Core Insights - Zillow Group reported strong financial performance in Q4 and full-year fiscal 2025, achieving all stated financial targets and entering 2026 with momentum [4][3] Financial Performance - Q4 total revenue increased 18% year-over-year to $654 million, with EBITDA of $149 million and a margin of 23%, up 260 basis points from the previous year [3][7] - For the full year 2025, total revenue grew 16%, with EBITDA margins expanding by nearly 200 basis points year-over-year, and GAAP net income reported at $23 million [2][4] Segment Performance - The For Sale segment generated $475 million in Q4 revenue, up 11% year-over-year, with residential revenue at $418 million, up 8% [1][6] - Rentals revenue surged 45% year-over-year to $168 million in Q4, now comprising 26% of total revenue, with multifamily revenue increasing 63% [11][12] Growth Drivers - Growth in the For Sale segment was driven by agent offerings and software products, while Rentals benefited from a comprehensive marketplace strategy [1][12] - Mortgages revenue rose 39% year-over-year in Q4 to $57 million, with purchase loan origination volume growing 67% [7][6] Strategic Initiatives - Zillow is focusing on building "Enhanced Markets" to connect buyers, agents, and loan officers, with 44% of connections in Q4 coming from this initiative [8][12] - The company is also enhancing user engagement through tools like BuyAbility, which enrolled 3.6 million users [9][12] Outlook - For Q1 2026, Zillow guided total revenue of $700 million to $710 million, expecting mid-teens revenue growth for the full year, including approximately 30% growth in Rentals [5][20] - The company anticipates continued EBITDA margin expansion despite elevated legal expenses impacting margins in the near term [5][20]

Financial Data and Key Metrics Changes - In Q4 2025, total revenue increased by 18% year-over-year to $654 million, near the top end of the outlook range [24] - Full-year 2025 total revenue grew by 16%, consistent with the mid-teens growth outlook [30] - EBITDA for Q4 was $149 million, with a margin of 23%, up 260 basis points year-over-year [24] - Full-year 2025 EBITDA grew by 25% year-over-year, with a net income margin expansion of 990 basis points [30][32] Business Line Data and Key Metrics Changes - For Sale revenue grew by 11% year-over-year in Q4 to $475 million, with residential revenue up 8% and mortgages revenue up 39% [25][27] - Rentals revenue in Q4 was $168 million, accelerating to 45% year-over-year growth, driven by a 63% increase in multifamily revenue [28][29] - For Sale revenue for the full year reached $1.9 billion, up 9% from 2024, while Rentals revenue totaled $630 million, up 39% from 2024 [10][30] Market Data and Key Metrics Changes - Zillow's share of rental listings increased to 63% in 2025, up from 54% in 2024 [21] - Average monthly unique visitors for Zillow Rentals reached 31 million in Q4 [20] - The housing market grew by 3% in 2025, while Zillow's revenue outperformed the market by 1,300 basis points [30] Company Strategy and Development Direction - The company is focused on integrating and digitizing the real estate transaction process to improve consumer experiences and professional productivity [6][11] - Zillow Pro, a new offering, aims to help agents manage their entire business and improve lead conversion [71] - The strategy emphasizes building a comprehensive marketplace for rentals and modernizing the rental transaction process [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and does not expect legal challenges to materially impact financial performance [22][66] - The company anticipates continued growth in 2026, with mid-teens revenue growth expected and a focus on enhancing the rental business [36][38] - Management highlighted improvements in affordability in the housing market, which could drive broader recovery over time [39] Other Important Information - The company reported $23 million of GAAP net income for the full year, achieving full-year profitability [10] - Share-based compensation expense decreased by 13% year-over-year, contributing to net income growth [32][42] - The company repurchased $670 million of shares throughout 2025, returning $1.1 billion to shareholders [34][35] Q&A Session Summary Question: Can you elaborate on rental trends and opportunities? - Management indicated that the growth in rentals is due to a unique strategy focused on organizing various types of supply, including long-tail listings, which drives audience engagement and revenue growth [46][47] Question: How do you view the impact of recent industry consolidation? - Management does not expect any risk or impact from industry consolidation, as the majority of sellers and agents prefer broad exposure for their listings [55][56] Question: Is there any change in approach due to legal challenges? - Management confirmed that there are no expected changes to the business strategy due to ongoing legal challenges, maintaining confidence in their long-term approach [66][67] Question: What is the status of Zillow Pro and its impact on lead conversion? - Zillow Pro is currently in beta testing, with plans for nationwide expansion in the second half of the year, aimed at improving agent efficiency and conversion rates [71][72]

Summary of Zillow Fireside Chat at Goldman Sachs Communicopia and Technology Conference Company Overview - **Company**: Zillow - **Industry**: Real Estate Technology - **User Base**: Over 240 million average monthly unique users across apps and sites [3] Core Business Model - **Housing Super App**: Zillow aims to be a comprehensive platform for buying, selling, renting, and financing homes [3] - **Revenue Segments**: - For Sale Market: Revenue from buying, selling, and financing homes - Rentals: Revenue from renting homes or apartments [3] Financial Performance - **2024 Performance**: - Revenue growth of 15% across the company - EBITDA margins expanded by 200 basis points - Positive GAAP net income [4] - **2025 Outlook**: - Projected mid-teens revenue growth for the full year - 40% growth rate in rentals [4][14] - **Q2 Performance**: - Residential revenue up 6% year-over-year - For Sale segment grew 9% year-over-year, outperforming the housing market by 800 basis points [7][8] Growth Drivers - **For Sale Business**: - Growth driven by enhanced agent support and mortgage growth through Zillow Home Loans - Introduction of innovative products like Zillow Showcase, which enhances listing visibility [9][10] - **Rentals Business**: - Unique position in the market with 60% of all single-family homes for rent listed on Zillow - Significant growth in multifamily revenue, increasing from 27,000 buildings to 64,000 in three years [15][16] - **Mortgage Business**: - Zillow Home Loans revenue up 41% year-over-year, with 48% growth in originations [27] - Focus on building relationships between agents and loan officers to drive growth [27][28] Strategic Partnerships - **Redfin Partnership**: - Expanded distribution and introduced more multifamily customers - Collaboration with Realtor.com and Redfin to enhance inventory visibility [22][24] Product Development - **Enhanced Markets**: - Targeting 35%+ of transactions by the end of the year, with a long-term goal of 75% [34][36] - **Follow Up Boss**: - CRM tool aimed at improving agent productivity and lead conversion [44] - **AI Integration**: - Utilizing AI for consumer experience, agent productivity, and internal operations [69][71] Capital Allocation and M&A Strategy - **Debt Management**: - Successfully retired convertible debt, achieving a clean balance sheet [72] - **Stock Buyback Program**: - Over $2 billion in stock repurchased since 2021, reducing share count [72] - **M&A Approach**: - Focus on product-led growth with selective acquisitions to fill gaps [75] Strategic Priorities - **Future Focus**: - Continued growth in for sale and rentals business, particularly in multifamily execution - Emphasis on cost discipline and leveraging enhanced markets for revenue opportunities [77][78] Conclusion - **Overall Sentiment**: - Positive outlook on growth opportunities despite a challenging housing market - Confidence in executing strategic initiatives to drive revenue and profitability [54][58]