Share-Based Awards

In connection with the annual review cycle, option awards and restricted stock units are granted under the Zillow Group, Inc. 2020 Incentive Plan (the “2020 Plan”) during the first quarter of each year and typically vest quarterly over four years. On August 20, 2026, pursuant to delegated authority under the 2020 Plan, a supplemental grant of either option awards or restricted stock units, depending on employee position, was authorized and granted to eligible employees. Directors and officers then subject to Section 16 of the Exchange Act were excluded from this supplemental grant. The supplemental option awards and restricted stock units vest quarterly over a two-year period from the grant date, with the first vesting date in November 2026. The exercisability and settlement terms of these equity awards are otherwise consistent with the terms of the option awards and restricted stock units typically granted under the 2020 Plan. 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 nine months ended September 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	5,580	41.94
Exercised	(811)	28.93
Forfeited or canceled	(991)	52.95
Outstanding at September 30, 2026	31,081	48.82		5.7	—
Vested and exercisable at September 30, 2026	23,527	48.54		4.6	—

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


	Three Months Ended September 30,		Nine Months Ended September 30,
	2026	2025	2026	2025
Expected volatility	53%	54%	53% - 56%	54% - 60%
Risk-free interest rate	4.70%	3.82%	3.87% - 4.70%	3.82% - 4.17%
Weighted-average expected life	5.8 years	5.3 years	5.8 - 7.0 years	5.3 - 6.8 years
Weighted-average fair value of options granted	$18.90	$46.43	$22.69	$43.34

As of September 30, 2026, there was a total of $194 million in unrecognized compensation cost related to unvested option awards.

Restricted Stock Units

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


	Restricted Stock Units (in thousands)	Weighted-Average Grant Date Fair Value
Unvested outstanding at January 1, 2026	9,319	$	61.83
Granted	9,314	40.41
Vested	(4,000)	53.46
Forfeited	(1,655)	56.68
Unvested outstanding at September 30, 2026	12,978	$	49.70

As of September 30, 2026, there was a total of $603 million in unrecognized compensation cost related to unvested restricted stock units.

Share-Based Compensation Expense

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 September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Cost of revenue	$	2	$	3	$	6	$	9
Sales and marketing	13		18		43		55
Technology and development	33		41		97		119
General and administrative	26		37		84		112
Impairment and restructuring costs	12		—		25		—
Total share-based compensation	$	86	$	99	$	255	$	295