Zillow Beats Expectations In Second Quarter Earnings

Zillow beat its revenue expectations in the second quarter despite a depressed spring housing market.

The company reported a net income of $2 million, an improvement on last year’s second-quarter net loss of $17 million. Its revenue of $655 million, up 15 percent from the year prior, exceeded the high end of its estimate for the quarter.

Zillow’s adjusted EBITDA was $155 million, in line with the high end of its projections for the quarter.

The results came despite the housing market “bouncing along the bottom,” said Chief Executive Officer Jeremy Wacksman, adding that he expects the conditions to continue through the end of the year.

Wacksman said the results keep the firm on track for “full-year 2025 goals of low to mid teens revenue growth, EBITDA margin expansion and positive GAAP net income.”

The company had 243 million average monthly unique visitors in the quarter, up 5 percent from the prior year.

Its mortgage revenues increased 41 percent to $48 million, driven by a 48 percent increase in purchase loan origination volume to $1.1 billion. Its rental revenue increased 36 percent to $159 million, which the company attributed to multifamily revenue growing 56 percent year-over-year.

The company’s operating expenses and cost of revenue were up 10 percent to $666 million. That increase was partially driven by lead acquisition costs associated with Zillow’s rentals partnership with Redfin, which went live in April.

Zillow agreed to pay $100 million in exchange for Redfin syndicating Zillow’s multifamily rental listings — properties with at least 25 units — on its sites, including Rent.com and ApartmentGuide.com.

At the end of May, the company reported 60,000 multifamily properties on its platform.

“We now have more than 2 million listings, that mix of single-family as well as multi-family,” said Wacksman. “We think that’s the most listings that are out there in one place.”

The company’s cash balance fell to $1.2 billion from $1.6 billion, due to settling $419 in convertible notes and $150 million in share repurchases.

The company has made headlines in recent months for a recent policy rollout, which bans listings that are publicly marketed but not added to Zillow or the multiple listing service.

“It’s really just about encouraging the industry to implement what most are already practicing,” he said. “We announced those standards because we see such a consumer good in buyer and seller empowerment.”

In June, Compass sued Zillow over its listing policy, which it rolled out in May.

Zillow is also facing a legal challenge to its growing rental business. Last month, CoStar sued Zillow, alleging the platform used copyrighted photos as part of its effort to break into the multi-family listing market.