ZILLOW GROUP, INC.ZG

ZILLOW GROUP, INC. Leases Disclosure

10-KFiled Feb 11, 20262 min read
Leases
The components of our operating lease expense were as follows for the periods presented (in millions):
Year Ended December 31,
202520242023
Operating lease cost$17 $22 $35 
Variable lease cost8 13 18 
     Total lease cost$25 $35 $53 

We have subleases related to certain of our operating leases. For the years ended December 31, 2025, 2024 and 2023, we recognized $6 million, $6 million and $10 million, respectively, of sublease income. For the years ended December 31, 2025, 2024, and 2023, we recognized impairment costs of $2 million, $6 million and $16 million, respectively, within impairment and restructuring costs in our consolidated statements of operations associated with changes in the use of certain office spaces, primarily related to subleases where anticipated sublease income was less than the carrying value of the related asset group.
Total lease costs associated with short-term leases were not material for the years ended December 31, 2025, 2024 and 2023. Other information related to operating leases was as follows for the periods presented (in millions, except for years and percentages):
Year Ended December 31,
20252024
2023(1)
Cash paid for amounts included in the measurement of operating lease liabilities$22 $46 $42 
Right of use assets obtained in exchange for new operating lease obligations$8 $2 $(8)
Weighted average remaining lease term for operating leases6 years6 years6 years
Weighted average discount rate for operating leases9.4 %9.5 %9.4 %
(1) During the year ended December 31, 2023, we amended our existing office space lease for our corporate headquarters in Seattle, Washington, to provide the landlord the option to terminate a portion of our lease prior to the original lease termination date. In December 2023, the landlord exercised the early termination option for the relevant floors effective June 30, 2024. This modification to the lease term resulted in an immediate reduction in the right of use asset and lease liability of $8 million. We ceased use of the terminated space as of December 31, 2023, and as a result, we accelerated recognition of $14 million of amortization for the related right of use asset during the year ended December 31, 2023.
The following table presents the scheduled maturities of our operating lease liabilities by year as of December 31, 2025 (in millions):
2026$21 
202721 
202821 
2029
21 
2030
15 
Thereafter21 
     Total lease payments120 
Less: Imputed interest(27)
     Present value of lease liabilities$93 
Operating lease liabilities included in the table above do not include sublease income. As of December 31, 2025, we expect to receive sublease income totaling approximately $29 million from 2026 through 2030.

Historical Timeline

Fiscal YearFiled
2025Feb 11, 2026Showing above
2024Feb 11, 2025
2023Feb 15, 2024
2022Feb 15, 2023
2021Feb 10, 2022
2020Feb 12, 2021
2019Feb 19, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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