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# Zillow Swings To A $158 Million Loss After $165 Million Zillow Offers Settlement Charge
- URL: https://www.bullished.co/zillow-swings-to-a-158-million-loss-after-165-million-zillow-offers-settlement-charge-050d4b1d/
- Published: 2026-11-04T23:22:46.000Z
- Updated: 2026-11-04T23:22:46.000Z
- Description: Revenue rose 7% to $724 million as rentals and mortgages grew, but the settlement over its wound-down home-flipping unit erased the profit.
- Author: Matteo Parrino
- Tags: Earnings, ZG, Industry: Communication Services

[Zillow Group](https://www.bullished.co/tag/zg/), which runs the Zillow, Trulia and StreetEasy home-search sites, posted a [$158 million net loss](https://www.sec.gov/Archives/edgar/data/0001617640/000161764026000068/q32026991.htm?ref=bullished.co) for the third quarter, or $0.70 a share, against net income of $10 million a year earlier. The company pointed to a $165 million charge, net of expected insurance recoveries, to settle a securities class action tied to its wound-down Zillow Offers business, in results released Wednesday.

## Rentals and mortgages carry the quarter

Revenue rose 7% to [$724 million](https://www.inman.com/2026/11/04/zillow-ceo-preferred-will-handle-all-buyer-connections-by-early-2027/?ref=bullished.co), even as the company said the housing market proved weaker than it expected. Rentals revenue climbed 26% to $220 million, led by 35% growth in multifamily. Mortgages revenue rose 32% to $70 million on a 55% jump in purchase loan origination volume to $2.0 billion.

Residential revenue, the agent advertising line, fell 4% to [$419 million](https://www.housingwire.com/articles/zillow-traffic-ai-mode-q3/?ref=bullished.co), which the company blamed on higher-than-expected mortgage rates that pressured transaction volume. For Sale revenue overall was flat at $489 million.

Excluding the settlement and other items, adjusted net income was $124 million, or $0.55 a share, against $0.44 a year ago. Adjusted EBITDA, a measure of operating profit before certain costs, was [$182 million](https://www.inman.com/2026/11/04/zillow-ceo-preferred-will-handle-all-buyer-connections-by-early-2027/?ref=bullished.co), a 25% margin. Impairment and restructuring costs of $32 million also weighed on the reported loss.

"Q3 highlighted Zillow's durability," CEO Jeremy Wacksman said, citing growth "during one of the toughest housing markets in a generation."

## Preferred shift muddies For Sale revenue

Zillow is moving agents from its legacy advertising model to Preferred, where partners pay on closed transactions. In the third quarter, two-thirds of buyer connections went to Preferred partners, up from about one-third a year ago, and the company expects 100% in the first half of 2027.

Preferred connections generate 35% more revenue per connection than the old model, according to the [shareholder letter](https://www.sec.gov/Archives/edgar/data/0001617640/000161764026000068/exhibit992.htm?ref=bullished.co). The shift also cost an estimated 200 basis points of For Sale revenue growth in the quarter, because mortgage revenue arrives six to twelve months after a connection.

Rentals now make up 30% of total revenue, up from 21% two years ago, the letter said. Traffic slipped 3% to [215 million](https://www.housingwire.com/articles/zillow-traffic-ai-mode-q3/?ref=bullished.co) average monthly unique users.

## Fourth-quarter outlook points lower

Zillow guided fourth-quarter revenue of $635 million to $665 million and adjusted EBITDA of $100 million to $135 million. It expects both For Sale and Residential revenue to decline roughly 9% to 15% year over year, and now sees industry purchase mortgage originations falling 10% to 15% after the recent rise in mortgage rates.

For the full year, it expects revenue growth of approximately 10% to 11% and adjusted EBITDA of $655 million to $690 million. Cash and investments stood at $707 million, and about $1.1 billion remains on its buyback authorizations, the company said. A webcast on the results was set for 5 p.m. Eastern Wednesday.

Zillow's own fourth-quarter guidance calls for For Sale revenue to fall 9% to 15%, after the quarter just reported was flat.

Learn

- [Item 2.02: results of operations →](https://www.bullished.co/learn/8-k-items-explained/#item-202-results-of-operations)  
From 8-K Items Explained: What Every Item Code From 1.01 To 9.01 Tells You, With Examples

### Sources

- [8-K Filing — ZILLOW GROUP, INC. (ZG)](https://www.sec.gov/Archives/edgar/data/0001617640/000161764026000068/z-20261104.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit q32026991.htm — ZILLOW GROUP, INC. 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0001617640/000161764026000068/q32026991.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit exhibit992.htm — ZILLOW GROUP, INC. 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0001617640/000161764026000068/exhibit992.htm?ref=bullished.co) — SEC EDGAR
- [Zillow CEO: Preferred Will Handle All Buyer Connections By Early 2027 | Inman Real Estate News](https://www.inman.com/2026/11/04/zillow-ceo-preferred-will-handle-all-buyer-connections-by-early-2027/?ref=bullished.co) — inman.com
- [Zillow posts $158 million loss as Q3 traffic declines](https://www.housingwire.com/articles/zillow-traffic-ai-mode-q3/?ref=bullished.co) — housingwire.com

### More on Zillow Group

- [Zillow Will Pay $212.5 Million To End Shareholder Class Action Over 2021 Stock Purchases](https://www.bullished.co/zillow-will-pay-212-5-million-to-end-shareholder-class-action-over-2021-stock-purchases-50cf05bb/)

[All Zillow Group (ZG) coverage →](https://www.bullished.co/tag/zg/)