Zillow Misses Q3 Earnings Estimates Despite Higher Revenues

Zillow Group ZG reported relatively mixed third-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 250 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 immense popularity.

Net Income

In the reported quarter, net income (on a GAAP basis) was $10 million or 4 cents per share against a net loss of $20 million or a loss of 8 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 44 cents per share, which missed the Zacks Consensus Estimate by a penny.

Revenues

Quarterly revenues increased to $676 million from $581 million in the year-ago quarter. Healthy growth in the residential and mortgages segment boosted the top line. The top line beat the Zacks Consensus Estimate of $669 million.

Residential revenues increased 7% to $435 million, backed by solid growth in its agent and software offerings, which include Zillow Preferred (formerly Flex), Market Based Pricing and Zillow Showcase and ShowingTime, DotLoop and Follow Up Boss, respectively.

The Mortgages segment generated $53 million in revenues compared with $39 million in the year-earlier quarter. The growth was primarily driven by a 57% surge in purchase loan origination.

Rental revenues rose 41% to $174 million, primarily driven by 62% year-over-year growth of multifamily revenues.

Other Details

During the quarter, Zillow recorded a gross profit of $491 million compared with $441 million in the prior-year quarter, owing to healthy revenue growth in all segments. The operating expenses during the quarter were $494 million, up from $486 million in the prior-year quarter.

Adjusted EBITDA was $165 million compared with $127 million a year ago, backed by higher revenues and cost discipline.

Cash Flow & Liquidity

In the first nine months of 2025, Zillow generated $296 million in cash from operating activities compared with $306 million in the prior-year period. As of Sep 30, 2025, the company had $874 million in cash and cash equivalents, with $40 million in other long-term liabilities.

Outlook

For the third quarter of 2025, Zillow expects total revenues in the range of $645-$655 million. Total adjusted EBITDA is expected in the band of $145 million to $155 million. Management expects Mortgages’ revenues to grow approximately 20% year over year. Residential revenues are projected to grow high-single digits, while rental revenues are expected to rise more than 45% 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 & Other Stocks to Consider

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

Upcoming Releases

Arista Networks Inc. ANET is scheduled to release third-quarter 2025 earnings on Nov. 5. The Zacks Consensus Estimate for earnings is pegged at 72 cents per share, suggesting growth of 20% from the year-ago reported figure.

Arista has a long-term earnings growth expectation of 18.7%. The company delivered an average earnings surprise of 12.8% in the last four reported quarters.

Akamai Technologies, Inc. AKAM is slated to release third-quarter 2025 earnings on Nov. 6. The Zacks Consensus Estimate for earnings is pegged at $1.64 per share, indicating 3.1% growth from the year-ago reported figure.

Akamai has a long-term earnings growth expectation of 4.9%. The company delivered an average earnings surprise of 7.1% in the last four reported quarters.

Pinterest, Inc. PINS is set to release third-quarter 2025 earnings on Nov. 4. The Zacks Consensus Estimate for earnings is pegged at 42 cents per share, implying growth of 5% from the year-ago reported figure.

Pinterest has a long-term earnings growth expectation of 33.9%. The company delivered an average negative earnings surprise of 1.1% in the last four reported quarters.

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

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