Key Highlights

  • Revenue rose 7% to USD 724 million in the third quarter from USD 676 million, and Gross Profit increased 5% to USD 516 million.
  • The net loss was USD 158 million, or USD 0.70 per share, against Net Income of USD 10 million, or USD 0.04, a year earlier.
  • General and administrative expense rose USD 152 million, mainly on a USD 165 million charge for the ZO securities class action settlement, net of expected insurance recoveries.
  • Adjusted EBITDA, a non-GAAP measure, grew 10% to USD 182 million, a Margin of 25% of Revenue versus 24% in the prior-year quarter.

Settlement Accrual Pushes the Quarter Into a Loss

Zillow Group (NASDAQ:Z) filed its Quarterly Report for the period ended September 30, 2026 on November 4, 2026. On October 27, 2026 it agreed to settle the ZO securities class action, which concerned its former Zillow Offers business, by paying USD 212.5 million in cash into Escrow after preliminary court approval. The settlement still needs court approval. The company accrued the full USD 212.5 million at September 30 and booked a USD 48 million insurance receivable, so the net charge was about USD 165 million. That drove a loss from operations of USD 161 million, a pre-tax loss of USD 155 million and a net loss of USD 158 million. Management expects general and administrative expense to fall in the fourth quarter.

Rentals and Mortgages Grow While Residential Slips

Rentals revenue climbed 26% to USD 220 million on higher quarterly revenue per average monthly rentals unique visitor. Mortgages revenue rose 32% to USD 70 million on greater Loan origination volume. Residential revenue fell 4% to USD 419 million, which the company ties to fewer visits amid weaker Demand in the residential real estate market. Visits are now measured under a stricter method that excludes automated traffic, and prior periods were recast, lowering previously reported third-quarter 2025 visits by about 5%. Adjusted EBITDA of USD 182 million compares with USD 165 million, so the operating Business improved even as the settlement hit net results.

A 7% Headcount Cut, Buybacks and Lower Cash

On August 4, 2026 the company announced a headcount reduction of about 7% of employees. It recorded restructuring costs of USD 32 million in the quarter, of which USD 20 million was cash severance and USD 12 million accelerated share-based compensation. Cash and cash equivalents, investments and restricted cash totaled USD 713 million, against USD 1.3 billion at year end 2025. Share repurchases of Class A and Class C stock totaled about USD 846 million over nine months (calculated), including 539 thousand Class C shares for USD 20 million in the third quarter. Lower Investment balances reduced other income to USD 12 million from USD 18 million.

Where Things Stand

Mostly because of a one-time accounting charge, not weaker operations. Zillow Group (NASDAQ:Z) accrued USD 212.5 million for the ZO settlement, netted by USD 48 million of expected insurance recoveries, while revenue grew 7% and adjusted EBITDA rose 10%. Residential revenue is still shrinking and cash is lower after buybacks and restructuring. The next markers are court approval of the settlement, the escrow payment, the expected fall in fourth-quarter administrative costs and residential demand.