Zillow Group Inc.
10/30/2025 | Press release | Distributed by Public on 10/30/2025 14:36
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those described in or implied by any forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, including in Part II, Item 1A (Risk Factors) and in the section titled "Note Regarding Forward-Looking Statements," and those factors discussed in Part I, Item 1A (Risk Factors) of our Annual Report on Form 10-K for the year ended December 31, 2024.
Overview of our Business
Zillow Group is reimagining real estate to make home a reality for more and more people. As the most visited real estate app and website in the United States, Zillow and its affiliates help people find and get the home they want by connecting them with digital solutions, dedicated real estate professionals, and easier buying, selling, financing and renting experiences.
Our portfolio of affiliates, subsidiaries and brands includes Zillow Premier Agent, Zillow Home Loans, our mortgage origination operations and affiliate lender, Zillow Rentals, Trulia, StreetEasy, HotPads and Out East. In addition, Zillow Group provides a comprehensive suite of marketing software and technology solutions for the real estate industry, including ShowingTime+, Spruce and Follow Up Boss.
As of September 30, 2025, we had 7,031 employees, compared to 6,856 employees as of December 31, 2024.
Health of Housing Market
Our financial performance is impacted by changes in the health of the housing market, which is impacted, in turn, by general economic conditions. Current market factors have been driven by low housing inventory, elevated and volatile mortgage interest rates, changes in rental inventory and occupancy rates, as well as home price fluctuations and inflationary conditions. These factors may impact the number of transactions consumers complete using our products and services and demand for our advertising services. According to residential real estate data collected and estimated by Zillow Group as published monthly on our site, TTV increased 6% during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 and increased 5% during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. We continue to invest in the growth of our business, which we believe has resulted in year over year total revenue results, described below, for the three and nine month periods ended September 30, 2025 as compared to the same periods in the prior year, that exceeded industry performance for the same periods. The extent to which market factors impact our results and financial position will depend on future developments, which are uncertain and difficult to predict.
Revenue Overview
Our revenue is classified into four categories: Residential, Mortgages, Rentals and Other. Our "For Sale revenue" subtotal includes our Residential and Mortgages revenue categories and represents our revenue from participation in residential real estate purchase and sale transactions.
Residential. Residential revenue includes revenue generated by our Premier Agent and new construction marketplaces, as well as revenue from the sale of advertising and business technology solutions for real estate professionals through ShowingTime+, StreetEasy for-sale product offerings and Follow Up Boss.
Premier Agent revenue is generated by the sale of advertising services, as well as marketing and technology products and services, to help real estate agents and brokers grow and manage their businesses and brands. We offer these products and services through our Premier Agent program. Premier Agent products, which include the delivery of validated customer connections, or leads, are offered on a share of voice ("market-based pricing") and pay for performance ("Flex") basis. For our market-based pricing offering, connections are distributed to Premier Agent partners in proportion to their share of voice, or a Premier Agent partner's share of total advertising purchased in a particular zip code. With the Flex model, Premier Agent partners are provided with leads at no initial cost and pay a performance advertising fee only when a real estate transaction is closed with one of the leads, generally within two years.
New construction revenue primarily includes advertising services sold to home builders on a cost per residential community or cost per impression basis.
Revenue generated through ShowingTime+ includes ShowingTime revenue, which is primarily generated by Appointment Center, a software-as-a-service and call center solution allowing real estate agents, brokerages and MLSs to efficiently schedule real estate viewing appointments on behalf of their customers. Appointment Center services also include call center specialists who provide scheduling support to customers. ShowingTime+ revenue also includes our dotloop real estate transaction management software-as-a-service solution, as well as Zillow Showcase, a listing marketing package.
StreetEasy for-sale revenue primarily consists of our StreetEasy Experts and StreetEasy subscription offerings. StreetEasy Experts is our pay for performance pricing model available in the New York City market for which agents and brokers are provided with leads at no initial cost and pay a performance referral fee only when a real estate purchase transaction is closed with one of the leads. Revenue generated through StreetEasy subscription offerings includes the sale of advertising and a suite of tools to developers, property managers, agents and other market professionals.
Follow Up Boss revenue primarily consists of our software-as-a-service customer relationship management system which provides real estate agents, teams and brokerages with a central hub to manage real estate transactions from connection to close.
Mortgages. Mortgages revenue primarily includes revenue generated through mortgage originations and the related sale of mortgages on the secondary market through Zillow Home Loans and revenue from advertising sold to mortgage lenders and other mortgage professionals on a cost-per-lead basis, including our Custom Quote and Connect services.
Rentals. Rentals revenue includes advertising and a suite of tools sold to property managers on a cost-per-lead, lease, listing or impression basis or for a fixed fee for certain advertising packages through both the Zillow and StreetEasy brands. Rentals revenue also includes revenue generated from our rental applications product, through which potential renters can submit applications to multiple properties for a flat service fee.
Other. Other revenue includes revenue generated primarily by display advertising.
For additional information on our revenue categories, see Note 2 in our Notes to Consolidated Financial Statements in Part II, Item 8 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Financial Overview
For the three months ended September 30, 2025 and 2024, we generated total revenue of $676 million and $581 million, respectively, an increase of 16%. The increase in total revenue was primarily attributable to the following:
Rentals Revenue
•Rentals revenue increased by $51 million, or 41%, to $174 million, due to increases in quarterly revenue per average monthly rentals unique visitor.
For Sale Revenue
•Residential revenue increased by $30 million, or 7%, to $435 million, due to increases in the number of visits and in Residential revenue per visit.
•Mortgages revenue increased by $14 million, or 36%, to $53 million, driven by an increase in mortgage originations revenue as a result of increased total loan origination volume.
During the three months ended September 30, 2025 and 2024, we generated gross profit of $491 million and $441 million, respectively, an increase of 11%.
Key Metrics
Management has identified visits, unique users, For Sale revenue per TTV, and the volume of loans originated through Zillow Home Loans as relevant to investors' and others' assessment of our financial condition and results of operations.
Visits
The number of visits is an important metric because it is an indicator of consumers' level of engagement with our mobile applications, websites and other services. We believe highly engaged consumers are more likely to use our products and services, including Zillow Homes Loans, or be transaction-ready real estate market participants and therefore more sought-after by our Premier Agent partners.
We define a visit as a group of interactions by users with our Zillow, Trulia and StreetEasy mobile applications and websites. A single visit can contain multiple page views and actions, and a single user can open multiple visits across domains, web browsers, desktop or mobile devices. Visits can occur on the same day, or over several days, weeks or months.
Zillow and StreetEasy measure visits using an internal measurement tool, and Trulia measures visits with Adobe Analytics. Visits to Trulia end after thirty minutes of user inactivity. Visits to Zillow and StreetEasy end after thirty minutes of user inactivity or at midnight. From January 1, 2024 through June 30, 2024, we measured visits to StreetEasy using Google's Universal Analytics. Since July 1, 2024, we have measured visits to StreetEasy using an internal measurement tool. Through Universal Analytics, visits to StreetEasy ended either: (i) after thirty minutes of user inactivity or at midnight; or (ii) through a campaign change. A visit ends through a campaign change if a visitor arrived via one campaign or source (for example, via a search engine or referring link on a third-party website), left the mobile application or website, and then returned via another campaign or source.
We believe that using an internal measurement tool to measure visits to Zillow and StreetEasy allows us to maintain control over and provide greater insight into our end-to-end data as we enhance our broader long-term analytics strategy, while also becoming less reliant on third-party providers.
The following table presents the number of visits to our mobile applications and websites for the periods presented (in millions, except percentages):
|
Three Months Ended
September 30,
|
2024 to 2025
% Change
|
Nine Months Ended September 30, |
2024 to 2025 % Change |
||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Visits | 2,546 | 2,440 | 4 | % | 7,490 | 7,251 | 3 | % | |||||||||||||||||||||||||||
Unique Users
Measuring unique users is important to us because much of our revenue depends in part on our ability to connect home buyers and sellers, renters and individuals with or looking for a mortgage to real estate, rental and mortgage professionals, products and services. Growth in consumer traffic to our mobile applications and websites increases the number of impressions, clicks, connections, leads and other events we can monetize to generate revenue. For example, our revenue depends in part, on users accessing our mobile applications and websites to engage in the sale, purchase, renting and financing of homes, including with Zillow Home Loans, and a significant portion of our Residential revenue, Rentals revenue and Other revenue depends on advertisements being served to users of our mobile applications and websites.
We count a unique user the first time an individual accesses one of our mobile applications using a mobile device during a calendar month and the first time an individual accesses one of our websites using a web browser during a calendar month. If an individual accesses our mobile applications using different mobile devices within a given month, the first instance of access by each such mobile device is counted as a separate unique user. If an individual accesses more than one of our mobile applications within a given month, the first access to each mobile application is counted as a separate unique user. If an individual accesses our websites using different web browsers within a given month, the first access by each such web browser is counted as a separate unique user. If an individual accesses more than one of our websites in a single month, the first access to each website is counted as a separate unique user since unique users are tracked separately for each domain.
Zillow, StreetEasy, and HotPads measure unique users using an internal measurement tool, and Trulia measures unique users with Adobe Analytics. From January 1, 2024 through June 30, 2024, we measured unique users for StreetEasy and HotPads using Google's Universal Analytics. Since July 1, 2024, we have measured unique users for StreetEasy and HotPads using an internal measurement tool.
Due to technological limitations, user software settings, or user behavior, our internal measurement tool and Universal Analytics may assign a unique cookie to different instances of access by the same individual to our mobile applications and websites. In such instances, although these tools capture the number of unique users in accordance with the defined methodology, there are inherent limitations in measuring the number of unique individuals accessing our mobile applications and websites.
We believe that using an internal measurement tool to measure unique users of Zillow, StreetEasy and HotPads allows us to maintain control over and provide greater insight into our end-to-end data as we enhance our broader long-term analytics strategy, while also becoming less reliant on third-party providers.
The following table presents our average monthly unique users for the periods presented (in millions, except percentages):
|
Three Months Ended September 30, |
2024 to 2025
% Change
|
Nine Months Ended September 30, |
2024 to 2025 % Change |
||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Average monthly unique users | 250 | 233 | 7 | % | 240 | 227 | 6 | % | |||||||||||||||||||||||||||
For Sale Revenue Per Total Transaction Value
For Sale revenue per TTV is an important metric because it is an indicator of our For Sale revenue performance relative to the residential real estate industry. To evaluate how our investments drive performance relative to industry growth, we use this metric to measure our ability to both connect and convert more buyers and sellers to transact with us and to grow revenue per customer transaction.
We calculate For Sale revenue per TTV as total For Sale revenue for the relevant period divided by the aggregate TTV for the same period. TTV is calculated as the number of existing residential homes sold during the relevant period multiplied by the average sales price of existing residential homes sold during the same period according to residential real estate data collected and estimated by Zillow Group, as published monthly on our site. For Sale revenue and TTV have historically been affected by seasonal fluctuations in the residential real estate market. We generally expect For Sale revenue to peak during the three months ending June 30 or September 30. As such, we measure performance and present our For Sale revenue per TTV on a trailing twelve-month basis to account for seasonality.
The following table presents our For Sale revenue per TTV for the periods presented:
|
Twelve Months Ended
September 30,
|
2024 to 2025 % Change |
||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
|
For Sale revenue (in millions)
|
$ | 1,856 | $ | 1,682 | 10 | % | |||||||||||
|
Total Transaction Value (in trillions) (1)
|
$ | 1.8 | $ | 1.7 | 7 | % | |||||||||||
|
For Sale revenue per Total Transaction Value (in basis points)
|
10.1 | 9.8 | 3 | % | |||||||||||||
(1)Estimate for the twelve months ended September 30, 2025 is as of October 2025.
Loan Origination Volume
Loan origination volume is an important metric as it is a measure of how successful we are at the origination of mortgage loan products through our Zillow Home Loans mortgage origination operations, which directly impacts our Mortgages revenue. Loan origination volume represents the total value of mortgage loan originations closed through Zillow Home Loans during the period.
The following table presents loan origination volume by purpose and in total for Zillow Home Loans for the periods presented (in millions, except percentages):
|
Three Months Ended September 30, |
2024 to 2025 % Change |
Nine Months Ended September 30, |
2024 to 2025 % Change |
||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| Purchase loan origination volume | $ | 1,276 | $ | 812 | 57 | % | $ | 3,183 | $ | 2,169 | 47 | % | |||||||||||||||||||||||
| Refinance loan origination volume | 5 | 7 | (29) | % | 20 | 14 | 43 | % | |||||||||||||||||||||||||||
| Total loan origination volume | $ | 1,281 | $ | 819 | 56 | % | $ | 3,203 | $ | 2,183 | 47 | % | |||||||||||||||||||||||
During the three and nine months ended September 30, 2025, total loan origination volume increased 56% and 47%, respectively, compared to the three and nine months ended September 30, 2024. This increase was primarily driven by the continued growth in Zillow Home Loans purchase loan originations in line with our strategic priorities.
Results of Operations
Given continued uncertainty surrounding the health of the housing market, interest rate environment and inflationary conditions, financial performance for current and prior periods may not be indicative of future performance.
Revenue
| % of Total Revenue | |||||||||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2024 to 2025 |
Three Months Ended September 30, |
|||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | ||||||||||||||||||||||||||||||
| (in millions, except percentages, unaudited) | |||||||||||||||||||||||||||||||||||
|
Revenue:
|
|||||||||||||||||||||||||||||||||||
|
For Sale revenue:
|
|||||||||||||||||||||||||||||||||||
| Residential | $ | 435 | $ | 405 | $ | 30 | 7 | % | 64 | % | 70 | % | |||||||||||||||||||||||
|
Mortgages
|
53 | 39 | 14 | 36 | 8 | 7 | |||||||||||||||||||||||||||||
|
Total For Sale revenue
|
488 | 444 | 44 | 10 | 72 | 76 | |||||||||||||||||||||||||||||
| Rentals | 174 | 123 | 51 | 41 | 26 | 21 | |||||||||||||||||||||||||||||
| Other | 14 | 14 | - | - | 2 | 2 | |||||||||||||||||||||||||||||
| Total revenue | $ | 676 | $ | 581 | $ | 95 | 16 | % | 100 | % | 100 | % | |||||||||||||||||||||||
| % of Total Revenue | |||||||||||||||||||||||||||||||||||
|
Nine Months Ended September 30, |
2024 to 2025 |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | ||||||||||||||||||||||||||||||
| (in millions, except percentages, unaudited) | |||||||||||||||||||||||||||||||||||
|
Revenue:
|
|||||||||||||||||||||||||||||||||||
|
For Sale revenue:
|
|||||||||||||||||||||||||||||||||||
| Residential | $ | 1,286 | $ | 1,207 | $ | 79 | 7 | % | 67 | % | 72 | % | |||||||||||||||||||||||
|
Mortgages
|
142 | 104 | 38 | 37 | 7 | 6 | |||||||||||||||||||||||||||||
|
Total For Sale revenue
|
1,428 | 1,311 | 117 | 9 | 74 | 78 | |||||||||||||||||||||||||||||
| Rentals | 462 | 337 | 125 | 37 | 24 | 20 | |||||||||||||||||||||||||||||
| Other | 39 | 34 | 5 | 15 | 2 | 2 | |||||||||||||||||||||||||||||
| Total revenue | $ | 1,929 | $ | 1,682 | $ | 247 | 15 | % | 100 | % | 100 | % | |||||||||||||||||||||||
Three Months Ended September 30, 2025 compared to Three Months Ended September 30, 2024
Total revenue increased $95 million, or 16%, to $676 million:
Rentals Revenue
•Rentals revenue increased $51 million, or 41%, driven by a 46% increase in quarterly revenue per average monthly rentals unique visitor to $4.97 for the three months ended September 30, 2025 from $3.42 for the three months ended September 30, 2024. The increase in quarterly revenue per average monthly rentals unique visitor was driven by a 62% increase in multifamily rentals revenue due to growth in multifamily property listings and in revenue per property as property managers upgraded to more comprehensive advertising packages. We calculate quarterly revenue per average monthly rentals unique visitor by dividing total Rentals revenue for the period by the average monthly rentals unique visitors for the period and then dividing by the number of quarters in the period. Average monthly rentals unique visitors decreased 3% to 35 million during the three months ended September 30, 2025 from 36 million during the three months ended September 30, 2024. We have estimated average monthly rentals unique visitors using Comscore data, which measures average monthly unique visitors on rental listings on Zillow, Trulia and HotPads mobile apps and websites, and on Realtor.com and Redfin and its sites, including Rent.com and ApartmentGuide.com.
For Sale Revenue
•Residential revenue increased $30 million, or 7%. The increase in Residential revenue was partially driven by a 4% increase in the number of visits to 2.5 billion for the three months ended September 30, 2025 from 2.4 billion for the three months ended September 30, 2024. Residential revenue was also positively impacted by an increase in Residential revenue per visit to $0.171 for the three months ended September 30, 2025 from $0.166 for the three months ended September 30, 2024, primarily due to growth in our Premier Agent revenue driven by continued improvement in our ability to connect high-intent customers to agents, an increase in ShowingTime+ revenue driven by increasing adoption of our software services by sellers and listing agents, and continued growth in new construction revenue. We calculate Residential revenue per visit by dividing the revenue generated by our Residential offerings by the number of visits in the period. We expect Residential revenue to decrease in absolute dollars during the three months ending December 31, 2025, primarily due to the impact of seasonality on the residential real estate market.
•Mortgages revenue increased $14 million, or 36%, driven by a $14 million increase in mortgage originations revenue. The increase in mortgage originations revenue was primarily due to a 56% increase in total loan origination volume to $1.3 billion for the three months ended September 30, 2025 from $819 million for the three months ended September 30, 2024, primarily driven by continued growth in Zillow Home Loans purchase loan origination volume. The increase in mortgage originations revenue was partially offset by a 6% decrease in gain on sale margin. Gain on sale margin represents the net gain on sale of mortgage loans divided by total loan origination volume for the period. Net gain on sale of mortgage loans includes all components related to the origination and sale of mortgage loans, including the net gain on sale of loans into the secondary market, loan origination fees, unrealized gains and losses associated with changes in fair value of IRLCs and mortgage loans held for sale, realized and unrealized gains or losses from derivative financial instruments and the provision for losses relating to representations and warranties.
Nine Months Ended September 30, 2025 compared to Nine Months Ended September 30, 2024
Total revenue increased $247 million, or 15%, to $1.9 billion:
Rentals Revenue
•Rentals revenue increased $125 million, or 37%, driven by a 25% increase in quarterly revenue per average monthly rentals unique visitor to $4.53 for the nine months ended September 30, 2025 as compared to $3.62 for the nine months ended September 30, 2024. The increase in quarterly revenue per average monthly rentals unique visitor was driven by a 56% increase in multifamily rentals revenue due to growth in multifamily property listings and in revenue per property as property managers upgraded to more comprehensive advertising packages. The increase in Rentals revenue was also driven by growth in average monthly rentals unique visitors, which increased 10% to 34 million during the nine months ended September 30, 2025 from 31 million during the nine months ended September 30, 2024.
For Sale Revenue
•Residential revenue increased $79 million, or 7%. The increase in Residential revenue was partially driven by a 3% increase in the number of visits to 7.5 billion for the nine months ended September 30, 2025 from 7.3 billion for the nine months ended September 30, 2024. Residential revenue was also positively impacted by a 3% increase in Residential revenue per visit to $0.172 for the nine months ended September 30, 2025 from $0.166 for the nine months ended September 30, 2024, primarily due to growth in our Premier Agent revenue driven by continued improvement in our ability to connect high-intent customers to agents, an increase in ShowingTime+ revenue driven by increasing adoption of our software services by sellers and listing agents, and continued growth in new construction revenue.
•Mortgages revenue increased $38 million, or 37%. This increase was driven by a $38 million increase in mortgage originations revenue. The increase in mortgage originations revenue was primarily due to a 47% increase in total loan origination volume to $3.2 billion for the nine months ended September 30, 2025 from $2.2 billion for the nine months ended September 30, 2024, primarily driven by continued growth in Zillow Home Loans purchase loan origination volume. The increase in mortgage originations revenue was also attributable to an 2% increase in gain on sale margin.
Adjusted EBITDA
The following tables summarize net income (loss) and Adjusted EBITDA for each of the periods presented (in millions, except percentages):
| % of Revenue | |||||||||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2024 to 2025 |
Three Months Ended September 30, |
|||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | ||||||||||||||||||||||||||||||
| Net income (loss) | $ | 10 | $ | (20) | $ | 30 | 150 | % | 1 | % | (3) | % | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 165 | $ | 127 | $ | 38 | 30 | % | 24 | % | 22 | % | |||||||||||||||||||||||
| % of Revenue | |||||||||||||||||||||||||||||||||||
|
Nine Months Ended September 30, |
2024 to 2025 |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | ||||||||||||||||||||||||||||||
| Net income (loss) | $ | 20 | $ | (60) | $ | 80 | 133 | % | 1 | % | (4) | % | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 473 | $ | 386 | $ | 87 | 23 | % | 25 | % | 23 | % | |||||||||||||||||||||||
To provide investors with additional information regarding our financial results, we have disclosed Adjusted EBITDA, a non-GAAP financial measure, in this Quarterly Report on Form 10-Q. We have provided a reconciliation below of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure.
We have included Adjusted EBITDA in this Quarterly Report on Form 10-Q as it is a key metric used by our management and Board to measure operating performance and trends and to prepare and approve our annual budget. In particular, we believe the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis.
Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider this measure in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
•Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
•Adjusted EBITDA does not consider the potentially dilutive impact of share-based compensation;
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditures or contractual commitments;
•Adjusted EBITDA does not reflect impairment costs;
•Adjusted EBITDA does not reflect acquisition-related costs;
•Adjusted EBITDA does not reflect loss on extinguishment of debt;
•Adjusted EBITDA does not reflect interest expense or other income, net;
•Adjusted EBITDA does not reflect income taxes; and
•Other companies, including companies in our own industry, may calculate Adjusted EBITDA differently from the way we do, limiting its usefulness as a comparative measure.
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash-flow metrics, net income (loss) and our other GAAP results.
The following table presents a reconciliation of Adjusted EBITDA to net income (loss) for each of the periods presented (in millions, unaudited):
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net income (loss) | $ | 10 | $ | (20) | $ | 20 | $ | (60) | |||||||||||||||
| Income taxes | 2 | - | 2 | 4 | |||||||||||||||||||
|
Other income, net
|
(18) | (34) | (58) | (101) | |||||||||||||||||||
| Depreciation and amortization | 67 | 63 | 199 | 178 | |||||||||||||||||||
| Share-based compensation | 99 | 108 | 295 | 329 | |||||||||||||||||||
|
Impairment costs
|
2 | - | 2 | 6 | |||||||||||||||||||
| Acquisition-related costs | - | 1 | - | 1 | |||||||||||||||||||
| Loss on extinguishment of debt | - | - | - | 1 | |||||||||||||||||||
| Interest expense | 3 | 9 | 13 | 28 | |||||||||||||||||||
| Adjusted EBITDA | $ | 165 | $ | 127 | $ | 473 | $ | 386 | |||||||||||||||
Costs and Expenses, Gross Profit and Other Items
| % of Total Revenue | |||||||||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
2024 to 2025 |
Three Months Ended September 30, |
|||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | ||||||||||||||||||||||||||||||
| (in millions, except percentages, unaudited) | |||||||||||||||||||||||||||||||||||
| Cost of revenue | $ | 185 | $ | 140 | $ | 45 | 32 | % | 27 | % | 24 | % | |||||||||||||||||||||||
| Gross profit | 491 | 441 | 50 | 11 | 73 | 76 | |||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||
| Sales and marketing | 214 | 217 | (3) | (1) | 32 | 37 | |||||||||||||||||||||||||||||
| Technology and development | 151 | 145 | 6 | 4 | 22 | 25 | |||||||||||||||||||||||||||||
| General and administrative | 127 | 123 | 4 | 3 | 19 | 21 | |||||||||||||||||||||||||||||
| Impairment costs | 2 | - | 2 | - | - | - | |||||||||||||||||||||||||||||
| Acquisition-related costs | - | 1 | (1) | (100) | - | - | |||||||||||||||||||||||||||||
| Total operating expenses | 494 | 486 | 8 | 2 | 73 | 84 | |||||||||||||||||||||||||||||
| Other income, net | 18 | 34 | (16) | (47) | 3 | 6 | |||||||||||||||||||||||||||||
| Interest expense | 3 | 9 | (6) | (67) | - | 2 | |||||||||||||||||||||||||||||
| Income tax expense | 2 | - | 2 | - | - | - | |||||||||||||||||||||||||||||
| % of Total Revenue | |||||||||||||||||||||||||||||||||||
|
Nine Months Ended September 30, |
2024 to 2025 |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | ||||||||||||||||||||||||||||||
| (in millions, except percentages, unaudited) | |||||||||||||||||||||||||||||||||||
| Cost of revenue | $ | 490 | $ | 393 | $ | 97 | 25 | % | 25 | % | 23 | % | |||||||||||||||||||||||
| Gross profit | 1,439 | 1,289 | 150 | 12 | 75 | 77 | |||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||
| Sales and marketing | 638 | 588 | 50 | 9 | 33 | 35 | |||||||||||||||||||||||||||||
| Technology and development | 453 | 436 | 17 | 4 | 23 | 26 | |||||||||||||||||||||||||||||
| General and administrative | 369 | 386 | (17) | (4) | 19 | 23 | |||||||||||||||||||||||||||||
| Impairment costs | 2 | 6 | (4) | (67) | - | - | |||||||||||||||||||||||||||||
| Acquisition-related costs | - | 1 | (1) | (100) | - | - | |||||||||||||||||||||||||||||
| Total operating expenses | 1,462 | 1,417 | 45 | 3 | 76 | 84 | |||||||||||||||||||||||||||||
|
Loss on extinguishment of debt
|
- | 1 | (1) | (100) | - | - | |||||||||||||||||||||||||||||
| Other income, net | 58 | 101 | (43) | (43) | 3 | 6 | |||||||||||||||||||||||||||||
| Interest expense | 13 | 28 | (15) | (54) | 1 | 2 | |||||||||||||||||||||||||||||
|
Income tax expense
|
2 | 4 | (2) | (50) | - | - | |||||||||||||||||||||||||||||
Cost of Revenue
Cost of revenue consists of expenses related to operating our mobile applications and websites, including associated headcount-related expenses, such as salaries, benefits, bonuses and share-based compensation expense, as well as revenue-sharing costs related to our commercial business relationships, depreciation expense, and costs associated with hosting our mobile applications and websites. Cost of revenue also includes amortization costs related to capitalized website and development activities, amortization of software, amortization of certain intangible assets and other costs to obtain data used to populate our mobile applications and websites, and amortization of certain intangible assets recorded in connection with acquisitions, including developed technology. Cost of revenue also includes credit card fees and ad serving costs paid to third parties, direct costs to provide our rental applications product, and direct costs to originate mortgage loans, including underwriting and processing costs.
Three Months Ended September 30, 2025 compared to Three Months Ended September 30, 2024
Cost of revenue increased $45 million, or 32%, primarily driven by increases of $33 million in lead acquisition costs, primarily associated with our rentals partnership with Redfin, $8 million in ad serving costs to support the growth of our rentals marketplace, and $3 million in depreciation and amortization expense primarily due to an increase in amortization of website development costs.
Nine Months Ended September 30, 2025 compared to Nine Months Ended September 30, 2024
Cost of revenue increased $97 million, or 25%, due to increases of $58 million in lead acquisition costs, primarily associated with our rentals partnership with Redfin, $17 million in depreciation and amortization expense primarily due to an increase in amortization of website development costs, $14 million in ad serving costs to support the growth of our rentals marketplace, $4 million in headcount-related expenses, including share-based compensation expense, as we continue to invest in human capital to grow our business, and $4 million in software and hardware costs.
Gross Profit
Gross profit is calculated as revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue. Our gross profit has and will continue to be affected by a number of factors, including the mix of revenue from our various product offerings.
Three Months Ended September 30, 2025 compared to Three Months Ended September 30, 2024
Gross profit increased by $50 million, or 11%, primarily due to an increase in revenue, discussed above. Total gross margin decreased from 76% to 73%, primarily due to increased lead acquisition costs associated with our rentals partnership with Redfin.
Nine Months Ended September 30, 2025 compared to Nine Months Ended September 30, 2024
Gross profit increased by $150 million, or 12%, primarily due to an increase in revenue, discussed above. Total gross margin decreased from 77% to 75%, primarily due to increased lead acquisition costs associated with our rentals partnership with Redfin.
Sales and Marketing
Sales and marketing expenses consist of advertising costs and other sales expenses related to promotional and marketing activities, headcount-related expenses, including salaries, commissions, benefits, bonuses and share-based compensation expense for sales, sales support, customer support, including the customer connections team and mortgage loan officers and specialists, marketing and public relations employees, depreciation expense and amortization of certain acquired intangible assets, including trade names and trademarks and customer relationships.
Three Months Ended September 30, 2025 compared to Three Months Ended September 30, 2024
Sales and marketing expenses decreased $3 million, or 1%, due to a decrease of $18 million in marketing and advertising costs primarily driven by the timing of our rentals advertising campaigns. This decrease was partially offset by a $10 million increase in headcount-related expenses, including share-based compensation expense, as we continue to invest in human capital to grow our business, and a $2 million increase in depreciation and amortization expense.
Nine Months Ended September 30, 2025 compared to Nine Months Ended September 30, 2024
Sales and marketing expenses increased $50 million, or 9%, due to increases of $38 million in headcount-related expenses, including share-based compensation expense, as we continue to invest in human capital to grow our business and $5 million in depreciation and amortization expense.
Technology and Development
Technology and development expenses consist of headcount-related expenses, including salaries, benefits, bonuses and share-based compensation expense for individuals engaged in the design, development and testing of our products, mobile applications and websites and the tools and applications that support our products. Technology and development expenses also include equipment and software maintenance costs and depreciation expense.
Three Months Ended September 30, 2025 compared to Three Months Ended September 30, 2024
Technology and development expenses increased $6 million, or 4%, primarily due to an increase of $4 million in headcount-related expenses, including share-based compensation expense, as we continue to invest in human capital to grow our business.
Nine Months Ended September 30, 2025 compared to Nine Months Ended September 30, 2024
Technology and development expenses increased $17 million, or 4%, due to increases of $10 million in headcount-related expenses, including share-based compensation expense, as we continue to invest in human capital to grow our business, and $5 million in software and hardware costs.
General and Administrative
General and administrative expenses consist of headcount-related expenses, including salaries, benefits, bonuses and share-based compensation expense for executive, finance, accounting, legal, human resources, recruiting, corporate information technology costs and other administrative support. General and administrative expenses also include legal settlement costs and estimated legal liabilities, legal, accounting and other third-party professional service fees, rent expense, depreciation expense, change in the fair value of contingent consideration, and bad debt expense.
Three Months Ended September 30, 2025 compared to Three Months Ended September 30, 2024
General and administrative expenses increased $4 million, or 3%, due to increases of $9 million in third-party professional service fees, including legal expenses, and $2 million in software and hardware costs. These increases were partially offset by decreases of $8 million in headcount-related expenses, including share-based compensation expense, driven primarily by equity award actions that occurred in August 2022 and impacted the three months ended September 30, 2024.
Nine Months Ended September 30, 2025 compared to Nine Months Ended September 30, 2024
General and administrative expenses decreased $17 million, or 4%, primarily due to decreases of $21 million in headcount-related expenses, including share-based compensation expense, driven primarily by equity award actions that occurred in August 2022 and impacted the nine months ended September 30, 2024, $3 million due to the change in fair value of contingent consideration associated with our acquisition of Follow Up Boss, and $3 million in facility expenses driven by cost savings associated with changes in the use of certain office space in our lease portfolio. These decreases were partially offset by increases of $5 million in software and hardware costs and $4 million in third-party professional service fees, including legal expenses.
Other Income, net
Other income, net consists primarily of interest income earned on our cash, cash equivalents and investments.
Other income, net decreased $16 million and $43 million for the three and nine months ended September 30, 2025, respectively, as compared to the three and nine months ended September 30, 2024, primarily driven by lower interest income on investments due to a decrease in our investment balances as a result of the settlement of the 2024 Notes, 2025 Notes and 2026 Notes.
Interest Expense
Interest expense consists primarily of interest on our previously outstanding convertible senior notes, including the amortization of deferred issuance costs, and on our master repurchase agreements related to our Zillow Home Loans operations.
Interest expense decreased $6 million and $15 million for the three and nine months ended September 30, 2025, respectively, as compared to the three and nine months ended September 30, 2024, primarily due to the settlement of the 2024 Notes, 2025 Notes and 2026 Notes.
Income Taxes
On July 4, 2025, the One Big Beautiful Bill Act (the "Bill") was enacted into law. The Bill provides for significant U.S. tax law changes and modifications and makes permanent certain key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, the expensing of domestic research costs, and the business interest expense limitation. The provisions of the Bill did not have a material impact on our condensed consolidated financial statements for the three or nine month periods ended September 30, 2025.
We are subject to income taxes in the United States (federal and state) and certain foreign jurisdictions. As of September 30, 2025 and December 31, 2024, we have provided a valuation allowance against our net deferred tax assets that we believe, based on the weight of available evidence, are not more likely than not to be realized. There is a reasonable possibility that within the next several years, sufficient positive evidence will become available to demonstrate that a significant portion of the valuation allowance against our U.S. net deferred tax assets will no longer be required. We have accumulated federal tax losses of approximately $1.3 billion as of December 31, 2024, which are available to reduce future taxable income. We have accumulated state tax losses of approximately $66 million (tax effected) as of December 31, 2024.
Income tax expense was not material for the three and nine month periods ended September 30, 2025 or 2024.
Liquidity and Capital Resources
Our primary sources of liquidity and capital resources are cash flows from operations, debt financing and equity offerings. Our cash requirements consist principally of working capital, general corporate needs and mortgage loan originations. We continue to invest in the development and expansion of our operations using available cash flows from operations. Ongoing investments include, but are not limited to, improvements in our technology platforms, investments in new products and services, and continued investments in sales and marketing. We also use cash flows from operations to service our debt obligations and to repurchase Class A common stock, Class C capital stock, or a combination thereof through our Repurchase Authorizations or otherwise.
Sources of Liquidity
As of September 30, 2025 and December 31, 2024, we had cash and cash equivalents, investments and restricted cash of $1.4 billion and $1.9 billion, respectively. Cash and cash equivalents balances consist of operating cash on deposit with financial institutions, money market funds, and, from time to time, U.S. government treasury securities and commercial paper. Investments consist of fixed income securities, which include U.S. government treasury securities, investment grade corporate securities, U.S. government agency securities, certificates of deposit and commercial paper. Restricted cash primarily consists of amounts used to fund customer home purchases in our mortgage origination operations. Amounts on deposit with third-party financial institutions exceed the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation insurance limits, as applicable. As of September 30, 2025, Zillow Group and its subsidiaries were in compliance with all debt covenants specified in the facilities described below.
We believe that cash from operations and cash and cash equivalents and investment balances will be sufficient to meet our ongoing operating activities, working capital, capital expenditures, strategic acquisitions and investments and other capital requirements for at least the next 12 months. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operations, debt financing and equity offerings, as applicable.
Summarized Cash Flow Information
The following table presents selected cash flow data for the periods presented (in millions, unaudited):
|
Nine Months Ended September 30, |
|||||||||||
| 2025 | 2024 | ||||||||||
| Cash Flow Data: | |||||||||||
| Net cash provided by operating activities | $ | 296 | $ | 306 | |||||||
| Net cash provided by investing activities | 44 | 121 | |||||||||
| Net cash used in financing activities | (546) | (847) | |||||||||
|
Adjusted free cash flow
|
295 | 231 | |||||||||
Cash Flows Provided By Operating Activities
Our operating cash flows result primarily from cash received from real estate professionals, rental professionals, mortgage professionals, builders and brand advertisers, as well as cash received from sales of mortgages originated by Zillow Home Loans. Our primary uses of cash from operating activities include marketing and advertising activities, mortgages funded through Zillow Home Loans and employee compensation and benefits. Additionally, uses of cash from operating activities include costs associated with operating our mobile applications and websites and other general corporate expenditures.
For the nine months ended September 30, 2025, net cash provided by operating activities was $296 million. This was primarily driven by net income of $20 million, adjusted by share-based compensation of $295 million, depreciation and amortization of $199 million, amortization of contract cost assets of $16 million, accretion of bond discount of $7 million, amortization of right of use assets of $6 million, and $6 million in other adjustments to reconcile net income to net cash provided by operating activities. Changes in operating assets and liabilities decreased net cash provided by operating activities by $230 million. The changes in operating assets and liabilities are primarily related to a $132 million increase in mortgage loans held for sale due to an increase in purchase loan origination volume, a $67 million increase in prepaid expenses and other assets primarily due to an increase in accrued revenue, a $53 million increase in accounts receivable primarily due to an increase in revenue from products and services billed in arrears, an $18 million increase in contract costs assets primarily due to an increase in capitalized sales commissions, and a $9 million decrease in lease liabilities due to contractual lease payments. These changes were partially offset by a $32 million increase in accrued expenses and other current liabilities and an $8 million
increase in accounts payable, both primarily driven by the timing of payments, and a $7 million increase in deferred revenue attributable to the timing of revenue recognition.
For the nine months ended September 30, 2024, net cash provided by operating activities was $306 million. This was driven by a net loss of $60 million, adjusted by share-based compensation of $329 million, depreciation and amortization of $178 million, accretion of bond discount of $23 million, amortization of contract cost assets of $14 million, amortization of right of use assets of $8 million, impairment costs of $6 million, amortization of debt issuance costs of $4 million, and $14 million in other adjustments to reconcile net loss to cash provided by operating activities. Changes in operating assets and liabilities decreased cash provided by operating activities by $164 million. The changes in operating assets and liabilities are primarily related to a $73 million increase in prepaid expenses and other assets primarily due to an increase in accrued revenue, a $64 million increase in mortgage loans held for sale due to an increase in purchase loan origination volume, a $31 million decrease in lease liabilities due to contractual lease payments, a $21 million increase in accounts receivable primarily due to an increase in revenue from products and services billed in arrears, and a $15 million increase in contract cost assets primarily due to capitalized sales commissions. These changes were partially offset by a $25 million increase in accounts payable driven by the timing of payments, an $8 million increase in accrued expenses and other current liabilities primarily driven by the timing of billings, and a $5 million increase in deferred revenue attributable to the timing of revenue recognition.
Cash Flows Provided By Investing Activities
Our primary investing activities include the purchase and sale or maturity of investments and the purchase of property and equipment and intangible assets.
For the nine months ended September 30, 2025, net cash provided by investing activities was $44 million. This was primarily related to $272 million of net proceeds from maturities and sales of investments, partially offset by $228 million of purchases of property and equipment and intangible assets, including a $100 million payment in connection with the rentals partnership we entered into with Redfin in February 2025.
For the nine months ended September 30, 2024, net cash provided by investing activities was $121 million. This was the result of $251 million of net proceeds from maturities and sales of investments and $130 million of purchases of property and equipment and intangible assets.
Cash Flows Used In Financing Activities
Our primary financing activities include repurchases of Class A common stock and Class C capital stock, the exercise of employee option awards, repayments of borrowings on our master repurchase agreements related to Zillow Home Loans, settlements of convertible senior notes and capped call transactions, and the payment of contingent consideration up to its acquisition-date fair value.
For the nine months ended September 30, 2025, net cash used in financing activities was $546 million, which primarily related to $438 million of cash paid for share repurchases, $419 million of cash paid for the settlement of the 2025 Notes, and $30 million related to the settlement of the acquisition date fair value of the first Follow Up Boss contingent consideration earn out payment. The cash outflows were partially offset by $176 million of proceeds from the exercise of stock options, $127 million of net borrowings on our master repurchase agreements related to Zillow Home Loans, and $38 million of proceeds from the settlement of capped call transactions.
For the nine months ended September 30, 2024, net cash used in financing activities was $847 million, which primarily related to $697 million of cash paid for the settlement of the 2024 Notes and partial repurchase of the 2025 Notes, and $301 million of cash paid for share repurchases. The cash outflows were partially offset by $96 million of proceeds from the exercise of stock options and $55 million of net borrowings on our master repurchase agreements related to Zillow Home Loans.
Adjusted Free Cash Flow
To provide investors with additional information regarding our liquidity, we have disclosed Adjusted free cash flow, a non-GAAP financial measure, in this Quarterly Report on Form 10-Q. We have provided a reconciliation below of Adjusted free cash flow to net cash provided by operating activities, the most directly comparable GAAP financial measure. We define Adjusted free cash flow as net cash provided by operating activities adjusted for purchases of property and equipment, purchases of intangible assets, net borrowings on repurchase agreements, and the initial payment in connection with the Redfin rentals partnership. Borrowings on repurchase agreements are used to fund Zillow Home Loans mortgage loan originations, and we consider them part of our ongoing liquidity management. The initial payment in connection with the Redfin rentals
partnership was considered a one-time and nonrecurring cash flow, and we exclude it from our calculation as we believe it impacts the ability to evaluate the liquidity of our business operations on a period-to-period basis.
We have included Adjusted free cash flow in this Quarterly Report on Form 10-Q as it is a key metric used by our management to evaluate the effectiveness of our business strategies and execution and our ability to consistently generate cash from our core operations on a period-to-period basis.
Our use of Adjusted free cash flow has limitations as an analytical tool, and you should not consider this measure in isolation or as a substitute for analysis of our results as reported under GAAP. Adjusted free cash flow does not represent the residual cash flow available for discretionary expenditures. Other companies, including companies in our own industry, may calculate Adjusted free cash flow differently from the way we do, limiting its usefulness as a comparative measure.
The following table provides a reconciliation of Adjusted free cash flow to net cash provided by operating activities for the periods presented (in millions, unaudited):
|
Nine Months Ended September 30, |
|||||||||||
| 2025 | 2024 | ||||||||||
|
Net cash provided by operating activities
|
$ | 296 | $ | 306 | |||||||
| Purchases of property and equipment | (105) | (109) | |||||||||
| Purchases of intangible assets | (123) | (21) | |||||||||
| Net borrowings on repurchase agreements | 127 | 55 | |||||||||
|
Initial payment in connection with Redfin rentals partnership
|
100 | - | |||||||||
|
Adjusted free cash flow
|
$ | 295 | $ | 231 | |||||||
Capital Resources
Settlement of 2025 Notes
The 2025 Notes matured on May 15, 2025, and we settled the remaining $419 million in aggregate principal amount of the 2025 Notes with cash payments totaling $425 million, which included $419 million in principal repayments, $6 million for accrued interest, and a nominal cash payment in lieu of fractional shares, and the issuance of a nominal number of shares of Class C capital stock.
Settlement of Capped Call Transactions
In August 2025, we settled the capped call transactions we entered into in connection with the issuance of the 2026 Notes, resulting in the receipt of approximately 3.1 million shares of Class C capital stock and $38 million in cash. Subsequent to this settlement, no capped call transactions remain outstanding.
Refer to Note 6 of our Notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q for additional information regarding our 2025 Notes and capped call transactions.
Share Repurchases
On May 2, 2025, the Board authorized the repurchase of up to an additional $1 billion of our Class A common stock, Class C capital stock, or a combination thereof, which increased our total cumulative Repurchase Authorizations to $3.5 billion as of September 30, 2025. During the nine months ended September 30, 2025, we repurchased 4.7 million shares of Class A common stock and 1.4 million shares of Class C capital stock at an average price of $71.39 and $73.19 per share, respectively, for an aggregate purchase price of $335 million and $103 million, respectively. As of September 30, 2025, $943 million remained available for future repurchases of our stock pursuant to the Repurchase Authorizations, which repurchases decrease our liquidity and capital resources when effected. For additional information on these authorizations, see Notes 10 and 12 of our Notes to Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Credit Facilities
Zillow Home Loans operations impact our liquidity and capital resources as a cash intensive business that funds mortgage loans originated for resale in the secondary market. We primarily use debt financing to fund mortgage loan originations. The following table summarizes our master repurchase agreements as of the periods presented (in millions, except interest rates):
| Lender | Maturity Date | Maximum Borrowing Capacity |
Outstanding Borrowings at
September 30, 2025
|
Outstanding Borrowings at
December 31, 2024
|
Weighted Average Interest Rate at
September 30, 2025
|
|||||||||||||||||||||||||||
|
JPMorgan Chase Bank, N.A.(1)
|
April 28, 2026 | $ | 200 | $ | 120 | $ | 72 | 5.87 | % | |||||||||||||||||||||||
|
UBS AG(2)
|
September 4, 2026 | 150 | 78 | 73 | 5.88 | % | ||||||||||||||||||||||||||
|
Bank of Montreal(3)
|
February 26, 2026 | 150 | 74 | - | 5.85 | % | ||||||||||||||||||||||||||
|
Bank of Nova Scotia(4)
|
June 8, 2026 | 100 | - | - | - | % | ||||||||||||||||||||||||||
| Total | $ | 600 | $ | 272 | $ | 145 | ||||||||||||||||||||||||||
(1) Agreement was amended on April 29, 2025 to increase the total maximum borrowing capacity from $150 million to $200 million and to extend the maturity date to April 28, 2026.
(2) Agreement was amended and renewed on September 5, 2025 to extend the maturity date to September 4, 2026.
(3) Agreement was entered into on February 27, 2025.
(4) Agreement was entered into on June 9, 2025.
Refer to Note 6 of our Notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q for additional information on Zillow Home Loans' master repurchase agreements.
Contractual Obligations and Other Commitments
Credit Facilities- Includes principal amounts due for amounts borrowed under the master repurchase agreements to finance mortgages originated through Zillow Home Loans. Principal amounts under the master repurchase agreements are due when the related mortgage loan is sold to an investor or directly to an agency. As of September 30, 2025, we have outstanding principal amounts of $272 million. Amounts exclude an immaterial amount of estimated interest payments.
Operating Lease Obligations- Our lease portfolio comprises operating leases for our office space. During the three months ended September 30, 2025, there were no material changes to our operating lease obligations disclosed in Note 9 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Contingent Consideration- In connection with the acquisition of Follow Up Boss, we are obligated to pay contingent consideration upon the achievement of certain performance metrics over a three-year period measured at each anniversary of the closing date of the acquisition. For additional information regarding this contingent consideration, see Note 3 of our Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
Purchase Obligations- We have non-cancelable purchase obligations for content related to our mobile applications and websites, certain cloud computing services and payments under certain partnership agreements. For additional information regarding our purchase obligations, see Note 11 to our Notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q.
Critical Accounting Estimates
Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures. We evaluate our estimates, judgments and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates, and the health of the housing market and the broader economy have introduced significant additional uncertainty with respect to estimates, judgments and assumptions, which may materially impact our estimates. For information on our critical accounting policies and estimates, see Part II, Item 7 (Management's Discussion and Analysis of Financial Condition and Results of Operations) of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. There have been no material changes to our critical accounting policies and estimates as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Zillow Group Inc. published this content on October 30, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 30, 2025 at 20:36 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]