Zillow Group, Inc. (Z Quick QuoteZ - Free Report) delivered first-quarter 2026 adjusted earnings of 53 cents per share, which rose 29.3% year over year and beat the Zacks Consensus Estimate by 23.3%. The upside reflected broad-based strength across the For Sale business and continued momentum in Rentals.

Total revenues came in at $708 million, up 18.4% year over year and narrowly ahead of the consensus mark of $704.27 million. Multifamily revenues, a key Rentals growth lever, increased 57% year over year during the quarter.

Z Shows Broad-Based For Sale Momentum

Z generated For Sale revenues of $514 million in the first quarter, increasing 12.2% year over year. Residential revenues rose 8% year over year to $450 million, driven by growth across Preferred, Zillow Showcase, the company’s suite of agent software tools and its New Construction marketplace. Mortgage revenues climbed 56% year over year to $64 million, primarily due to a 96% increase in purchase loan origination volume to $1.5 billion.

Zillow Leans on Rentals Marketplace Expansion

Rentals revenues increased 42% year over year to $183 million, reflecting continued progress in scaling the platform’s marketplace reach and monetization. Management attributed the growth primarily to strength in multifamily, supported by both audience and partner adoption.

Operationally, Zillow continued to add supply. Multifamily properties advertising across Zillow reached 76,000 at quarter-end, up 38% from the end of the first quarter of 2025. Zillow also reported 2.7 million average monthly active rental listings in the quarter, reinforcing the breadth of inventory that underpins engagement and lead volume.

Z Navigates Higher Costs, Sustains Profitability

Z produced gross profit of $519 million in the quarter, up 13.1% year over year, as total revenue growth outpaced expense growth across several major lines. Gross profit as a percentage of revenue was 73.3%, down from 76.8% a year ago, reflecting a heavier cost profile tied to growth initiatives and mortgage-related activity.

Total operating expenses and the cost of revenues were $672 million, up 10.7% year over year, with the higher cost of revenues cited as a key driver. Management noted that the cost of revenues increased $50 million year over year, primarily tied to higher lead acquisition costs associated with the rentals syndication agreement with Redfin and higher mortgage loan processing costs due to increased purchase loan origination volume. Despite the cost headwinds, Adjusted EBITDA was $182 million, and the Adjusted EBITDA margin held at 26%, even as incremental legal expenses created a 160-basis-point headwind.

Online traffic on Zillow Group’s mobile applications and sites was down 3% year over year to 220 million average monthly unique users. Visits declined 3% year over year to 2.3 billion.

Zillow Strengthens Liquidity While Funding Buybacks

Cash and investments totaled $788 million at the end of the first quarter, down from $1.3 billion at the end of 2025. The decline largely reflected capital returns, as Zillow repurchased 13.5 million shares for $626 million during the quarter.

Cash generation remained solid. Net cash provided by operating activities was $200 million, up 92% year over year. Adjusted free cash flow was $127 million, increasing 44% from the year-ago period. Zillow also ended the quarter with a $500 million undrawn revolving credit facility, and management cited total liquidity of $1.3 billion. The company had approximately $1.3 billion remaining under its share repurchase authorizations at quarter-end.

Z Outlines Q2 Targets and Maintains 2026 Growth View

For the second quarter of 2026, Z expects total revenues in the range of $750 million-$765 million. Management anticipates year-over-year For Sale revenue growth similar to the first quarter, with Residential revenue growth expected in the mid-single digits and Mortgages revenues projected to grow at levels similar to the first quarter.

On profitability, Zillow expects Adjusted EBITDA of $150 million to $165 million in the second quarter, with Adjusted EBITDA expenses projected at $600 million. The outlook also includes a planned total advertising spend of approximately $80 million in the second quarter, up from $64 million last year, with the year-over-year increase tied to the timing of planned product launches.

For full-year 2026, management reaffirmed expectations for mid-teens total revenue growth, Rentals revenue growth of approximately 30% and year-over-year expansion of the adjusted EBITDA margin, alongside an updated outlook for share-based compensation expenses to be down more than 15% year over year.

Zillow Group’s Zacks Rank

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

Zillow Group, Inc. Price, Consensus and EPS Surprise

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

Performance of Other Real Estate Operations Industry Stocks

CBRE Group, Inc. (CBRE Quick QuoteCBRE - Free Report) posted first-quarter 2026 core earnings of $1.61 per share, up 80.9% from 89 cents a year ago. The figure beat the Zacks Consensus Estimate of $1.13 by 42.48%.

CBRE’s quarterly revenues grew 18.6% year over year to $10.53 billion, topping the Zacks Consensus Estimate of $10.13 billion, delivering a 3.97% upside, as leasing strength and faster capital-markets activity lifted results.

Jones Lang LaSalle Incorporated (JLL Quick QuoteJLL - Free Report) posted first-quarter 2026 adjusted earnings of $3.43 per share, up 48.5% from $2.31 a year ago and ahead of the Zacks Consensus Estimate of $2.88 by 19.1%.

The quarter benefited from strength across both transaction-based and recurring service lines, alongside continued platform leverage.

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