Zillow at Goldman Sachs Conference: Pursuing Housing Super App Vision

On Wednesday, 10 September 2025, Zillow Group Inc. (NASDAQ:Z) participated in the Goldman Sachs Communicopia + Technology Conference 2025, presenting its ambitious vision of becoming a "Housing Super App." While the company highlighted impressive growth in rentals and mortgage segments, it also faces the challenge of maintaining cost discipline to drive operating leverage.

Key Takeaways

• Zillow is on track for mid-teens revenue growth this year, with a 15% increase in 2024.
• The rentals segment is experiencing significant growth, with a 40% revenue increase expected for the year.
• Zillow Home Loans showed a 41% revenue growth year-over-year, with origination growth at 48% last quarter.
• The company is expanding its enhanced markets, aiming for 35% coverage by the end of the year.
• Zillow has repurchased over $2 billion in stock since the end of 2021.

Financial Results

• Zillow achieved a 15% revenue growth in 2024 and is on track for mid-teens growth this year.
• EBITDA margins expanded by 200 basis points in 2024, with further expansion expected this year.
• For-sale revenue grew 9% year-over-year in Q2, outperforming the housing market significantly.
• Rentals revenue is projected to grow 40% this year, continuing its acceleration from Q1 and Q2.
• Multifamily revenue saw a 56% year-over-year increase, with property count growth at 45%.
• Mortgage revenue increased 41% year-over-year last quarter, with origination growth at 48%.
• Stock-based compensation decreased by 12% year-over-year in Q2 and is expected to decline 10% for the full year.

Operational Updates

• Zillow is focused on developing the "Housing Super App," integrating buying, selling, renting, and financing.
• The Listing Showcase now represents 2.5% of all new listings in the U.S.
• Approximately 60% of single-family homes for rent are listed on Zillow.
• Multifamily listings have grown from 27,000 to 64,000 over the past three years.
• Enhanced markets currently cover about 27% of connections, with a target of 35% by year-end.
• Zillow has formed distribution partnerships with Realtor.com and Redfin for multifamily listings.
• The company retired $400 million in convertible debt in May, achieving a debt-free status.

Future Outlook

• Zillow aims to continue expanding enhanced markets into 2026 and beyond.
• Rentals growth will focus on multifamily execution.
• The company targets 35% enhanced markets coverage by year-end, with a mid-cycle goal of 75%.
• Zillow is building a purchase mortgage origination business, aspiring to become a leading player.
• Cost discipline remains a priority to enhance operating leverage.
• AI development is ongoing, particularly in enhancing Follow Up Boss and consumer experience.

Q&A Highlights

• Enhanced markets are emphasized for their product experience, including real-time touring and integration with Zillow Home Loans.
• Flex is designed to align Zillow, customers, and premier agents at the revenue event.
• Follow Up Boss is a CRM tailored for high-performing teams, used by 43 out of the top 50 real estate teams.
• Zillow continues to innovate, with AI playing a significant role in product development.
• The stock buyback program, initiated in 2021, has been beneficial for the company.

In conclusion, Zillow’s strategic efforts to become a comprehensive housing platform are well underway. For further insights, please refer to the full transcript below.

Full transcript - Goldman Sachs Communicopia + Technology Conference 2025:

Mike Ng, Analyst, Goldman Sachs: Good afternoon, everybody. Welcome to the Zillow Fireside Chat at the Goldman Sachs Communicopia and Technology Conference. I have the privilege of introducing Jeremy Hofmann, who’s the CFO of Zillow. My name is Mike Ng, and I cover Zillow as part of our real estate tech coverage here at Goldman Sachs. We have about 35 minutes for today’s presentation. Jeremy, thank you so much for being here once again with us. It’s really a pleasure.

Jeremy Hofmann, CFO, Zillow: Yeah, thank you. Really happy to be here.

Mike Ng, Analyst, Goldman Sachs: Great. Zillow, you know, clearly a household name, strong brand awareness, over 240 million average monthly unique users across apps and sites. Most people have obviously interacted with the portal either through the app or the website. For those who may be a little bit less familiar with the business model, could you talk a little bit about the Zillow business and notable highlights from the business that you have this year so far?

Jeremy Hofmann, CFO, Zillow: Yeah. We have been on the journey of building what we’re calling the Housing Super App. What we want to do with the Housing Super App is be known for all things moving. That translates to historically having been known as a place to dream and shop, and more frequently now being known as a place to buy, sell, rent, and finance. That’s the product experience that we’re building. Revenue comes through in two distinct segments. One is our for sale market, and that is anybody that’s buying or selling or financing a home. The other is in rentals for folks that are renting a home or apartment. With respect to results for this year, we have had a really good first half of the year. We’re on track to grow revenue double digits, actually mid-teens at this point for a full year.

That includes a 40% growth rate in rentals as well. That’s on the back of strong performance in 2024, where we grew revenue across the company 15%, expanded EBITDA margins by 200 basis points. We’re on track to do mid-teens growth this year. We’re going to expand EBITDA margins again and produce GAAP net income, which is important for us. That’s in the midst of a housing market that has bounced along the bottom of the cycle for the last three plus years. We’re quite pleased with all that we’re doing and excited to dig in with you.

Mike Ng, Analyst, Goldman Sachs: Yeah, there really is no doubt that this year was just another example of Zillow revenue outperformance. At least it’s shaping up to be, given the more sober housing backdrop.

Jeremy Hofmann, CFO, Zillow: Yeah.

Mike Ng, Analyst, Goldman Sachs: Maybe we can just dig in a little bit more on that for sale umbrella. Residential revenue was up 6% year over year in the past quarter. Zillow is forecasting mid-single-digit growth for the third quarter. Maybe breaking down the for sale piece between the underlying agent revenues versus software offerings. Where are you seeing the most growth? What’s been driving that relative outperformance compared to the market this year and perhaps as you think about next year into 2026?

Jeremy Hofmann, CFO, Zillow: Sure. For sale, which is a combination of our residential businesses and our mortgage offering, grew 9% year over year in Q2. That outperformed the housing market by 800 basis points. We are quite pleased with that outperformance. The outperformance, we do not overly focus on the quarterly fluctuations, but the outperformance has been pretty sustained over the last few years. We grew on a two-year stack basis by 1,500 basis points, outperformed as well. We feel really good about what we are doing. What is driving that is a combination of a few things. We are consistently finding ways to help our premier agents convert more and more folks that are looking to buy homes and sell homes to actually transacting. That is one big lever. Another lever is continued mortgage growth through our home loans originations business that we call Zillow Home Loans.

That is coupled with a really exciting product we call Zillow Showcase, which is basically making listings look more dynamic on the sites and apps through a combination of rich media, floor plan technology, drones that circle the house and are able to see kind of contextually where you are outside the home as well. Even today, we released a feature that allows these listings to have virtual staging on them. All these really cool things in Listing Showcase. That is now 2.5% of all new listings in the country. We started selling that product about 18 months ago, so quite pleased there. That is coupled with just increased adoption of our Follow Up Boss software as well. When we look at the for sale business, it is really a combination of things. We feel good about that heading into the back half of the year.

Even as you look out to our mid-cycle targets, the way in which we get to our mid-cycle targets in the for sale business is really around the back of what I just talked about. Roll out more and more of our enhanced markets, grow Zillow Home Loans, and continue to penetrate in Follow Up Boss and Listing Showcase.

Mike Ng, Analyst, Goldman Sachs: Right. So much more beyond just the, you know, core or historically core like lead generation.

Jeremy Hofmann, CFO, Zillow: You got it.

Mike Ng, Analyst, Goldman Sachs: Business. Rentals, I think, is a fascinating story within Zillow. Obviously, the growth numbers kind of speak for themselves, right? You’re guiding for 40% revenue growth in rentals for the upcoming quarter and for the full year. Could you talk a little bit about Zillow’s history in rentals? You know, why is it growing so quickly, you know, just now? You know, provide a little bit of a history of, you know, why Zillow is in kind of a unique advantage position to do well in rentals.

Jeremy Hofmann, CFO, Zillow: Yeah. Maybe I’ll start with the renter problem that exists. The renter problem has historically existed where there wasn’t one place to find all of the inventory of homes and apartments to rent. We are going after that. We are trying to get as many single-family homes for rent as possible on our sites and apps and couple that with as many apartments for rent as well. That has been a journey on the single-family side. It has been a journey for a long period of time. We’ve increased the focus on apartment buildings over the last few years. The goal really is to aggregate as much or all of that supply in one place on Zillow so that a renter can just come to Zillow to find all the inventory. That’s the supply side of the market. That’s coupled with really strong demand.

As we’ve been able to build up the supply, we’re roughly 60% of all single-family homes for rent in the country are on Zillow now. That’s the most of anywhere. We still have a long way to go, but that’s the most of anywhere. A lot of that is unique content to us. Then we’re coupling that with apartment buildings. The apartment building story has been a really good one. I’ll double-click into that. We call that multifamily revenue. That was, call it three years ago, about 27,000 buildings on Zillow. We are now at 64,000 as of the end of Q2. We’ve really grown that quite nicely, and the revenue profile has grown consequently. That has been able to allow us to drive more traffic. On the supply side, it’s built as much inventory as we possibly can.

On the demand side, as we build that inventory, we build up demand, and the two-sided marketplace starts to really spin. All of that is really taking us to a revenue story that’s quite compelling. In Q1 of this year, we grew 33% in rentals. In Q2, we grew 36%. We expect to grow 40% plus in Q3, and we expect 40% overall growth for rentals in 2025. That implies acceleration throughout the course of the year. Within the multifamily business, we grew property count 45% year over year, and we grew that revenue base 56% year over year. Everything is really spinning nicely, and it’s a really nice business to build for a variety of reasons. We’re quite pleased.

Mike Ng, Analyst, Goldman Sachs: Yeah. Rentals is unique because there is no central marketplace like there might be for sale with the MLS, right? Could you talk a little bit about maybe why you’re in a unique position from an inventory perspective, like a rentals inventory perspective, like why were single-family homes neglected by other rental sites?

Jeremy Hofmann, CFO, Zillow: Yeah. We’re in a unique position, I think, because Zillow, the brand, means more things to more people, right? Zillow means housing to people. That could be homes for sale, homes for rent, apartments for rent, mortgages. You choose the thing that we go and go after. That’s a pretty unique opportunity because aggregating the supply on the homes for rent is really hard because the vast majority of those homes are rented by mom-and-pop landlords. Mom-and-pop landlords, you can’t really sell into. You have to have a brand and a product that means something to them, that allows them to list their home for rent and ultimately fill that rental. What we provide for them on the single-family side is the ability to take applications, to take payments, to take leases. That’s all for free for them. They get leads as well that ultimately convert to leases.

We’ve been able to build a really unique set of supply there that has then allowed us to actually go into multifamily. That opportunity is one that just feels like if we can build the supply side as well as we think we can, you have most of, if not all of the inventory, you start to be known for all things rental. We love that as an opportunity. It’s allowed us to really go into the apartment building space as well.

Mike Ng, Analyst, Goldman Sachs: Single-family homes, mom-and-pop landlords, maybe not the best in terms of modernization, but amazing for engagement and, you know, consumer traffic.

Jeremy Hofmann, CFO, Zillow: Yeah. If you think of yourself, some folks look, some people are apartment-only shoppers. Some people are home-only shoppers. There are a good number of people that are thinking about either/or. We want to have all the supply for them in one place. There is nowhere on the internet that has that offering like we do.

Mike Ng, Analyst, Goldman Sachs: The Zillow-Redfin partnership went live in, I think, April. It expanded Zillow’s distribution and introduced more multifamily customers, you know, and they’re choosing Zillow rentals. Could you just unpack some of the moving parts around the Redfin partnership, given that there were so many moving parts?

Jeremy Hofmann, CFO, Zillow: Yeah. What we did, as we’ve been building the supply on the apartments front, it’s been growing pretty rapidly. When you’re building a two-sided marketplace, you start to see supply grow and grow. We’ve got to make sure we’re bringing demand alongside that because otherwise, you’re going to have new suppliers not necessarily thrilled with the experience that they’re having. We’ve been really careful to manage the marketplace that way. As supply has grown, we want to make sure demand is growing commensurate. We have a lot of demand between Zillow, Trulia, HotPads, and StreetEasy already in the sites and apps that we own. We look to extend that demand through distribution partnerships with both Realtor.com and Redfin. Realtor.com, we started in early 2024. Redfin, we announced in early 2025. The arrangement is effectively, we are now the supplier of those multifamily buildings.

We distribute that content to Redfin and to Realtor.com. They bring consumers onto their sites and apps. Those consumers get interested in the apartments that are there. That all flows to our shared property management company customers. From a property management company, the payer that is paying us the revenue, they’re thrilled, right?

Mike Ng, Analyst, Goldman Sachs: Yep.

Jeremy Hofmann, CFO, Zillow: Not only are they getting high-quality customers from Zillow, Trulia, HotPads, and StreetEasy, they’re now seeing folks from Realtor.com, Redfin, and Redfin’s apartment-focused brands as well. It increases distribution for us meaningfully, and it’s a win for consumers. They’re seeing more inventory. It’s a win for the property management company payers because they’re seeing great ROI. It’s a win for Zillow, Realtor.com, and Redfin because we’re all sharing in those economics.

Mike Ng, Analyst, Goldman Sachs: Right. You’re paying for that lead, and it’s upon you to convert that into a signed contract and actual rental.

Jeremy Hofmann, CFO, Zillow: You got it. Right. Yeah. Both Redfin and Realtor.com generate leads. We pay them that cost of acquisition, and then we translate that into selling more buildings and gaining building count alongside looking for ways to make the packages that we sell even more appealing, such that the folks that were already with us are looking to upgrade as well.

Mike Ng, Analyst, Goldman Sachs: Great. Shifting gears to mortgage, just to contextualize how fast Zillow’s mortgage business is growing, revenue was up 41% year over year last quarter, 48% origination growth. Could you talk a little bit about how Zillow is growing the mortgage business, Zillow Home Loans, this quickly in what’s a pretty sober housing market? How do you think about sustainability of mortgage revenue in the long term?

Jeremy Hofmann, CFO, Zillow: Yeah. The mortgage business, I think if you just step back for what we’re trying to do generally, we want to be known. We’ve long been known for dreaming and shopping. We want to be known for buying, selling, renting, financing. Financing is an important piece of the puzzle. For any buyer, the vast majority of folks need a mortgage and they need an agent. We want to do that as well as we possibly can through Zillow Home Loans financing and then our really high-quality premier agent partners. We’ve been investing against the Zillow Home Loans originations business. Like you said, it grew 41% year over year. In Q2, originations grew 48%. That’s really on the back of the relationships that are being built between our premier agent base and our Zillow Home Loans loan officers. That’s driving the bulk of the growth.

We think that’s a really good formula going forward. A lot of that comes together in what we call enhanced markets, which is basically our go-to-market motion across all of the buy and sell side is to have every bit of the best consumer experience, best agent experience, market-by-market rollout. Zillow Home Loans is a key piece of that. As we expand the enhanced markets, Zillow Home Loans grows alongside that because we start to see the relationships build between the premier agent and the home loans loan officer. Originations start to flow accordingly. Consumers are pleased, right? They’re able to do both of those things in one place. We’re starting to play more and more coordinator and project manager for them through Zillow rather than they, the buyer, having to do that. There are a lot of integration positives that come from it. It makes the experience simpler.

We’re seeing the revenue translate quite nicely. We have a long way to go in mortgage. We’re growing quite nicely. We think the opportunity for us in mortgage is far bigger than we are today. We think we should be one of the biggest purchase mortgage originators in the country over time. That’s going to take a long time. We’re off to a good start. The growth algorithm is really going to be primarily on the back of this enhanced market rollout.

Mike Ng, Analyst, Goldman Sachs: Yeah, the revenue model for mortgage is mostly gain on sale?

Jeremy Hofmann, CFO, Zillow: Gain on sale and origination fees.

Mike Ng, Analyst, Goldman Sachs: OK.

Jeremy Hofmann, CFO, Zillow: Some combination of both of those things. A critical point for those of you that may be newer to the story, we are looking to build a purchase mortgage origination business. We don’t have designs on Big Refi or servicing, any of that type of stuff. We originate the mortgage, hold those loans on balance sheet for a week or two, and then we sell them off either to government entities or to capital markets providers. It is not a balance sheet heavy business.

Mike Ng, Analyst, Goldman Sachs: Right. You mentioned enhanced markets. I think enhanced markets cover about 27% of transactions as of last quarter, and the company is targeting 35%+ by the end of the year. Just to take a step back for a moment, could you just remind everybody what does the enhanced market rollout look like from a product availability perspective? Maybe you can talk a little bit about the modernization models for, you know, Flex versus MVP.

Jeremy Hofmann, CFO, Zillow: Yeah. Enhanced markets are where the product experience comes to life most vividly. That’s a combination of what we’ve done in touring with real-time touring, Listing Showcase on the sell side, Follow Up Boss. We’re at a point now where all of our enhanced market partners are using Follow Up Boss. That’s a CRM that we can talk about a bit more as well that really powers kind of day-to-day operations for these agents. We couple that with a tight integration between our premier agent partners and Zillow Home Loans. That is what we call the enhanced market experience. We are rolling it out on a market-by-market basis primarily because the relationship between the Zillow Home Loans loan officer and the premier agent is one that is relationship-driven. There’s trust that has to come with that. That is more person-to-person than it is software.

When we find ways to expand these things faster nationally, we will go do that. Listing Showcase is national. Follow Up Boss usage is national. Real-time touring is national. The enhanced markets are really governed by we’ve got to get the mortgage and premier agent relationship right. We’re now at a point where 27% of all of the connections that come through Zillow are in this experience. That will be 35% by the end of the year. Our mid-cycle goal is to get that to 75%.

Mike Ng, Analyst, Goldman Sachs: Right.

Jeremy Hofmann, CFO, Zillow: 75% is a mile marker. We think it should be more than that. As we were thinking about how investors should think about modeling the business and monitoring progress, we put that out there. Ultimately, this experience should be one that feels really integrated and all done within Zillow’s app to the point that when you’re at a cocktail party or when I’m at a cocktail party, my goal in a few years is when I’m at a cocktail party, I’ll get less questions about somebody’s estimate and more questions or more positive responses about I bought with Zillow and it was really differentiated. That’s what we’re trying to build. We’re rolling that out methodically because of the integration between home loans and premier agent. With respect to monetization model, we monetize our premier agent business in two ways. One is upfront advertising spend. We call that market-based pricing, MVP.

The other is where we take a percentage of the commission check. We call that Flex. As the enhanced markets grow more and more, you’ll see more and more of the business go into Flex because it’s the right alignment mechanism to align Zillow, the customer, and the premier agent at the revenue event. Everybody is happy when the transaction gets closed and everybody gets paid accordingly.

Mike Ng, Analyst, Goldman Sachs: Maybe just on that MVP versus Flex dynamic, is Flex clearly better than MVP? Is it really something that gets evaluated on a market-by-market basis? From a Zillow standpoint, do you see Flex as an opportunity to just get a greater share of wallet because you kind of remove the psychological barrier for the agent of not knowing what the return on his upfront investment is? Is it a pricing opportunity as well?

Jeremy Hofmann, CFO, Zillow: We think about it as an alignment mechanism. It’s not so much a pricing mechanism or a monetization opportunity as much as it is the Flex versus MVP are a bit of a wash at this point.

Mike Ng, Analyst, Goldman Sachs: Yep.

Jeremy Hofmann, CFO, Zillow: The reason we go to the commission sharing model is because it just better aligns us with our partners. They know that we have skin in the game together to deliver this customer experience. That’s why we’re doing that. As we roll these enhanced markets out, we both launch new ones and expand deeper into the ones that we’re in already. That’s where Flex starts to take more and more share. The reason that we expand into these deeper markets or launch new ones is really Zillow Home Loans. It just happens to be that the modernization model changes alongside. Zillow Home Loans is the driver of it more than it is Flex versus MVP.

Mike Ng, Analyst, Goldman Sachs: Yeah. In talking about the enhanced markets, you also mentioned Follow Up Boss, the CRM. Maybe you can expand on that a little bit more. Is it better than the CRM that’s typically offered to your typical agent?

Jeremy Hofmann, CFO, Zillow: We think so. No. Yeah. Follow Up Boss, we bought in late 2023. The reason was we thought having a CRM that we worked really tightly with our partners made sense. Having a shared software platform made a bunch of sense to us and to our agents as well. At that point in time, Follow Up Boss was already a long-term partner of ours and had worked with a bunch of our high-performing premier agent partners already. Fast forward, close to two years in, we are now seeing all of our enhanced market partners on Follow Up Boss. It’s really good software. It was purpose-built for high-performing teams. 43 out of the top 50 teams in the country, Zillow or not, are on Follow Up Boss as a proxy.

Mike Ng, Analyst, Goldman Sachs: Wow.

Jeremy Hofmann, CFO, Zillow: I think it’s really great software. We’re very excited about it, and we think the ability to help agents be more productive and better convert leads.

Mike Ng, Analyst, Goldman Sachs: Yeah.

Jeremy Hofmann, CFO, Zillow: Connections that we send to them, there’s a lot we can do on the consumer-facing side. Follow Up Boss is a big driver of that as well.

Mike Ng, Analyst, Goldman Sachs: Yeah. Let’s talk a little bit about some of Zillow’s recent product launches, Sky Tour, tour itineraries, buyability. How are these and other product launches viewed within the company? Are these more revenue sources that you might be able to charge a discrete fee for? Is it more of a conversion driver? I’d love to hear about perhaps some of those new products and then your thoughts around products generally.

Jeremy Hofmann, CFO, Zillow: Yeah, we are, without a doubt, a product-led company.

Mike Ng, Analyst, Goldman Sachs: Yeah.

Jeremy Hofmann, CFO, Zillow: Like we have been since the inception of the company, we will continue to be. We are always looking for ways to innovate on behalf of consumers and on behalf of our partners. The ones that you highlighted are in that vein. Ultimately, what they should do is drive more engagement, more conversion, and ultimately more revenue. Will we charge discrete fees, TBD? The context for so much of the product development that we do is how do we make a consumer’s life easier? How do we help them transact? How do we make an agent’s life easier and help them transact and be more productive? The way in which we develop products kind of hangs off of that on the for sale side. Obviously, similar principles exist for the rentals business as well.

Mike Ng, Analyst, Goldman Sachs: Maybe going back to some of the numbers, as you mentioned, mid-teens revenue growth is the outlook for this year. Could you just talk a little bit about your confidence in the rest of the year, the back half? Maybe talk a little bit about why comparing Zillow’s revenue growth to the growth in the market can be not the appropriate thing to do in any given quarter. Like how much of that do you guys look at internally in terms of Zillow versus market?

Jeremy Hofmann, CFO, Zillow: Yeah. We feel quite confident. At the beginning of 2025, our annual targets were low to mid-teens revenue growth, expanded EBITDA margins, and positive GAAP net income. Fast forward to halfway through the year, we feel good about how we’re performing. The updated guidance was mid-teens revenue growth, expanded margins on the EBITDA front, and positive GAAP net income. We’re well on pace and tightened up the lower end of the range as a result. The drivers of that are a lot of what we’ve talked about: continued expansion in enhanced markets, continued adoption of listing showcase, continued adoption of Follow Up Boss, continued growth in Zillow Home Loans. The rentals business is just really humming at the moment. That’s what gives us the confidence going forward.

I think when we think about how we’re doing, we measure ourselves on are we growing in a way that feels consistent with the opportunity in front of us. We grew 15% total company in 2024. We’re on track for mid-teens in 2025. That feels quite good to us versus a housing market that has been really bouncing along the bottom for a long period of time. It’s important, though, that not just the revenue growth comes, but we also get leverage on top of that for EBITDA and ultimately net income. We’ve done that well as well. I think we feel really confident. Where we don’t spend a lot of time is the quarter-to-quarter fluctuations.

Mike Ng, Analyst, Goldman Sachs: Right.

Jeremy Hofmann, CFO, Zillow: Just because when housing macro is as odd as it has been for the last three years, there’s always gyrations. We just try to zoom out and say, are we taking share over annual periods, over, you know, two-year periods, three-year periods? Can we continue to do so?

Mike Ng, Analyst, Goldman Sachs: Right.

Jeremy Hofmann, CFO, Zillow: We’re confident that we are. We love the growth levers we have in front of us. Our job really is to go execute and grow regardless of the macro environment.

Mike Ng, Analyst, Goldman Sachs: Great. On your topic of operating leverage, margin expansion, Zillow’s obviously done a good job of getting to GAAP profitability. I think you were positive GAAP net income for the last two quarters, and you’re forecasting that for the full year. Let’s talk a little bit about the cost discipline and the operating leverage in the model, how you think about fixed versus variable.

Jeremy Hofmann, CFO, Zillow: Yeah. Our cost, this is for EBITDA costs, break down in three buckets.

Mike Ng, Analyst, Goldman Sachs: Yep.

Jeremy Hofmann, CFO, Zillow: We have roughly $1 billion of fixed cost in the business, and then the rest of the, call it $1.7 billion basis, in variable and in marketing. We have been really disciplined on the fixed cost bucket for the last few years, and we expect to do so going forward up to these mid-cycle targets. That has been great discipline for us. I think we forward invested ahead of that discipline, and now we’re starting to see the fruits of our labor come through. We like keeping our fixed costs flat. There’ll be some inflation in there, but generally try to keep them as flat as possible and feel like we’re well invested for the growth opportunities in front of us. That’s been able to drive the leverage you see in the model. Variable and marketing, we will dial up and down depending on opportunities we see.

Marketing is a good example. In 2024, we felt like there was real value in doing an apartment-only marketing campaign. Zillow is actually not all that well known for apartments today.

Mike Ng, Analyst, Goldman Sachs: Right.

Jeremy Hofmann, CFO, Zillow: Versus homes for rent and homes for sale. We lit up a distinct campaign there. It did quite well. You can see the growth that’s coming in the rentals business. That’s one where we’re going to push on the gas. Same for the rentals business overall across sales and some of these distribution partnerships and the Zillow Home Loans loan officer count. Those are good variable investments in front of a really interesting growth opportunity. We can do that while also being disciplined on fixed and driving leverage. That’s really the formula. That’s been the formula for most of 2023, 2024, 2025, and, you know, into the future. The nice part about that as well is stock-based comp, which sits below EBITDA costs. 90% of that stock-based comp charge sits in that fixed bucket.

Mike Ng, Analyst, Goldman Sachs: Mm-hmm.

Jeremy Hofmann, CFO, Zillow: When we get leverage on the fixed costs, we’re also getting leverage on stock-based comp. Stock-based comp was down 12% year over year for us in Q2, and we expected it to be down 10% for full year 2025. I think that’s how we think about how do we drive leverage while making sure we’re really well invested to keep growing against all the exciting stuff we have going on.

Mike Ng, Analyst, Goldman Sachs: Right. How is Zillow using AI, whether for, you know, end consumer or agent-facing tools or inside the company?

Jeremy Hofmann, CFO, Zillow: Everywhere is the short answer. We leaned in pretty heavily pretty early. Now I’d say the investments are in three buckets. On the consumer front, we are looking for ways all the time to make the experience better using generative AI. It’s still early days there, but we feel well positioned just given the strength of our brand, the amount of direct traffic we have, and the differentiated data we have. You start to think about all the cool things you can do with generative AI as a result of that. On the operator side, that’s bucket two. We want to make loan officers and real estate agents more productive. That’s good for them, that’s good for our business, that’s good for consumers. We’ve spent a lot of our resourcing and effort on delivering AI tools for Follow Up Boss, for example.

Things like call recordings that are then summarized up for these agents, smart lists, how do you get from, you know, what’s the next action you’re supposed to take using generative AI for that. Anecdotally, we’re hearing we’re saving hours of time a day for people where they can no longer do these administrative tasks, but instead spend their time with their customers and our customers. We’re really pleased with that. The third bucket is just employee productivity. The vast, vast majority of our code now is being touched with AI in some form. We’re making our own employee base more efficient, which helps us just get more out of the folks that we have in the building going forward as well.

Mike Ng, Analyst, Goldman Sachs: Great. Earlier this year, you settled your convertible notes, and the company is now convertible debt-free. Could you talk a little bit about your capital allocation priorities? What’s your appetite for M&A?

Jeremy Hofmann, CFO, Zillow: Yeah. One of the big goals for the year was to get to convertible debt-free. We retired the last $400 million-some-odd in May, and we’re now clean balance sheet there. That was a great thing to get done. We’ve also bought back roughly $400 million or so through the first two quarters of the year in stock, which more than offset any stock-based grants for employees. We’re pleased on both of those. When we look more broadly and longer term, the buyback program has been really good for us. We started it in the end of 2021. We have bought well over $2 billion worth of stock back at an average price of $48. It’s been a great program over the course of whatever it is, four years or so. Share count has decreased over that period of time. We like it as a tool in the toolkit going forward.

The last bit of our capital allocation is M&A. There, we always look at stuff.

Mike Ng, Analyst, Goldman Sachs: Yeah.

Jeremy Hofmann, CFO, Zillow: We tend to buy a company or two a year, depending on the year. There is no set formula there. When we think about that, that is an accelerant to a product-led company. We are absolutely, first and foremost, a product organic-led company, and then M&A supplements that in the places where we can fill in gaps.

Mike Ng, Analyst, Goldman Sachs: Yeah. Just in the last couple of minutes that we have, maybe you can talk about your key strategic priorities over the next 12 to 24 months. You know, what are you most excited about? I mean, a lot of it is not even assuming that we get back anywhere close to mid-cycle on the macro, but would love to hear your thoughts there.

Jeremy Hofmann, CFO, Zillow: Yeah. I get this question a bunch. It’s like, well, who’s your favorite kid, right? We’re excited about everything we’re doing at the moment. We feel like across the for sale business, we are growing quite nicely in a pretty depressed market. The mortgage business continues to grow really well. Follow Up Boss is in more people’s hands. We’re just doing more and more to help our agents and consumers effectuate transactions. We’re excited. We will continue to roll out these enhanced markets the rest of 2025 into 2026 and beyond. That will be a big focus because so much of the product experience actually comes to life there. We’ll couple that with continued rentals growth. That’ll be primarily on the back of this multifamily execution journey that we’ve been on. When you put those two things together and listing showcase, we feel like there’s a really interesting revenue opportunity.

Couple that with good cost discipline. It feels like about as exciting a time to be at Zillow that we’ve had in a long time.

Mike Ng, Analyst, Goldman Sachs: Jeremy, it’s been such a privilege to have you on stage here with us. Really appreciate it.

Jeremy Hofmann, CFO, Zillow: Thanks for having me.

Mike Ng, Analyst, Goldman Sachs: Thank you.

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