** for Follow Up Boss contingent consideration[178](index=178&type=chunk) - These outflows were partially offset by **$55 million** from stock option exercises and **$85 million** in net borrowings on master repurchase agreements[178](index=178&type=chunk) [Capital Resources](index=40&type=section&id=Capital%20Resources) This section details specific changes in Zillow Group's capital resources, including the settlement of the 2025 Notes, updates to share repurchase authorizations, and the status of credit facilities used to fund mortgage loan originations - The **2025 Notes** matured on May 15, 2025, with the remaining **$419 million** principal settled via **$425 million** cash payments (including interest) and a nominal issuance of Class C capital stock[180](index=180&type=chunk) [Share Repurchases](index=41&type=section&id=Share%20Repurchases) On May 2, 2025, the Board authorized an additional **$1 billion** for share repurchases, increasing the total cumulative authorization to **$3.5 billion** - On May 2, 2025, the Board authorized an additional **$1 billion** for repurchases of Class A common stock, Class C capital stock, or a combination, increasing total cumulative Repurchase Authorizations to **$3.5 billion**[182](index=182&type=chunk) - For YTD 2025, the company repurchased **4.2 million Class A shares** (**$297 million**) and **1.4 million Class C shares** (**$103 million**) at average prices of **$70.09** and **$73.19** per share, respectively[182](index=182&type=chunk) - As of June 30, 2025, **$981 million** remained available for future stock repurchases[182](index=182&type=chunk) [Credit Facilities](index=41&type=section&id=Credit%20Facilities) Zillow Home Loans utilizes master repurchase agreements to fund mortgage loan originations, amending its JPMorgan Chase agreement to increase capacity and extending maturity, and entering a new agreement with Bank of Nova Scotia Master Repurchase Agreements (in millions, except interest rates) | Master Repurchase Agreements (in millions, except interest rates) | Maturity Date | Maximum Borrowing Capacity | Outstanding Borrowings at June 30, 2025 | Outstanding Borrowings at December 31, 2024 | Weighted Average Interest Rate at June 30, 2025 | | :--------------------------------------------------------------- | :------------ | :------------------------- | :-------------------------------------- | :------------------------------------------ | :------------------------------------------ | | JPMorgan Chase Bank, N.A. | April 28, 2026 | $200 | $92 | $72 | 6.05% | | UBS AG | September 5, 2025 | $150 | $74 | $73 | 6.05% | | Bank of Montreal | February 26, 2026 | $150 | $64 | $— | 6.02% | | Bank of Nova Scotia | June 8, 2026 | $100 | $— | $— | —% | | Total | | $600 | $230 | $145 | | - The JPMorgan Chase Bank, N.A. agreement was amended on April 29, 2025, increasing maximum borrowing capacity to **$200 million** and extending maturity to April 28, 2026[183](index=183&type=chunk) - A new master repurchase agreement with Bank of Nova Scotia was entered into on June 9, 2025, providing **$100 million** maximum borrowing capacity, with no draws during Q2 2025[183](index=183&type=chunk) - As of June 30, 2025, Zillow Home Loans was in compliance with all financial covenants[68](index=68&type=chunk) [Contractual Obligations and Other Commitments](index=41&type=section&id=Contractual%20Obligations%20and%20Other%20Commitments) This section summarizes Zillow Group's contractual obligations, including principal amounts due under credit facilities, operating lease obligations, contingent consideration for acquisitions, and non-cancelable purchase obligations - Outstanding principal amounts under master repurchase agreements totaled **$230 million** as of June 30, 2025, due upon sale of related mortgage loans[184](index=184&type=chunk) - Operating lease obligations for office space had no material changes during Q2 2025[185](index=185&type=chunk) - Contingent consideration is owed for the Follow Up Boss acquisition, payable over three years upon achievement of performance metrics[186](index=186&type=chunk) - Non-cancelable purchase obligations include agreements for content, cloud computing services, and partnership payments[187](index=187&type=chunk) [Critical Accounting Estimates](index=42&type=section&id=Critical%20Accounting%20Estimates) This section highlights Zillow Group's critical accounting estimates, emphasizing the use of management judgment and assumptions in financial reporting and confirming no material changes since the last annual report - The preparation of financial statements requires estimates, judgments, and assumptions that affect reported amounts, which are evaluated on an ongoing basis[188](index=188&type=chunk) - There have been no material changes to the critical accounting policies and estimates previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[188](index=188&type=chunk) [Item 3. Quantitative a

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) This section provides details on the Quarterly Report on Form 10-Q for Zillow Group, Inc. for the period ended June 30, 2025 [Filing Details](index=1&type=section&id=Filing%20Details) This is a Quarterly Report on Form 10-Q for Zillow Group, Inc. for the period ended June 30, 2025. The registrant is a large accelerated filer and has filed all required reports and interactive data files - The report is a Quarterly Report on Form 10-Q for the period ended **June 30, 2025**[2](index=2&type=chunk) - **Zillow Group, Inc.** is a large accelerated filer[5](index=5&type=chunk) - As of July 30, 2025, **50,089,971 shares of Class A common stock**, **6,217,447 shares of Class B common stock**, and **185,964,745 shares of Class C capital stock** were outstanding[5](index=5&type=chunk) [Table of Contents](index=3&type=section&id=TABLE%20OF%20CONTENTS) This section provides an organized list of all chapters and sections within the Quarterly Report on Form 10-Q [Glossary of Terms](index=4&type=section&id=GLOSSARY%20OF%20TERMS) This section defines key abbreviations, acronyms, and common terms used throughout the Quarterly Report on Form 10-Q [Definitions](index=4&type=section&id=Definitions) This section provides definitions for key abbreviations, acronyms, and common terms used throughout the Quarterly Report on Form 10-Q, such as Zillow Group, various convertible notes, and industry-specific terms like MLS, NAR, and TTV - The glossary defines terms such as **'Zillow Group'**, **'2024 Notes'**, **'2025 Notes'**, **'2026 Notes'**, **'Board'**, **'Exchange Act'**, **'FASB'**, **'GAAP'**, **'IRLC'**, **'Lenders'**, **'MBS'**, **'MLS'**, **'NAR'**, **'Repurchase Authorizations'**, **'SEC'**, **'SOFR'**, and **'TTV'**[13](index=13&type=chunk) [Note Regarding Forward-Looking Statements](index=5&type=section&id=NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section cautions investors about forward-looking statements, which are subject to various risks and uncertainties [Forward-Looking Statements and Risks](index=5&type=section&id=Forward-Looking%20Statements%20and%20Risks) This section highlights that the report contains forward-looking statements based on management's beliefs and assumptions, which are subject to various risks and uncertainties. These risks include economic and real estate industry health, ability to manage advertising and partner relationships, compliance with industry rules, innovation, mortgage operations, and litigation outcomes. Investors are cautioned not to unduly rely on these statements due to the competitive and rapidly changing environment - Forward-looking statements are identified by terms such as **'believe,' 'may,' 'will,' 'estimate,' 'continue,' 'anticipate,' 'intend,' 'could,' 'would,' 'project,' 'plan,' 'expect,' 'potential,' 'might'** or their negatives[15](index=15&type=chunk) - Key risks include the **health and stability of the economy and U.S. residential real estate industry**, ability to manage advertising and partner relationships, compliance with NAR/MLS rules, ability to navigate industry changes (e.g., lawsuits), and ability to operate and grow Zillow Home Loans' mortgage operations[16](index=16&type=chunk) - The company operates in a **very competitive and rapidly changing environment**, and actual results could differ materially and adversely from forward-looking statements[17](index=17&type=chunk) [Note Regarding Industry and Market Data](index=6&type=section&id=NOTE%20REGARDING%20INDUSTRY%20AND%20MARKET%20DATA) This section clarifies that market and industry data in the report are based on internal estimates and third-party sources [Data Sources and Verification](index=6&type=section&id=Data%20Sources%20and%20Verification) This section clarifies that market and industry data in the report are based on internal estimates and third-party sources. The company has not independently verified third-party data or its underlying economic assumptions - Market and industry data are based on **internal estimates and research**, as well as independent industry publications and third-party statistical information[21](index=21&type=chunk) - The company has **not independently verified** any data from third-party sources nor validated their underlying economic assumptions[21](index=21&type=chunk) [Where You Can Find More Information](index=6&type=section&id=WHERE%20YOU%20CAN%20FIND%20MORE%20INFORMATION) This section directs readers to Zillow Group's SEC filings and other public disclosure channels for additional information [SEC Filings and Disclosure Channels](index=6&type=section&id=SEC%20Filings%20and%20Disclosure%20Channels) Zillow Group's SEC filings are available on its investor relations website. The company also uses press releases, public conference calls, webcasts, and specific social media channels (X and LinkedIn) to disclose material financial information, advising investors to monitor these channels - SEC filings (**10-K, 10-Q, 8-K**) are available free of charge on the 'Investors' section of **www.zillowgroup.com**[23](index=23&type=chunk) - Zillow Group uses **press releases, SEC filings, public conference calls, webcasts, its Investor Relations Site, Blog, X Account, and LinkedIn Account** for disclosing material financial information[24](index=24&type=chunk)[25](index=25&type=chunk) [PART I – FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part contains Zillow Group's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements (unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Zillow Group's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income (loss), shareholders' equity, and cash flows, along with detailed notes explaining accounting policies, financial instruments, debt, share-based awards, and other financial commitments [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This table provides a snapshot of Zillow Group's assets, liabilities, and shareholders' equity at specific points in time | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | Change (in millions) | % Change | | :-------------------------------- | :-------------------------- | :------------------------------ | :------------------- | :------- | | Cash and cash equivalents | $587 | $1,082 | $(495) | -45.7% | | Total current assets | $1,821 | $2,334 | $(513) | -22.0% | | Total assets | $5,416 | $5,829 | $(413) | -7.1% | | Total current liabilities | $546 | $831 | $(285) | -34.3% | | Convertible senior notes | $— | $418 | $(418) | -100.0% | | Total liabilities | $670 | $981 | $(311) | -31.7% | | Total shareholders' equity | $4,746 | $4,848 | $(102) | -2.1% | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This table presents Zillow Group's revenues, expenses, and net income (loss) over specific reporting periods | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Change (in millions) | % Change | | :-------------------------- | :------------------------------------- | :------------------------------------- | :------------------- | :------- | | Total revenue | $655 | $572 | $83 | 14.5% | | Gross profit | $489 | $442 | $47 | 10.6% | | Loss from operations | $(11) | $(38) | $27 | 71.1% | | Net income (loss) | $2 | $(17) | $19 | 111.8% | | Basic EPS | $0.01 | $(0.07) | $0.08 | 114.3% | | Diluted EPS | $0.01 | $(0.07) | $0.08 | 114.3% | | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | Change (in millions) | % Change | | :-------------------------- | :------------------------------------ | :------------------------------------ | :------------------- | :------- | | Total revenue | $1,253 | $1,101 | $152 | 13.8% | | Gross profit | $948 | $848 | $100 | 11.8% | | Loss from operations | $(20) | $(83) | $63 | 75.9% | | Net income (loss) | $10 | $(40) | $50 | 125.0% | | Basic EPS | $0.04 | $(0.17) | $0.21 | 123.5% | | Diluted EPS | $0.04 | $(0.17) | $0.21 | 123.5% | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This table details Zillow Group's net income (loss) and other comprehensive income (loss) components for the reporting periods | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Change (in millions) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | :------------------- | | Net income (loss) | $2 | $(17) | $19 | | Net unrealized gains (losses) on investments | $1 | $— | $1 | | Total other comprehensive income (loss) | $1 | $— | $1 | | Comprehensive income (loss) | $3 | $(17) | $20 | | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | Change (in millions) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :------------------- | | Net income (loss) | $10 | $(40) | $50 | | Net unrealized gains (losses) on investments | $4 | $(6) | $10 | | Total other comprehensive income (loss) | $4 | $(6) | $10 | | Comprehensive income (loss) | $14 | $(46) | $60 | [Condensed Consolidated Statements of Shareholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) This table outlines changes in Zillow Group's shareholders' equity, including additional paid-in capital and accumulated deficit | Metric | Balance at April 1, 2025 (in millions) | Balance at June 30, 2025 (in millions) | Change (in millions) | | :-------------------------- | :------------------------------------ | :------------------------------------ | :------------------- | | Additional Paid-In Capital | $6,628 | $6,617 | $(11) | | Accumulated Deficit | $(1,874) | $(1,872) | $2 | | Total Shareholders' Equity | $4,754 | $4,746 | $(8) | | Metric | Balance at January 1, 2025 (in millions) | Balance at June 30, 2025 (in millions) | Change (in millions) | | :-------------------------- | :------------------------------------ | :------------------------------------ | :------------------- | | Additional Paid-In Capital | $6,733 | $6,617 | $(116) | | Accumulated Deficit | $(1,882) | $(1,872) | $10 | | Total Shareholders' Equity | $4,848 | $4,746 | $(102) | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This table summarizes Zillow Group's cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | Change (in millions) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :------------------- | | Net cash provided by operating activities | $191 | $135 | $56 | | Net cash provided by (used in) investing activities | $25 | $(207) | $232 | | Net cash used in financing activities | $(709) | $(240) | $(469) | | Net decrease in cash, cash equivalents and restricted cash | $(493) | $(312) | $(181) | | Cash, cash equivalents and restricted cash at end of period | $592 | $1,183 | $(591) | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [Note 1. Organization and Description of Business](index=13&type=section&id=Note%201.%20Organization%20and%20Description%20of%20Business) Zillow Group is a real estate technology company aiming to simplify home transactions. Its portfolio includes Zillow Premier Agent, Zillow Home Loans, Zillow Rentals, and marketing software solutions like ShowingTime+, Spruce, and Follow Up Boss. The company operates in a dynamic industry with significant risks including economic conditions, industry changes, and regulatory compliance - **Zillow Group's core business** is reimagining real estate through digital solutions, real estate professionals, and easier buying, selling, financing, and renting experiences[38](index=38&type=chunk) - Key brands and services include **Zillow Premier Agent, Zillow Home Loans, Zillow Rentals, Trulia, StreetEasy, HotPads, Out East, ShowingTime+, Spruce, and Follow Up Boss**[39](index=39&type=chunk) - Significant risks include the **health of the U.S. residential real estate industry**, changes due to lawsuits or government investigations, ability to manage advertising and partner relationships, and operating Zillow Home Loans[40](index=40&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=14&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) The financial statements are prepared in conformity with GAAP and SEC interim reporting rules, consolidating Zillow Group and its subsidiaries. Management makes estimates and judgments that affect reported amounts, particularly in areas like revenue recognition, asset recoverability, and share-based compensation. The company is evaluating recently issued FASB guidance on income tax disclosures and cost/expense disclosures, with no material impact expected from the former - Condensed consolidated financial statements are prepared in conformity with **GAAP and SEC rules** for interim financial reporting[41](index=41&type=chunk) - Management's estimates include accounting for **revenue, amortization of contract cost assets, recoverability of long-lived and intangible assets, share-based compensation, income taxes, and business combinations**[43](index=43&type=chunk) - New FASB guidance on income tax rate reconciliation (effective after December 15, 2024) is expected to result in additional disclosures but **no material impact** on consolidated financial statements[44](index=44&type=chunk) [Note 3. Financial Instruments](index=14&type=section&id=Note%203.%20Financial%20Instruments) This note details the fair value measurements for various financial instruments, including cash equivalents, short-term investments, restricted cash, mortgage loans held for sale, forward contracts, contingent consideration, and interest rate lock commitments (IRLCs). The company uses Level 1, Level 2, and Level 3 inputs for these measurements, with specific methodologies for contingent consideration and IRLCs - Fair value measurements for **cash equivalents, short-term investments, restricted cash, mortgage loans held for sale, and forward contracts** are primarily based on **Level 1 or Level 2 inputs**[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - Contingent consideration (related to the Follow Up Boss acquisition) and IRLCs are valued using **Level 3 inputs**, with Monte Carlo simulation for contingent consideration and pull-through rates for IRLCs[49](index=49&type=chunk)[52](index=52&type=chunk) IRLCs Activity (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Balance, beginning of period | $7 | $5 | $4 | $3 | | Issuances | $24 | $11 | $45 | $23 | | Transfers | $(22) | $(12) | $(40) | $(22) | | Balance, end of period | $9 | $4 | $9 | $4 | Fair Value of Assets and Liabilities (in millions) | Category | June 30, 2025 Estimated Fair Market Value | December 31, 2024 Estimated Fair Market Value | | :------------------------------------ | :---------------------------------------- | :------------------------------------------ | | Total assets measured at fair value | $1,422 | $2,025 | | Total liabilities measured at fair value | $64 | $91 | [Note 4. Property and Equipment, Net](index=18&type=section&id=Note%204.%20Property%20and%20Equipment,%20Net) This note details the composition of property and equipment, net, which primarily includes website development costs. The company capitalized significant website development costs and recorded associated amortization expense Property and Equipment, Net (in millions) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Website development costs | $597 | $564 | | Property and equipment, net | $373 | $360 | - Capitalized website development costs were **$51 million for Q2 2025** (vs **$54 million in Q2 2024**) and **$99 million for H1 2025** (vs **$106 million in H1 2024**)[58](index=58&type=chunk) - Amortization expense for website development costs was **$42 million for Q2 2025** (vs **$36 million in Q2 2024**) and **$83 million for H1 2025** (vs **$69 million in H1 2024**)[58](index=58&type=chunk) [Note 5. Intangible Assets, Net](index=18&type=section&id=Note%205.%20Intangible%20Assets,%20Net) This note provides a breakdown of intangible assets, net, which include customer relationships, software, developed technology, and trade names. A significant addition to customer relationships resulted from a partnership with Redfin. Amortization expense for intangible assets is also presented, along with estimated future amortization Intangible Assets, Net (in millions) | Category | June 30, 2025 Net | December 31, 2024 Net | | :-------------------------- | :---------------- | :-------------------- | | Customer relationships | $155 | $65 | | Software | $66 | $62 | | Developed technology | $38 | $51 | | Trade names and trademarks | $20 | $22 | | Purchased content | $6 | $7 | | Total | $285 | $207 | - On February 6, 2025, Zillow entered into a partnership with Redfin, becoming the exclusive provider of multifamily rental listings on Redfin's sites, involving a **$100 million payment** included in customer relationships[60](index=60&type=chunk) - Amortization expense for intangible assets was **$22 million for Q2 2025** (vs **$19 million in Q2 2024**) and **$42 million for H1 2025** (vs **$38 million in H1 2024**)[61](index=61&type=chunk) Estimated Future Amortization Expense for Intangible Assets (in millions) | Period | Amount | | :---------------- | :----- | | Remainder of 2025 | $42 | | 2026 | $70 | | 2027 | $59 | | 2028 | $35 | | 2029 | $28 | | Thereafter | $59 | | Total | $293 | [Note 6. Debt](index=19&type=section&id=Note%206.%20Debt) This note outlines Zillow Group's debt, primarily consisting of master repurchase agreements for Zillow Home Loans and the settlement of convertible senior notes. The company increased its borrowing capacity and settled the 2025 Notes, significantly reducing its total debt Carrying Values of Debt (in millions) | Debt Type | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Total master repurchase agreements | $230 | $145 | | 2025 Notes | $— | $418 | | Total debt | $230 | $563 | - Zillow Home Loans amended its JPMorgan Chase Bank, N.A. master repurchase agreement to increase borrowing capacity to **$200 million** and extended maturity to **April 28, 2026**[65](index=65&type=chunk) - The 2025 Notes matured on **May 15, 2025**, with the remaining **$419 million principal** settled for **$425 million in cash**, including accrued interest[71](index=71&type=chunk) Interest Expense Related to Convertible Senior Notes (in millions) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Total Interest Expense | $1 | $7 | $5 | $15 | [Note 7. Income Taxes](index=21&type=section&id=Note%207.%20Income%20Taxes) This note discusses the impact of the recently enacted 'One Big Beautiful Bill' on U.S. tax law, which Zillow Group is currently evaluating. The company maintains a valuation allowance against its net deferred tax assets due to uncertainty of realization, despite having significant accumulated federal and state tax losses - The **'One Big Beautiful Bill'** was enacted on **July 4, 2025**, providing significant U.S. tax law changes, including permanent **100% bonus depreciation** and expensing of domestic research costs[75](index=75&type=chunk) - Zillow Group is **evaluating the impact** of the new tax bill on its financial statements[75](index=75&type=chunk) - A valuation allowance is provided against net deferred tax assets, with approximately **$1.3 billion in accumulated federal tax losses** and **$66 million (tax effected) in state tax losses** as of December 31, 2024[76](index=76&type=chunk) [Note 8. Share Repurchase Authorizations](index=21&type=section&id=Note%208.%20Share%20Repurchase%20Authorizations) The Board authorized an additional $1.0 billion for share repurchases on May 2, 2025, increasing the total cumulative authorization to $3.5 billion. The company actively repurchased Class A common stock and Class C capital stock during the period - On **May 2, 2025**, the Board authorized an additional **$1.0 billion** for repurchases of Class A common stock, Class C capital stock, or a combination, increasing total cumulative authorizations to **$3.5 billion**[78](index=78&type=chunk) - As of June 30, 2025, **$981 million** remained available for future repurchases[78](index=78&type=chunk) Share Repurchase Activity (in millions, except shares in thousands and per share amounts) | Period | Class A Common Stock Repurchased (shares) | Class C Capital Stock Repurchased (shares) | Weighted-Average Price Per Share (Class A) | Weighted-Average Price Per Share (Class C) | Total Purchase Price (Class A) | Total Purchase Price (Class C) | | :-------------------------- | :---------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------- | :----------------------------- | | Three Months Ended June 30, 2025 | 1,784 | 522 | $65.04 | $65.03 | $116 | $34 | | Six Months Ended June 30, 2025 | 4,244 | 1,401 | $70.09 | $73.19 | $297 | $103 | [Note 9. Share-Based Awards](index=22&type=section&id=Note%209.%20Share-Based%20Awards) This note details the activity and unrecognized compensation costs for option awards and restricted stock units (RSUs). The company granted new awards and recognized significant share-based compensation expense during the period Option Award Activity (Six Months Ended June 30, 2025) | Metric | Number of Shares Subject to Existing Options (in thousands) | Weighted Average Exercise Price Per Share | | :-------------------------- | :------------------------------------------------ | :---------------------------------------- | | Outstanding at January 1, 2025 | 29,941 | $46.58 | | Granted | 2,183 | $75.95 | | Exercised | (1,320) | $41.47 | | Outstanding at June 30, 2025 | 30,491 | $48.86 | - As of June 30, 2025, there was **$228 million** in unrecognized compensation cost related to unvested option awards[81](index=81&type=chunk) Restricted Stock Units Activity (Six Months Ended June 30, 2025) | Metric | Restricted Stock Units (in thousands) | Weighted Average Grant Date Fair Value | | :-------------------------- | :------------------------------------ | :------------------------------------- | | Unvested outstanding at January 1, 2025 | 11,729 | $50.31 | | Granted | 4,302 | $75.73 | | Vested | (2,967) | $50.90 | | Unvested outstanding at June 30, 2025 | 12,458 | $58.82 | - As of June 30, 2025, there was **$680 million** in unrecognized compensation cost related to unvested restricted stock units[82](index=82&type=chunk) Share-Based Compensation Expense (in millions) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Total share-based compensation | $99 | $113 | $196 | $221 | [Note 10. Net Income (Loss) Per Share](index=23&type=section&id=Note%2010.%20Net%20Income%20(Loss)%20Per%20Share) This note provides the reconciliation of denominators used for basic and diluted net income (loss) per share calculations. It also lists Class C capital stock equivalents that were excluded from diluted EPS calculations because their effect would have been antidilutive Denominators for EPS Calculations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Denominator for basic calculation | 241,083 | 233,453 | 241,667 | 234,074 |\ | Denominator for dilutive calculation | 251,665 | 233,453 | 253,916 | 234,074 | Excluded Antidilutive Class C Capital Stock Equivalents (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Total Class C capital stock equivalents | 10,573 | 66,378 | 10,974 | 67,408 | [Note 11. Commitments and Contingencies](index=24&type=section&id=Note%2011.%20Commitments%20and%20Contingencies) This note details the company's purchase commitments and ongoing legal proceedings. Significant legal cases include patent infringement, federal securities class action, and shareholder derivative suits. While outcomes are uncertain, management does not believe they will have a material effect on financial position, results of operations, or cash flow Purchase Commitments (in millions) | Period | Purchase Obligations | | :---------------- | :------------------- | | Remainder of 2025 | $99 | | 2026 | $117 | | 2027 | $67 | | 2028 | $1 | | Total | $284 | - The company is involved in a **patent infringement lawsuit with IBM**, a **federal securities class action lawsuit**, and **shareholder derivative suits**, all of which are in various stages of litigation[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) - Management believes the outcomes of these legal proceedings will **not have a material effect** on the company's financial position, results of operations, or cash flow, and no material accruals have been recorded[86](index=86&type=chunk)[90](index=90&type=chunk) [Note 12. Revenue and Contract Balances](index=25&type=section&id=Note%2012.%20Revenue%20and%20Contract%20Balances) This note explains the company's revenue recognition policy, which is based on satisfying performance obligations. It also provides details on contract assets and deferred revenue balances, including the amounts recognized as revenue during the periods - Revenue is recognized when **performance obligations are satisfied** by transferring control of products or services to customers[92](index=92&type=chunk) - Contract assets totaled **$201 million** as of June 30, 2025, up from **$157 million** as of December 31, 2024[93](index=93&type=chunk) - For Q2 2025, **$53 million** of the opening deferred revenue balance of **$70 million** was recognized as revenue[94](index=94&type=chunk) For H1 2025, **$53 million** of the opening deferred revenue balance of **$62 million** was recognized as revenue[95](index=95&type=chunk) [Note 13. Segment Information](index=26&type=section&id=Note%2013.%20Segment%20Information) This note presents a table of significant expense categories that impact the company's reported measure of segment profitability, providing a breakdown of costs relative to revenue and net income (loss) Significant Expense Categories (in millions) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Revenue | $655 | $572 | $1,253 | $1,101 | | Headcount-related expenses (excl. share-based comp) | $298 | $272 | $586 | $536 | | Share-based compensation | $99 | $113 | $196 | $221 | | Depreciation and amortization | $67 | $59 | $132 | $115 | | Marketing and advertising costs | $64 | $58 | $107 | $88 | | Direct product and service costs | $73 | $44 | $123 | $87 | | Loss from operations | $(11) | $(38) | $(20) | $(83) | | Net income (loss) | $2 | $(17) | $10 | $(40) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Zillow Group's financial condition and results of operations, discussing business overview, market health, revenue categories, key performance metrics, and detailed analysis of revenue, expenses, and liquidity. It highlights the company's strategic focus on growth despite housing market uncertainties [Overview of our Business](index=27&type=section&id=Overview%20of%20our%20Business) Zillow Group aims to simplify real estate transactions through its digital solutions and professional connections. Its brand portfolio includes Zillow Premier Agent, Zillow Home Loans, Zillow Rentals, and various marketing software solutions. The company's employee count increased slightly since the end of 2024 - **Zillow Group's mission** is to reimagine real estate to make home a reality for more people, connecting them with digital solutions and real estate professionals[98](index=98&type=chunk) - The company's portfolio includes **Zillow Premier Agent, Zillow Home Loans, Zillow Rentals, Trulia, StreetEasy, HotPads, Out East, ShowingTime+, Spruce, and Follow Up Boss**[99](index=99&type=chunk) - As of June 30, 2025, Zillow Group had **6,944 employees**, an increase from **6,856 employees** as of December 31, 2024[100](index=100&type=chunk) [Health of Housing Market](index=27&type=section&id=Health%20of%20Housing%20Market) The housing market's health, influenced by low inventory, volatile mortgage rates, and home price fluctuations, impacts Zillow Group's financial performance. Despite these challenges, the company's revenue growth outpaced the industry's Total Transaction Value (TTV) increase - Current market factors include **low housing inventory, elevated and volatile mortgage interest rates, changes in rental inventory and occupancy rates, and home price fluctuations**[101](index=101&type=chunk) - **Total Transaction Value (TTV)** increased **2% for Q2 2025 YoY** and **4% for H1 2025 YoY**[101](index=101&type=chunk) - **Zillow Group's total revenue growth** for Q2 and H1 2025 **exceeded the industry's TTV performance** for the same periods[101](index=101&type=chunk) [Revenue Overview](index=27&type=section&id=Revenue%20Overview) Zillow Group's revenue is categorized into Residential, Mortgages, Rentals, and Other. Residential revenue includes Premier Agent, new construction, and software solutions like ShowingTime+, StreetEasy, and Follow Up Boss. Mortgages revenue comes from originations and advertising. Rentals revenue is generated from advertising and applications, while Other revenue is primarily from display advertising - Revenue is classified into **Residential, Mortgages, Rentals, and Other**, with 'For Sale revenue' combining Residential and Mortgages[102](index=102&type=chunk) - Residential revenue sources include **Premier Agent** (market-based pricing and Flex model), **new construction advertising, ShowingTime+** (Appointment Center, dotloop, Zillow Showcase), **StreetEasy** (Experts, subscriptions), and **Follow Up Boss CRM**[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) - Mortgages revenue is primarily from **mortgage originations through Zillow Home Loans** and advertising to mortgage professionals[109](index=109&type=chunk) - Rentals revenue is derived from **advertising and tools for property managers and rental applications**[110](index=110&type=chunk) [Financial Overview](index=29&type=section&id=Financial%20Overview) Zillow Group reported a 15% increase in total revenue and an 11% increase in gross profit for the three months ended June 30, 2025, compared to the same period in the prior year. This growth was primarily driven by increases in Rentals and For Sale revenue Financial Overview (Three Months Ended June 30, in millions) | Metric | 2025 | 2024 | Change | % Change | | :----------- | :--- | :--- | :----- | :------- | | Total revenue | $655 | $572 | $83 | 14.5% | | Gross profit | $489 | $442 | $47 | 10.6% | - Rentals revenue increased by **$42 million (36%) to $159 million**[112](index=112&type=chunk) - Residential revenue increased by **$25 million (6%) to $434 million**, and Mortgages revenue increased by **$14 million (41%) to $48 million**[116](index=116&type=chunk) [Key Metrics](index=29&type=section&id=Key%20Metrics) Management tracks visits, unique users, For Sale revenue per TTV, and loan origination volume as key indicators of financial condition and operational results. These metrics show positive trends, reflecting increased consumer engagement and successful mortgage operations [Visits](index=29&type=section&id=Visits) Visits to Zillow's mobile applications and websites increased by 4% for Q2 2025 and 3% for H1 2025 compared to the prior year. The company transitioned to an internal measurement tool for Zillow and StreetEasy visits to enhance data control and reduce reliance on third-party providers - Visits are defined as a group of interactions by users with **Zillow, Trulia, and StreetEasy mobile applications and websites**[117](index=117&type=chunk) Visits to Mobile Applications and Websites (in millions) | Period | June 30, 2025 | June 30, 2024 | % Change | | :---------------- | :------------ | :------------ | :------- | | Three Months Ended | 2,590 | 2,495 | 4% | | Six Months Ended | 4,944 | 4,811 | 3% | - **Zillow and StreetEasy** now measure visits using an **internal measurement tool**, moving away from Google's Universal Analytics for StreetEasy[118](index=118&type=chunk)[119](index=119&type=chunk) [Unique Users](index=30&type=section&id=Unique%20Users) Average monthly unique users increased by 5% for both Q2 and H1 2025 compared to the prior year, indicating growing consumer traffic. Zillow, StreetEasy, and HotPads now use an internal measurement tool for unique users to improve data insight - A unique user is counted the first time an individual accesses one of the company's mobile applications or websites using a specific device/browser within a calendar month[121](index=121&type=chunk) Average Monthly Unique Users (in millions) | Period | June 30, 2025 | June 30, 2024 | % Change | | :---------------- | :------------ | :------------ | :------- | | Three Months Ended | 243 | 231 | 5% | | Six Months Ended | 235 | 224 | 5% | - **Zillow, StreetEasy, and HotPads** measure unique users using an **internal measurement tool**, transitioning from Google's Universal Analytics for StreetEasy and HotPads[122](index=122&type=chunk)[124](index=124&type=chunk) [For Sale Revenue Per Total Transaction Value](index=31&type=section&id=For%20Sale%20Revenue%20Per%20Total%20Transaction%20Value) For Sale revenue per TTV increased by 5% to 10.3 basis points for the twelve months ended June 30, 2025, reflecting the company's ability to connect and convert more buyers and sellers relative to the residential real estate industry's total transaction value - **For Sale revenue per TTV** measures the company's For Sale revenue performance relative to the residential real estate industry's total transaction value[125](index=125&type=chunk) For Sale Revenue Per Total Transaction Value (Twelve Months Ended June 30) | Metric | 2025 | 2024 | % Change | | :------------------------------------ | :--- | :--- | :------- | | For Sale revenue (in millions) | $1,812 | $1,624 | 12% | | Total Transaction Value (in trillions) | $1.8 | $1.6 | 6% | | For Sale revenue per TTV (in basis points) | 10.3 | 9.8 | 5% | [Loan Origination Volume](index=31&type=section&id=Loan%20Origination%20Volume) Total loan origination volume through Zillow Home Loans significantly increased by 48% for Q2 2025 and 41% for H1 2025 compared to the prior year, primarily driven by growth in purchase loan originations, aligning with strategic priorities - **Loan origination volume** measures the total value of mortgage loan originations closed through Zillow Home Loans[128](index=128&type=chunk) Loan Origination Volume (in millions) | Loan Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :-------------------------- | :------------------------------- | :------------------------------- | :------- | :------------------------------ | :------------------------------ | :------- | | Purchase loan origination volume | $1,116 | $756 | 48% | $1,907 | $1,357 | 41% | | Refinance loan origination volume | $10 | $3 | 233% | $15 | $8 | 88% | | Total loan origination volume | $1,126 | $759 | 48% | $1,922 | $1,365 | 41% | - The increase was primarily driven by continued growth in **Zillow Home Loans purchase loan originations**[129](index=129&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of Zillow Group's revenue, expenses, and profitability for the three and six months ended June 30, 2025, compared to the prior year. It highlights significant growth in Rentals and Mortgages revenue, alongside changes in operating costs and a shift to net income [Revenue](index=32&type=section&id=Revenue) Total revenue increased by 15% for Q2 2025 and 14% for H1 2025. This growth was primarily fueled by a 36% increase in Rentals revenue and significant increases in Mortgages revenue (41% for Q2, 37% for H1), driven by higher loan origination volume and gain on sale margin Total Revenue by Category (in millions, except percentages) | Revenue Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :-------------------------- | :------------------------------- | :------------------------------- | :------- | :------------------------------ | :------------------------------ | :------- | | Residential | $434 | $409 | 6% | $851 | $802 | 6% | | Mortgages | $48 | $34 | 41% | $89 | $65 | 37% | | Total For Sale revenue | $482 | $443 | 9% | $940 | $867 | 8% | | Rentals | $159 | $117 | 36% | $288 | $214 | 35% | | Other | $14 | $12 | 17% | $25 | $20 | 25% | | Total revenue | $655 | $572 | 15% | $1,253 | $1,101 | 14% | - Rentals revenue increased due to a **21% increase in quarterly revenue per average monthly rentals unique visitor** and a **13% increase in average monthly rentals unique visitors** for Q2 2025[132](index=132&type=chunk) - Mortgages revenue increased primarily due to a **48% increase in total loan origination volume** and a **5% increase in gain on sale margin** for Q2 2025[136](index=136&type=chunk) [Adjusted EBITDA](index=34&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA increased by 16% for Q2 2025 and 19% for H1 2025, reflecting improved operating performance. The company provides a reconciliation to net income (loss) and outlines the limitations of Adjusted EBITDA as a non-GAAP measure Net Income (Loss) and Adjusted EBITDA (in millions, except percentages) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :-------------------------- | :------------------------------- | :------------------------------- | :------- | :------------------------------ | :------------------------------ | :------- | | Net income (loss) | $2 | $(17) | 112% | $10 | $(40) | 125% | | Adjusted EBITDA | $155 | $134 | 16% | $308 | $259 | 19% | - **Adjusted EBITDA** is a key metric used by management and the Board to measure operating performance and trends, excluding certain expenses like share-based compensation, depreciation, and interest[139](index=139&type=chunk)[141](index=141&type=chunk) Reconciliation of Adjusted EBITDA to Net Income (Loss) (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net income (loss) | $2 | $(17) | $10 | $(40) | | Income taxes | $— | $2 | $— | $4 | | Other income, net | $(18) | $(34) | $(40) | $(67) | | Depreciation and amortization | $67 | $59 | $132 | $115 | | Share-based compensation | $99 | $113 | $196 | $221 | | Impairment costs | $— | $— | $— | $6 | | Loss on extinguishment of debt | $— | $1 | $— | $1 | | Interest expense | $5 | $10 | $10 | $19 | | Adjusted EBITDA | $155 | $134 | $308 | $259 | [Costs and Expenses, Gross Profit and Other Items](index=35&type=section&id=Costs%20and%20Expenses,%20Gross%20Profit%20and%20Other%20Items) This section provides a summary of changes in cost of revenue, gross profit, and operating expenses. Cost of revenue increased, leading to a slight decrease in gross margin, while total operating expenses saw a modest increase Costs and Expenses Summary (in millions, except percentages) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :-------------------------- | :------------------------------- | :------------------------------- | :------- | :------------------------------ | :------------------------------ | :------- | | Cost of revenue | $166 | $130 | 28% | $305 | $253 | 21% | | Gross profit | $489 | $442 | 11% | $948 | $848 | 12% | | Sales and marketing | $226 | $205 | 10% | $424 | $371 | 14% | | Technology and development | $153 | $144 | 6% | $302 | $291 | 4% | | General and administrative | $121 | $131 | -8% | $242 | $263 | -8% | | Total operating expenses | $500 | $480 | 4% | $968 | $931 | 4% | [Cost of Revenue](index=36&type=section&id=Cost%20of%20Revenue) Cost of revenue increased by 28% for Q2 2025 and 21% for H1 2025, primarily driven by higher lead acquisition costs from the Redfin rentals partnership, increased depreciation and amortization of website development costs, and higher ad serving costs - Cost of revenue increased by **$36 million (28%) for Q2 2025**, primarily due to **$20 million in lead acquisition costs** (Redfin partnership), **$5 million in depreciation and amortization**, and **$5 million in ad serving costs**[147](index=147&type=chunk) - Cost of revenue increased by **$52 million (21%) for H1 2025**, primarily due to **$25 million in lead acquisition costs** (Redfin partnership), **$13 million in depreciation and amortization**, and **$6 million in ad serving costs**[148](index=148&type=chunk) - Cost of revenue includes expenses related to **operating mobile applications/websites, headcount, revenue-sharing, depreciation, amortization of website development costs and intangible assets, credit card fees, and mortgage loan origination costs**[146](index=146&type=chunk) [Gross Profit](index=37&type=section&id=Gross%20Profit) Gross profit increased by 11% for Q2 2025 and 12% for H1 2025, driven by higher revenue. However, gross margin decreased slightly from 77% to 75% for Q2 and from 77% to 76% for H1, mainly due to increased lead acquisition costs from the Redfin rentals partnership - Gross profit increased by **$47 million (11%) for Q2 2025** and **$100 million (12%) for H1 2025**, primarily due to increased revenue[150](index=150&type=chunk)[151](index=151&type=chunk) - Gross margin decreased from **77% to 75% for Q2 2025** and from **77% to 76% for H1 2025**, primarily due to increased lead acquisition costs associated with the Redfin rentals partnership[150](index=150&type=chunk)[151](index=151&type=chunk) [Sales and Marketing](index=37&type=section&id=Sales%20and%20Marketing) Sales and marketing expenses increased by 10% for Q2 2025 and 14% for H1 2025, driven by higher headcount-related expenses (including share-based compensation) and increased marketing and advertising costs, particularly for the rentals marketplace - Sales and marketing expenses increased by **$21 million (10%) for Q2 2025**, due to **$12 million in headcount-related expenses** and **$6 million in marketing and advertising costs**[153](index=153&type=chunk) - Sales and marketing expenses increased by **$53 million (14%) for H1 2025**, due to **$28 million in headcount-related expenses** and **$18 million in marketing and advertising costs**[154](index=154&type=chunk) - The increases reflect continued investment in **human capital** and growth of the **rentals marketplace**[153](index=153&type=chunk)[154](index=154&type=chunk) [Technology and Development](index=37&type=section&id=Technology%20and%20Development) Technology and development expenses increased by 6% for Q2 2025 and 4% for H1 2025, primarily due to increased headcount-related expenses (including share-based compensation) and higher software and hardware costs, reflecting ongoing investment in product development - Technology and development expenses increased by **$9 million (6%) for Q2 2025**, due to **$6 million in headcount-related expenses** and **$2 million in software and hardware costs**[156](index=156&type=chunk) - Technology and development expenses increased by **$11 million (4%) for H1 2025**, due to **$6 million in headcount-related expenses** and **$4 million in software and hardware costs**[157](index=157&type=chunk) - These increases are driven by continued investment in **human capital** to grow the business[156](index=156&type=chunk)[157](index=157&type=chunk) [General and Administrative](index=38&type=section&id=General%20and%20Administrative) General and administrative expenses decreased by 8% for both Q2 and H1 2025, primarily due to lower headcount-related expenses (influenced by prior equity award actions) and reduced third-party professional service fees, partially offset by increased software and hardware costs - General and administrative expenses decreased by **$10 million (8%) for Q2 2025**, due to **$7 million in headcount-related expenses** and **$2 million in third-party professional service fees**[159](index=159&type=chunk) - General and administrative expenses decreased by **$21 million (8%) for H1 2025**, due to **$13 million in headcount-related expenses, $6 million in third-party professional service fees, and $3 million in facility expenses**[160](index=160&type=chunk) - The decreases in headcount-related expenses were primarily influenced by **equity award actions in August 2022**[159](index=159&type=chunk)[160](index=160&type=chunk) [Other Income, net](index=38&type=section&id=Other%20Income,%20net) Other income, net, primarily consisting of interest income, decreased by $16 million for Q2 2025 and $27 million for H1 2025. This decline was mainly due to lower interest income on investments, resulting from a decrease in investment balances following the settlement of convertible senior notes - Other income, net, primarily interest income, decreased by **$16 million for Q2 2025** and **$27 million for H1 2025**[161](index=161&type=chunk) - The decrease was driven by lower interest income on investments due to a decrease in investment balances after settling the **2024, 2025, and 2026 Notes**[161](index=161&type=chunk) [Interest Expense](index=38&type=section&id=Interest%20Expense) Interest expense decreased by $5 million for Q2 2025 and $9 million for H1 2025, primarily due to the settlement of the 2024, 2025, and 2026 convertible senior notes - Interest expense decreased by **$5 million for Q2 2025** and **$9 million for H1 2025**[163](index=163&type=chunk) - The decrease was primarily due to the settlement of the **2024, 2025, and 2026 Notes**[163](index=163&type=chunk) [Income Taxes](index=38&type=section&id=Income%20Taxes) Income tax expense was not material for the periods presented. The company is evaluating the impact of the recently enacted 'One Big Beautiful Bill' on future tax provisions. A valuation allowance is maintained against net deferred tax assets due to uncertainty of realization, despite significant accumulated tax losses - Income tax expense was **not material** for the three and six months ended June 30, 2025 or 2024[166](index=166&type=chunk) - The company is evaluating the impact of the **'One Big Beautiful Bill'** enacted on **July 4, 2025**, which includes significant U.S. tax law changes[164](index=164&type=chunk) - A valuation allowance is provided against net deferred tax assets, with approximately **$1.3 billion in federal tax losses** and **$66 million (tax effected) in state tax losses** as of December 31, 2024[165](index=165&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Zillow Group's liquidity primarily comes from cash flows from operations, debt financing, and equity offerings, used for working capital, corporate needs, and mortgage originations. The company believes its current liquidity and capital resources are sufficient for at least the next 12 months, with longer-term needs met through a combination of cash flows, debt, and equity - Primary sources of liquidity are **cash flows from operations, debt financing, and equity offerings**[167](index=167&type=chunk) - Cash requirements include **working capital, general corporate needs, and mortgage loan originations**, with ongoing investments in technology, new products, and sales/marketing[167](index=167&type=chunk) - As of June 30, 2025, cash and cash equivalents, investments, and restricted cash totaled **$1.2 billion**, down from **$1.9 billion** at December 31, 2024[168](index=168&type=chunk) - Management believes current liquidity is sufficient for ongoing operating activities and capital requirements for at least the **next 12 months**[169](index=169&type=chunk) [Summarized Cash Flow Information](index=39&type=section&id=Summarized%20Cash%20Flow%20Information) This section provides a summary of cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024, showing a net decrease in cash for both periods Selected Cash Flow Data (in millions) | Cash Flow Data | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $191 | $135 | | Net cash provided by (used in) investing activities | $25 | $(207) | | Net cash used in financing activities | $(709) | $(240) | [Cash Flows Provided By Operating Activities](index=39&type=section&id=Cash%20Flows%20Provided%20By%20Operating%20Activities) Net cash provided by operating activities increased to $191 million for H1 2025 from $135 million for H1 2024. This was driven by net income and non-cash adjustments, partially offset by increases in operating assets like mortgage loans held for sale and accounts receivable - Net cash provided by operating activities was **$191 million for H1 2025**, driven by net income of **$10 million**, adjusted by **$196 million in share-based compensation** and **$132 million in depreciation and amortization**[172](index=172&type=chunk) - Changes in operating assets and liabilities decreased net cash by **$152 million in H1 2025**, primarily due to increases in **mortgage loans held for sale ($91 million), accounts receivable ($47 million), and prepaid expenses ($46 million)**[172](index=172&type=chunk) - For H1 2024, net cash provided by operating activities was **$135 million**, adjusted by a net loss of **$40 million**, **$221 million in share-based compensation**, and **$115 million in depreciation and amortization**[173](index=173&type=chunk) [Cash Flows Provided By (Used In) Investing Activities](index=40&type=section&id=Cash%20Flows%20Provided%20By%20(Used%20In)%20Investing%20Activities) Net cash provided by investing activities was $25 million for H1 2025, a significant improvement from net cash used of $207 million in H1 2024. This shift was primarily due to net proceeds from investment maturities and sales, partially offset by purchases of property, equipment, and intangible assets, including a $100 million payment for the Redfin partnership - Net cash provided by investing activities was **$25 million for H1 2025**, primarily from **$213 million in net proceeds from investment maturities and sales**[175](index=175&type=chunk) - This was partially offset by **$188 million in purchases of property and equipment and intangi

[Financial Statements](index=1&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=1&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet provides a snapshot of Zillow Group's financial position, showing a decrease in total assets and total liabilities from December 31, 2024, to June 30, 2025, while shareholders' equity also slightly declined | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | Change (in millions) | | :-------------------------------- | :----------------------------- | :------------------------------- | :------------------- | | Total assets | $5,416 | $5,829 | $(413) | | Total liabilities | $670 | $981 | $(311) | | Total shareholders' equity | $4,746 | $4,848 | $(102) | | Cash and cash equivalents | $587 | $1,082 | $(495) | | Short-term investments | $571 | $776 | $(205) | | Convertible senior notes (current) | — | $418 | $(418) | - Current assets decreased by **$513 million**, primarily driven by a significant reduction in cash and cash equivalents and short-term investments[2](index=2&type=chunk) - Current liabilities decreased by **$285 million**, largely due to the settlement of convertible senior notes[2](index=2&type=chunk) [Condensed Consolidated Statements of Operations](index=2&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Zillow Group reported a return to net income for the three and six months ended June 30, 2025, reversing losses from the prior year periods, driven by revenue growth and reduced operating losses despite increased cost of revenue and sales and marketing expenses | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Change (YoY) | | :-------------------------- | :------------------------------------------- | :------------------------------------------- | :----------- | | Revenue | $655 | $572 | +14.5% | | Gross profit | $489 | $442 | +10.6% | | Loss from operations | $(11) | $(38) | +71.1% | | Net income (loss) | $2 | $(17) | N/A (from loss to income) | | Basic EPS | $0.01 | $(0.07) | N/A | | Diluted EPS | $0.01 | $(0.07) | N/A | | Adjusted EBITDA | $155 | $134 | +15.7% | | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | Change (YoY) | | :-------------------------- | :------------------------------------------ | :------------------------------------------ | :----------- | | Revenue | $1,253 | $1,101 | +13.8% | | Gross profit | $948 | $848 | +11.8% | | Loss from operations | $(20) | $(83) | +75.9% | | Net income (loss) | $10 | $(40) | N/A (from loss to income) | | Basic EPS | $0.04 | $(0.17) | N/A | | Diluted EPS | $0.04 | $(0.17) | N/A | | Adjusted EBITDA | $308 | $259 | +18.9% | - Total share-based compensation decreased by **$14 million** for the three months ended June 30, 2025, and by **$25 million** for the six months ended June 30, 2025, compared to the prior year periods[3](index=3&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, Zillow Group generated positive cash flow from operating activities, significantly improved cash flow from investing activities, but experienced a substantial increase in cash used in financing activities, leading to an overall net decrease in cash | Cash Flow Activity | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | Change (YoY) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | :----------- | | Net cash provided by operating activities | $191 | $135 | +$56 | | Net cash provided by (used in) investing activities | $25 | $(207) | +$232 | | Net cash used in financing activities | $(709) | $(240) | $(469) | | Net decrease in cash, cash equivalents and restricted cash | $(493) | $(312) | $(181) | | Cash, cash equivalents and restricted cash at end of period | $592 | $1,183 | $(591) | - The significant increase in cash used in financing activities was primarily due to higher repurchases of Class A common stock and Class C capital stock (**$400 million** vs. **$301 million**) and the settlement of convertible senior notes (**$419 million** vs. **$89 million**)[5](index=5&type=chunk) - Investing activities shifted from a net use of cash to a net provision of cash, largely driven by a decrease in purchases of investments and an increase in proceeds from maturities and sales of investments[5](index=5&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) [Non-GAAP Net Income per Share](index=4&type=section&id=Non-GAAP%20Net%20Income%20per%20Share) Zillow Group presents non-GAAP net income per share as a supplemental measure, excluding share-based compensation, impairment costs, loss on extinguishment of debt, and income taxes, showing consistent positive non-GAAP net income and EPS for both the three and six months ended June 30, 2025 and 2024 | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Change (YoY) | | :-------------------------- | :------------------------------------------- | :------------------------------------------- | :----------- | | Net income (loss), as reported | $2 | $(17) | N/A | | Share-based compensation | $99 | $113 | $(14) | | Non-GAAP net income, adjusted | $101 | $99 | +$2 | | Non-GAAP net income per share (Basic) | $0.42 | $0.42 | 0% | | Non-GAAP net income per share (Diluted) | $0.40 | $0.39 | +2.6% | | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | Change (YoY) | | :-------------------------- | :------------------------------------------ | :------------------------------------------ | :----------- | | Net income (loss), as reported | $10 | $(40) | N/A | | Share-based compensation | $196 | $221 | $(25) | | Non-GAAP net income, adjusted | $206 | $192 | +$14 | | Non-GAAP net income per share (Basic) | $0.85 | $0.82 | +3.7% | | Non-GAAP net income per share (Diluted) | $0.81 | $0.75 | +8.0% | - The primary adjustment for non-GAAP net income is share-based compensation, which was **$99 million** for Q2 2025 and **$196 million** for H1 2025[7](index=7&type=chunk) [Key Operating Metrics](index=5&type=section&id=Key%20Operating%20Metrics) [Platform Engagement Metrics](index=5&type=section&id=Platform%20Engagement%20Metrics) Zillow Group's platform engagement metrics show continued growth in both visits and average monthly unique users across its mobile apps and websites for the three and six months ended June 30, 2025, compared to the prior year | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | % Change | | :-------------------------- | :------------------------------------------- | :------------------------------------------- | :------- | | Visits | 2,590 | 2,495 | 4% | | Average monthly unique users | 243 | 231 | 5% | | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | % Change | | :-------------------------- | :------------------------------------------ | :------------------------------------------ | :------- | | Visits | 4,944 | 4,811 | 3% | | Average monthly unique users | 235 | 224 | 5% | - The growth in visits and unique users indicates sustained user interest and engagement with Zillow, Trulia, StreetEasy, and HotPads platforms[8](index=8&type=chunk)[9](index=9&type=chunk) [Real Estate Transaction Metrics](index=5&type=section&id=Real%20Estate%20Transaction%20Metrics) For the twelve months ended June 30, 2025, Zillow Group experienced growth in For Sale revenue and Total Transaction Value (TTV), alongside an increase in the For Sale revenue per TTV, indicating improved monetization efficiency | Metric | Twelve Months Ended June 30, 2025 | Twelve Months Ended June 30, 2024 | % Change | | :------------------------------------- | :-------------------------------- | :-------------------------------- | :------- | | For Sale revenue (in millions) | $1,812 | $1,624 | 12% | | Total Transaction Value (in trillions) | $1.8 | $1.6 | 6% | | For Sale revenue per Total Transaction Value (in basis points) | 10.3 | 9.8 | 5% | - The increase in For Sale revenue per TTV suggests Zillow Group is more effectively capturing value from real estate transactions on its platform[9](index=9&type=chunk) [Loan Origination Volume](index=5&type=section&id=Loan%20Origination%20Volume) Zillow Home Loans demonstrated strong growth in loan origination volume for both purchase and refinance loans for the three and six months ended June 30, 2025, reflecting increased activity in its mortgage segment | Loan Type | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | % Change | | :------------------------------ | :------------------------------------------- | :------------------------------------------- | :------- | | Purchase loan origination volume | $1,116 | $756 | 48% | | Refinance loan origination volume | $10 | $3 | 233% | | Total loan origination volume | $1,126 | $759 | 48% | | Loan Type | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | % Change | | :------------------------------ | :------------------------------------------ | :------------------------------------------ | :------- | | Purchase loan origination volume | $1,907 | $1,357 | 41% | | Refinance loan origination volume | $15 | $8 | 88% | | Total loan origination volume | $1,922 | $1,365 | 41% | - The substantial growth in both purchase and refinance loan volumes indicates a robust performance for Zillow Home Loans, outpacing overall market trends in some areas[10](index=10&type=chunk)