Fresh from its dramatic victory in federal court on Feb. 6, in which U.S. District Judge Jeannette Vargas of the Southern District of New York denied a request by Compass to block its new listing rules, the Seattle-based portal giant announced in a report Feb. 10 that earnings for Q4 2025 and for the full year of 2025 largely matched its financial expectations.
Revenue in Q4 2025 rose 18% annually to $654 million, while revenue for the full year climbed 16% compared to 2024, reaching $2.6 billion. Net income rose to $23 million for 2025, up from a $112 million net loss in 2024.
However, investors appeared disappointed in the results, as the company’s stock tanked almost 20% in early trading Wednesday following the release.
“We delivered strong results in the fourth quarter and throughout 2025, achieving all our reported full-year financial targets, including positive net income, while continuing to gain share in both For Sale and Rentals,” said Zillow CEO Jeremy Wacksman.
The company has faced legal challenges, most notably from people who used its home loan service, who claim they were overcharged as Zillow-affiliated agents were pressured into steering them toward the company’s mortgage products.
Wacksman noted that based on early tests, messaging within the Zillow app, powered by Follow Up Boss, is driving more frequent communication between consumers and their agents, helping them stay aligned at key moments, communicate more consistently and focus on delivering for clients instead of managing tasks.
“Our audience and engagement are strong, and consumers and partners keep choosing Zillow because of the scale, transparency, and experiences we offer,” he claimed. “You can see the impact of our steady focus and consistent execution in the results we’ve reported today. Our multiyear strategy is designed to perform across market conditions. And the momentum we carried through 2025 has set us up well for 2026.”
Zillow previously said in an earnings release back in October that it expects the “macro housing environment” to “continue to bounce along the bottom of the housing cycle.”
CFO Jeremy Hofmann expanded on the company’s performance, noting that residential revenue growth was driven primarily by Zillow’s agent and software offerings and new construction marketplace.
“Agent offerings include Zillow preferred, market-based pricing, and Zillow showcase,” he said. “Software offerings primarily include Follow-up Boss, Dotloop, and ShowingTime. Within the for sale revenue category, mortgages revenue increased 39% year over year in Q4 to $57 million. This was better than our outlook for approximately 20% year over year growth, as we saw better than expected conversion rates from customers in our mortgage funnel. Purchase loan origination volume accelerated to 67% year over year growth in Q4, which was the main driver of our mortgages revenue growth.”
Regarding the company’s outlook for Q1, Hofmann said they expect total revenue to be between $700 million and $710 million, implying a year-over-year increase of 18% at the midpoint of its outlook range.
“We expect for sale revenue growth in Q1 to be in line to slightly better than Q4, driven by residential revenue growth in the high single-digit range and mortgages revenue growth of approximately 40%,” Hofmann said. “Our guidance reflects our expectation that challenging housing market conditions will continue in Q1. We expect our rentals revenue growth will be approximately 40% year over year in Q1, driven by further multifamily revenue growth.”
Following the formal presentation, investors asked questions, including one about how Zillow sees AI becoming more and more a part of the real estate industry equation.
“We have a really unique strategy that I think is going to benefit from AI,” said Wacksman. “Residential real estate, it’s highly regulated and deeply local. It’s organized around millions of independent licensed professionals and then the consumer experience. It’s not a one-visit transaction. It’s high dollar, high stakes, and takes place over months or sometimes years.
“The average buyer buys once every 14 years at this point. So you’re turning to a professional team and a vertically integrated experience to really help you. That’s something where we think AI is actually an ingredient to us building this vertical rather than a threat or something, and why we lean into it. That’s also why we’re so confident we’re going to be the ones to help deliver that. Our strategy to build this vertically integrated experience is what we’ve been doing for years now, and we’re the ones with deep industry expertise and the proprietary assets and data at scale.”
Asked if Zillow anticipates making any changes to how it operates with the legal challenges it has had to face, Wacksman said no.
“We’re not making meaningful change to our business or results in any issues, and we’re really confident in our positions and approach,” he said. “We don’t expect the issues to have a material impact on our long-term strategy or our financial position.”
Regarding the recent legal victory over Compass, Wacksman added that private listings are not a major aspect of Zillow’s business anyway.
“The reason it’s small is the vast majority of sellers and agents don’t want that,” he said. “Agents don’t want to limit exposure and have a home take longer to sell, or not maximize price.”
