Zillow Group reported better-than-expected first-quarter earnings and revenue on Thursday, but shares tumbled 5% in after-hours trading as the company’s second-quarter guidance midpoint fell short of analyst estimates.

The online real estate marketplace posted adjusted earnings per share of $0.41 for the first quarter, surpassing the analyst consensus of $0.37. Revenue came in at $598 million, up 13% YoY and above the $587.69 million analysts had expected.

Despite the strong Q1 performance, Zillow’s outlook for the second quarter disappointed investors. The company forecasts Q2 revenue between $635 million and $650 million, with the $642.5 million midpoint falling below the $648.7 million consensus estimate.

"Our strong Q1 results surpassed our expectations and demonstrate how well we’re executing," said Zillow Chief Executive Officer Jeremy Wacksman. "We are on track to meet our full-year 2025 goals, and we’re well-positioned to deliver sustainable profitable growth."

Zillow’s For Sale revenue, which includes residential and mortgage segments, grew 8% YoY to $458 million. Rentals revenue saw a significant 33% YoY increase to $129 million, driven primarily by 47% growth in multifamily revenue.

The company reported net income of $8 million, or 1% of revenue, compared to a net loss in the same quarter last year. Adjusted EBITDA rose to $153 million, representing 26% of revenue.

For the full year 2025, Zillow expects low- to mid-teens revenue growth with continued Adjusted EBITDA margin expansion. The company also anticipates approximately 40% growth in Rentals revenue and positive GAAP net income for the year.