Zillow Misses Q3 Revenue at $724M, Below Its $745M Guide, as Adjusted EPS Beats at $0.55
Rentals grew 26% and Mortgages 32% and adjusted EPS beat, but revenue fell below the low end of guidance and a $165 million settlement drove a GAAP net loss of $158 million.
Zillow Group (Z) reported third-quarter 2026 revenue of $724 million, up 7% from a year earlier but below the $754.8 million estimate and the low end of its $745 million to $760 million guidance, while adjusted EPS rose 25% to $0.55, above the $0.53 estimate. GAAP EPS was -$0.70 after a securities class action settlement.
Shares fell about 16% in after-hours trading, to $28.41 from a $33.90 close that was up 9.4% on the day.
Q3 scorecard
| Parameters | Expected | Actual | Beat/Miss |
|---|---|---|---|
| Adjusted EPS | $0.53 | $0.55 | Beat by 3.8% |
| Revenue | $754.8M | $724M | Miss by 4.1% |
| Revenue (guidance midpoint) | $752.5M | $724M | Miss by 3.8% |
| Adjusted EBITDA (guidance midpoint) | $190M | $182M | Miss by 4.2% |
| Change | YoY | QoQ |
|---|---|---|
| Adjusted EPS | ▲ 25.0% | ▲ 5.8% |
| Revenue | ▲ 7.1% | ▼ 6.2% |
Adjusted EPS beat the estimate by 2 cents, while revenue missed it by about $31 million and the $752.5 million guidance midpoint by about $29 million. Third-quarter 2025 revenue was $676 million and adjusted EPS was $0.44. Second-quarter 2026 revenue was $772 million and adjusted EPS was $0.52.
Revenue by business
- Rentals. Rentals revenue rose 26% to $220 million, driven by 35% growth in multifamily.
- Mortgages. Mortgages revenue rose 32% to $70 million, and purchase loan originations rose 55% to $2.0 billion.
- Residential. Residential revenue fell 4% to $419 million amid elevated mortgage rates and weak housing transactions.
- For Sale. Total For Sale revenue was flat at $489 million.
- Industry. Zillow said its revenue grew 7%, against roughly 1% growth in the broader residential real estate industry.
Results versus guidance
In its second-quarter shareholder letter, Zillow guided third-quarter For Sale revenue up 5% to 7%, Residential flat, Mortgages up more than 50%, Rentals up in the high-20% range and adjusted EBITDA of $180 million to $200 million. Actual results were For Sale flat, Residential down 4%, Mortgages up 32%, Rentals up 26% and adjusted EBITDA of $182 million.
Profit, cash flow and audience
- GAAP result. Net loss was $158 million, against a $10 million profit a year earlier, and GAAP EPS was -$0.70, against $0.04. The loss included a $165 million securities class action settlement, net of expected insurance recoveries.
- Adjusted profit. Adjusted net income was $124 million, up 10%. Adjusted EBITDA was $182 million, up 10%, and the margin was 25%, against 24% a year earlier. Gross margin fell to 71% from 73%.
- Cash flow. Operating cash flow was $162 million, against $105 million a year earlier. Adjusted free cash flow was $46 million, against $107 million. Cash and investments totaled $707 million.
- Audience. Average monthly unique users fell 3% to 215 million, and visits fell 5% to 2.3 billion. Zillow reached 77% of average monthly unique visitors in the real estate category, according to Comscore.
- Nine months. Revenue rose 14% to $2.20 billion, and adjusted EBITDA was $556 million.
Outlook and management view
- Full-year outlook. Zillow's August outlook called for 2026 revenue of $2.92 billion to $2.96 billion and adjusted EBITDA of $730 million to $760 million. Against nine-month revenue of $2.20 billion, that range implies fourth-quarter revenue of about $720 million to $760 million.
- CEO comment. CEO Jeremy Wacksman said, “We grew revenue and outperformed the real estate category during one of the toughest housing markets in a generation.”
What to watch
- Fourth-quarter revenue. Whether Zillow updates its full-year outlook after revenue came in below the low end of third-quarter guidance.
- Mortgages. Whether growth moves back toward the 50% guided for the third quarter after the 32% result.
- Residential and traffic. How Residential revenue and the declines in users and visits develop in a weak housing market.
- Cash flow. Whether adjusted free cash flow recovers after falling to $46 million from $107 million.
- Related coverage. See our reports on Wayfair and CAVA.
Sources: Results are from Zillow's third-quarter 2026 report. Estimates are consensus figures. Guidance, second-quarter 2026 and third-quarter 2025 comparison figures are from the company's earlier releases. This article is informational only and is not investment advice.
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