Zillow Q3 2026 Call: Revenue Up 7% and Rentals Up 26%, but Rate Shock Cuts the Q4 Mortgage Guide

Zillow Group (NASDAQ: Z) is in the news after Nasdaq published a summary of its third-quarter earnings call on 5 November 2026 (see Sources). The call took place on 4 November 2026. Management reported revenue growth and margin expansion in a quarter it described as a sharp deterioration in housing conditions, and guided to a weaker fourth quarter for mortgages.

Key takeaways

• Q3 revenue rose 7% year over year to $724 million. EBITDA was $182 million, with margin up 70 basis points to 25% (CEO Jeremy Wacksman, COO/CFO Jeremy Hofmann).
• Rentals revenue grew 26% to $220 million, led by multi-family revenue up 35%. Residential revenue fell 4% to $419 million, and mortgages revenue rose 32% to $70 million, below management's own outlook.
• Mortgage rates rose almost 100 basis points from mid-6% at the end of June to mid-7% by early October. Management now expects industry purchase mortgage origination volume to fall 10% to 15% in Q4, versus its earlier mid-single-digit decline estimate.
• Q4 revenue is guided to $635 million to $665 million, roughly flat year over year, with EBITDA of $100 million to $135 million.
• The shift of buyer connections to the Preferred partner model is on track: about two-thirds of Q3 connections, more than 75% by year-end and 100% in the first half of 2027.

Bull case

• Outperformance against a falling market. Wacksman said For Sale revenue was flat while purchase mortgage industry volume fell 4%. Hofmann said that after adjusting for an expected 200 basis point headwind from the Preferred transition, underlying For Sale revenue beat the industry by 600 basis points.
• Diversification. Hofmann said about 40% of revenue now comes from rentals and software, which he described as less rate dependent. Wacksman said Rentals is 30% of revenue, up from 21% two years earlier, with a clear path to more than $1 billion in annual revenue.
• Multi-family momentum. Management cited a record 81,000 multi-family properties advertised (up 17%) and said partners report the best return on spend in the category.
• Better economics per connection. Management said Preferred connections generate 35% more revenue per connection than the legacy advertising model, and that Zillow Home Loans adoption is roughly 20% in the oldest markets.
• Audience and AI. Per comScore, as cited by Wacksman, Zillow had 77% of average monthly unique visitors in its category while category traffic fell 10%. About 80% of traffic is direct. Users of AI mode spend nearly three times as long on Zillow, and AI mode is now open to all signed-in users.
• Costs and capital returns. EBITDA expenses of $542 million came in below the $560 million to $565 million expected. Adjusted diluted EPS was $0.55 versus $0.44 a year earlier. Year-to-date free cash flow was $269 million, and $846 million of stock has been repurchased, with about $1.1 billion of authorization remaining.

Bear case

• Weak mortgage guide. Brad Erickson (RBC) pointed out that the Q4 mortgage guide sits much closer to the industry growth rate than before. Hofmann said macro was worse than expected and that pipelines were hurt most in Finance First, the pre-approval channel, which "fell off in Q3". Mortgage revenue is guided down low single digits in Q4 at the midpoint.
• Residential decline. Residential revenue fell 4% in Q3, including an estimated 600 basis point headwind from the Preferred transition. Management expects For Sale and Residential revenue to decline roughly 9% to 15% in Q4.
• Q4 margin step-down. The EBITDA guide implies an 18% margin at the midpoint versus 25% in Q3.
• GAAP loss. Zillow reported a net loss of $158 million; adjusted net income, which excludes one-time items, was $124 million.
• No near-term macro relief. Hofmann said it is "not obvious" how things improve and that the company is planning for a drag continuing into 2027. Wacksman said he cannot yet forecast 2027.
• Buyers on the sidelines. Nick Jones (BNP Paribas) asked how the market resolves with few buyers. Wacksman said affordability-challenged buyers mean fewer buyers, while rental demand rose nearly 20% in Q3.

What management said

• "Housing conditions deteriorated sharply, but Zillow kept growing and outperforming." Jeremy Wacksman, CEO.
• "Macro is worse than we expected." Jeremy Hofmann, COO and CFO, on the mortgage guide.
• "Nothing structurally has changed." Jeremy Hofmann, answering the RBC question on mortgages.
• "Can't really forecast '27 yet." Jeremy Wacksman, on the housing outlook.

Note a discrepancy in the transcript: Follow Up Boss was cited as having about 141,000 monthly active users in Wacksman's prepared remarks (up 16%), while a later Q&A answer from Wacksman referred to 114,000 agents on the platform. The transcript does not reconcile the two figures; the difference may be a transcription error.

Risks

• Rate shock and affordability. Management said volatility keeps buyers on the sidelines and that it will take time to rebuild the mortgage funnel.
• Execution of the Preferred transition. It creates a 400 to 500 basis point headwind to For Sale revenue growth and 900 to 1,000 basis points for Residential in Q4, plus greater seasonality and revenue-recognition timing differences. Hofmann said the transition is going to plan.
• AI and search-traffic shifts. A Citi analyst asked about AI search and personal agents. Wacksman said Zillow sees no meaningful traffic impact yet. He also said Google Local Service Ads for real estate have had no impact to date.
• Litigation. Wacksman said several matters were resolved this year and legal costs should be more normal from Q4. He said the cases did not affect the business.
• Loan officer capacity. Hofmann said Zillow is still hiring loan officers to meet Preferred-driven demand, which adds cost.

Outlook

• Q4 2026: revenue of $635 million to $665 million, roughly flat year over year; EBITDA expenses of $530 million to $535 million (about 5% growth); EBITDA of $100 million to $135 million. Rentals revenue growth is expected to be similar to Q3's 26%. Mortgage origination volume is expected up high single digits with revenue down low single digits at the midpoint.
• Full year 2026: revenue growth of about 10% to 11%, including about 30% growth in rentals; flat EBITDA margin, with EBITDA of $655 million to $690 million; share-based compensation down more than 20%. Management expects the housing market to be flat and the purchase mortgage industry to be down mid-single digits.
• Not committed: management gave no 2027 guidance, no formula for Preferred revenue per connection by market, and no long-term figure for Zillow Home Loans adoption. It said it expects fixed costs to grow with inflation in 2027 and to keep growing profit faster than revenue, without giving numbers.

Sources

• Nasdaq, "Zillow Group Q3 Earnings Call Highlights" (5 November 2026): https://www.nasdaq.com/articles/zillow-group-q3-earnings-call-highlights
• Nasdaq earnings headlines feed: https://www.nasdaq.com/feed/rssoutbound?category=Earnings
• Zillow Group Q3 2026 earnings call transcript (call date 4 November 2026), retrieved via the Financial Modeling Prep earnings transcript service (symbol Z, fiscal Q3 2026).