Zillow posted a strong earnings report for Q1 2026, with revenue up year-over-year as the company launches new consumer-facing initiatives.
But in CEO Jeremy Wacksman’s opening remarks to investors yesterday after the report, he specifically framed Zillow’s success as overcoming a housing market in a rut.
“We once again outperformed the broader housing market, which stayed essentially flat amid worse-than-expected weather and interest rate volatility,” said Wacksman. Citing data from the National Association of Realtors®’ (NAR) existing-home sales report, Zillow estimated in its earnings press release that the residential real estate industry grew by 2% in Q1, while purchase mortgage origination volume for the industry dropped 1% that quarter.
During the investor Q&A, when asked about Zillow’s expectations that residential revenue will only grow by mid-single digits through the year, Chief Financial Officer Jeremy Hofmann reiterated that “the housing market has been effectively flat; we are not planning for that to get better. It may, but we are not planning for it.”
During Q1, Zillow launched a “Zillow Preview” pre-marketing program, which attracted dozens of industry partners. In May, shortly before its earnings report, Zillow announced that Realtor.com® had joined as one of those partners. Zillow has seen conflict (including a dropped lawsuit) with Compass over the latter’s use of “private” listings and pre-market practices. On the earnings call, Wacksman framed Zillow Preview in the terms of this debate.
“Zillow Preview gives pre-market listings broad, public exposure on the most visited real estate platform in America. Unlike pre-marketing in a private listing network, Preview puts listings in front of the buying public from day one,” said Wacksman. “It is really just a win-win for both Zillow Group, Inc. Class A and our agent partners as well as Realtor.com.”
Compass CEO Robert Reffkin, speaking to investors after his company reported Q1 earnings a day before Zillow, took shots at Zillow Preview as he sought to position Compass’s “three-phased marketing plan” as the superior option. Zillow has drawn a line at pre-marketing that involves brokerages holding exclusive inventory just for their own agents, or requiring consumers to work with them to see homes for sales.
Zillow is in the progress of launching other new initiatives, with Hofmann noting during the earnings call that the company’s advertising budget is tilted to Q2 due to planned product launches. For instance, AI Mode, a conversational AI interface designed to let consumers ask questions while on a real estate search. The feature is live for 5% of Zillow users thus far, and the company remained bullish on AI mode during the call; Wacksman claimed that AI mode is driving “deeper, more substantive conversations than in traditional search.”
Financials
Zillow’s Q2 earnings report was explicitly reported to have exceeded expectations. Revenue was at the high end of the company’s outlook range, coming in at $708 million, or an 18% annual increase. Residential revenue was $450 million, up 8% year-over-year, which was attributed to growth of Zillow’s agent software tool suite Zillow Showcase, as well as the new construction marketplace.
Mortgage revenue increased 56% year-over-year to $64 million, attributed to a 96% increase in loan origination volume. Rentals revenue increased 42% year-over-year to $183 million, due to a 57% increase in multifamily revenue. In Zillow’s outlook for the rest of 2026, they projected a continuing rental revenue increase of about 30%.
“Our rentals revenue is on a clear path to $1 billion-plus in annual revenue,” said Hofmann during the earnings call. “Our rental growth algorithm is clear: add more properties to our apps and sites, and deliver best-in-class ROI to increase wallet share.”
Potentially complicating that outlook is a lawsuit by the FTC and several state attorneys general, whose lawsuit claiming that Zillow and Redfin conspired to reduce competition for rental listing was recently allowed to move forward by a federal judge.
Zillow net income at the end of Q1 was $46 million, while the company’s cash and investments were $788 million, down from $1.3 billion at the end of 2025. Adjusted earnings before interest, deduction, taxes and amortization (EBITDA) was largely flat at $182 million, attributed to “incremental legal expenses” of $11 million.
The company reported that traffic to Zillow’s platform was also down slightly, 3% year-over-year in Q1, averaging 220 million monthly users. However, Zillow also cited data from web analytics company Comscore, which found monthly unique visitors to Zillow’s websites and mobile apps in Q1 was 127 million, a 12% annual increase.
“Our revenue has consistently outperformed industry total transaction value for more than three years now. That kind of performance in this kind of environment does not happen by accident,” Wacksman said, touting the strength of Zillow’s business strategy and brand as the drivers of this strong financial performance and traffic. “We earn the trust of consumers and professionals by consistently showing up for them at every stage of the housing journey. It is why roughly 80% of our traffic comes directly to us.”
For the full Zillow Q1 2026 earnings report, click here.
