Zillow Group, Inc. Class C

Q2 revenue was $772 million, up 18% year over year. EBITDA was $176 million, with a 23% EBITDA margin, and adjusted net income was $118 million; diluted adjusted net income per share was $0.52 versus $0.40 a year ago. For sale revenue increased 14% to $549 million, including residential revenue of $465 million up 7% and mortgage revenue of $84 million up 75%. Rentals revenue was $209 million, up 31%, led by 42% multifamily growth. On the balance sheet, Zillow ended Q2 with $682 million of cash and investments and $1.2 billion of total liquidity including its undrawn credit line. For Q3, management guided to revenue of $745 million to $760 million, EBITDA of $180 million to $200 million, and EBITDA expenses of $560 million to $565 million. For full-year 2026, it continues to expect mid-teens total revenue growth, revenue of $2.92 billion to $2.96 billion, rentals growth of about 30%, and EBITDA of $730 million to $760 million.

Jeremy Wacksman framed the quarter as evidence that Zillow’s consumer brand and end-to-end real estate platform are working, highlighting direct traffic, strong app engagement, and AI Mode as differentiators. He emphasized that the company is building the “operating system for modern real estate” and said the integrated experience is deepening engagement and improving outcomes for buyers, sellers, renters, agents, and lenders. He also said the leadership changes and restructuring are about moving faster and strengthening execution, not changing strategy.

Jeremy Hofmann said Q2 results beat the high end of outlook, with revenue of $772 million, EBITDA of $176 million, a 23% margin, and adjusted net income of $118 million. He noted share-based compensation expense was down 24% year over year, year-to-date free cash flow was $223 million, and Zillow repurchased $200 million of stock in Q2 and $826 million year to date. He also detailed the restructuring: about 7% of employees were eliminated, $36 million of restructuring costs were recorded in Q2, another $23 million to $28 million are expected in Q3, and annualized EBITDA savings are expected to be $75 million from Q2 run rates, or $140 million including previously planned headcount reductions. On capital allocation, he highlighted $1.1 billion remaining under buyback authorization and said the company is balancing growth investment, capital reserves, M&A flexibility, and opportunistic repurchases.

Analysts focused heavily on the leadership changes, the employee reduction, legal and Google-related noise, and the economics of Zillow’s shift to preferred monetization. Management said there is no strategy change: the COO/CFO expansion is meant to tighten execution, and the restructuring is about efficiency and speed without affecting growth bets. On Google’s local services ads expansion, Wacksman said Zillow has seen no impact on traffic or metrics, and on legal issues he said they are not affecting the business and recent adverse allegations were dismissed. Several questions also probed the residential-to-mortgage revenue shift and margin tradeoffs; Hofmann said the preferred model produces 23% higher revenue per connection in 2025 and is expected to reach 35% in 2026, with ZHL now profitable on both fixed and variable costs.