Zillow Group's Q3 EPS Lags Estimates, Revenues Grow Y/Y

Zillow Group Z reported its third-quarter 2025 adjusted earnings per share (EPS) of 44 cents, which missed the Zacks Consensus Estimate of 45 cents. However, the figure increased 25.7% on a year-over-year basis.

Results reflected higher for-sale revenues and rental revenues year over year. However, an increased cost of revenues undermined the results to some extent.

Total revenues of $676 million surpassed the Zacks Consensus Estimate of $669 million. The figure improved 16.4% year over year.

Zillow Group’s Q3 in Detail

For-sale revenues reported during the third quarter were higher by 9.9% at $488 million. Residential revenues of $435 million increased 7.4% year over year, aided by growth in the company’s agent and software offerings and within its new construction marketplace. Mortgage revenues were 35.9% higher year over year at $53 million, backed by a 57% increment in purchase loan origination volume to $1.3 billion.

Rental revenues grew 41.5% year over year to $174 million, led by multifamily revenue growth of 62% year over year in the third quarter.

The adjusted EBITDA margin increased 200 basis points to 24% of revenues at $165 million, led by better-than-expected revenue growth and cost discipline.

Online traffic on Zillow Group’s mobile applications and sites was higher by 7% year over year to 250 million average monthly unique users. Visits improved 4% year over year to 2.5 billion.

However, the cost of revenues grew 32.1% year over year to $185 million due to an increase in lead acquisition costs related to strategic partnerships and ad-serving costs to support the growth of its rental marketplace.

Balance Sheet of Zillow Group

Zillow exited the third quarter of 2025 with $1.4 billion in cash and investments, up from $1.2 billion at the prior quarter's end.

Z’s 2025 Outlook

Zillow expects its fourth-quarter 2025 total revenues in the range of $645-655 million and adjusted EBITDA between $145 and $155 million.

Fourth-quarter for-sale revenues are expected to increase in the high single digits, driven by residential revenue growth on similar lines to the third quarter and mortgage revenue growth of around 20%, with continued purchase origination volume growth of more than 40%.

Rental revenues are anticipated to rise more than 45% year over year, driven by accelerated multifamily revenue growth.

The company expects its adjusted EBITDA expenses to be around $500 million, a decrease from the third quarter due to normal seasonality.

For 2025, management projects mid-teens revenue growth year over year and rental revenue growth of around 40% year over year. The company expects to have adjusted margin expansion year over year and a positive GAAP net income.

Zillow Group’s Zacks Rank

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

Zillow Group, Inc. Price, Consensus and EPS Surprise

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

Performance of Another Real Estate Market Stock

CBRE Group Inc. CBRE reported third-quarter 2025 core EPS of $1.61, ahead of the Zacks Consensus Estimate of $1.47. The reported figure also increased 34.2% year over year.

Results reflected year-over-year revenue growth across most of its business segments except the Real Estate Investments segment. CBRE’s resilient businesses generated net revenue growth of 14%, surpassing the 13% increase in its transactional businesses.

Upcoming Earnings Release

We now look forward to the earnings release of another REIT — Jones Lang LaSalle JLL — which is slated to report on Nov. 5.

The Zacks Consensus Estimate for Jones Lang LaSalle’s third-quarter 2025 EPS stands at $4.24, indicating a 21.1% increase year over year. JLL currently has a Zacks Rank #3.

Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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