Mortgages, rentals push Zillow into profitability 

The housing market may be off to a slow start this year, but Zillow achieved double-digit revenue growth during the first quarter as it begins to navigate new waters with its listing policy changes.

Not only was revenue up 13% year-over-year, net income was positive and site traffic increased 5%. That's because Zillow is growing its market share, CEO Jeremy Wacksman said in a phone interview, as it continues to expand its mortgage and rentals businesses.

The company's "super app" experience, which bundles its various consumer offerings, appears to be driving more homebuyers to Zillow Home Loans, pushing mortgage revenue up 32% year-over-year to $41 million.

Rentals revenue rose 33%, bolstered by an increase in multifamily listings. The company is looking for continued growth from its rental listings agreement with Realtor.com, which launched last year, and a more recent rentals partnership with Redfin. The Redfin deal was announced in February and has reportedly come under scrutiny from the Federal Trade Commission.

"As we expand our services and scale the housing super app across more markets, we are bringing more customers and real estate professionals together and making buying, selling, and renting easier for them, which is helping us grow both our revenue and profits," Wacksman said in the earnings release.

Standing behind new listing standards

Zillow caused a stir last month with the announcement of its new listing policy, which bars listings that are publicly promoted but not made widely available on the MLS.

Wacksman reiterated that the move was intended to encourage practices that most in the industry already follow: If an agent is marketing a listing, it should be available to all buyers and all buyer agents.

"That doesn't mean there's no choice. You can have pocket listings and you can have off-internet listings. There's lots of choices for sellers," Wacksman said.

While it's still early — Wacksman said they are going to provide more details about the listings standards later this month — he's been encouraged by the support they've received so far.

"We should do our fiduciary duty and explain to sellers the risk of not marketing widely and make sure buyers can get access to all listings," Wacksman said.

Key numbers

Revenue: $598 million for Q1, up 13% year-over-year and $15 million above the company's earlier outlook range. Residential — the company's largest revenue stream — was up 6% to $417 million.

Cash and investments: $1.6 billion at the end of March, down from the $1.9 billion and the end of 2024.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): $153 million in Q1, up from $125 million a year earlier.

Net income/loss: A gain of $8 million in Q1, which was an improvement from the $23 million loss a year ago.

Traffic and visits: Traffic across all Zillow Group websites and apps totaled 227 million average monthly unique users in Q1, up 5% year-over-year, the company said. Total visits were 2.4 billion in Q1, also up 2% year-over-year. 

Q2 outlook: For the second quarter, Zillow estimates revenue will be in the $635 million to $650 million range, continuing its double-digit year-over-year growth.

Notable moves

While Zillow's new listing policy was the big news in recent months, the company has also been expanding Zillow Showcase, which gives listings agents access to enhanced visual features and interactive floor plans. HomeServices of America adopted the service in mid-April, followed days later by Epique Realty.