Investing Talk #40: Zillow Business

Zillow Business Overview

• Zillow Group, Inc. is a major U.S. real-estate marketplace. Wikipedia+2productmint+2

• It operates a platform (website and apps) for buying, selling, renting, and financing homes. Wikipedia+1

• Its strategy is to be a “housing super-app” — connecting users across the full real estate lifecycle: searching homes, getting a mortgage, selling, renting. Wikipedia

Key Revenue Streams

1. Premier Agent / Real Estate Agent Leads & Advertising

   • Zillow’s biggest business is connecting real estate agents with homebuyers. Agents pay Zillow to get leads (buyer contacts) and more visibility for their profile. The Motley Fool+1

   • The lead cost varies by ZIP code and market. productmint

2. Rentals / Property Manager Services

   • Landlords and property managers pay to list their properties on Zillow. The Motley Fool

   • Zillow offers tools for tenant screening, rent collection, and lease management. The Motley Fool+1

   • They also offer advertising to property management companies. Digital Data Design Institute at Harvard

3. Mortgage Origination / Marketplace

   • Zillow has Zillow Home Loans, which originates mortgages. axiomalpha.com+1

   • It connects homebuyers with other lenders via its marketplace — Zillow gets paid for leads. productmint

   • Mortgage originations contribute to its revenue growth. investors.zillowgroup.com

4. Data & Other Services

   • Zillow sells access to its real-estate data (home values, rent indices, forecast data, etc.) to businesses and professionals. The Motley Fool+1

   • Advertising also comes from non-agent sources: inspectors, home improvement professionals, builders, and so on. productmint

Recent Performance & Trends

• In Q3 2025, Zillow reported revenue of US$676 million, up 16% year over year. investors.zillowgroup.com

• Its rentals business is growing fast: Q3 rentals revenue was US$174 million, up 41% YoY. investors.zillowgroup.com

• Mortgage revenue also jumped: Q3 mortgages revenue was US$53 million, increasing 36% YoY. investors.zillowgroup.com

• Adjusted EBITDA for Q3 was US$165 million (about 24% margin). investors.zillowgroup.com

Strategic Strengths

• High traffic & consumer reach: Zillow has a massive user base, which makes it very attractive for agents and advertisers. White Label Fox

• Lead generation power: Its Premier Agent program is very effective — agents are willing to pay a lot for quality leads. iCoderz Solutions

• Diversified model: It’s not just about listings — Zillow touches mortgages, rentals, advertising, and data. axiomalpha.com

• Data advantage: Zillow’s “Zestimate” and other data products help it build value for both consumers and professionals. Wikipedia

Challenges & Risks

• Agent-lead dependency: A large portion of Zillow’s revenue comes from agents paying for leads, which could be risky if agents pull back. iCoderz Solutions

• Mortgage risk: As a mortgage originator, Zillow is exposed to interest rate risk and credit risk. productmint

• Competition: Other real-estate platforms (like Redfin, Realtor.com) and newer players compete strongly. Seeking Alpha

• Regulatory / market risk: Changes in real estate commission structures or rental advertising rules could impact its business.

• Costs of expansion: Some of Zillow’s earlier bets (like iBuying) cost a lot and were scaled back. Seeking Alpha

Why Zillow Matters

• For homebuyers: Zillow is often the first stop for browsing homes, checking estimates (Zestimates), and researching neighborhoods.

• For real estate professionals: It’s a crucial source of leads and brand exposure.

• For investors: Zillow is not just a portal — it’s increasingly a fintech + data + marketplace business, offering diversified revenue opportunities.

• For the real estate industry: Zillow’s platform helps modernize and digitalize real estate transactions, influencing how people buy, sell, and rent.