Zillow shares slide 15% after EBITDA miss and free cash flow margin collapse
Zillow reported Q4 revenue of $654 million and GAAP profit of $0.01 per share, topping forecasts, but adjusted EBITDA of $149 million fell short of the $151.5 million consensus and free cash flow margin plunged to 6.7% from 15.9% year-over-year. Shares dropped 15.1% as investors reacted to the mixed results and cautious Q1 sales guidance of $700–$710 million.
1. Mixed fourth-quarter performance
Zillow delivered Q4 revenue of $654 million and a GAAP profit of $0.01 per share, both above expectations. However, adjusted EBITDA reached only $149 million versus a $151.5 million consensus, and free cash flow margin collapsed to 6.7% from 15.9% year-over-year, highlighting weakening cash generation.
2. Cautious first-quarter guidance
Management set first-quarter sales guidance at $700–$710 million, slightly above street estimates but reflecting tempered optimism for transaction volumes in a slow housing market. The modest outlook underscores ongoing pressure on revenue growth and margins as market activity remains subdued.
3. Significant share decline and sector impact
Shares plunged 15.1% on the mixed earnings and guidance, marking one of Zillow’s largest single-day moves in over a year. The sharp sell-off also dragged down other housing-sensitive stocks, illustrating broad investor concern about near-term housing market dynamics.