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 six months ended June 30, 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	4,681	43.24
Exercised	(785)	28.83
Forfeited or canceled	(571)	52.98
Outstanding at June 30, 2026	30,628	49.27		5.9	1
Vested and exercisable at June 30, 2026	22,798	48.43		4.9	1

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


	Three Months Ended June 30,		Six Months Ended June 30,
	2026	2025	2026	2025
Expected volatility	53%	59%	53% - 56%	59% - 60%
Risk-free interest rate	4.16%	3.92%	3.87% - 4.16%	3.92% - 4.17%
Weighted-average expected life	5.8 years	5.5 years	5.8 - 7.0 years	5.3 - 6.8 years
Weighted-average fair value of options granted	$18.64	$37.18	$23.42	$43.17

As of June 30, 2026, there was a total of $211 million in unrecognized compensation cost related to unvested option awards.

The following table summarizes activity for restricted stock units for the six months ended June 30, 2026:


	Restricted Stock Units (in thousands)	Weighted-Average Grant Date Fair Value
Unvested outstanding at January 1, 2026	9,319	$	61.83
Granted	6,190	43.12
Vested	(2,747)	53.05
Forfeited	(817)	58.18
Unvested outstanding at June 30, 2026	11,945	$	54.40

As of June 30, 2026, there was a total of $611 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 June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Cost of revenue	$	2	$	3	$	4	$	6
Sales and marketing	14		19		30		37
Technology and development	31		40		64		78
General and administrative	28		37		58		75
Restructuring costs	13		—		13		—
Total share-based compensation	$	88	$	99	$	169	$	196