Zillow Group(US:Z)2025-08-06 22:00Financial 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]