Core Viewpoint - The Federal Trade Commission (FTC) is suing Zillow and Redfin for allegedly conspiring to reduce competition in the online multifamily rental listing market, violating federal antitrust laws [1][2]. Summary by Sections Allegations of Antitrust Violations - The FTC claims that Zillow paid Redfin $100 million to re-host Zillow's multifamily rental listings on Redfin's platforms, which constitutes a violation of antitrust laws [2]. - Redfin agreed to terminate contracts with its existing advertising customers and assist Zillow in acquiring that business, committing to stay out of the multifamily advertising market for up to nine years [3]. Impact on Employment and Market Structure - Following the agreement, Redfin reportedly fired hundreds of employees and then helped Zillow selectively rehire many of them [4]. - The arrangement has led to a situation where Redfin's platforms became virtually identical to Zillow's, reducing competition in the market [3]. Market Reaction and Statements - Following the FTC's announcement, shares of Zillow and Redfin's parent company, Rocket Companies, experienced a sharp decline in afternoon trading [5]. - A Zillow spokesperson defended the partnership, stating it benefits both renters and property managers by expanding access to multifamily listings [6]. Legal Actions and Potential Outcomes - The FTC's lawsuit aims to unwind the agreement and may involve requirements for divestitures or restructuring to restore competition in the rental advertising market [7].

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]

Financial Data and Key Metrics Changes - Zillow reported total Q1 revenue of $598 million, up 13% year over year, exceeding expectations [11][27] - Adjusted EBITDA for Q1 was $153 million, with an EBITDA margin of 26%, a 200 basis point improvement year over year [12][28] - The company achieved positive GAAP net income of $8 million, representing 1% of revenue [28][26] Business Line Data and Key Metrics Changes - For Sale category revenue was $458 million, up 8% year over year, with residential revenue growing 6% and mortgages revenue increasing 32% [11][30] - Rentals revenue reached an all-time high of $129 million, up 33% year over year, driven primarily by multifamily revenue growth of 47% [19][30] Market Data and Key Metrics Changes - Zillow had 227 million average monthly unique users in Q1, maintaining a significant lead in the residential real estate market [9] - The company reported 37 million unique visitors to Zillow Rentals in March, solidifying its position as renters' number one preference [21] Company Strategy and Development Direction - Zillow is focused on executing its differentiated housing super app strategy, aiming to monetize a larger share of the total addressable market [7][12] - The company is expanding its enhanced markets, with a goal of increasing connections within these markets to over 35% by the end of the year [13][84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year 2025 goals of low to mid-teens revenue growth and continued EBITDA margin expansion despite macroeconomic challenges [7][34] - The company anticipates accelerating rentals revenue growth, projecting a 40% increase for the full year 2025 [35][36] Other Important Information - Zillow's cash and investments at the end of Q1 were $1.6 billion, down from $1.9 billion, primarily due to share repurchases [32] - The board approved an additional $1 billion share repurchase authorization, reflecting confidence in the company's financial position [34] Q&A Session Summary Question: What is driving the accelerating growth in the rentals business? - Management highlighted the execution of their strategy to build a comprehensive marketplace, resulting in increased inventory and brand preference among renters [43][45] Question: How should growth be assessed relative to the market? - Management noted that Zillow's growth outperformed the market, particularly in the residential segment, despite macroeconomic noise [50][52] Question: What are the mechanics of the partnership with Redfin? - Management clarified that there was no transfer of contracts; Zillow had to win the business, which resulted in significant property count growth [70][72] Question: What is the industry reaction to the new listing access standards? - Management reported positive industry support for the standards, which promote transparency in the real estate market [96] Question: What factors contributed to the lower than expected EBITDA expenses in Q1? - Management indicated slower hiring and lower marketing expenses than anticipated were the primary reasons for the variance [98]

Financial Data and Key Metrics Changes - Zillow reported total Q1 revenue of $598 million, up 13% year over year, exceeding expectations by $15 million [9][25] - Adjusted EBITDA for Q1 was $153 million, with an EBITDA margin of 26%, reflecting a 200 basis point year over year improvement [11][25] - The company achieved positive GAAP net income of $8 million, representing 1% of revenue, marking a significant milestone [26] Business Line Data and Key Metrics Changes - For Sale category revenue was $458 million, up 8% year over year, with residential revenue growing 6% to $417 million and mortgages revenue increasing 32% to $41 million [9][27] - Rentals revenue reached an all-time high of $129 million, up 33% year over year, driven primarily by multifamily revenue growth of 47% [10][28] - The number of multifamily properties on Zillow increased by 38% year over year, reaching 55,000 by the end of Q1 [18][28] Market Data and Key Metrics Changes - Zillow's average monthly unique users reached 227 million, significantly outpacing competitors with four times the app engagement [7] - The company reported 37 million unique visitors to Zillow Rentals in March, solidifying its position as renters' number one preference [19] Company Strategy and Development Direction - Zillow is focused on executing its differentiated housing super app strategy, aiming to monetize a larger share of the total addressable market [6][9] - The company is expanding its enhanced markets, with a goal of increasing connections within these markets to over 35% by the end of the year [12][83] - Zillow is integrating its Premier Agent and Zillow Home Loans offerings to create a seamless experience for buyers and sellers [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full year 2025 goals of low to mid-teens revenue growth and continued EBITDA margin expansion despite macroeconomic challenges [6][23] - The company anticipates accelerating rentals revenue growth of approximately 40% for the full year 2025, driven by strong demand and strategic partnerships [32][33] Other Important Information - Zillow's cash and investments at the end of Q1 were $1.6 billion, down from $1.9 billion, primarily due to share repurchases [30] - The board approved an additional $1 billion share repurchase authorization, reflecting confidence in the company's financial position [31] Q&A Session Summary Question: What is driving the accelerating revenue growth in the rentals business? - Management highlighted the execution of their strategy to build a comprehensive marketplace, resulting in increased inventory and audience engagement [40][42] Question: How should investors assess Zillow's growth relative to the market? - Management noted that Zillow's growth outperformed the market, particularly in the residential and for sale categories, despite macroeconomic noise [48][50] Question: What are the mechanics of the partnership with Redfin? - Management clarified that there was no transfer of contracts; Zillow had to win the business, which has resulted in significant property count growth [66][72] Question: What is the industry reaction to the new listing access standards? - Management reported positive early reactions from the industry, with many brokerages supporting the principles of transparency in real estate [96] Question: What factors contributed to the lower than expected EBITDA expenses in Q1? - Management indicated slower hiring and lower marketing expenses than anticipated were the primary reasons for the variance [98]