ZILLOW GROUP, INC. (ZG) Q1 2025 Earnings Summary

Executive Summary

Q1 2025 was solid: revenue rose 13% YoY to $598M, above S&P consensus ($589.4M*) and above the company’s outlook midpoint by $15M; non‑GAAP diluted EPS was $0.41 vs S&P $0.368*; GAAP diluted EPS was $0.03 . Results were driven by Residential strength, accelerating Rentals, and higher purchase mortgage originations .
Adjusted EBITDA was $153M (26% margin), up from $125M a year ago (24% margin), on revenue outperformance and cost discipline; GAAP net income was $8M (1% margin) .
Outlook: Q2 For Sale growth mid‑single digits YoY; Rentals >35% YoY as Redfin syndication goes live; Q2 Adjusted EBITDA expenses implied at $495M; FY25 still low‑ to mid‑teens revenue growth, ~40% Rentals growth, and positive GAAP net income .
Potential catalysts: accelerating Rentals (multifamily +47% YoY; 55k properties at Q1, 60k in early May), Redfin partnership, progress in Enhanced Markets and AI‑enabled tools (Follow Up Boss, BuyAbility, Real Time Touring). Board also authorized an additional $1B buyback in early May .

What Went Well and What Went Wrong

What Went Well
- Q1 revenue and Adjusted EBITDA beat the company’s outlook; revenue outpaced industry TTV growth (NAR ~3%; Zillow est. ~6%) with For Sale +8% YoY and Rentals +33% YoY; non‑GAAP diluted EPS $0.41 .
- Multifamily Rentals momentum: properties +38% YoY to 55k at Q1 and 60k by early May; multifamily revenue +47% YoY; 37M unique renters in March .
- Mortgage purchase loan origination +32% YoY to $791M, supporting Mortgages revenue +32% YoY to $41M; stronger Premier Agent conversion and Showcase adoption in Residential .
- CEO tone positive: “Our strong Q1 results surpassed our expectations… we’re well‑positioned to deliver sustainable profitable growth” .
What Went Wrong
- OpEx mix pressures: sales & marketing up $32M YoY and cost of revenue up $16M YoY, including amortization of website development and higher lead acquisition costs tied to strategic partnerships (e.g., rentals syndication) .
- Implied Q2 Adjusted EBITDA expenses step up to $495M (seasonal marketing and incremental lead costs from Redfin) which may cap near‑term margin expansion despite top‑line growth .
- Cash & investments fell to $1.6B from $1.9B QoQ due to $250M buybacks and $100M Redfin payment; still strong, but less flexibility until operating cash flow replenishes .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025	Q1 2025 vs S&P Est.
Total Revenue ($M)	$581	$554	$598	Beat: $598 vs $589.4*
GAAP Diluted EPS ($)	$(0.08)	$(0.22)	$0.03	n/a
Non‑GAAP Diluted EPS ($)	n/a	n/a	$0.41	Beat: $0.41 vs $0.368*
Gross Margin (%)	76%	76%	77%	n/a
Net Income Margin (%)	(3)%	(9)%	1%	n/a
Adjusted EBITDA ($M)	$127	$112	$153	n/a
Adjusted EBITDA Margin (%)	22%	20%	26%	n/a

Q1 v Q4 sequential: Revenue +8%, margins improved (Adj. EBITDA 20% → 26%), GAAP profitability returned .
S&P Global estimates used for “vs Est.” column; asterisk indicates S&P Global values.*

Segment revenue breakdown

Revenue ($M)	Q3 2024	Q4 2024	Q1 2025
Residential	$405	$387	$417
Mortgages	$39	$41	$41
Total For Sale	$444	$428	$458
Rentals	$123	$116	$129
Other	$14	$10	$11
Total	$581	$554	$598

KPIs and operating metrics

KPI	Q3 2024	Q4 2024	Q1 2025
Avg. Monthly Unique Users (MM)	233	204	227
Visits (B)	2.4	2.1	2.354
Multifamily Properties on Zillow (k)	47	50	55 (60 early May)
Active Rental Listings (MM)	1.9 (Sept)	1.9 (YE)	2.2 (end of Q1)
Purchase Loan Origination ($M)	812	923	791

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
For Sale revenue growth (YoY)	Q1 2025	Mid‑single digits	n/a	n/a
Rentals revenue growth (YoY)	Q1 2025	~30%	n/a	n/a
Adjusted EBITDA expenses ($M)	Q1 2025	~$450	n/a	n/a
For Sale revenue growth (YoY)	Q2 2025	n/a	Mid‑single digits	Initiated
Rentals revenue growth (YoY)	Q2 2025	n/a	>35%	Initiated
Adjusted EBITDA expenses ($M)	Q2 2025	n/a	~$495	Initiated (implies higher seasonal marketing + Redfin lead costs)
Total revenue growth (YoY)	FY 2025	Low‑ to mid‑teens; positive GAAP NI; margin expansion	Low‑ to mid‑teens; positive GAAP NI; margin expansion	Maintained
Rentals revenue growth (YoY)	FY 2025	n/a	~40%	New/Added specificity

Earnings Call Themes & Trends

Note: A Q1 2025 earnings call transcript was not available in the corpus; we base “Current Period” on the shareholder letter and press release. We include Q3 2024 call remarks for prior commentary .

Topic	Previous Mentions (Q3’24 and Q4’24)	Current Period (Q1’25)	Trend
AI/agent productivity (Follow Up Boss, automation)	Scaling Premier Agent, cost discipline; early signs of operating leverage .	AI‑powered call summaries and follow‑ups in Follow Up Boss; >90% of Enhanced Market connections managed in FUB; BuyAbility enrollments >1.5M .	Expanding AI tooling and adoption.
Real‑time touring	Not highlighted in Q3 release; core consumer funnel investments .	Real Time Touring now 36% of connections vs 12% a year ago .	Strong adoption improving conversion.
Showcase/product differentiation	Q3: Showcase ~1.5% of new listings ; Q4: continued expansion .	Showcase at ~2% of new listings; agents using Showcase win 30% more listings; listings sell faster/for ~2% more; launched listing performance insights .	Broadening penetration and monetization.
Rentals scaling/partnerships	Q3: 47k properties, Rentals +24% YoY ; Q4: 50k properties, Rentals +25% YoY .	55k at Q1, 60k by early May; Rentals +33% YoY; Redfin syndication live in April; >35% Q2 growth guide; FY ~40% .	Accelerating, aided by syndication and ad spend.
Mortgage integration	Q3: Purchase originations +80% YoY to $812M .	Purchase originations +32% YoY to $791M; 70% of movers financing with Zillow Home Loans also use a Premier Agent partner .	Integrated transaction flywheel deepening.
Macro/industry outperformance	Outperformed TTV growth (2%) .	Outperformed TTV (NAR ~3%; Zillow est. ~6%) .	Persistent outperformance vs industry.

Management Commentary

“Our strong Q1 results surpassed our expectations… we’re well‑positioned to deliver sustainable profitable growth.” — CEO Jeremy Wacksman .
“We exceeded our Q1 outlook… GAAP net income was $8M… Adjusted EBITDA margin up 200 bps YoY to 26%.” — Shareholder letter .
“We expect Q2 Rentals revenue to grow by more than 35% YoY… and ~40% growth for full‑year 2025.” — Outlook .
“We continue to see double‑digit adoption of Zillow Home Loans across all Enhanced Markets… 70% of movers choosing financing through Zillow Home Loans are also working with a Premier Agent partner.” — Shareholder letter .
Redfin partnership expands multifamily reach and lead flow across Redfin, Rent.com, and ApartmentGuide.com — anticipated to broaden exposure and demand for advertising partners .

Q&A Highlights

A Q1 2025 earnings call transcript was not available in the document corpus; we will update Q&A insights if/when the transcript becomes available. Current themes emphasized in prepared materials: Rentals acceleration (multifamily/property growth and partnerships), Enhanced Markets execution with AI‑enabled agent workflows, and disciplined investment in marketing/lead acquisition tied to Rentals scaling .

Estimates Context

Q1 2025 vs S&P Global consensus: Revenue $598.0M vs $589.4M*; Primary (non‑GAAP) EPS $0.41 vs $0.368*; number of estimates: Revenue 25, EPS 13 .
Adjusted EBITDA is a company‑specific non‑GAAP metric; S&P’s “EBITDA Consensus Mean” methodology may differ from Zillow’s Adjusted EBITDA. We anchor EPS/Revenue comparisons to S&P consensus and use company‑reported Adjusted EBITDA for margin analysis .

Metric	Q1 2025 Actual	Q1 2025 S&P Consensus	# Estimates
Revenue ($M)	598.0	589.4*	25*
Primary EPS (non‑GAAP) ($)	0.41	0.368*	13*

Values marked with * retrieved from S&P Global (GetEstimates).

Key Takeaways for Investors

Durable outperformance vs housing market: Q1 revenue +13% YoY despite flat purchase mortgage market; For Sale revenue per TTV improved to 10.2 bps TTM, signaling share gains and deeper monetization .
Rentals flywheel is accelerating: multifamily inventory scaling (55k → 60k), partnerships (Redfin, Realtor.com) broadening reach; Q2 guide >35% YoY and FY ~40% growth indicate sustained momentum .
Integrated transaction strategy is working: tighter PA–ZHL integration and AI‑enabled tools (Follow Up Boss, BuyAbility, Real Time Touring) should support conversion and monetization across the funnel .
Near‑term margin watch: marketing and lead costs (Redfin syndication) lift Q2 Adjusted EBITDA expenses; monitor ROI on Rentals marketing and lead acquisition as growth scales .
Capital returns active: $250M repurchased in Q1; new $1B authorization adds support; balances lower near‑term cash but operating cash flow remains positive .
Positioning into Q2: modest For Sale growth with stronger Rentals; estimate revisions likely bias up on Rentals, with stable to modestly higher consolidated revenue and EPS trajectories given execution and mix .

Appendix: Additional Data Points and Sources

Q1 financial highlights table (revenue by category, gross profit, margins) .
Balance sheet and cash flow details (cash/investments, operating cash flow) .
Q4 2024 and Q3 2024 reference results for trend analysis .
Redfin rentals partnership press release for context on lead acquisition costs and Rentals distribution .