Shares of Zillow Group Inc (NASDAQ:ZG) fell almost 5% in after-hours trading after the online real estate platform posted fourth-quarter results that came in slightly below profit expectations.
The company reported earnings per share of $0.39, just under the $0.40 consensus forecast. Revenue reached $654 million, topping analyst estimates of $650.23 million and marking an 18% increase from a year earlier.
“We delivered strong results in the fourth quarter and throughout 2025, achieving all our reported full-year financial targets, including positive net income, while continuing to gain share in both For Sale and Rentals,” said Zillow Chief Executive Officer Jeremy Wacksman. “As we celebrate 20 years of Zillow, our results demonstrate our disciplined and consistent execution of our strategy. With our deeply engaged audience, industry-leading software that powers industry workflows, and two decades of AI innovation, we are uniquely positioned to drive durable growth by making the entire moving journey easier for consumers and the real estate professionals who serve them.”
Although EPS fell short, quarterly revenue landed near the upper end of Zillow’s guidance range. For the full year 2025, revenue totaled $2.6 billion, up 16% year over year — far outpacing the broader U.S. residential real estate market, which expanded by just 3% according to National Association of Realtors data.
Growth was broad-based across Zillow’s segments. Rentals revenue surged 45% year over year to $168 million, including a 63% jump in multifamily revenue. The For Sale segment grew 11% to $475 million, while Mortgages revenue climbed 39% to $57 million, supported by a 67% increase in purchase loan originations.
Looking ahead, Zillow expects revenue in fiscal 2026 to rise in the mid-teens percentage range, broadly in line with Wall Street projections of around 15% growth. Rental revenue is forecast to increase roughly 30%, above the 27% consensus estimate.
The company projects EBITDA margins will expand year over year, but warned of short-term pressure. Management cited approximately 200 basis points of margin headwinds in the first quarter and around 100 basis points for the full year, driven by higher legal costs and elevated variable expenses in the first half related to investments in Zillow Home Loans (ZHL).
Morgan Stanley analysts said Zillow “continues to execute at the company level.”
“That said, while management reiterated their bullish medium-term guide and showed strong progress on Rentals/Mortgage, we believe significant revisions will still rely on a Residential recovery,” they added.
Meanwhile, Bank of America lowered its price target on the stock to $65 from $80, “based on a lower multiple of 20x ’26E EV/EBITDA (from 23x) on continued overhang in housing market.”
On a GAAP basis, Zillow posted fourth-quarter net income of $3 million, translating to a net margin of 0% — an improvement of 990 basis points from the prior year.
User engagement also improved, with average monthly unique users rising 8% year over year to 221 million, while total visits increased 2% to 2.1 billion during the quarter.