Zillow Group Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ronald Josey - Citi Infrastructure Investments LLC - Analyst : Great. Thanks for taking the question. And hey, guys, I wanted to ask a little bit more and drill in on the rentals business, just given the goal or the guidance for accelerating growth in the back half, but then also just the strength in multifamily properties and the net additions. So help us understand just on the insights, what you're seeing, what you're hearing with your conversations from large property managers, maybe

Question: Ronald Josey - Citi Infrastructure Investments LLC - Analyst : That's great. Thanks, guys.

Question: Brad Erickson - RBC Capital Markets Inc - Analyst : Hey, guys. Two for me. So one, last quarter, resi rev growth was a little bit below the market and this quarter, it was noticeably ahead. Appreciate all the drivers within marketplace and software services you gave in the prepared remarks. But I guess, quarter-over-quarter, what specifically would REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 06, 2025 / 9:00PM, Z.OQ - Q2 2025 Zillow Group Inc Earnings Call you say the change was that drove the faster-than-market growth? And I'm talking, of course, excluding the mortgage piece of it? And then I have a follow-up.

Question: Brad Erickson - RBC Capital Markets Inc - Analyst : Got it. And then just a follow-up on rentals, along the lines of Ron's question. We get asked a lot about the contribution for Redfin on this back half acceleration, where you're calling for -- can you help us just maybe unpack that at all? Or maybe if you could just walk us through how we should think about the Redfin contribution that's layering on top of the rentals growth. Thanks.

Question: Brad Erickson - RBC Capital Markets Inc - Analyst : Got it. That's great. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 06, 2025 / 9:00PM, Z.OQ - Q2 2025 Zillow Group Inc Earnings Call

Question: John Colantuoni - Jefferies LLC - Analyst : Hi. Great. Thanks for the questions. I wanted to ask two. Starting with variable expenses, they've been outpacing revenue growth in the past couple of years. Can you talk about the key areas of investment you've been making? And what milestones you're looking to achieve before you'll start turning down the dial so variable expenses start tracking more closely with revenue. And second, turning to the Redfin partnership specifically and if possible, can you discuss incrementality from the leads you're now receiving from Redfin versus the opportunity to find new property managers using Redfin's existing relationships? Thanks.

Question: John Colantuoni - Jefferies LLC - Analyst : Thanks so much.

Question: Trevor Young - Barclays Services Corp - Analyst : Great. Thanks. Just back to the comment around Redfin and being dollar accretive in 2H. Just to clarify, is that 2H in aggregate? Or should it be expect it to start being accretive here in 3Q?

Question: Trevor Young - Barclays Services Corp - Analyst : Great. Thank you.

Question: Thomas Champion - Piper Sandler - Analyst : Hi. Good afternoon, guys. One of the questions we get a lot is around enhanced markets. And perhaps you could just talk about what you're seeing in the intermediate enhanced markets that are maybe part of the 2024 cohort. Curious if those are coming up the maturity curve like you expect? And then maybe for Jeremy Hofman. I'm wondering if you could just talk to the outperformance of mortgage in Q2. It looked like the growth stepped up quite a little bit, but maybe is going to -- expected to settle back down to high 20s in 3Q. Just curious if you could walk us through trend in mortgage and linearity that you've seen through the year. Thank you.

Question: Thomas Champion - Piper Sandler - Analyst : Makes sense. Thanks, guys.

Question: Dae Lee - JPMorgan Chase & Co - Analyst : Great. Thanks for taking my questions. I have two little follow-ups. First one on the rental opportunity. You did talk about growing the wallet share with your advertisers as 1 of the opportunities. So curious like where you are in terms of unlocking some of that opportunity. And is the $1 billion medium-term target more driven by the supply growth? Or is growing wallet share part of that?

Question: Dae Lee - JPMorgan Chase & Co - Analyst : Got it. And as a follow-up. On enhanced markets. I think in May, you guys brought a release saying you're targeting 60 additional markets at end of July. So I was curious if that 27% number you have in the letter includes that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 06, 2025 / 9:00PM, Z.OQ - Q2 2025 Zillow Group Inc Earnings Call And if not, how are you progressing on getting those additional markets live -- to get these markets up and running, how long does it take for them to show up in your results?

Question: Dae Lee - JPMorgan Chase & Co - Analyst : Got it. Thank you.

Question: Stephen Sheldon - William Blair Capital Partners - Analyst : Hey. Thanks. I just wanted to follow up on Zillow showcase. I'm curious how monetization of that solution has been trending and whether it's becoming more material contributor -- revenue contributor to the Residential segment. And then as we think about the housing backdrop, has that actually become more favorable for Showcase given that home sellers and their agents could be a little more concerned about the home selling altogether and the price received in this environment. I guess, what are you seeing on the demand side there?

Question: Stephen Sheldon - William Blair Capital Partners - Analyst : Right. Thank you.

Question: Andrew Boone - Citizens JMP Securities LLC - Analyst : Thanks so much for taking the question. I wanted to ask about AI and the improvement of just automation across the platform. You guys mentioned in the latter, the 2 million people -- the 2 million smart messages that have been exchanged since June. Can you guys just talk about what AI allows for automation in terms of connecting buyers and sell those more efficiently? And what's the overall vision if we -- one to two years out of what you guys can do with Follow Up Boss as just more capabilities are enabled. Thanks so much.

Question: Stephen Sheldon - William Blair Capital Partners - Analyst : Great. Thank you.