In connection with the annual review cycle, option awards and restricted stock units are granted under the Zillow Group, Inc. 2020 Incentive Plan during the first quarter of each year and typically vest quarterly over four years. For additional information regarding our share-based awards, see Note 11 in the Notes to the Consolidated Financial Statements in Part II, Item 8 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

The following table summarizes option award activity for the three months ended March 31, 2026:


	Number of Shares Subject to Existing Options (in thousands)	Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in millions)
Outstanding at January 1, 2026	27,303	$	49.79	5.7	$	565
Granted	4,487	43.61
Exercised	(658)	27.26
Forfeited or canceled	(168)	56.65
Outstanding at March 31, 2026	30,964	49.34		6.1	26
Vested and exercisable at March 31, 2026	22,189	48.28		5.0	24

The following assumptions were used to determine the fair value of option awards granted for the periods presented:


	Three Months Ended March 31,
	2026	2025
Expected volatility	54% - 56%	59% - 60%
Risk-free interest rate	3.87% - 3.98%	4.16% - 4.17%
Weighted-average expected life	5.8 - 7.0 years	5.3 - 6.8 years
Weighted-average fair value of options granted	$23.62	$43.41

As of March 31, 2026, there was a total of $240 million in unrecognized compensation cost related to unvested option awards.

The following table summarizes activity for restricted stock units for the three months ended March 31, 2026:


	Restricted Stock Units (in thousands)	Weighted-Average Grant Date Fair Value
Unvested outstanding at January 1, 2026	9,319	$	61.83
Granted	5,660	43.70
Vested	(1,456)	52.54
Forfeited	(426)	59.91
Unvested outstanding at March 31, 2026	13,097	$	55.09

As of March 31, 2026, there was a total of $683 million in unrecognized compensation cost related to unvested restricted stock units.

The following table presents the effects of share-based compensation expense in our condensed consolidated statements of operations during the periods presented (in millions):


	Three Months Ended March 31,
	2026		2025
Cost of revenue	$	2	$	3
Sales and marketing	16		18
Technology and development	33		38
General and administrative	30		38
Total share-based compensation	$	81	$	97