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Zillow Misses Q2 Earnings Estimates Despite Higher Revenues

By Zacks Equity Research | August 07, 2025, 10:14 AM

Zillow Group, Inc. ZG reported mixed second-quarter 2025 results, wherein the bottom line missed the Zacks Consensus Estimate but the top line beat the same. The company registered a healthy improvement in revenues with deep customer connect and a solid brand position in the residential real estate industry, boasting 243 million average monthly unique users across the Zillow ecosystem of apps and sites. Its advanced technology, such as Zillow Showcase, featuring various AI features, Real Time Touring and New Construction marketplace, is gaining huge popularity.

Net Income

In the reported quarter, net income (on a GAAP basis) was $2 million or 1 cent per share against a net loss of $17 million or a loss of 7 cents per share in the prior-year quarter. Solid top-line growth primarily boosted the net income. On a non-GAAP basis, net income was 40 cents per share, which missed the Zacks Consensus Estimate by 4 cents.

Zillow Group, Inc. Price, Consensus and EPS Surprise

Zillow Group, Inc. Price, Consensus and EPS Surprise

Zillow Group, Inc. price-consensus-eps-surprise-chart | Zillow Group, Inc. Quote

Revenues

Quarterly revenues increased to $655 million from $572 million in the year-ago quarter. Healthy growth in the residential and rental segment boosted the top line. The top line beat the Zacks Consensus Estimate of $647 million.

Residential revenues increased 6% to $434 million, backed by solid growth in its agent and software offerings, which include Premier Agent and Zillow Showcase and ShowingTime, DotLoop and Follow Up Boss, respectively.

The Mortgages segment generated $48 million in revenues compared with $34 million in the year-earlier quarter. The growth was primarily driven by a 48% surge in purchase loan origination.

Rental Revenues rose 36% to $159 million, primarily driven by 56% year-over-year growth of multifamily revenues.

Other Details

During the quarter, Zillow recorded a gross profit of $489 million compared with $442 million in the prior-year quarter, owing to healthy revenue growth in all segments. The operating expenses during the quarter were $500 million, up from $480 million in the prior-year quarter.

Adjusted EBITDA was $155 million compared with $134 million a year ago, backed by higher revenues and cost discipline.

Cash Flow & Liquidity

In the first six months of 2025, Zillow generated $191 million in cash from operating activities compared with $135 million in the prior-year period. As of June 30, 2025, the company had $587 million in cash and cash equivalents, with $38 million in other long-term liabilities.

Outlook

For the third quarter of 2025, Zillow expects total revenues in the range of $663-$673 million. Total adjusted EBITDA is expected in the band of $150 million to $160 million. Management expects Mortgages’ revenues to grow approximately 20% year over year. Residential revenues are projected to grow mid-single digits, while rental revenues are expected to rise more than 40% year over year.

The company expects low to mid-teens revenue growth for 2025, with continued adjusted EBITDA margin expansion. GAAP net income is also forecasted to be positive.

Zacks Rank

Zillow currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Keysight Technologies, Inc. KEYS is scheduled to release third-quarter 2025 earnings on Aug. 19. The Zacks Consensus Estimate for earnings is pegged at $1.67 per share, suggesting a growth of 6.4% from the year-ago reported figure.

Keysight has a long-term earnings growth expectation of 12%. Keysight delivered an average earnings surprise of 8.2% in the last four reported quarters.

Akamai Technologies, Inc. AKAM is slated to release second-quarter 2025 earnings on Aug. 7. The Zacks Consensus Estimate for earnings is pegged at $1.55 per share, indicating a 1.9% decline from the year-ago reported figure.

Akamai has a long-term earnings growth expectation of 8%. Akamai delivered an average earnings surprise of 4.8% in the last four reported quarters.

Pinterest, Inc. PINS is set to release second-quarter 2025 earnings on Aug. 7. The Zacks Consensus Estimate for earnings is pegged at 34 cents per share, implying a growth of 17.2% from the year-ago reported figure.

Pinterest has a long-term earnings growth expectation of 33.3%. Pinterest delivered an average earnings surprise of 0.5% in the last four reported quarters.

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Akamai Technologies, Inc. (AKAM): Free Stock Analysis Report
 
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This article originally published on Zacks Investment Research (zacks.com).

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