ZG · Zillow Group, Inc. Class A

Zillow Group delivered strong Q1 2026 results with total revenue of $708 million, up 18% year over year, significantly outperforming the residential real estate industry's 2% growth and a 1% decline in purchase mortgage originations. For Sale revenue rose 12% to $514 million, driven by 8% Residential growth from Preferred, Zillow Showcase, agent tools, and New Construction, plus a standout 56% increase in Mortgages to $64 million on 96% higher purchase loan volume reaching $1.5 billion. Rentals revenue surged 42% to $183 million, primarily from 57% multifamily growth, reflecting wallet share gains with property managers due to strong ROI. Gross profit reached $519 million at 73% margin, down slightly from 77% YoY amid revenue mix shift. Net income improved sharply to $46 million (6% margin, +520 bps) with diluted EPS of $0.19 versus $0.03 last year. Adjusted EBITDA held at $182 million (26% margin), flat YoY despite $11 million extra legal costs; excluding these, it would have been $193 million (27% margin). CEO Jeremy Wacksman highlighted the integrated platform's value, AI embedding for indispensability, consistent execution, brand strength, and multi-year strategy durability. Traffic dipped 3% to 220 million monthly unique users and 2.3 billion visits, but Comscore data showed 12% audience growth to 127 million, maintaining category leadership. Balance sheet showed $788 million cash and investments after $626 million share repurchases of 13.5 million shares, down from $1.3 billion year-end 2025. Operating cash flow doubled to $200 million, adjusted free cash flow up 44% to $127 million. Shareholder letter emphasized AI acceleration via content, context, and integration advantages, with new features like AI mode, BuyAbility (4.3M users), Shop with Pre-Approval, Zillow Preview, and tools like Follow Up Boss driving momentum toward $1 billion mid-cycle For Sale revenue target.