Zillow (ZG) Q2 2026 Earnings Call Transcript

Revenue hit $772 million with 18% growth led by mortgages and rentals expansion. Need a quote from a Motley Fool analyst? Email [email protected] Management at Zillow Group, Inc. ( ZG -2.26% ) reported that the company is accelerating its transition to an integrated transaction model, characterized by a shift from legacy lead-generation advertising toward a success-based referral system. The company outperformed its quarterly revenue and EBITDA guidance, led by double-digit growth in the rentals and mortgage segments. Management announced a restructuring of approximately 7% of its workforce to optimize cost structures and increase operational velocity. The company stated that it remains on track to hit its full-year goals, despite lowering its market-level forecast for industry purchase mortgage originations to a low to mid-single-digit decline. The strategic focus remains on the housing super app, combining AI-driven search, integrated financing through Zillow Home Loans, and premium software tools for real estate professionals. Operator: Hello, and welcome to Zillow Group's second quarter 2026 financial Results Call. We ask that you please hold all questions until the completion of the formal remarks at which time you will be given instructions for the question and answer session. Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Bradley, you may begin. Bradley Allen Berning: Thank you. Good afternoon, and welcome to Zillow Group's quarterly earnings call. Joining me today to discuss our results are Zillow Group CEO, Jeremy Wacksman; as well as COO and CFO, Jeremy Hofmann.

During today's call, we will make forward looking statements about our future performance and operating plans, based on current expectations and assumptions. These statements are subject to risks and uncertainties and we encourage you to consider the risk factors described in our SEC filings for additional information. We undertake no obligation to update these statements as a result of new information or future events except as required by law. Please review the cautionary statement and additional information in our earnings release, which can be found on our investor Relations website. This call is being broadcast on the Internet and is available on our Investor Relations website. A recording of the call will be available later today. During the call, we will discuss GAAP and non GAAP measures, including adjusted net income, diluted adjusted net income per share, adjusted EBITDA, which we refer to as EBITDA, and adjusted free cash flow, which we refer to as free cash flow. We encourage you to read our shareholder letter and earnings release, which can be found on our Investor Relations website as they contain important information about our GAAP and non GAAP results including reconciliations of historical non GAAP financial measures. We will open the call with remarks followed by live Q&A. And with that, I will now turn the call over to Jeremy Wacksman. According to Comscore, which tracks growth trends across the residential real estate category, Zillow's average monthly unique visitors in Q2 outperform the category. Which saw a decline overall amid the rise in mortgage rates. Zillow is the only large company in the category to consistently expand its reach with the real estate audience over the past 7 quarters. In Q2, we delivered total revenue growth of 18%, above our outlook range. We once again outperformed the broader housing market, and even more so when looking at the purchase mortgage market which was flat this quarter compared to a year ago. EBITDA was above our expectations, and we reported a $118 million in adjusted net income.

We are on track toward our full year goals. In For Sale, revenue grew 14% year over year in Q2 to $549 million with 7% growth in residential revenue and 75% growth in mortgages revenue. In rentals, Q2 revenue was up 31% year over year, driven by 42% growth in multifamily revenue. Our consistently strong quarterly results brand equity, and direct relationship with our users come from 2 decades of keeping the consumer as our North Star. In for sale, we have built a platform where our interests align with the interests of buyers, sellers, and agents. Buyers want access to all available inventory, Sellers want to sell quickly and for the most money. Agents want tools that help them serve their clients and win business. Zillow delivers on what matters most to consumers and their agents which is why we continue to grow our audience and revenue. For buyers, we have been investing in the depth of the experience, helping with each step from the first question to keys in hand. Buyers spend months on this decision, because buying a home is an exhaustive and complex process that is not the same as other consumer purchases online. This is the largest financial decision most people make. And they make it only a few times in their entire lives. It requires hours of deep research. In fact, the average buyer who ends up transacting with a preferred agent partner visits Zillow nearly 100 times.

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