Zillow shares drop 15.8% after hours despite Q3 revenue rise

Zillow (ZG) said third-quarter revenue rose 7% from a year earlier to $724 million. The company reported a net loss of $158 million, compared with net income of $10 million a year earlier.

Shares fell 15.8% in after-hours trading as of 4:44 p.m. ET, from a regular-session close of $34.44.

Here's how the company did:

• Revenue: $724 million vs. $676 million a year earlier
• Adjusted EPS: 55 cents per share vs. 44 cents a year earlier
• Adjusted EBITDA: $182 million vs. $165 million a year earlier

The company's brands include Zillow, Trulia, StreetEasy and Zillow Home Loans.

Adjusted net income was $124 million, compared with $113 million a year earlier. Adjusted net income and Adjusted EBITDA exclude the $165 million Zillow Offers securities class action settlement, net of expected insurance recoveries.

"Q3 highlighted Zillow's durability. We grew revenue and outperformed the real estate category during one of the toughest housing markets in a generation," said Zillow Chief Executive Officer Jeremy Wacksman.

Segment results

For Sale revenue was flat year over year at $489 million. Residential revenue fell 4% to $419 million, which the company attributed to weak housing demand and the transition of connections to its Preferred partners.

Mortgages revenue rose 32% to $70 million, driven by 55% growth in purchase loan origination volume to $2.0 billion. The company said Mortgages revenue was below its outlook because the rapid rise in mortgage rates during the quarter caused lower conversion.

Rentals revenue increased 26% to $220 million, led by a 35% increase in multifamily revenue.

Fourth-quarter and full-year outlook

The company expects fourth-quarter total revenue of $635 million to $665 million and Adjusted EBITDA of $100 million to $135 million.

For the full year 2026, the company expects total revenue growth of approximately 10% to 11% year over year and Adjusted EBITDA of $655 million to $690 million.

Costs and charges

Sales and marketing, technology and development, general and administrative expenses and cost of revenue totaled $853 million in the quarter, up 26% year over year. The company said higher general and administrative expenses were primarily associated with the $165 million settlement.

Net income swung from a profit of $46.0 million in the first quarter of 2026 to a loss of $4.0 million in the second quarter of 2026, according to its SEC filings.