Zillow Group (Z) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $708 million, up 18% year-over-year, near the high end of guidance, with net income of $46 million and adjusted EBITDA of $182 million, reflecting strong execution and margin expansion despite a flat housing market.

• The business outperformed the broader market, driven by integrated platform strategy, AI-powered innovation, and strong engagement across for sale and rentals.

• AI initiatives accelerated product development and operational efficiency, with new consumer-facing AI mode live for 5% of users and early signs of deeper engagement and higher conversion.

• Diluted net income per share increased to $0.19 from $0.03 a year ago.

• Cash and investments at quarter-end were $788 million, with $626 million spent on share repurchases.

Financial highlights

• Total revenue grew 18% year-over-year to $708 million; adjusted EBITDA margin was 26%, flat year-over-year, and net income margin expanded to 6%.

• For sale revenue rose 12% to $514 million; residential revenue increased 8% to $450 million, driven by Premier Agent, agent tools, and new construction.

• Mortgages revenue surged 56% to $64 million, with purchase loan origination volume up 96% to $1.5 billion.

• Rentals revenue jumped 42% to $183 million, led by 57% growth in multifamily revenue.

• Gross profit was $519 million, up 13% year-over-year, with gross margin at 73%.

Outlook and guidance

• Q2 2026 revenue expected at $750–$765 million, implying 16% year-over-year growth at midpoint; for sale revenue growth similar to Q1, residential mid-single digits, mortgages strong, rentals up ~30%.

• Q2 EBITDA expected at $150–$165 million, with $20 million in incremental legal expenses and $16 million in additional advertising spend; excluding legal, EBITDA would be $170–$185 million.

• Full-year 2026 guidance: mid-teens total revenue growth, ~30% rentals revenue growth, and continued EBITDA margin expansion, with margin acceleration expected in the back half.

• Share-based compensation expense for the year expected to decline over 15% year-over-year.

• Management reaffirmed its multi-year strategy and highlighted ongoing AI integration to enhance the real estate experience.