Zillow Group, Inc. 10-Q Summary: Q1 2026
Business Context and Reporting Period
This summary covers Zillow Group, Inc.'s (ZG) quarterly report on Form 10-Q for the period ended March 31, 2026. Zillow operates as a leading online real estate marketplace, connecting consumers with agents, lenders, and rental properties through its ecosystem of brands including Zillow, Trulia, StreetEasy, and Zillow Home Loans.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenue | $708 million | $598 million |
| Net Income | $46 million | $8 million |
| Adjusted EBITDA | $182 million | $153 million |
| Gross Margin | 73% | 77% |
| Operating Cash Flow | $200 million | $104 million |
| Cash & Investments | $783 million | $1.3 billion (Dec 2025) |
| Debt (Master Repurchase Agreements) | $335 million | $364 million (Dec 2025) |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 18% year-over-year (YoY), driven by significant growth in Rentals and Mortgages segments.
- Segment Performance:
- Rentals: Revenue surged 42% to $183 million, fueled by a 20% increase in unique visitors and higher revenue per visitor.
- Mortgages: Revenue jumped 56% to $64 million, supported by a 97% increase in loan origination volume ($1.57 billion vs. $796 million).
- Residential: Revenue grew 8% to $450 million, primarily due to higher revenue per visit.
- Profitability: Net income increased 475% to $46 million. Operating income turned positive at $36 million compared to a $9 million loss in Q1 2025.
- Share Repurchases: The company repurchased $626 million of stock in Q1 2026, significantly higher than the $250 million repurchased in Q1 2025. On March 4, 2026, the Board authorized an additional $1.25 billion in repurchases, bringing the total authorization to $4.8 billion.
- Liquidity: Cash and cash equivalents decreased to $678 million from $768 million at year-end 2025, largely due to share buybacks and investment maturities.
Outlook, Risks, and Management Commentary
- Guidance & Expectations: Management expects Mortgages and Rentals revenue to increase in absolute dollars in Q2 2026, driven by continued growth in purchase loan originations and multifamily rental listings.
- Market Conditions: The housing market remains impacted by low inventory and elevated mortgage rates. However, Zillow's revenue growth outpaced the industry's Total Transaction Value (TTV) growth of 2%.
- Legal Proceedings:
- Antitrust: The FTC and several state Attorneys General filed complaints alleging the Zillow-Redfin partnership harms competition in online multifamily rental listings. Zillow has filed a motion to dismiss.
- Securities Litigation: A consolidated federal securities class action regarding Zillow Offers remains stayed pending an appeal on class certification, which was affirmed by the Ninth Circuit in September 2025.
- Patent Dispute: IBM litigation regarding patent infringement continues, though IBM voluntarily dismissed most claims in 2024.
- Capital Structure: Zillow entered a new $500 million Revolving Credit Facility in January 2026 (maturity 2031) with no amounts drawn as of March 31, 2026.
Investor Verification Checklist
- Redfin Partnership Impact: Verify the status of the FTC antitrust complaint and potential impact on the multifamily rental revenue stream.
- Mortgage Origination Sustainability: Assess the durability of the 97% increase in loan origination volume given the current interest rate environment.
- Share Repurchase Capacity: Confirm the remaining $1.3 billion authorization balance and the company's commitment to capital return amidst legal uncertainties.
- Cost of Revenue Trends: Monitor the impact of lead acquisition costs (specifically the Redfin syndication agreement) on gross margins, which declined from 77% to 73%.
- Legal Accruals: Review Note 11 for any updates on the estimated loss ranges for the securities class action and antitrust suits, currently deemed "not estimable."