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ZILLOW GROUP, INC. (ZG) Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue grew 17% year over year to $554M, with strength across Residential (+11%), Mortgages (+86%), and Rentals (+25%); Adjusted EBITDA was $112M (20% margin) as results exceeded the company’s outlook for revenue and EBITDA .
  • GAAP net loss improved to $52M (–9% margin) from $73M (–15%) a year ago; full-year 2024 revenue rose 15% to $2.236B and Adjusted EBITDA reached $498M (22% margin), up 200 bps year over year .
  • 1Q25 outlook: For Sale mid-single-digit y/y growth (Residential low to mid-single digits; Mortgages ~30%), Rentals ~30% y/y growth, and implied Adjusted EBITDA expenses of ~$450M; full-year 2025 guide calls for low to mid-teens revenue growth, margin expansion, and positive GAAP net income .
  • Narrative catalysts: expanding Enhanced Markets (target >35% of connections by YE25), Showcase adoption (1.7% of new listings), accelerating purchase mortgage volumes, and a new Redfin partnership broadening multifamily rental distribution—key drivers for share and monetization in 2025 .

What Went Well and What Went Wrong

  • What Went Well

    • Outperformance vs. industry and company outlook: Q4 revenue +17% y/y to $554M (above outlook midpoint by $21M) and Adjusted EBITDA $112M (20%) on better-than-expected Residential and strong Rentals .
    • Mortgages scaled: purchase loan origination volume +90% y/y to $923M in Q4; Mortgages revenue +86% y/y to $41M, supported by mid-teens Zillow Home Loans adoption in seasoned Enhanced Markets .
    • Rentals momentum: multifamily revenue +41% y/y; multifamily properties on platform grew to 50,000 by year-end (from 37,000), with network reach expanding further via the Redfin partnership announced on 2/11/25 .

  • What Went Wrong

    • GAAP profitability remains a headwind: Q4 GAAP net loss of $52M (–9% margin), albeit improved y/y; cash and investments fell to $1.9B from $2.2B in Q3 due to convertible debt settlement .
    • Higher costs in select areas: y/y increase in sales & marketing (+$37M) and cost of revenue (+$19M) tied to rentals and Showcase sales investments and higher mortgage processing costs .
    • Q1 macro caution: management expects a more challenging housing market in Q1 with flat industry growth, tempering near-term For Sale growth to mid-single digits y/y .

Financial Results

Time-series (oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($M)$572 $581 $554
Gross Profit ($M)$442 n/a$420
GAAP Net Loss ($M)$(17) $(20) (3% margin) $(52)
Adjusted EBITDA ($M)$134 $127 $112
Net Loss Margin (%)(3)% (3)% (9)%
Adjusted EBITDA Margin (%)23% 22% 20%

Segment breakdown (Q4 2024)

Segment ($M)Q4 2024
Residential$387
Mortgages$41
For Sale total$428
Rentals$116
Other$10
Total Revenue$554

KPIs and operating metrics (oldest → newest)

KPIQ2 2024Q3 2024Q4 2024
Purchase Loan Origination Vol. ($M)$756 $812 $923
Multifamily Properties (count)44,000 47,000 50,000
Active Rental Listings (mm)1.9 1.9 (Sept) 1.9 (year-end)
Visits (mm)2,495 n/a2,057
Avg. Monthly Unique Users (mm)231 233 204
For Sale Rev / TTV (bps)n/an/a10.7

Non-GAAP EPS and GAAP EPS (Q4 2024)

  • Non-GAAP diluted EPS: $0.27
  • GAAP net loss per share: $(0.22)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
For Sale revenue growth y/yQ1 2025n/aMid-single digits New
Residential revenue growth y/yQ1 2025n/aLow to mid-single digits New
Mortgages revenue growth y/yQ1 2025n/a~30% New
Rentals revenue growth y/yQ1 2025n/a~30% New
Adjusted EBITDA expenses ($M)Q1 2025n/a~$450 (seq. increase due to seasonal payroll taxes) New
Company revenue growthFY 2025n/aLow to mid-teens; margin expansion New
GAAP net incomeFY 2025n/aPositive New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Enhanced Markets coverage and conversionQ2: Plan to reach 40 markets by YE24; mid-teens mortgage adoption in mature markets; revenue per TTV up 80% in earliest markets . Q3: 43 markets; >80% connections via Follow Up Boss; strong share gains vs TTV .Coverage was 21% of connections in Q4; aim to exceed 35% by YE25; mid-teens adoption sustained in seasoned markets .Expanding footprint and deepening integration
Zillow Showcase adoption and impactQ2: >1% of new listings; $150–$300M revenue potential at 5–10% listing coverage . Q3: ~1.5% share; higher engagement; faster/higher-priced sales vs non-Showcase .1.7% of all new listings; helping agents win more listings; targeted 5–10% medium term .Adoption rising with proven efficacy
Rentals multifamily scale and distributionQ2: 44k properties; 1.9M listings; Comscore rentals UVs +20% y/y . Q3: 47k properties; 1.9M listings; multifamily revenue +38% y/y .50k properties; multifamily revenue +41% y/y; signed Redfin partnership to expand distribution (adds Redfin/Rent.com/ApartmentGuide to network) .Accelerating scale and reach
Mortgages growthQ2: Purchase originations +125% y/y; $756M . Q3: +80% y/y; $812M; mortgages revenue +63% .+90% y/y; $923M; mortgages revenue +86% .Sustained acceleration
Industry/Regulatory context (NAR settlement, macro)Q3: Buyer agreements integrated; conversion intact; macro affordability remains a challenge .Q1 industry growth expected flat; market “more challenging” near term .Macro headwinds near-term
Cost discipline / SBCQ3: Fixed costs ~$1B run-rate; leverage expected; SBC to decline vs 2023 .Expect continued margin expansion in 2025; positive GAAP NI; implied Q1 expense seasonality .Fixed cost leveraged; variable spend targeted

Management Commentary

  • “2024 was a remarkable year for Zillow: We achieved our stated goals for the year — including double-digit revenue growth — and we expect to keep up our momentum in 2025.” — CEO Jeremy Wacksman (press release) .
  • “Q4 Adjusted EBITDA was $112 million, or 20% of revenue, driven primarily by higher-than-expected Residential revenue and strong Rentals revenue.” (shareholder letter/press release) .
  • “We believe we have a clear path to $5 billion in revenue and 45% Adjusted EBITDA margin in a normalized housing market.” (shareholder letter) .
  • On Rentals distribution: “Adding the Redfin sites to the Zillow Rentals Network helps us scale our impact and drive continued growth for our multifamily partners and our business.” — CEO Jeremy Wacksman (partnership PR) .

Q&A Highlights

  • 2025 framework and cost cadence: Management expects low to mid-teens revenue growth, EBITDA margin expansion, and positive GAAP net income in 2025; variable costs will grow ahead of revenue in 2025 to support Rentals and Zillow Home Loans before normalizing over time .
  • Enhanced Markets penetration: Target to expand Enhanced Markets to 35%+ of connections by YE25, supporting transaction share and mortgage attach over time .
  • Rentals strategy: Redfin exclusivity for multifamily boosts distribution and leads for property managers; multifamily remains the primary growth engine within Rentals .
  • Guidance clarifications: Q1 outlook embeds flat industry growth and seasonal payroll tax headwinds on expenses; still expects ~30% Rentals y/y growth and ~30% Mortgages y/y growth .

Estimates Context

  • Q4 2024: Revenue of $554M beat consensus by ~$7.3M; non-GAAP diluted EPS of $0.27 missed by ~$0.01 .
  • Note: We attempted to retrieve S&P Global consensus via GetEstimates but hit a daily request limit; therefore, S&P Global figures were unavailable at this time. The consensus comparisons above are sourced from Seeking Alpha’s earnings page .

Estimates vs Actuals (Q4 2024)

MetricQ4 2024 ActualQ4 2024 Consensus
Revenue ($M)$554 ~$546.7
Non-GAAP Diluted EPS ($)$0.27 ~$0.28

Key Takeaways for Investors

  • Execution outpaced a tough market: Q4 revenue and EBITDA exceeded outlook; sustained outperformance vs industry TTV highlights share gains in core For Sale and Mortgages .
  • Mortgages flywheel is working: Integrated funnel with Premier Agent partners is lifting attach and conversion, driving +90% y/y purchase originations; this is a key multi-year monetization lever .
  • Rentals scaling with distribution: Multifamily supply and paid reach continue to expand (now including Redfin), reinforcing a path toward a $1B+ Rentals revenue opportunity over time .
  • 2025 setup: Management guides to low/mid-teens revenue growth, margin expansion, and positive GAAP net income—catalysts include Enhanced Markets rollout to 35%+ of connections and Showcase penetration .
  • Cost discipline supports operating leverage: Fixed cost base leveraged; Q1 expense step-up is seasonal; expect continued EBITDA margin expansion in 2025 .
  • Watch KPIs: Enhanced Markets mix, Showcase listing share, multifamily property count, purchase mortgage volume, and For Sale revenue per TTV (bps) as leading indicators of monetization and share .
  • Near-term risk: Macro affordability/transaction volumes could pressure For Sale growth in Q1; however, Zillow’s share gains and Rentals/Mortgages diversification provide offsets .

Additional Detail and Cross-References

  • Cash and investments at Q4 end were $1.9B (down from $2.2B in Q3) due to 2026 convertible debt settlement; principal on converts was $419M at Q4-end; $381M remained under repurchase authorization .
  • Traffic: Q4 average monthly unique users +3% y/y to 204M; visits +3% y/y to 2.1B .
  • Non-GAAP reconciliations and methodology: See provided tables for Adjusted EBITDA and non-GAAP net income per share reconciliations .

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