By Mark Maurer

Zillow is advancing toward its first year in the black since 2012.

The online home buying and rental platform, which launched in 2006 and went public in July 2011, expects to report full-year profit in part through higher revenue and keeping fixed costs, including salaries, software and office space, roughly flat. That progress is occurring as the housing market remains sluggish, with high prices and economic uncertainty deterring buyers.

Zillow has focused on boosting revenue from services such as rentals and mortgages, while slowing head count growth following a hiring surge in 2021, to reach its profitability goal under U.S. generally accepted accounting principles, Chief Financial Officer Jeremy Hofmann said.

"Even if the housing market were to stay where it is, we think there's a lot of growth to come," Hofmann said.

Zillow reported quarterly profit of $8 million for the period ended March 31, its first since 2022, followed by a $2 million profit the following quarter. "It's a nice thing to be able to do, but we obviously want to be more profitable as time goes on," Hofmann said. "It's going to be some form of the same formula."

The company's only full-year profits were in 2011 and 2012, at $1.1 million and $5.9 million, respectively.

Reaching full-year profitability helps the company to be eligible for inclusion in the S&P 500 index, Hofmann said. U.S.-based companies also need to have a market capitalization of at least $22.7 billion, among other criteria, for inclusion. Zillow's market cap has fluctuated around that amount.

The Seattle-based company rose to prominence with online listings, but has over time diversified into mortgage origination and software for real estate professionals and strengthened its rental-listings business.

"Trying to figure out exactly how we were going to monetize best wasn't as obvious 10 years ago," Hofmann said.

Zillow's revenue in the mortgages business was up 41% in the latest quarter from a year ago, primarily from higher volume of loan originations. Revenue for the residential business, which centers on agent advertising and software, climbed 6%, in part because of greater adoption of software services by sellers and listing agents, as the housing market stayed essentially flat.

In one cost-related move, the company isn't dramatically increasing its number of employees anymore, resulting in a reduction in stock-based compensation, 90% of which Zillow considers fixed costs, Hofmann said.

The company's head count rose 9% to 6,856 employees at the end of 2024, roughly the same increase as in the previous year. Before that, the workforce was down 28% in 2022, largely from layoffs as Zillow wound down an algorithm-based home-flipping business called Zillow Offers. The prior year, head count surged by 45%.

At the same time as the layoffs, the company invested heavily in its "housing super app" and other businesses in 2022 and 2023, then pivoted to focus more on improving costs upon observing revenue growth. The company's app combines its listings, services and other tools in one place.

"The biggest thing that we've done differently over the last 2 1/2 years has been this fixed-cost discipline," said Hofmann, who was promoted to CFO from senior vice president of corporate development and strategy in May 2023.

Zillow expects stock-based compensation to fall 10% in 2025 compared with the previous year. Such compensation was down 12% in the latest quarter. Many Zillow employees, from product managers to engineers and marketers, receive stock-based compensation. Recent hiring has been focused on sales staff, which typically receive a lower amount of stock-based compensation than certain other employees, Hofmann said.

The company booked revenue of $2.2 billion in 2024, up 15% from a year earlier. For the year of its IPO in 2011, revenue totaled $66.1 million.

"Part of the reason it took so long [to become profitable post-2012] is that they just went public with a very, very small revenue base and profitability is in part driven by scale," said Mark Mahaney, a senior managing director at Evercore's research arm.

Hofmann said Zillow's profitability status is a mark of the company's maturity, natural evolution and strong performance regardless of the housing market.

"We plan our revenue as if housing is flat and then if there is a move up, we'll be happy and capture that goodness, because more volume is better for us. But we don't necessarily make new business decisions based on macro gyrations," Hofmann said.

Write to Mark Maurer at mark.maurer@wsj.com

(END) Dow Jones Newswires

September 26, 2025 06:00 ET (10:00 GMT)

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