ZILLOW GROUP, INC.
For the period ended Jun 30, 2026. Filed Aug 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 5, 2026
ZG$30.36-2.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001617640-26-000039
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001617640-26-000052
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 144 previous paragraphs and 158 current paragraphs.
101 unchanged; 37 reworded; 15 added; 6 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 11 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
•Residential revenue increased by $31 million, or 7%, to $465 million, due to an increase in residential revenue per visit.
Current report
August 2026 Cost Management Actions
Current report
On August 4, 2026, Zillow Group announced a plan to reduce its headcount by approximately 7% of its employees. This headcount reduction is designed to allow the Company to move faster and operate more efficiently, including with a more sustainable cost structure. As a result, the Company currently estimates that it will incur pre-tax restructuring costs totaling approximately $59 million to $64 million related to employee termination costs, of which an estimated $36 million to $38 million are expected to be future cash expenditures associated with severance payments, and the remaining amount is expected to be accelerated share-based compensation expense. For the three months ended June 30, 2026, Zillow Group recorded $36 million in restructuring costs related to employee termination costs and expects that the remainder of the restructuring costs will be recognized during the three months ending September 30, 2026. These employee termination costs have been recorded as restructuring costs within our condensed consolidated statements of operations. We plan to fund the cash expenditures through existing cash and investment balances. We expect total headcount-related expenses to decrease in absolute dollars during the three months ending September 30, 2026 as a result of these cost management actions.
Current report
Total revenue increased $227 million, or 18%, to $1.5 billion:
Current report
•Mortgages revenue increased $59 million, or 66%, primarily driven by a $64 million increase in mortgage originations revenue. The increase in mortgage originations revenue was primarily due to a 95% increase in total loan origination volume to $3.8 billion for the six months ended June 30, 2026 from $1.9 billion for the six months ended June 30, 2025. This increase was largely driven by continued growth in Zillow Home Loans purchase loan origination volume as we continued expanding the integrated transaction experience.
Current report
•Adjusted EBITDA does not reflect restructuring costs;
Current report
•Adjusted EBITDA does not reflect certain litigation costs directly associated with our pending antitrust litigation brought by the FTC and state attorneys general (“FTC Matter”), consisting of legal fees and related expenses that we have determined arise outside the ordinary course of our business and are nonrecurring, infrequent, or unusual. In making this determination, we considered the following factors: (1) the FTC Matter is the first legal proceeding of this nature brought against us, and we do not currently expect similar proceedings to recur; (2) the nature of the remedies sought by the FTC, including, among other things, a permanent injunction and a divestiture of assets or reconstruction of businesses, differs from the relief typically sought in our ordinary course litigation; and (3) the counterparties are a federal regulatory agency and state attorneys generals, which are distinct from the type of counterparties involved in our ordinary course litigation; and
Current report
(1) Beginning with the three months ended June 30, 2026, we calculate and report Adjusted EBITDA excluding litigation costs directly associated with the FTC Matter, which we have determined to be nonrecurring, infrequent, or unusual and outside the ordinary course of our business. We have revised Adjusted EBITDA for the three months ended March 31, 2026 to conform to the current period presentation. As a result of this revision, Adjusted EBITDA for the three months ended March 31, 2026 increased by $16 million, from $182 million as previously reported to $198 million.
Current report
Sales and marketing expenses increased $23 million, or 10%, primarily driven by increases of $11 million in headcount-related expenses to support loan origination costs driven by growth in Mortgages purchase loan origination volume and $9 million in marketing and advertising costs as we continue to invest in the growth of our business. We expect sales and marketing expenses to decrease in absolute dollars during the three months ending September 30, 2026 as marketing and advertising spend normalizes following strategic increases in the first half of the year.
Current report
Sales and marketing expenses increased $35 million, or 8%, primarily driven by increases of $20 million in headcount-related expenses to support loan origination costs driven by growth in Mortgages purchase loan origination volume and $10 million in marketing and advertising costs as we continue to invest in the growth of our business.
Current report
Technology and development expenses increased $3 million, or 2%, due to a $9 million increase in software and hardware costs which was partially offset by an $8 million decrease in headcount-related expenses driven primarily by a decrease in share-based compensation expense.
Current report
General and administrative expenses increased $12 million, or 5%, primarily due to an increase of $29 million in legal expenses which was partially offset by a decrease of $21 million in headcount-related expenses, including share-based compensation expense.
Current report
Restructuring Costs
Current report
Restructuring costs of $36 million for the three and six months ended June 30, 2026 related to employee termination costs incurred as a result of the reduction in headcount announced on August 4, 2026. For additional information regarding our restructuring costs, see Note 14 to our Notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q.
Current report
Restructuring Payments - We expect to make future cash payments of approximately $36 million to $38 million related to the employee termination costs incurred as a result of the reduction in headcount announced on August 4, 2026. We expect these additional cash payments to be made primarily during the three months ending September 30, 2026. For additional information regarding our restructuring costs, see Note 14 to our Notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q.
Removed paragraphs (6)
Previous report
For Sale Revenue
Previous report
•Residential revenue increased by $33 million, or 8%, to $450 million, due to an increase in residential revenue per visit.
Previous report
Rentals Revenue
Previous report
For Sale Revenue
Previous report
Rentals Revenue
Previous report
Sales and marketing expenses increased $12 million, or 6%, primarily driven by increases of $9 million in headcount-related expenses to support growth in our Mortgages purchase loan origination volume. We expect sales and marketing expenses to increase in absolute dollars during the three months ending June 30, 2026, primarily due to the impact of seasonality on the real estate market and strategic increases in our marketing and advertising costs to support the continued expected growth of our business.
Reworded paragraphs (37)
Previous wording
As of March 31, 2026, we had 7,058 employees, compared to 7,068 employees as of December 31, 2025.
Current wording
As of June 30, 2026, we had 7,232 employees, compared to 7,068 employees as of December 31, 2025.
Previous wording
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 published by NAR, TTV increased 2% during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. 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 months ended March 31, 2026 as compared to the three months ended March 31, 2025, that exceeded industry performance for the same period. The extent to which market factors impact our results and financial position will depend on future developments, which are uncertain and difficult to predict.
Current wording
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 published by NAR, TTV increased 6% during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 and increased 4% during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. 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 six month periods ended June 30, 2026 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.
Previous wording
Residential. Residential revenue includes revenue generated from our agent and software offerings and revenue derived from our New Construction marketplace and StreetEasy for sale product offerings. Agent offerings include Premier Agent market-based pricing, Zillow Preferred and Zillow Showcase. Software offerings primarily include Follow Up Boss, dotloop, and ShowingTime.
Current wording
Residential. Residential revenue includes revenue generated from our agent and software offerings and revenue derived from our New Construction marketplace and StreetEasy for sale product offerings. Agent offerings include Zillow Preferred, Premier Agent market-based pricing, and Zillow Showcase. Software offerings primarily include Follow Up Boss, dotloop, and ShowingTime.
Previous wording
For the three months ended March 31, 2026 and 2025, we generated total revenue of $708 million and $598 million, respectively, an increase of 18%. The increase in total revenue was primarily attributable to the following:
Current wording
For the three months ended June 30, 2026 and 2025, we generated total revenue of $772 million and $655 million, respectively, an increase of 18%. The increase in total revenue was primarily attributable to the following:
Previous wording
•Mortgages revenue increased by $23 million, or 56%, to $64 million, driven by an increase in mortgage originations revenue as a result of increased total loan origination volume.
Current wording
•Mortgages revenue increased by $36 million, or 75%, to $84 million, driven by an increase in mortgage originations revenue as a result of increased total loan origination volume.
Previous wording
Rentals revenue increased by $54 million, or 42%, to $183 million, due to increases in quarterly revenue per average monthly rentals unique visitor and average monthly rentals unique visitors.
Current wording
Rentals revenue increased by $50 million, or 31%, to $209 million, due to increases in quarterly revenue per average monthly rentals unique visitor and average monthly rentals unique visitors.
Previous wording
During the three months ended March 31, 2026 and 2025, we generated gross profit of $519 million and $459 million, respectively, an increase of 13%.
Current wording
During the three months ended June 30, 2026 and 2025, we generated gross profit of $562 million and $489 million, respectively, an increase of 15%.
Previous wording
We have recast TTV and For Sale revenue per TTV for the twelve months ended March 31, 2025 to conform with the revised TTV methodology used for the twelve months ended March 31, 2026, described above. The change in methodology to calculate TTV resulted in an approximately 27% increase in TTV and 22% decrease in For Sale revenue per TTV reported for the twelve months ended March 31, 2025, primarily due to differences in existing residential homes sold and average sales price of existing residential homes sold for the period as collected and estimated by Zillow Group compared to as reported by NAR.
Current wording
We have recast TTV and For Sale revenue per TTV for the twelve months ended June 30, 2025 to conform with the revised TTV methodology used for the twelve months ended June 30, 2026, described above. The change in methodology to calculate TTV resulted in an approximately 26% increase in TTV and 20% decrease in For Sale revenue per TTV reported for the twelve months ended June 30, 2025, primarily due to differences in existing residential homes sold and average sales price of existing residential homes sold for the period as collected and estimated by Zillow Group compared to as reported by NAR.
Previous wording
During the three months ended March 31, 2026, total loan origination volume increased 97%, compared to the three months ended March 31, 2025. This increase was primarily driven by the continued growth in Zillow Home Loans purchase loan originations in line with our strategic priorities.
Current wording
During the three and six months ended June 30, 2026, total loan origination volume increased 94% and 95%, respectively, compared to the three and six months ended June 30, 2025. This increase was primarily driven by the continued growth in Zillow Home Loans purchase loan originations in line with our strategic priorities.
Previous wording
Total revenue increased $110 million, or 18%, to $708 million:
Current wording
Total revenue increased $117 million, or 18%, to $772 million:
Previous wording
•Mortgages revenue increased $23 million, or 56%, primarily driven by a $26 million increase in mortgage originations revenue. The increase in mortgage originations revenue was primarily due to a 97% increase in total loan origination volume to $1.6 billion for the three months ended March 31, 2026 from $796 million for the three months ended March 31, 2025, largely driven by continued growth in Zillow Home Loans purchase loan origination volume. We expect Mortgages revenue to increase in absolute dollars during the three months ending June 30, 2026, primarily driven by continued growth in Zillow Home Loans purchase loan origination volume.
Current wording
•Mortgages revenue increased $36 million, or 75%, primarily driven by a $38 million increase in mortgage originations revenue. The increase in mortgage originations revenue was primarily due to a 94% increase in total loan origination volume to $2.2 billion for the three months ended June 30, 2026 from $1.1 billion for the three months ended June 30, 2025. This increase was largely driven by continued growth in Zillow Home Loans purchase loan origination volume as we continued expanding the integrated transaction experience.
Previous wording
•Rentals revenue increased $54 million, or 42%. The increase in Rentals revenue was driven by growth in average monthly rentals unique visitors, which increased 20% to 36 million during the three months ended March 31, 2026 from 30 million during the three months ended March 31, 2025. 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 beginning in February 2025, Redfin and its sites, including Rent.com and ApartmentGuide.com. The increase in Rentals revenue was also due to an 18% increase in quarterly revenue per average monthly rentals unique visitor to $5.08 for the three months ended March 31, 2026 from $4.30 for the three months ended March 31, 2025, primarily driven by a 57% 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. We expect Rentals revenue to increase in absolute dollars during the three months ending June 30, 2026, primarily driven by continued growth in multifamily revenue from the addition of new rental properties.
Current wording
•Rentals revenue increased $50 million, or 31%. The increase in Rentals revenue was primarily due to a 28% increase in quarterly revenue per average monthly rentals unique visitor to $5.65 for the three months ended June 30, 2026 from $4.42 for the three months ended June 30, 2025, primarily driven by a 42% 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. The increase in Rentals revenue was also driven by growth in average monthly rentals unique visitors, which increased 3% to 37 million during the three months ended June 30, 2026 from 36 million during the three months ended June 30, 2025. We have estimated average monthly rentals unique visitors using Comscore data, which measures average monthly unique visitors on rental listings on Zillow’s, Trulia’s and HotPads’ mobile apps and websites, and on Realtor.com and beginning in February 2025, Redfin and its sites, including Rent.com and ApartmentGuide.com. We expect Rentals revenue to increase in absolute dollars during the three months ending September 30, 2026, primarily driven by continued growth in multifamily revenue from the addition of new rental properties.
Previous wording
•Residential revenue increased $33 million, or 8%. The increase in Residential revenue was driven by a 12% increase in Residential revenue per visit to $0.198 for the three months ended March 31, 2026 from $0.177 for the three months ended March 31, 2025, 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 and Follow Up Boss revenue. We calculate Residential revenue per visit by dividing the revenue generated by our Residential offerings by the number of visits in the period.
Current wording
•Residential revenue increased $64 million, or 8%. The increase in Residential revenue was primarily driven by an 11% increase in Residential revenue per visit to $0.190 for the six months ended June 30, 2026 from $0.172 for the six months ended June 30, 2025, 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 Zillow Showcase revenue driven by increasing adoption of our enhanced listing features by sellers and listing agents, continued growth in new construction revenue and Follow Up Boss revenue.
Previous wording
The following table summarizes net income and Adjusted EBITDA (in millions, except percentages):
Current wording
The following table summarizes net income (loss) and Adjusted EBITDA (in millions, except percentages):
Previous wording
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, the most directly comparable GAAP financial measure.
Current wording
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.
Previous wording
•Adjusted EBITDA does not reflect income taxes; and
Current wording
•Adjusted EBITDA does not reflect income taxes;
Previous wording
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash-flow metrics, net income and our other GAAP results.
Current wording
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.
Previous wording
The following table presents a reconciliation of Adjusted EBITDA to net income for each of the periods presented (in millions, unaudited):
Current wording
The following table presents a reconciliation of Adjusted EBITDA to net income (loss) for each of the periods presented (in millions, unaudited):
Previous wording
Cost of revenue increased $50 million, or 36%, primarily driven by increases of $38 million in lead acquisition costs, primarily associated with our Redfin rentals syndication agreement, $5 million in mortgage loan processing costs due to increased purchase loan origination volume, $3 million in ad serving costs to support the growth of our rentals marketplace, and $3 million in software and hardware costs. We expect our cost of revenue to increase in absolute dollars during the three months ending June 30, 2026, primarily due to higher direct product and service costs, including increased lead acquisition costs associated with our Redfin rentals syndication agreement, as we continue to support growth in revenue.
Current wording
Cost of revenue increased $44 million, or 27%, primarily driven by increases of $29 million in lead acquisition costs, primarily associated with our Redfin rentals syndication agreement, $6 million in mortgage loan processing costs due to increased purchase loan origination volume, $4 million in software and hardware costs, $3 million in ad serving costs to support the growth of our rentals marketplace, and $3 million in headcount-related expenses to support loan fulfillment and processing costs driven by growth in Mortgages purchase loan origination volume.
Previous wording
Gross profit increased by $60 million, or 13%, primarily due to an increase in revenue, discussed above. Total gross margin decreased from 77% to 73%, primarily due to increased lead acquisition costs associated with our Redfin rentals syndication agreement.
Current wording
Gross profit increased by $73 million, or 15%, primarily due to an increase in revenue, discussed above. Total gross margin decreased from 75% to 73%, primarily due to increased lead acquisition costs associated with our Redfin rentals syndication agreement.
Previous wording
Technology and development expenses increased $1 million, or 1%, primarily due to a $5 million increase in software and hardware costs which was partially offset by a $4 million decrease in headcount-related expenses driven primarily by a decrease in share-based compensation expense.
Current wording
Technology and development expenses increased $4 million, or 1%, due to a $14 million increase in software and hardware costs which was partially offset by a $12 million decrease in headcount-related expenses driven primarily by a decrease in share-based compensation expense.
Previous wording
General and administrative expenses increased $2 million, or 2%, primarily due to an increase of $11 million in legal expenses which was partially offset by a $9 million decrease in headcount-related expenses, driven primarily by a decrease in share-based compensation expense.
Current wording
General and administrative expenses increased $10 million, or 8%, primarily due to an increase of $18 million in legal expenses which was partially offset by a $12 million decrease in headcount-related expenses, driven primarily by a decrease in share-based compensation expense.
Previous wording
Other income, net decreased $6 million, or 27%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025 primarily due to lower interest income driven by a decrease in our investment balances as a result of share repurchases and the settlement of the 2025 Notes.
Current wording
Other income, net decreased $5 million and $11 million for the three and six months ended June 30, 2026, respectively, as compared to the three and six months ended June 30, 2025, primarily due to lower interest income driven by a decrease in our investment balances as a result of share repurchases and the settlement of the 2025 Notes.
Previous wording
Income tax expense was not material for the three months ended March 31, 2026 or 2025.
Current wording
Income tax expense was not material for the three and six month periods ended June 30, 2026 or 2025.
Previous wording
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.
Current wording
Our primary sources of liquidity and capital resources are cash flows from operations and debt financing. 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.
Previous wording
As of March 31, 2026 and December 31, 2025, we had cash and cash equivalents, investments and restricted cash of $788 million and $1.3 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 and U.S. government agency securities. 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 March 31, 2026, Zillow Group and its subsidiaries were in compliance with all debt covenants specified in the facilities described below.
Current wording
As of June 30, 2026 and December 31, 2025, we had cash and cash equivalents, investments and restricted cash of $688 million and $1.3 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 investment grade corporate securities, U.S. government treasury securities, commercial paper, and U.S. government agency securities. 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 June 30, 2026, Zillow Group and its subsidiaries were in compliance with all debt covenants specified in the facilities described below.
Previous wording
For the three months ended March 31, 2026, net cash provided by operating activities was $200 million. This was primarily driven by net income of $46 million, adjusted by share-based compensation of $81 million, depreciation and amortization of $65 million, amortization of contract cost assets of $6 million, and $16 million in other adjustments to reconcile net income to net cash provided by operating activities. Changes in operating assets and liabilities increased net cash provided by operating activities by $16 million. The changes in operating assets and liabilities are primarily related to a $32 million increase in accounts payable due to the timing of payments, a $25 million decrease in mortgage loans held for sale due to the timing of loan sales, a $23 million increase in accrued expenses and other current liabilities and an $8 million increase in accrued compensation and benefits, both primarily driven by the timing of payments, and a $5 million increase in deferred revenue related to growth in subscription-based contracts. These changes were partially offset by a $64 million increase in prepaid expenses and other assets primarily due to an increase in accrued revenue, a $6 million increase in contract cost assets primarily due to an increase in capitalized sales commissions, a $4 million increase in accounts receivable primarily due to an increase in revenue from products and services billed in arrears, and a $4 million decrease in lease liabilities due to contractual lease payments.
Current wording
For the six months ended June 30, 2026, net cash provided by operating activities was $211 million. This was primarily driven by net income of $42 million, adjusted by share-based compensation of $169 million, depreciation and amortization of $130 million, amortization of contract cost assets of $13 million, amortization of right of use assets of $4 million, and $13 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 $134 million. The changes in operating assets and liabilities are primarily related to a $108 million increase in mortgage loans held for sale due to the timing of loan sales, a $94 million increase in prepaid expenses and other assets primarily due to an increase in accrued revenue, a $26 million increase in accounts receivable primarily due to an increase in revenue from products and services billed in arrears, a $13 million increase in contract cost assets primarily due to an increase in capitalized sales commissions, a $7 million decrease in lease liabilities due to contractual lease payments, and a $4 million decrease in deferred revenue. These changes were partially offset by a $49 million increase in accrued expenses and other current liabilities, a $36 million increase in accounts payable, and a $32 million increase in accrued compensation and benefits, each primarily driven by the timing of payments.
Previous wording
For the three months ended March 31, 2025, net cash provided by operating activities was $104 million. This was driven by net income of $8 million, adjusted by share-based compensation of $97 million, depreciation and amortization of $65 million, amortization of contract cost assets of $5 million, amortization of right of use assets of $2 million, and $5 million in other adjustments to reconcile net income to cash provided by operating activities. Changes in operating assets and liabilities decreased cash provided by operating activities by $68 million. The changes in operating assets and liabilities are primarily related to a $38 million increase in prepaid expenses and other current assets primarily due to an increase in accrued revenue, a $26 million increase in mortgage loans held for sale due to an increase in purchase loan origination volume, an $11 million increase in accounts receivable primarily due to an increase in revenue from products and services billed in arrears, a $7 million increase in contract cost assets primarily due to an increase in capitalized sales commissions, a $5 million decrease in accrued compensation and benefits driven by the timing of payments, and a $2 million decrease in lease liabilities due to contractual lease payments. These changes were partially offset by a $9 million increase in accrued expenses and other current liabilities primarily driven by the timing of payments, an $8 million increase in deferred revenue attributable to the timing of revenue recognition, and a $5 million increase in accounts payable driven by the timing of payments.
Current wording
For the six months ended June 30, 2025, net cash provided by operating activities was $191 million. This was driven by net income of $10 million, adjusted by share-based compensation of $196 million, depreciation and amortization of $132 million, amortization of contract cost assets of $10 million, amortization of right of use assets of $4 million, and $9 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 $152 million. The changes in operating assets and liabilities are primarily related to a $91 million increase in mortgage loans held for sale due to an increase in purchase loan origination volume, a $47 million increase in accounts receivable primarily due to an increase in revenue from products and services billed in arrears, a $46 million increase in prepaid expenses and other current assets primarily due to an increase in accrued revenue, a $13 million increase in contract cost assets primarily due to an increase in capitalized sales commissions, and a $6 million decrease in lease liabilities due to contractual lease payments. These changes were partially offset by a $26 million increase in accounts payable and an $18 million increase in accrued expenses and other current liabilities, both primarily driven by the timing of payments, and an $8 million increase in deferred revenue attributable to the timing of revenue recognition.
Previous wording
Cash Flows Provided By (Used in) Investing Activities
Current wording
Cash Flows Provided By Investing Activities
Previous wording
For the three months ended March 31, 2026, net cash provided by investing activities was $376 million. This was primarily related to $420 million of net proceeds from maturities and sales of investments, partially offset by $44 million of purchases of property and equipment and intangible assets.
Current wording
For the six months ended June 30, 2026, net cash provided by investing activities was $325 million. This was primarily related to $414 million of net proceeds from maturities and sales of investments, partially offset by $89 million of purchases of property and equipment and intangible assets.
Previous wording
For the three months ended March 31, 2025, net cash used in investing activities was $52 million. This was primarily related to $144 million of purchases of property and equipment and intangible assets, including a $100 million payment in connection with the partnership we entered into with Redfin in February 2025. These outflows were partially offset by $92 million of net proceeds from maturities and sales of investments.
Current wording
For the six months ended June 30, 2025, net cash provided by investing activities was $25 million. This was primarily related to $213 million of net proceeds from maturities and sales of investments. These inflows were partially offset by $188 million of purchases of property and equipment and intangible assets, including a $100 million payment in connection with the partnership we entered into with Redfin in February 2025.
Previous wording
For the three months ended March 31, 2026, net cash used in financing activities was $666 million, which primarily related to $626 million of cash paid for share repurchases, $29 million of net repayments on our master repurchase agreements related to Zillow Home Loans, and $27 million related to the settlement of the acquisition date fair value of the second Follow Up Boss contingent consideration earn out payment. The cash outflows were partially offset by $18 million of proceeds from the exercise of stock options.
Current wording
For the six months ended June 30, 2026, net cash used in financing activities was $731 million, which primarily related to $826 million of cash paid for share repurchases and $27 million related to the settlement of the acquisition date fair value of the second Follow Up Boss contingent consideration earn out payment. The cash outflows were partially offset by $101 million of net borrowings on our master repurchase agreements related to Zillow Home Loans and $23 million of proceeds from the exercise of stock options.
Previous wording
For the three months ended March 31, 2025, net cash used in financing activities was $219 million, which primarily related to $250 million of cash paid for share repurchases 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 $33 million of proceeds from the exercise of option awards and $28 million of net borrowings on our master repurchase agreements related to Zillow Home Loans.
Current wording
For the six months ended June 30, 2025, net cash used in financing activities was $709 million, which primarily related to $419 million of cash paid for the settlement of the 2025 Notes, $400 million of cash paid for share repurchases, 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 $85 million of net borrowings on our master repurchase agreements related to Zillow Home Loans and $55 million of proceeds from the exercise of option awards.
Previous wording
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 (repayments) on master repurchase agreements, and the initial payment in connection with the Redfin rentals partnership. Borrowings (repayments) on master 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.
Current wording
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 master repurchase agreements, and the initial payment in connection with the Redfin rentals partnership. Borrowings on master 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.
Previous wording
On March 4, 2026, the Board authorized the repurchase of up to an additional $1.25 billion of our Class A common stock, Class C capital stock, or a combination thereof, which increased our total cumulative Repurchase Authorizations to $4.8 billion as of March 31, 2026. During the three months ended March 31, 2026, we repurchased 3.8 million shares of Class A common stock and 9.7 million shares of Class C capital stock at an average price of $47.84 and $45.92 per share, respectively, for an aggregate purchase price of $182 million and $444 million, respectively, totaling $626 million. As of March 31, 2026, $1.3 billion remained available for future repurchases of our stock pursuant to the Repurchase Authorizations, which repurchases decrease our liquidity and capital resources when effected.
Current wording
On March 4, 2026, the Board authorized the repurchase of up to an additional $1.25 billion of our Class A common stock, Class C capital stock, or a combination thereof, which increased our total cumulative Repurchase Authorizations to $4.8 billion as of June 30, 2026. On June 3, 2026, the Board approved an amendment to the Repurchase Authorizations, pursuant to which, effective June 3, 2026, no repurchase of shares under the Repurchase Authorizations is permitted if, after giving effect to such repurchase, any single shareholder would beneficially own more than 45% of the then-outstanding voting power of the Company’s voting securities. During the six months ended June 30, 2026, we repurchased 4.8 million shares of Class A common stock and 14.3 million shares of Class C capital stock at an average price of $45.25 and $42.52 per share, respectively, for an aggregate purchase price of $219 million and $607 million, respectively, totaling $826 million. As of June 30, 2026, $1.1 billion remained available for future repurchases of our stock pursuant to the Repurchase Authorizations, which repurchases decrease our liquidity and capital resources when effected.
Previous wording
Master Repurchase Agreements - 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 March 31, 2026, we have outstanding principal amounts of $335 million. Amounts exclude an immaterial amount of estimated interest payments.
Current wording
Master Repurchase Agreements - 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 June 30, 2026, we have outstanding principal amounts of $465 million.
Previous wording
Purchase Obligations - We have non-cancelable purchase obligations for content related to our mobile apps and websites, certain cloud computing services and amounts due under certain partnership agreements. During the three months ended March 31, 2026, there were no material changes to the purchase commitments disclosed in Note 13 in 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, 2025.
Current wording
Purchase Obligations - We have non-cancelable purchase obligations for content related to our mobile apps and websites, certain cloud computing services and amounts due 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.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
•Residential revenue increased $31 million, or 7%. The increase in Residential revenue was primarily driven by a 10% increase in Residential revenue per visit to $0.184 for the three months ended June 30, 2026 from $0.168 for the three months ended June 30, 2025, 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 Zillow Showcase revenue driven by increasing adoption of our enhanced listing features 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 September 30, 2026, due to housing market seasonality and as we continue to scale our Zillow Preferred model resulting in a continued shift in revenue from Residential to Mortgages as we bring the integrated transaction to more consumers.
Current report — wording carried from elsewhere
•Rentals revenue increased $104 million, or 36%. The increase in Rentals revenue was driven by a 25% increase in quarterly revenue per average monthly rentals unique visitor to $5.44 for the six months ended June 30, 2026 from $4.36 for the six months ended June 30, 2025, primarily driven by a 48% 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 9% to 36 million during the six months ended June 30, 2026 from 33 million during the six months ended June 30, 2025.
Current report — wording carried from elsewhere
Cost of revenue increased $94 million, or 31%, primarily driven by increases of $67 million in lead acquisition costs, primarily associated with our Redfin rentals syndication agreement, $11 million in mortgage loan processing costs due to increased purchase loan origination volume, $7 million in software and hardware costs, $6 million in ad serving costs to support the growth of our rentals marketplace, and $5 million in headcount-related expenses to support loan fulfillment and processing costs driven by growth in Mortgages purchase loan origination volume.
Current report — wording carried from elsewhere
Gross profit increased by $133 million, or 14%, 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 Redfin rentals syndication agreement.
Current report — wording carried from elsewhere
(4)Agreement was amended and renewed on June 5, 2026 to increase the total maximum borrowing capacity from $100 million to $150 million and to extend the maturity date to June 4, 2027.