Zillow Group (ZG) risk factors, 2025 10-K

Risks Related to Our Business and Industry

1. 01Our business and operating results have been and may continue to be impacted by the health of the United States residential real estate industry and may be negatively affected by downturns or significant changes in this industry and general economic conditions
2. 02Our business may be impacted by industry changes, including as a result of past, pending or future lawsuits, settlements or government investigations
3. 03If real estate, rental and mortgage professionals, home builders, property managers or other real estate partners reduce or end their spending with us or if we are unable to effectively manage advertising and product inventory or pricing, our business could be harmed
4. 04We may not be able to maintain or establish relationships with real estate brokerages, real estate listing aggregators, MLSs, property management companies, home builders and other third-party listing providers, which could limit the information we have to power our products and services
5. 05We may not be able to maintain or establish relationships with other data providers, which could limit the information we are able to provide to our consumers and impair our ability to attract or retain customers
6. 06If we fail to comply with the rules and compliance requirements of MLSs, our access to and use of listings data may be restricted or terminated
7. 07If our data integrity suffers real or perceived harm, customers and real estate partners may decrease use or cease using our products and services, and we may be subject to legal liability
8. 08If we do not innovate or provide high-quality products and services that deliver efficient and integrated transaction experiences to our customers and real estate partners, our business could be harmed
9. 09We may not be able to compete successfully against our existing or future competitors in attracting customers or real estate partners, which could harm our business, results of operations and financial condition
10. 10We compete in a dynamic industry, and we may invest significant resources to pursue strategies, develop new products and services, and expand existing products and services into new markets that do not prove effective
11. 11Natural disasters, climate change, geopolitical events, and catastrophic events may disrupt real estate markets or otherwise harm our business
12. 12Our targets and disclosures related to ESG matters expose us to risks that could adversely affect our reputation and performance
13. 13Our dedication to making decisions based primarily on the best interests of customers may cause us to forgo short-term gains
14. 14We are subject to disputes and current or proposed rules and regulations regarding the accuracy or display of our Zestimates and Rent Zestimates
15. 15We rely on the performance of highly skilled personnel, and if we are unable to attract, retain and motivate well-qualified employees, our business could be harmed
16. 16We have and may continue to make acquisitions and investments, which could result in operating difficulties, dilution and other harmful consequences
17. 17Our fraud detection processes and information security controls may not successfully detect all fraudulent activity by third parties aimed at our employees or customers, which could adversely affect our reputation and business results
18. 18We are subject to multiple risks related to customer and partner payments
19. 19processing disruptions and increased operating expenses, either of which could harm our business, financial condition, or results of operations
20. 20Some of our potential losses may not be covered by insurance. We may not be able to obtain or maintain adequate insurance coverage
21. 21Applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents. Such disclosures are costly and the disclosure or the failure to comply with such requirements could lead to adverse consequences
22. 22Any significant disruption in service on our mobile applications or websites or in our network could damage our reputation and brands, and result in a loss of customers of our products and services and of our real estate partners, which could harm our business, results of operations and financial condition
23. 23We rely upon certain third-party services to support critical functions of our business and any disruption of or interference with our use of those third-party services could adversely impact our operations and our business

Risks Related to Our Mortgage Operations

1. 24If Zillow Home Loans is unable to obtain and maintain sufficient financing to fund its origination of mortgages or is unable to resell mortgages on the secondary market, our mortgage operations and financial results may suffer
2. 25Zillow Home Loans product offerings may not meet customers’ financing needs, which could cause them to use other lenders
3. 26Zillow Home Loans may not be able to continue to grow its mortgage origination operations, which could negatively affect our mortgages revenue, our results of operations, and our overall financial condition
4. 27Zillow Home Loans is dependent on United States government-sponsored entities and government agencies, and any actions by these entities or changes in these entities or their operations could adversely affect our mortgage operations, liquidity, financial condition and results of operations
5. 28Zillow Home Loans operates in a highly regulated industry, and federal, state, and local laws and regulations, including many that are continually changing, could materially and adversely affect our business, financial condition and results of operations
6. 29Our mortgage operations are impacted by interest rates. Changes in prevailing interest rates may have an adverse effect on our financial results

Risks Related to Our Intellectual Property

1. 30We may be unable to adequately protect our intellectual property, which could harm the value of our brands and our business
2. 31Intellectual property disputes are costly to defend and could harm our business, results of operations, financial condition and reputation
3. 32Proprietary rights agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information
4. 33We may not be able to halt the operations of websites that aggregate or misappropriate our data

Risks Related to Regulatory Compliance and Legal Matters

1. 34Failure to comply with federal, state and local laws, rules and regulations or to obtain and maintain required licenses or authorizations, could materially and adversely affect our business, financial condition and results of operations
2. 35demands; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers and other adverse business consequences
3. 36Our data processing activities subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security
4. 37We are from time to time involved in, and have in the past or may in the future be subject to claims, suits, government investigations, and other proceedings that may result in adverse outcomes
5. 38our business practices, products or technologies, which could in the future materially and adversely affect our business, operating results and financial condition

Risks Related to Our Financial Position

1. 39We have incurred significant operating losses in the past and we may not be able to sustain or increase our revenue growth or generate sufficient revenue to be profitable over the long term
2. 40These investments may not result in increased revenue or growth in our business. If we fail to continue to grow our revenue and overall business and to manage our expenses, we may incur significant losses in the future and may not be able to achieve or maintain profitability
3. 41Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our debt, settle conversions of our Notes, or repurchase our Notes upon a fundamental change
4. 42Any of these factors could materially and adversely affect our business, financial condition and results of operations. In addition, if we incur additional indebtedness, the risks related to our business and our ability to service or repay our indebtedness would increase
5. 43We may not be able to raise additional capital to support the operation and growth of our business on terms acceptable to us, or at all
6. 44We rely on assumptions, estimates, and business data to calculate our key performance indicators and other business metrics, and real or perceived inaccuracies in these metrics may harm our reputation and negatively affect our business
7. 45We expect our results of operations to fluctuate on a quarterly and annual basis
8. 46We could be subject to additional tax liabilities
9. 47Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited

Risks Related to Ownership of Our Common Stock, Capital Stock and Notes

1. 48Our Class A common stock and Class C capital stock prices may continue to be volatile, and the value of an investment in our Class A common stock and Class C capital stock may decline
2. 49Our capital structure as contained in our charter documents has the effect of concentrating voting control with our founders, and limits your ability to influence corporate matters
3. 50Future sales of our stock in the public market could cause our stock price to decline and future issuances of our stock could cause dilution
4. 51We cannot guarantee that activity under our repurchase authorizations will enhance shareholder value, and repurchases could affect the price of our Class A common stock, Class C capital stock and Notes
5. 52The capped call transactions may affect the value of our Class C capital stock
6. 53connection with the conversion of the 2026 Notes and/or offset any cash payments we were required to make in excess of the principal amount of converted notes. In connection with settling our 2026 Notes in December 2024, we elected to keep the associated capped call transactions outstanding
7. 54Anti-takeover provisions in our charter documents and under Washington law could make an acquisition of us more difficult, limit attempts by shareholders to replace or remove our management and affect the market price of our stock