Zillow Group says its engineers are shipping 40% more code each, on average, thanks to internal use of AI tools, allowing them to move features faster from concept to launch.
That’s one of the AI claims the company made in its first-quarter shareholder letter Wednesday, which read at times less like a financial recap and more like a tech strategy blueprint.
“We’re embedding AI throughout the real estate experience in ways that make Zillow increasingly indispensable, and we’re innovating with speed and intention,” CEO Jeremy Wacksman said in the letter, as the Seattle-based company reported revenue up 18% to $708 million in a housing market that was essentially flat.
Other examples of AI implementation from the letter include:
- Consumer AI search: Zillow has begun rolling out an AI-powered search mode to about 5% of its audience, or millions of users. The company said early signals show deeper conversations and more actionable engagement compared to traditional search.
- Agent tools: Follow Up Boss, Zillow’s CRM tool for real estate teams, is becoming an “AI-powered workflow engine” for coordination, prioritization, and outreach. Monthly active users are up more than 70% since Zillow acquired the product at the end of 2023.
- Rental leasing: AI Assist, a leasing assistant embedded in multifamily listings, handles lead management, applicant screening, and lease coordination for property managers.
Wacksman also addressed competition from general-purpose AI platforms, saying Zillow’s proprietary data, deep consumer engagement, and end-to-end transaction tools give it advantages that are difficult to replicate. Zillow launched a partnership with ChatGPT last October, feeding its listings, photos, and pricing into OpenAI’s platform and funneling users back to Zillow for tours and financing.
In addition to its flagship Zillow homes portal, Zillow Group includes real estate brands such as Trulia, StreetEasy, HotPads, Follow Up Boss, ShowingTime, dotloop, and Zillow Home Loans.
The company has cut jobs twice in the past 18 months, including about 200 positions in January, which it attributed to performance rather than AI-driven reductions.
Financial highlights:
- Net income rose to $46 million from $8 million a year ago.
- Purchase loan origination volume through Zillow Home Loans nearly doubled, rising 96% to $1.5 billion, making it a top-25 purchase lender nationally.
- Rentals revenue jumped 42% to $183 million, driven by 57% growth in multifamily revenue.
- The company repurchased 13.5 million shares for $626 million during the quarter, consuming nearly half its cash reserves.
Competitive moves: The day before earnings, Zillow announced a partnership with Realtor.com to extend its Zillow Preview pre-market listings across both platforms. Zillow Preview, launched seven weeks ago, now has more than 60 brokerage partners.
The move is part of a broader industry fight over listing transparency that put Zillow at odds with Compass, which sued over Zillow’s ban on private listings before settling in March.
Litigation costs: The company flagged $11 million in incremental legal expenses in Q1, expected to rise to about $20 million in Q2 as the FTC trial over Zillow’s rental syndication agreement with Redfin approaches. A CoStar copyright case also remain active.
Market reaction: Zillow shares dropped about 6% in after-hours trading, driven less by the Q1 results (which beat analyst estimates) than by Q2 revenue guidance of $750 million to $765 million, with the midpoint slightly below Wall Street expectations.
The company is projecting revenue growth in the mid teens for the full year and planning for the housing market to remain at the bottom of the cycle.
Correction: References to the status of the Compass lawsuit were corrected after publication.
