Finance

Zillow’s Q3 Surge: How Strategic Shifts Beat Housing Market Blues and Boosted Revenue

Zillow’s stock rose after Q3 results exceeded expectations, driven by growth in Rentals and Mortgages.

October 31, 2025, 9:17 PM

The Zillow Real Estate and Rentals app listing displayed on an iPhone screen, ready for update. By Tada Images / Shutterstock.com.

Executive Summary

Zillow’s Q3 2025 financial performance exceeded market expectations, reporting $676 million in revenue and $165 million in adjusted EBITDA.

The company’s Rentals segment saw robust 41% year-over-year revenue growth, while the Mortgages segment surged 36%.

Zillow’s strategic shift to a comprehensive, transaction-focused platform is proving beneficial, driving growth amidst a challenging housing market.

The Trajectory So Far

Zillow’s strong financial performance, despite a challenging housing market characterized by constrained listings and high interest rates, is largely attributed to its strategic transformation from a simple home search portal to a comprehensive, transaction-focused platform, which has notably boosted its Rentals and Mortgages segments.

Assessing Risk and Value

Zillow’s better-than-expected Q3 performance, driven by its strategic shift to a transaction-focused platform and strong growth in its Rentals and Mortgage segments, suggests effective execution and a more diversified revenue base, potentially enhancing its long-term value. While the company has shown resilience in a challenging housing market and is positioned as a cyclical recovery story, its sustained growth and full potential remain dependent on a broader housing market rebound, indicating that investors should weigh this market dependency as a key risk factor.

Expert Predictions and Forecasts

Zillow delivered strong third-quarter 2025 financial results, exceeding market expectations for revenue and adjusted EBITDA, driven by significant growth in its Rentals and Mortgage segments, indicating its strategic shift to a transaction-focused platform is yielding positive outcomes.

Despite Zillow’s internal success, the company anticipates that top-line growth may remain uneven in the short term due to broader housing market challenges such as constrained home listings and high interest rates.

Zillow is seen as an emerging cyclical recovery story, demonstrating solid execution and expanding opportunities, though its full potential is dependent on a more robust rebound in the overall housing market.

Zillow’s stock price experienced a significant boost following its strong third-quarter 2025 performance, with the real estate technology company reporting revenues and adjusted EBITDA that exceeded market expectations. Despite the housing market being described as “bouncing along the bottom,” Zillow’s strategic shift towards a comprehensive, transaction-focused platform appears to be yielding positive results, particularly in its Rentals and Mortgage segments.

Financial Performance Exceeds Expectations

For Q3, Zillow reported revenue of $676 million, a 16.4% increase year-over-year, surpassing its guidance range of $663 million to $673 million. Adjusted EBITDA also saw a substantial rise, climbing 30% year-over-year to $165 million, which was above the guided $150 million to $160 million. Looking ahead, the company has set its fourth-quarter revenue guidance between $645 million and $655 million, aligning with current market expectations.

Segmental Growth Drives Overall Results

The “For Sale” segment contributed $488 million in revenue, marking a 10% year-over-year increase. A significant driver within this segment was Mortgages, which surged 36% to $53 million, indicating a recovery in financing activity. The Rentals segment demonstrated even more robust growth, with revenue escalating 41% year-over-year to $174 million, including a 62% increase in multifamily revenue.

Zillow Rentals averaged 2.5 million monthly active listings during the quarter, with multifamily properties accounting for 69,000 of these, nearly doubling from two years prior. The company also notes a substantial growth opportunity, with approximately 140,000 untapped multifamily properties nationwide.

Strategic Shift Amid Challenging Market

Zillow has been actively transforming its business model from solely a home search portal to a broader, transaction-focused ecosystem. This platform now connects users across their entire housing journey, encompassing discovery, property touring, agent matching, and financing solutions. This strategic evolution is proving beneficial, especially as multifamily inventory expands and digital rental demand continues to rise.

Despite the broader housing market facing challenges such as constrained home listings and high interest rates, Zillow has managed to outperform the sector. However, the company acknowledges that top-line growth could remain uneven in the short term due to these market pressures. Zillow is increasingly viewed as an emerging cyclical recovery story, demonstrating solid execution and expanding opportunities, though its full potential remains reliant on a more robust housing market rebound.