Zillow Group reported an 18% increase in second-quarter revenue Wednesday, topping its high-end forecast even as the online real estate giant posted a narrow net loss over the quarter, just one day after announcing 500 layoffs companywide.
The results outpaced the overall 6% growth in the U.S. real estate industry over the same period a year ago, Zillow reported.
The Seattle-based company, which operates Zillow.com and a growing suite of real estate, rental and mortgage tools, said in its latest earnings release that revenue rose to $772 million for the three months ended June 30, up from $655 million a year ago.
“Zillow has consistently outperformed industry total transaction volume for three long years, while the housing market has basically stood still,” CEO Jeremy Wacksman told investors in prepared remarks on Wednesday. “We have grown revenue by mid-teens or better each year, even as industry growth has been essentially flat. We keep reaching more real estate audience, while others in our category don’t.”
As the company has faced challenges—both on the business side and in the courtroom—investors were eager to hear executives address the immediate impact or outlook.
Zillow reported $10 million in litigation expenses in Q2 directly related to a lawsuit filed by the Federal Trade Commission (FTC).
When investors asked about any ripples from Google’s new mobile search listings partnerships, Wacksman said there was no measurable impact to the company’s bottom line or its productivity.
“I think the big reason for why we don’t see impact—you heard it a bunch in our prepared remarks—the brand commands a direct audience because it’s a differentiated experience,” Wacksman said, noting that 80% of the platform’s traffic comes from direct users.
He added that the company is focused on its core products and services rather than legal challenges, noting that a class-action lawsuit targeting Zillow’s more foundational business practices was “loudly dismissed” last month.
“These things are things we’ll have to knock out and deal with, but they’re not going to impact the business or the team or our operations. And I think you see that in our continued results,” Wacksman said.
The company’s growth was led by its rentals business, where revenue climbed 31% year over year to $209 million, driven mostly by a 42% increase in multifamily listings revenue. Zillow’s mortgage business saw revenue jump 75% to $84 million above its outlook, thanks to purchase loan origination nearly doubling over the same period.
Residential revenue—Zillow’s largest segment by far—grew modestly by 7% to $465 million, which the company attributed to gains in Zillow Preferred, Showcase and new-construction offerings, as well as its suite of software tools for real estate agents.
Despite the revenue growth, Zillow saw a net loss of $4 million, or 2 cents per diluted share, compared with net income of $2 million, or 1 cent per share, a year ago. On an adjusted basis, a non-GAAP measure that omits certain expenses, the company reported earning $118 million (or 52 cents per diluted share), up from 40 cents the previous year.‘
Preferred’ agent program shows promising wins
Executives fielded a number of investors’ questions about its “Preferred” agent program, which is the next iteration of its core lead-generation business. Instead of getting paid upfront for leads, Zillow now routes more connections to a vetted group of high-producing Preferred agents and earns success-based fees when deals close, often bundled with revenue from Zillow Home Loans, listing upgrades like Zillow Showcase, and its FollowUp Boss CRM.
The integrated model is already generating roughly 23% more revenue per connection than the old ad model, with management guiding to about 35% by late 2026—even as the transition temporarily shifts dollars from the company’s residential business to its mortgage segment.
“The preferred agent partner base is made up of some of the most productive agents in the country, and is a group of people who are highly motivated to serve Zillow’s customers well,” COO and CFO Jeremy Hofmann said.
He added: “By partnering closely with this talented group of real estate agents, we are able to build technology and services that allow them to be more productive, win more business, and convert our shared customers better, and the results for Zillow have been excellent.”
Leaders address layoffs, leadership changes, industry ‘noise’
On the call with investors, executives acknowledged the company’s Tuesday layoffs, which eliminated roughly 7% of the company’s 7,000-employee workforce and resulted in $75 million in annualized EBITDA cost savings from Q2 run rates.
The company also announced key leadership changes during its earnings call, with Jeremy Hofmann taking on an expanded role as COO, in addition to CFO. Additionally, Jun Choo, COO since 2024, is stepping down to focus on his health, remaining in an advisory role through the end of the year.
Cassandra “Sandi” Knight, formerly VP of Litigation and Discovery at Google, joins as Zillow’s first-ever Chief Legal and Policy Officer. Knight has over 20 years of legal experience across tech and financial services. Also, Zillow promoted Katie Berroth to senior vice president of strategy and operations and Eric Wilson to senior vice president of business operations and mortgage strategy.
Still, even as the platform boasts undeniable brand loyalty and direct traffic dominance, its own numbers point to some softening. Average monthly unique users and total visits each fell 2%, to 239 million and 2.5 billion, respectively, for the quarter.
Hofmann said the company has also shifted its “macro” expectations for the second half of 2026. After initially projecting the home purchase market as flat, Zillow now expects it will be down “low to mid single digits.”
