Stats (all QOQ)
Revenue up 9%
Mortgage revenue up 31%
Rental income up 14%
Other revenue up 27%
Sales/Marketing expenses up 19%
Mortgage loans held for sale up 37%
Liabilities up 25%
Adjusted EBITDA down 23%
1. Zillow had a big round of layoffs just before earnings
They let go of 7% of their workforce, around 500 people, to “move faster and operate more efficiently”. Zillow announced this on August 4th, the day before their earnings call.
Total cost is estimated at $59-64MM, with $36MM of that recognized in Q2. If you break down the total amount per impacted employee, that comes to $118K-$128K per person (though that includes cash as well as benefits and share-based comp, etc.)
Geekwire has a pretty thorough analysis here. And here’s how Zillow described the changes.
From the Geekwire Piece:
Zillow cut about 200 jobs in January, but characterized those as performance-related and part of its annual review cycle. It had 7,058 employees as of March 31, down just 10 positions from the end of 2025, meaning it had largely backfilled January’s cuts before Tuesday.
From the 10K:
“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 these employee termination costs and expects that the remainder of the restructuring costs will be recognized during the three months ending September 30, 2026”
Key Takeaway: Companies make layoffs regardless of financial performance.
2. Zillow believes they’re now a top 25 lender
They’re generating serious loan volume.
From their shareholder letter:
“We continue to deliver double-digit adoption of Zillow Home Loans in the integrated experience thanks to a strong value proposition: convenience and competitive lending terms when compared with other industry-leading mortgage originators. Zillow Home Loans is now a top-25 purchase lender in the country.”
They did include a disclaimer that the designation is based on their internal data and estimates, but I don’t see any reason to doubt the accuracy here.
“Mortgages revenue increased 75% year over year to $84 million in Q2, primarily due to a 95% increase in purchase loan origination volume to $2.2 billion.”
Key Takeaway: Zillow Home Loans is becoming a major competitor in the mortgage space.
3. Rental Revenue is growing faster than For Sale
Zillow believes they can get rental revenue over a billion dollars.
“In Q2, we had 2.8 million average monthly active rental listings and an all-time high of 79,000 multifamily properties. Rentals revenue was up 31% year over year in Q2, with multifamily revenue up 42% — growth that reflects the compounding value of what we’ve built on both sides of this marketplace.”
“Rentals is one of our most compelling growth opportunities, with a clear path toward $1 billion and beyond in annual Rentals revenue.”
Key Takeaway: It makes sense that rentals would grow faster given how massive Zillow is in For-Sale, but also indicates that their efforts to diversify are working.
4. Their revenue is relatively diversified
Yes, it’s mostly all related to home purchase/rentals and loans around that, but I had forgotten about a few of their acquisitions over the years.
“Our portfolio of affiliates, subsidiaries and brands includes Zillow, Zillow Premier Agent, Zillow Home Loans, our mortgage origination operations and affiliate lender, Zillow Rentals, Zillow New Construction, Trulia, StreetEasy, Out East, HotPads, Follow Up Boss, ShowingTime, dotloop and Zillow Closing.”
Key Takeaway: While hyper-focused on the housing market, Zillow is more than just a website to find homes.
5. Traffic was down slightly YOY
Q2 traffic was down about 2% year-over-year, though visitors were actually up 11% quarter-over-quarter.
“Traffic to Zillow Group’s mobile apps and sites in Q2 was down 2% year over year to 239 million average monthly unique users. Visits during Q2 were down 2% year over year to 2.5 billion”
Zillow is suggesting they’re down less than others in the sector, citing Comscore in the Shareholder Letter:
“According to Comscore, which tracks growth trends across the residential real estate category, Zillow’s average monthly unique visitors in Q2 outperformed the category, which saw a decline overall amid the rise in mortgage rates. Zillow is the only large company in the category to consistently expand its reach with the real estate audience over the past seven quarters.”
Key Takeaway: Zillow seems to be weathering the complex housing market well.
