10-K: Zillow Group Reports Strong 2025 Growth, Returns to Profitability

Sentiment:

Annual Report 11 February 2026 6:33 AM

Zillow Group achieved significant revenue growth and returned to GAAP profitability in 2025, driven by strong performance in its Rentals and Mortgages segments and strategic product innovations.

Capital raiseZillow Group entered into a new $500 million Revolving Credit Facility on January 30, 2026.The Revolving Credit Facility has a maturity date of January 30, 2031.The facility may be increased by an additional $250 million, subject to the terms of the credit agreement.No amounts have been drawn under the Revolving Credit Facility as of the date of the Annual Report on Form 10-K.

Better than expectedThe company returned to GAAP net income of $23 million in 2025, a significant improvement from a net loss of $112 million in 2024.Total revenue grew by 16% to $2.6 billion, outperforming the 3% increase in the overall residential real estate industry's Total Transaction Value (TTV).Adjusted EBITDA increased by 25% to $622 million, indicating strong operational performance and efficiency.Rentals revenue surged by 39%, and Mortgages revenue increased by 37%, demonstrating successful strategic initiatives in these key segments despite challenging macroeconomic conditions.

Summary

Total revenue for the year ended December 31, 2025, increased by 16% to $2.6 billion, up from $2.2 billion in 2024.
The company reported a net income of $23 million in 2025, a substantial improvement from a net loss of $112 million in 2024.
Adjusted EBITDA grew by 25% to $622 million in 2025, compared to $498 million in the prior year.
Rentals revenue surged by 39% to $630 million, primarily due to a 31% increase in quarterly revenue per average monthly rentals unique visitor and a 6% increase in average monthly unique visitors to 33 million.
Residential revenue increased by 7% to $1.7 billion, driven by a 4% increase in revenue per visit and a 3% increase in total visits to 9.6 billion.
Mortgages revenue saw a 37% increase to $199 million, largely due to a 52% rise in total loan origination volume to $4.8 billion.
Zillow Home Loans' purchase loan origination volume increased by 53% to $4.721 billion in 2025.
The company introduced Zillow Preferred, an invite-only, pay-when-you-close program for top real estate agent teams, and Zillow Pro, an AI-powered membership suite for growth-oriented agents.
Enhancements were rolled out for BuyAbility and a new digital pre-approval process for Zillow Home Loans, alongside Offer Insights for for-sale listings.
The rentals marketplace expanded with 2.4 million average monthly active rental listings, including 72,000 multifamily properties (a 44% increase), and new partnerships with Redfin, Realtor.com, and Esusu.
Cash and cash equivalents, investments, and restricted cash decreased to $1.3 billion in 2025 from $1.9 billion in 2024, while Adjusted Free Cash Flow increased to $420 million from $309 million.
The company repurchased $773 million of Class A common stock and Class C capital stock in 2025, with $711 million remaining under authorization.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing positively, reflecting strong operational execution and strategic growth in key segments, particularly Rentals and Mortgages, leading to a return to profitability despite persistent macroeconomic headwinds in the housing market. The company's innovation and market positioning are strong, though ongoing legal challenges and a decrease in overall cash balances warrant continued monitoring.

Positives

Achieved GAAP profitability with a net income of $23 million in 2025, a significant turnaround from a $112 million net loss in 2024.
Reported strong total revenue growth of 16% year-over-year, reaching $2.6 billion, outpacing the 3% increase in the total transaction value (TTV) of the residential real estate industry.
Rentals revenue demonstrated exceptional growth of 39% to $630 million, driven by increased multifamily property listings and higher revenue per property.
Mortgages revenue increased by 37%, fueled by a 52% rise in total loan origination volume, indicating successful expansion of Zillow Home Loans.
Introduced innovative products like Zillow Preferred and Zillow Pro, leveraging AI and integrated solutions to enhance agent and customer experiences.
Expanded the rentals marketplace significantly, adding 72,000 multifamily properties and securing syndication agreements with major platforms like Redfin and Realtor.com.
Maintained a strong brand presence with 9.6 billion visits and 235 million average monthly unique users, reinforcing its position as a leading real estate platform.
Adjusted EBITDA increased by 25% to $622 million, reflecting improved operational efficiency and cost management.

Negatives

Cash and cash equivalents, investments, and restricted cash decreased from $1.9 billion in 2024 to $1.3 billion in 2025, indicating a reduction in overall liquidity.
Net cash provided by operating activities decreased to $368 million in 2025 from $428 million in 2024.
Gross margin decreased from 76% to 74%, primarily due to increased lead acquisition costs associated with the Redfin rentals syndication agreement.
The macroeconomic environment continues to present challenges, including low housing inventory, elevated and volatile mortgage interest rates, home price fluctuations, and inflationary conditions, leading to affordability issues for homebuyers and sellers.
Potential home sellers have postponed or forgone selling due to existing lower-rate mortgages, limiting for-sale housing supply.

Risks

The business is highly susceptible to the health and stability of the U.S. residential real estate industry, including changes in inflationary conditions, interest rates, housing availability, and affordability.
Industry changes resulting from lawsuits, settlements (e.g., NAR settlement), or government investigations could materially impact business, financial condition, and results of operations, potentially reducing agent marketing budgets or the number of real estate partners.
Inability to establish or maintain relationships with listing and data providers, including MLSs, could adversely affect traffic and data quality.
Failure to comply with MLS rules and requirements could lead to restricted or terminated access to listings data.
Data integrity issues, including inaccuracies in Zestimates and Rent Zestimates, could harm reputation and reduce customer/partner usage.
Intense competition from existing and future competitors, including those offering AI-based search and recommendation tools, could negatively impact market share and revenue.
Reliance on third-party services (e.g., AWS, Cloud Services) exposes the company to risks of disruption or interference.
Zillow Home Loans' operations depend on sufficient financing and the ability to resell mortgages on the secondary market, which are sensitive to interest rate and market fluctuations.
The company faces costly intellectual property disputes, including claims of infringement and challenges in protecting AI-related innovations.
Non-compliance with evolving federal, state, and local laws and regulations, particularly in highly regulated industries like real estate and mortgages, could result in fines, penalties, and business disruptions.
Ongoing legal proceedings, including federal securities class action lawsuits and antitrust complaints from the FTC and state attorneys general, pose potential liabilities and reputational harm.
The company's ability to use net operating loss carryforwards and other tax attributes may be limited due to ownership changes under the Internal Revenue Code.
Stock price volatility and concentrated voting control by founders (Richard Barton and Lloyd Frink) are risks for shareholders.

Future Outlook

The company expects Rentals revenue to increase in absolute dollars during the three months ending March 31, 2026, driven by growth in multifamily revenue and increased advertising spend. Residential revenue is also expected to increase in absolute dollars during the same period due to seasonality in the real estate market. The company believes it is well positioned for sustainable profitable growth despite continued macroeconomic uncertainty, including low housing inventory, elevated mortgage rates, and inflationary conditions. Management anticipates share-based compensation expense to decrease in 2026 compared to 2025.

Management Comments

We are reimagining residential real estate to make home a reality for more and more people.
Zillow connects hundreds of millions of consumers with innovative technology, trusted agents and loan officers, and seamless digital solutions.
With industry-leading tools and resources, Zillow supercharges real estate professionals so they can grow their businesses and deliver exceptional client experiences.
Our For Sale strategy is to increase the number of transactions using Zillow products and services, and revenue per transaction.
We are focused on continually improving our consumer funnel, capturing consumer demand and connecting that demand to our partner network.
We are innovating rapidly to apply new technology and industry software where it matters most, improving the customer journey and helping real estate professionals serve their clients better, work more efficiently and grow their businesses.
Building a better experience for renters and property managers has earned us consistently strong rentals traffic.
We continue to operate in a macro housing environment that has experienced low housing inventory, elevated and volatile mortgage rates, home price fluctuations and inflationary conditions, all of which have led to affordability challenges for homebuyers and sellers.
We believe we are well positioned to address existing and future demand for real estate transactions.
We believe we are well positioned for sustainable profitable growth.

Industry Context

StockSavvy.ai notes that Zillow Group's strong revenue growth and return to profitability in 2025 demonstrate resilience and effective strategic execution amidst a challenging U.S. housing market characterized by low inventory, high interest rates, and affordability concerns. The company's focus on integrated transaction experiences, AI-powered tools, and expansion of its rentals marketplace aligns with broader industry trends towards digital transformation and diversified revenue streams. The increase in rental demand, as observed by Zillow, reflects a shift in consumer behavior in response to the tight for-sale market, a trend many real estate platforms are seeking to capitalize on. The ongoing legal scrutiny and industry changes, such as the NAR settlement, highlight the evolving regulatory landscape and potential for disruption, which Zillow is actively navigating.

Comparison to Industry Standards

Zillow's 16% total revenue growth in 2025 significantly outpaced the 3% increase in the overall residential real estate industry's Total Transaction Value (TTV) for the same period, indicating market share gains and effective monetization strategies.
The 44% increase in multifamily properties listed on Zillow (to 72,000) as of December 31, 2025, demonstrates strong performance in the rental segment, especially compared to the broader U.S. rental market of nearly 50 million units, where Zillow Rentals ranks #1 in partner satisfaction for return on marketing investment.
Zillow's Zestimate feature achieved a median error rate of 1.8% for homes listed for sale and 7.2% for off-market homes in 2025, showcasing continued accuracy in its proprietary valuation model, a key differentiator in the market.
The company's 52% increase in total loan origination volume through Zillow Home Loans, particularly the 53% rise in purchase loan originations, suggests successful penetration and growth in the mortgage sector, despite elevated and volatile interest rates impacting the broader mortgage market.
Zillow's average monthly unique visitors of 235 million and 9.6 billion visits in 2025 solidify its position as the most visited real estate app and website in the United States, surpassing competitors like Realtor.com and Redfin in terms of audience reach and engagement.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Share Repurchase Authorization Increase	On May 2, 2025, the Board authorized the repurchase of up to an additional $1 billion of Class A common stock, Class C capital stock, or a combination thereof, increasing the total cumulative Repurchase Authorizations to $3.5 billion.	May 2, 2025	Enhances shareholder value by reducing outstanding shares and demonstrates confidence in the company's financial health, but also reduces liquidity.
Capital Structure and Voting Control	The capital structure concentrates voting control with founders Richard Barton and Lloyd Frink, who hold or control Class B common stock (10 votes per share). As of December 31, 2025, their holdings represented approximately 35% and 22.7% of the voting power, respectively.	Ongoing	Provides stability in leadership but limits the ability of other shareholders to influence corporate matters, potentially discouraging some investors.
Cybersecurity Oversight	The Audit Committee oversees major enterprise risks, including cybersecurity, with information and updates provided by legal, compliance, enterprise risk management, and information security management teams.	Ongoing	Strengthens risk management and protection of sensitive data, crucial for a technology-driven business.

Legal Proceedings

IBM Patent Infringement Lawsuit: IBM alleged infringement of seven patents. The U.S. Patent and Trial Appeal Board (PTAB) ruled claims of one patent unpatentable, which was affirmed by the Federal Circuit on December 9, 2025. IBM dismissed all other claims. Possible loss or range of loss is not estimable.
Federal Securities Class Action Lawsuit: Consolidated lawsuits alleging materially false and misleading statements regarding the Zillow Offers business. Class certification was granted on August 23, 2024, and affirmed by the Ninth Circuit on September 26, 2025. Zillow's en banc petition was denied on January 6, 2026. Possible loss or range of loss is not estimable.
Shareholder Derivative Suits: Multiple suits alleging breach of fiduciary duties, failure of internal controls, Section 14(a) and 20(a) violations, insider trading, and waste of corporate assets related to the Zillow Offers wind-down. All suits are currently stayed. Possible loss or range of loss is not estimable.
FTC and State Attorneys General Antitrust Complaint: Complaints filed on September 30, 2025, and October 1, 2025, alleging that the partnership with Redfin harmed competition for online multifamily rental listings. Zillow filed a motion to dismiss on January 13, 2026. Possible loss or range of loss is not estimable.

Stakeholder Impact

Shareholders: Benefited from share repurchases and the company's return to profitability, but face risks from stock price volatility and concentrated voting control by founders.
Employees: Benefit from a flexible workforce model, career and leadership development programs, and competitive talent rewards, contributing to lower attrition.
Customers (Buyers, Sellers, Renters): Experience enhanced digital solutions, integrated transaction experiences, and a comprehensive rental marketplace, improving their housing journey.
Real Estate Professionals (Agents, Brokers, Loan Officers, Property Managers): Gain access to innovative tools like Zillow Preferred and Zillow Pro, designed to help them grow their businesses and serve clients more efficiently, but face potential impacts from industry changes and competition.
Creditors: The company's strong financial position and new Revolving Credit Facility provide confidence in its ability to meet debt obligations, though variable interest rates introduce some risk.

Next Steps

Continue to invest in technology and product development to improve the customer journey and support real estate professionals.
Expand the integrated transaction experience in Enhanced Markets and grow the Zillow Preferred program.
Further develop the nationwide rentals marketplace, including expanding access to listings and enhancing renter/property manager tools.
Monitor and refine assessment of Pillar Two global tax rules as further guidance becomes available.
Jeremy Hofmann's 10b5-1 sales plan will become effective on February 17, 2026.

Key Dates

Date	Description
September 17, 2019	International Business Machines Corporation (IBM) filed a patent infringement complaint against Zillow.
August 8, 2019	The Zillow Group, Inc. 2019 Equity Inducement Plan became effective.
May 28, 2020	Zillow's motion to transfer venue in the IBM lawsuit to the U.S. District Court for the Western District of Washington was granted.
June 9, 2020	The Zillow Group, Inc. 2020 Incentive Plan became effective.
November 2020	NAR settlement agreement resolution with the Department of Justice.
November 16, 2021	First purported class action lawsuit (Barua v. Zillow Group, Inc. et al.) filed against Zillow.
November 19, 2021	Second purported class action lawsuit (Silverberg v. Zillow Group, et al.) filed against Zillow.
January 6, 2022	Third purported class action lawsuit (Hillier v. Zillow Group, Inc. et al.) filed against Zillow.
February 16, 2022	The three purported class action lawsuits were consolidated into the Federal Securities Suit.
March 10, 2022	First shareholder derivative suit filed in the U.S. District Court for the Western District of Washington.
May 5, 2022	Second shareholder derivative suit filed in the U.S. District Court for the Western District of Washington.
May 12, 2022	Plaintiffs filed their amended consolidated complaint in the Federal Securities Suit.
July 20, 2022	Third shareholder derivative suit filed in the U.S. District Court for the Western District of Washington.
July 25, 2022	Fourth shareholder derivative suit filed in the Superior Court of the State of Washington, King County.
August 3, 2022	Board approved adjustments to the exercise price of certain outstanding vested and unvested option awards for eligible employees.
August 8, 2022	Effective date for repriced option awards, with exercise price reduced to $38.78.
December 7, 2022	Court granted in part and denied in part Zillow's motion to dismiss the Federal Securities Suit.
January 23, 2023	Zillow filed its answer to the consolidated complaint in the Federal Securities Suit.
April 20, 2023	Court granted Zillow's motion to join an Inter Partes Review (IPR) petition in the IBM lawsuit.
August 23, 2023	Fifth shareholder derivative suit filed in the Superior Court of the State of Washington, King County.
October 11, 2023	U.S. Patent and Trial Appeal Board (PTAB) ruled claims of one patent asserted against Zillow in the IBM lawsuit unpatentable.
December 2023	Acquisition of Enchant, LLC, d/b/a Follow Up Boss.
November 21, 2023	IBM appealed the PTAB's decision in the patent lawsuit.
December 15, 2023	Zillow filed its cross-appeal in the IBM patent lawsuit.
March 14, 2024	Plaintiffs filed a motion for class certification in the Federal Securities Suit.
March 15, 2024	NAR settlement agreement finalized and implemented, leading to rule changes affecting commissions.
March 20, 2024	IBM voluntarily dismissed all claims against Zillow with prejudice, except those pertaining to the patent in the pending PTAB Appeal.
June 21, 2024	Zillow filed its response to the PTAB Appeal in the IBM lawsuit.
July 30, 2024	IBM filed its reply in further support of the PTAB Appeal.
August 23, 2024	Class certification granted in the Federal Securities Suit.
September 1, 2024	The 2024 Notes matured and were settled.
September 3, 2024	Zillow filed its reply in further support of its cross-appeal in the IBM lawsuit.
September 6, 2024	Zillow filed a petition for permission to appeal the class certification order in the Federal Securities Suit.
September 16, 2024	Plaintiffs filed their opposition to Zillow's petition for appeal in the Federal Securities Suit.
September 23, 2024	Zillow filed its reply in further support of the petition for appeal in the Federal Securities Suit.
October 8, 2024	Zillow submitted notice to redeem the remaining $499 million of 2026 Notes.
October 24, 2024	The Ninth Circuit granted Zillow permission to appeal the class certification order.
October 31, 2024	Sixth shareholder derivative suit filed in the U.S. District Court for the Western District of Washington.
November 1, 2024	Court issued an order staying the Federal Securities Suit pending the outcome of the appeal.
December 18, 2024	Redemption date for the 2026 Notes; remaining $1 million principal amount redeemed.
January 8, 2025	Zillow filed its opening brief in the appeal of the class certification order.
February 6, 2025	Zillow entered into a partnership with Redfin Corporation, becoming the exclusive provider of multifamily rental listings on Redfin and its sites.
March 10, 2025	Plaintiffs filed their response brief in the appeal of the class certification order.
May 2, 2025	Board authorized an additional $1 billion for share repurchases, increasing total authorization to $3.5 billion.
May 15, 2025	The 2025 Notes matured and were settled.
July 4, 2025	The One Big Beautiful Bill Act was enacted into law, providing significant U.S. tax law changes.
August 2025	Settlement of capped call transactions related to the 2026 Notes, resulting in receipt of 3.1 million shares of Class C capital stock and $38 million in cash.
September 5, 2025	UBS AG master repurchase agreement amended and renewed, extending maturity to September 4, 2026.
September 26, 2025	The Ninth Circuit affirmed the Court's class certification in the Federal Securities Suit.
September 30, 2025	Federal Trade Commission filed an antitrust complaint against Zillow Group, Inc., Zillow, Inc., and Redfin Corporation.
October 1, 2025	Attorneys General of Virginia, Arizona, Connecticut, New York, and Washington filed a similar antitrust complaint against Zillow and Redfin.
October 10, 2025	The stay on the Federal Securities Suit was extended.
October 24, 2025	Zillow filed an en banc petition before the Ninth Circuit seeking rehearing of the class certification decision.
November 19, 2025	Jeremy Hofmann, CFO, entered into a 10b5-1 sales plan.
December 9, 2025	The Federal Circuit affirmed the October 11, 2023 PTAB decision in the IBM lawsuit.
December 31, 2025	Fiscal year end. Second earn-out period for Follow Up Boss acquisition passed, with an expected payment of $33 million in February 2026.
January 6, 2026	The Ninth Circuit issued an order denying Zillow's en banc petition in the Federal Securities Suit.
January 13, 2026	Zillow filed its motion to dismiss the antitrust complaint by the FTC and State Attorneys General.
January 30, 2026	Zillow Group entered into a new $500 million Revolving Credit Facility with a maturity date of January 30, 2031.
February 3, 2026	Plaintiffs filed their opposition to Zillow's motion to dismiss the antitrust complaint.
February 4, 2026	Date for outstanding share count and market value of stock held by non-affiliates.
February 11, 2026	Date of the 10-K filing and audit report.
February 17, 2026	Jeremy Hofmann's 10b5-1 sales plan becomes effective.

Recommendation

buy

Zillow Group's 2025 annual report demonstrates a strong operational turnaround, marked by a return to GAAP profitability and robust revenue growth across all key segments, particularly Rentals and Mortgages. This performance, achieved despite persistent macroeconomic headwinds in the housing market, highlights effective strategic execution and product innovation. The company's continued investment in AI-powered tools and an integrated transaction ecosystem positions it well for future market share gains. While legal proceedings and a decrease in overall cash balances present some risks, the underlying business momentum and strategic clarity suggest a positive long-term outlook for seasoned investors.

Keywords

Real Estate, Online Marketplace, Mortgages, Rentals, AI, Technology, Financial Performance, SEC Filing, 10-K, Zestimate, Home Loans, Premier Agent, Property Management, Digital Real Estate

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