Key Takeaways Shares of Zillow tumbled 12.7% on Thursday following an unexpected Q2 net loss of $4 million, even as the company exceeded revenue projections with $772 million. Third-quarter r
Shares of Zillow experienced a sharp 12.7% decline Thursday morning, positioning the stock for its steepest single-session loss since February, following the real estate platform’s unexpected quarterly loss and reduced forward guidance.
The Seattle-based company disclosed a Q2 net loss of $4 million alongside revenue of $772 million. Wall Street had anticipated a profit of $21 million. The per-share loss of two cents contrasted sharply with analyst expectations of a nine-cent gain.
Top-line results showed an 18% year-over-year increase, while adjusted EBITDA reached $176 million, surpassing the $162 million projection. Adjusted earnings delivered 52 cents per share, exceeding the consensus estimate of 45 cents.
ZILLOW GROUP $Z Q2’26 EARNINGS HIGHLIGHTS
Revenue: $772M (Est. $758M)
; +18% YoY
Q3 Guide:
…
— Wall St Engine (@wallstengine) August 5, 2026
The bottom-line loss stemmed primarily from $36 million in impairment and restructuring expenses connected to workforce reductions affecting more than 500 employees that the company disclosed earlier in the week.
Chief Executive Jeremy Wacksman explained the layoffs were implemented to enable the organization to “move faster and operate more efficiently.” He maintained that the company continues progressing toward full-year revenue expansion in the mid-teens percentage range.
Looking ahead to Q3, Zillow projected revenue between $745 million and $760 million, trailing the $774 million analyst projection. The company’s adjusted EBITDA forecast of $180 million to $200 million similarly underperformed the $214 million consensus expectation.
Wacksman identified two primary factors affecting the forward outlook. The company now anticipates contraction in the overall mortgage market. Additionally, Zillow is accelerating its transition toward the “Preferred” agent partnership program.
The Preferred program structure requires agents to compensate Zillow only after successfully closing home sales rather than making upfront payments. According to Wacksman, this approach yields 23% higher revenue per connection, though it creates timing delays that are pressuring short-term financial performance.
Investment firm Bernstein downgraded Zillow from Outperform to Market-Perform on Thursday, simultaneously slashing its price objective from $50 to $38. Analyst Nikhil Devnani stated the firm is “throwing in the towel” on its previous bullish position.
Devnani explained that Bernstein’s initial optimistic thesis centered on market share expansion through the Preferred model transition combined with significant operating leverage improvements. He admitted the firm “got this one painfully wrong.”
The analyst highlighted that Residential segment revenue guidance indicates zero year-over-year growth in Q3, while market share gains excluding Mortgage operations appear to be contracting. He cautioned these challenges could extend through 2027.
William Blair analyst Stephen Sheldon projected Zillow shares will likely remain “range-bound” given the lack of clarity regarding housing market recovery and volatile near-term profitability trends.
Alongside earnings, Zillow revealed leadership restructuring. Chief Financial Officer Jeremy Hofmann will assume additional responsibilities as Chief Operating Officer. Jun Choo is stepping aside from the COO position due to health considerations and will continue as an advisor through December.
Cassandra “Sandi” Knight joined as Zillow’s new Chief Legal and Policy Officer. Knight previously held the position of VP of Litigation and Discovery at Google.
Year-to-date, Zillow stock has declined 47%, based on Dow Jones Market Data.
The post Zillow (Z) Stock Plummets 13% on Unexpected Loss and Disappointing Forecast appeared first on Blockonomi.
