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Zillow's Q1 Earnings Miss Estimates, Revenues Increase Y/Y
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Zillow Group, Inc. (ZG - Free Report) reported relatively mixed first-quarter 2025 results, wherein the bottom line missed the Zacks Consensus Estimate but the top line beat the same. It reported revenue expansion year over year.
The company has a solid brand position in the residential real estate industry, boasting 227 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.
Zillow’s Net Income
In the reported quarter, net income (on a GAAP basis) was $8 million or 3 cents per share against a net loss of $23 million or a loss of 10 cents in the prior-year quarter. Top-line growth boosted the net income.
On a non-GAAP basis, net income improved to $105 million or 41 cents per share from $93 million or 36 cents in the year-ago quarter. However, the bottom line missed the Zacks Consensus Estimate by 2 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Zillow Group, Inc. Price, Consensus and EPS Surprise
Quarterly revenues improved to $598 million from $529 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 $589 million.
Residential revenues increased 6% from $393 million in the prior-year quarter to $417 million in the first quarter of 2025, backed by solid growth in its Premier Agent offerings, Zillow Showcase, New Construction and Follow Up Boss.
The Mortgages segment generated $41 million in revenues compared with $31 million in the year-earlier quarter. The growth was primarily driven by a 32% surge in purchase loan origination.
Rental Revenues rose 33% to $129 million from $97 million in the previous-year quarter. The expansion was primarily driven by 47% year-over-year growth of multifamily revenues.
Other Details of Zillow
During the quarter, Zillow recorded a gross profit of $459 million compared with $406 million in the prior-year quarter, owing to healthy revenue growth in all the segments. The operating expenses during the quarter were $468 million, up from $451 million in the prior-year quarter.
Adjusted EBITDA was $153 million compared with $125 million a year ago, backed by higher revenues and cost discipline.
Zillow’s Cash Flow & Liquidity
In the first quarter, Zillow generated $104 million in cash from operating activities compared with $80 million in the prior-year quarter. As of March 31, 2025, the company had $914 million in cash and cash equivalents, with $37 million in other long-term liabilities.
Zillow’s Outlook
For the second quarter of 2025, Zillow expects total revenues in the range of $635-$650 million. Total adjusted EBITDA is expected in the band of $140 million to $155 million. Management expects Mortgages’ revenues to grow approximately 30% year over year. Residential revenues are projected to grow mid-single digits, while rental revenues are expected to grow 35% 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.
ZG’s Zacks Rank & Stocks to Consider
Zillow Group currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks that investors may consider.
In the trailing four quarters, InterDigital delivered an earnings surprise of 160.15%. It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. InterDigital boasts a comprehensive portfolio of more than 33,000 granted patents and applications. The company witnessed an exceptional year in innovation in 2024, with more than 5,000 new patent filings worldwide.
T-Mobile US, Inc. (TMUS - Free Report) carries a Zacks Rank #2 at present. Headquartered in Bellevue, WA, T-Mobile is a national wireless service provider. It continues to deploy 5G with the mid-band 2.5 GHz spectrum from Sprint. The 2.5 GHz 5G delivers superfast speeds and extensive coverage with signals that go through walls and trees, unlike 5G networks that are controlled by the mmWave spectrum. This gives T-Mobile a competitive edge over AT&T and Verizon.
Juniper Networks, Inc. (JNPR - Free Report) sports a Zacks Rank of 1 at present. In the last reported quarter, it delivered an earnings surprise of 4.88%.
Juniper is leveraging the 400-gig cycle to capture hyperscale switching opportunities inside the data center. The company is set to capitalize on the increasing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence. Juniper also introduced new features within the AI-driven enterprise portfolio that enable customers to simplify the rollout of their campus wired and wireless networks while bringing greater insight to network operators.
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Zillow's Q1 Earnings Miss Estimates, Revenues Increase Y/Y
Zillow Group, Inc. (ZG - Free Report) reported relatively mixed first-quarter 2025 results, wherein the bottom line missed the Zacks Consensus Estimate but the top line beat the same. It reported revenue expansion year over year.
The company has a solid brand position in the residential real estate industry, boasting 227 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.
Zillow’s Net Income
In the reported quarter, net income (on a GAAP basis) was $8 million or 3 cents per share against a net loss of $23 million or a loss of 10 cents in the prior-year quarter. Top-line growth boosted the net income.
On a non-GAAP basis, net income improved to $105 million or 41 cents per share from $93 million or 36 cents in the year-ago quarter. However, the bottom line missed the Zacks Consensus Estimate by 2 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Zillow Group, Inc. Price, Consensus and EPS Surprise
Zillow Group, Inc. price-consensus-eps-surprise-chart | Zillow Group, Inc. Quote
Revenues of Zillow
Quarterly revenues improved to $598 million from $529 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 $589 million.
Residential revenues increased 6% from $393 million in the prior-year quarter to $417 million in the first quarter of 2025, backed by solid growth in its Premier Agent offerings, Zillow Showcase, New Construction and Follow Up Boss.
The Mortgages segment generated $41 million in revenues compared with $31 million in the year-earlier quarter. The growth was primarily driven by a 32% surge in purchase loan origination.
Rental Revenues rose 33% to $129 million from $97 million in the previous-year quarter. The expansion was primarily driven by 47% year-over-year growth of multifamily revenues.
Other Details of Zillow
During the quarter, Zillow recorded a gross profit of $459 million compared with $406 million in the prior-year quarter, owing to healthy revenue growth in all the segments. The operating expenses during the quarter were $468 million, up from $451 million in the prior-year quarter.
Adjusted EBITDA was $153 million compared with $125 million a year ago, backed by higher revenues and cost discipline.
Zillow’s Cash Flow & Liquidity
In the first quarter, Zillow generated $104 million in cash from operating activities compared with $80 million in the prior-year quarter. As of March 31, 2025, the company had $914 million in cash and cash equivalents, with $37 million in other long-term liabilities.
Zillow’s Outlook
For the second quarter of 2025, Zillow expects total revenues in the range of $635-$650 million. Total adjusted EBITDA is expected in the band of $140 million to $155 million. Management expects Mortgages’ revenues to grow approximately 30% year over year. Residential revenues are projected to grow mid-single digits, while rental revenues are expected to grow 35% 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.
ZG’s Zacks Rank & Stocks to Consider
Zillow Group currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks that investors may consider.
InterDigital (IDCC - Free Report) carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the trailing four quarters, InterDigital delivered an earnings surprise of 160.15%. It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. InterDigital boasts a comprehensive portfolio of more than 33,000 granted patents and applications. The company witnessed an exceptional year in innovation in 2024, with more than 5,000 new patent filings worldwide.
T-Mobile US, Inc. (TMUS - Free Report) carries a Zacks Rank #2 at present. Headquartered in Bellevue, WA, T-Mobile is a national wireless service provider. It continues to deploy 5G with the mid-band 2.5 GHz spectrum from Sprint. The 2.5 GHz 5G delivers superfast speeds and extensive coverage with signals that go through walls and trees, unlike 5G networks that are controlled by the mmWave spectrum. This gives T-Mobile a competitive edge over AT&T and Verizon.
Juniper Networks, Inc. (JNPR - Free Report) sports a Zacks Rank of 1 at present. In the last reported quarter, it delivered an earnings surprise of 4.88%.
Juniper is leveraging the 400-gig cycle to capture hyperscale switching opportunities inside the data center. The company is set to capitalize on the increasing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence. Juniper also introduced new features within the AI-driven enterprise portfolio that enable customers to simplify the rollout of their campus wired and wireless networks while bringing greater insight to network operators.