Zillow CEO Fires Back, Vows to Execute Despite "External Noise" As Q3 Revenue Climbs 16%

The leading US real estate portal operator Zillow has revealed that it grew revenues 16% year-on-year in Q3 and logged its third straight quarter of profitability on a net income basis. Notable points from the company's report on the three months ended September 30th include:

• Total revenue was up 16% year-on-year at $676 million
• Adjusted EBITDA was up 30% at $165 million
• Net income was $10 million at a 1% margin (Q3 2024 was a net loss of $20 million)

The positive revenue and profit numbers, which Zillow says outperformed the market and its own guidance, come amid mounting legal headaches for the Seattle-based company.

Zillow stands accused of, among other things, colluding with the brokerage and discovery platform Redfin to restrict competition in the rentals market and of stealing over 47,000 property photos from a direct rival to bolster its listings inventory.

CoStar, the owner of Zillow's rival Apartments.com and the party suing Zillow for copyright infringement, said in its Q3 reporting this week that it had over 87,000 multifamily rental listings. In a letter to shareholders accompanying Zillow's Q3 report, CEO Jeremy Wacksman, touted the portal's 69,000 listings, a figure he said was double what it had two years ago in this category.

Thanks in large part to its inventory growth, Zillow's rentals business has been surging, accounting for $173 million in revenue in the third quarter, representing an increase of 41% year-on-year.

Zillow's mortgage business continues to perform well and revenue increased 36% in Q3 to $53 million, driven by a 57% increase in purchase loan origination volume.

As for Zillow's core sales leads business, year-on-year growth in Q3 was more modest at 7% ($435 million). However, a Zillow press release sought to contextualise the figure within a US housing market that saw transaction volume growth of only 5% during the period.

While CoStar's CEO cited third-party data provider ComScore in telling investors and analysts this week that his rival's unique traffic had fallen 6.5% in Q3, Zillow's press release reported a healthy 7% overall traffic increase for the period and said the company's websites and apps saw an average of 250 million unique users.

CoStar boss Andy Florance also claimed that his Homes.com portal is outstripping Zillow when it comes to selling enhanced visibility packages, citing an analyst report from Citi, which put the share of listings that Zillow had managed to upsell with its 'Showcase' product at 1.1% of the active market. Wacksman's figures for the product's coverage will sound much better to Zillow's shareholders.

"As of the end of Q3, Showcase was on 3.2% of all new listings in the U.S., up from 2.5% last quarter and more than double our share vs. a year ago"

Florance had also described his rival as "under siege", and in what was perhaps a veiled dig at Zillow's recent integration with the ChatGPT app, said that he believes that generalist AI solutions won't win in real estate and that "the past is prologue here".

Meanwhile, entitled 'Q3 results show Zillow is built for where the industry is going, not where it’s been', Wacksman's letter to shareholders included some subtle ripostes.

There was the assertion that Zillow's vision of creating an integrated transaction hub, rather than a simple "top of funnel lead generation", is what differentiates Zillow from "everyone else in our category".

"We are still in the very early innings of how AI will transform consumer experiences, but we strongly believe that the critical differentiators between those that succeed and those that get left behind in our category will be user experience, quality of audience, unique insights, and providing integrated transaction services instead of just top-of-funnel lead generation. We feel incredibly well-positioned to take advantage of AI transformation, given how unique our strategy is."

Mentioned towards the end of Wacksman's letter were the lawsuits, referred to as "external noise". Zillow is confident that it can continue to execute despite mounting lawsuits and deliver on its vision of an integrated 'super app' for all areas of real estate transactions.

The one thing Zillow and its East Coast rival have in common is that both of their share prices have failed to launch over the last few years despite growing revenue. Zillow will be hoping its steady recent stream of product and business model innovations can speak over external noise that is bound to get louder in 2026.