Zillow Group announced robust first-quarter 2026 financial results, with total revenue climbing 18% year over year to $708 million, aligning with the upper end of its projections. Despite a generally flat housing market and a 1% decline in the industry's purchase mortgage origination volume, the company's net income reached $46 million, a substantial increase from $8 million in the same quarter last year. Diluted net income per share rose to $0.19, up from $0.03 previously.
Key drivers for Zillow's strong performance included a 42% year-over-year surge in Rentals revenue to $183 million, largely attributed to a 57% growth in multifamily revenue. Mortgages revenue also saw a significant boost, increasing 56% year over year to $64 million, primarily due to a 96% rise in purchase loan origination volume to $1.5 billion. Residential revenue, which encompasses Zillow Showcase and agent tools, grew 8% annually to $450 million, and For Sale revenue was up 12% to $514 million.
Despite the positive Q1 results that exceeded analyst estimates, Zillow's shares dropped approximately 6% in after-hours trading. This decline was primarily a reaction to the company's second-quarter revenue guidance, which was projected between $750 million and $765 million. The midpoint of this forecast fell slightly below Wall Street's expectations, overshadowing the otherwise strong first-quarter performance and the company's upbeat outlook.
