Photo: Frederic J. Brown/AFP (archive)
Zillow Group posted a $158 million third-quarter net loss Wednesday as revenue and adjusted earnings fell short of Wall Street expectations, despite growth in its rentals and mortgage businesses.
The online real estate marketplace generated $724 million in revenue, up 7% from a year earlier. Adjusted earnings were 55 cents a share. Both figures missed the Zacks analyst survey benchmarks of $754.3 million in revenue and 60 cents a share in adjusted earnings.
Shares fell about 15% in after-hours trading, Investing.com reported. That is an after-hours reaction, not the stock’s regular-session closing move.
Reported loss and adjusted profit tell different stories
The net loss equaled 70 cents per diluted share, compared with net income of $10 million, or 4 cents a share, in the third quarter of 2025. Adjusted net income was $124 million, up from $113 million, while adjusted earnings per share rose from 44 cents.
Zillow’s financial release separates those non-GAAP measures from its reported results. The adjusted measures exclude a $165 million charge related to the Zillow Offers securities class-action settlement, net of expected insurance recoveries, as well as other specified expenses.
The $165 million figure is the charge reflected in this earnings adjustment. It should not be confused with a statement that the entire settlement’s gross value is $165 million.
Adjusted EBITDA was $182 million, or 25% of revenue, within the company’s outlook range. Net cash provided by operating activities increased to $162 million from $105 million.
Rentals grow while residential revenue declines
Rentals revenue rose 26% to $220 million, with multifamily revenue growing 35%. Mortgage revenue increased 32% to $70 million as purchase-loan origination volume rose 55% to $2 billion.
Residential revenue fell 4% to $419 million. Combined with mortgages, total For Sale revenue was essentially flat at $489 million. Zillow attributed the residential decline to higher-than-expected mortgage rates that pressured housing transaction volume.
Chief Executive Jeremy Wacksman described the period as “one of the toughest housing markets in a generation,” while pointing to revenue growth and the company’s broader business mix.
Higher sales did not clear the earnings bar
The quarter shows the difference between growing a business and meeting investor expectations. Rentals and mortgages expanded, but total revenue still came in below the forecasts in the Zacks survey. Adjusted profit improved from a year earlier while reported earnings swung to a loss.
The company also reported weaker audience activity: average monthly unique users declined 3% to 215 million, and visits fell 5% to 2.3 billion. Those company operating metrics add another measure of performance beyond revenue and adjusted earnings.
JBizNews Desk | New York
© JBizNews.com. All rights reserved. Unauthorized reproduction or redistribution is strictly prohibited.
