From Washington: In a development with clear implications for how technology companies extract profit from broken markets, Zillow is posting some of its strongest financial results on record, even as the American housing crisis it profits from shows little sign of easing. The company recorded full-year 2025 revenue of $2.6 billion, up 16% on the prior year, and swung to a net profit of $23 million after a $112 million loss in 2024.
For Australian investors and consumers, Zillow's trajectory offers a window into the future of real estate technology, and a cautionary tale about what happens when digital platforms become structurally embedded in markets with chronic supply problems.
CEO Jeremy Wacksman, who took the top role in 2024 after more than a decade at the company, has been blunt about the conditions his business operates in. The core problem, he argues, is a supply-demand imbalance: home prices are up nearly 100% from pre-pandemic levels, while incomes have not come close to keeping pace, making affordability a severe challenge. Zillow estimates the US is nearly 5 million homes underbuilt, the accumulated result of construction slowing sharply after the 2008 financial crisis. Wacksman has noted the company is roughly "2 million off a normalised market" in transaction volumes.
His response to this frozen market is not to wait for conditions to improve, but to capture a larger share of every transaction that does occur. The shift marks a deliberate move away from a model where Zillow made money when a shopper raised their hand, toward one where it participates in, and tries to simplify, the entire transaction. For the full year 2025, the company's mortgage operation generated $199 million in revenue, up 37% on the prior year, with purchase loan origination volume rising 53% annually.
Artificial intelligence sits at the centre of that ambition. Zillow applied machine learning early through its Zestimate home-value tool, and has since built out AI-powered CRM tools for real estate agents, including features that summarise calls, draft follow-up messages, and prepare next-step checklists. More recently, the company integrated its native app with ChatGPT, allowing users to conduct a home search, connect with an agent, and review financing directly within the ChatGPT interface. Wacksman has described this as a "new doorway" to Zillow, positioning first-mover advantage in the AI era as a genuine strategic asset.
The numbers on agent penetration are striking. Zillow estimates that agents who use its products touch approximately 80% of residential real estate transactions in the US. Yet the company holds only single-digit transaction share despite reaching 60-70% of monthly homebuyers, a gap Wacksman sees as a growth runway rather than a failure. The logic is sound from a fiscal standpoint: if Zillow can deepen its involvement in the transactions it already touches, the revenue upside is substantial without needing market conditions to improve.
That logic does not sit entirely comfortably, however. Critics would argue that a company monetising both sides of a distressed market, charging agents for software and consumers for mortgages while the underlying affordability crisis worsens, is extracting rent from dysfunction rather than solving it. Housing advocates point out that digital efficiency tools do nothing to address the supply deficit Wacksman himself identifies as the root cause of unaffordability. The argument has real force.
There are also legitimate questions about market concentration. The US property system operates on over 500 regional Multiple Listing Services maintained by realtor groups, which share listings openly across competitors, a structure Wacksman has called "an incredible public good" that exists nowhere else in the world. Some large brokerages, including Compass, are experimenting with "windowing", showing listings privately to their own network before publishing them widely, while Zillow's response has been a hardline 24-hour policy requiring any publicly marketed listing to appear on its platform within a day of going on the MLS or not be displayed at all.
That policy has landed Zillow in court. The company is also a defendant in a high-profile antitrust lawsuit from the Federal Trade Commission and multiple states over its multifamily rental listings syndication deal with Redfin, a case that alleges the arrangement stifles competition in the rental advertising market. Zillow's executives have maintained the legal challenges will not materially affect the company's financial position or strategy, but investors remain watchful.
There is also the AI disaggregation threat to contend with. If a user can simply ask a chatbot how much a property is worth and receive a reliable answer without ever opening Zillow's app, the platform's traffic dominance becomes less defensible. Wacksman has acknowledged AI disaggregation as a threat, but argues that real estate's complexity makes transaction software more defensible than top-of-funnel traffic, with 80% of Zillow's traffic still arriving direct.
For Australian property technology companies and the investors who back them, the Zillow story is instructive. A platform that began as a consumer information tool has engineered itself into the financial plumbing of a major industry, with the AI buildout now central to whether it can sustain double-digit growth in a market that, by its own CEO's admission, is not recovering quickly. The genuine tension, between a company with real consumer utility and one whose growth depends on a crisis it cannot fix, is unlikely to resolve cleanly. That ambiguity is precisely what makes Zillow worth watching from this side of the Pacific. Reasonable people can admire the execution while questioning the broader social arithmetic.