ZILLOW GROUP, INC.
For the period ended Dec 31, 2025. Filed Feb 11, 2026.
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FY2025 · Filed Feb 11, 2026
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Leases
Note 7. Leases
The components of our operating lease expense were as follows for the periods presented (in millions):
| Year Ended December 31, | |||
|---|---|---|---|
| 2025 | 2024 | 2023 | |
| Operating lease cost | $17 | $22 | $35 |
| Variable lease cost | 8 | 13 | 18 |
| Total lease cost | $25 | $35 | $53 |
We have subleases related to certain of our operating leases. For the years ended December 31, 2025, 2024 and 2023, we recognized $6 million, $6 million and $10 million, respectively, of sublease income. For the years ended December 31, 2025, 2024, and 2023, we recognized impairment costs of $2 million, $6 million and $16 million, respectively, within impairment and restructuring costs in our consolidated statements of operations associated with changes in the use of certain office spaces, primarily related to subleases where anticipated sublease income was less than the carrying value of the related asset group.
Total lease costs associated with short-term leases were not material for the years ended December 31, 2025, 2024 and 2023. Other information related to operating leases was as follows for the periods presented (in millions, except for years and percentages):
| Year Ended December 31, | |||||
|---|---|---|---|---|---|
| 2025 | 2024 | 2023(1) | |||
| Cash paid for amounts included in the measurement of operating lease liabilities | $22 | $46 | $42 | ||
| Right of use assets obtained in exchange for new operating lease obligations | $8 | $2 | $(8) | ||
| Weighted average remaining lease term for operating leases | 6 years | 6 years | 6 years | ||
| Weighted average discount rate for operating leases | 9.4% | 9.5% | 9.4% | ||
| (1) During the year ended December 31, 2023, we amended our existing office space lease for our corporate headquarters in Seattle, Washington, to provide the landlord the option to terminate a portion of our lease prior to the original lease termination date. In December 2023, the landlord exercised the early termination option for the relevant floors effective June 30, 2024. This modification to the lease term resulted in an immediate reduction in the right of use asset and lease liability of $8 million. We ceased use of the terminated space as of December 31, 2023, and as a result, we accelerated recognition of $14 million of amortization for the related right of use asset during the year ended December 31, 2023. | |||||
The following table presents the scheduled maturities of our operating lease liabilities by year as of December 31, 2025 (in millions):
| 2026 | $21 |
| 2027 | 21 |
| 2028 | 21 |
| 2029 | 21 |
| 2030 | 15 |
| Thereafter | 21 |
| Total lease payments | 120 |
| Less: Imputed interest | (27) |
| Present value of lease liabilities | $93 |
Operating lease liabilities included in the table above do not include sublease income. As of December 31, 2025, we expect to receive sublease income totaling approximately $29 million from 2026 through 2030.
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