Jeremy Hofmann

Thanks, Jeremy, and good afternoon, everyone. As you just heard, we delivered excellent results in Q3, and we are well positioned to continue doing so as we execute on our strategy. Our Q3 2024 results exceeded expectations for revenue and EBITDA with revenue up 17% year over year to $581 million, which was $28 million above the midpoint of our outlook range.
Executing on our strategy drove double-digit year over year growth across each of our revenue categories, including residential, rentals and mortgages. We outperformed the broader residential real estate industry by approximately 1,500 basis points as the housing market grew 2% this quarter according to NAR. Additionally, we estimate that the total purchase loan volume for mortgage buyers, which is more aligned with our customer base for Premier Agent declined low single digits in Q3, underperforming the overall housing market.
On a GAAP basis, Q3 net loss was $20 million, representing 3% of our revenue. EBITDA was $127 million for the quarter, resulting in a 22% EBITDA margin. The combination of our revenue outperformance and effective cost management delivered better-than-expected EBITDA results in the third quarter. Residential revenue grew 12% year over year to $405 million, outperforming our outlook range.
Our Premier Agent revenue benefited from continued conversion improvements as more buyers and sellers transacted with the Zillow agent partners. We also had a strong quarter of growth in Zillow Showcase, which now represents nearly 1.5% of all new for-sale listings in the country. Additionally, our new construction marketplace and the software solutions from ShowingTime+ and Follow Up Boss performed well. The combination of these factors led to better-than-expected results.
Rentals revenue grew 24% year over year in Q3 to $123 million, driven primarily by our multifamily revenue which grew 38% year over year. We increased the number of multifamily properties on our apps and sites by 34% year over year, reaching an all-time high of 47,000 multifamily properties as of the end of Q3, up from 44,000 properties at the end of Q2.
Total listings across our entire rentals marketplace were up 15% year over year to an industry-leading 1.9 million listings in September. With steady growth under our belts, we believe Zillow Rentals is well on its way towards the $1 billion-plus revenue opportunity we see in front of us.
Mortgages revenue growth accelerated in Q3, up 63% year over year to $39 million, with purchased loan origination volume growing 80% year over year to $812 million. Our mortgage strategy is leading to more buyers choosing financing through Zillow Home Loans. As expected, we are also seeing our purchased loan origination volume growth more closely aligned with mortgages revenue growth. This means our purchase mortgage revenue is now the main growth driver of our overall mortgages revenue category.
Our disciplined cost management resulted in Q3 EBITDA expenses of $454 million, roughly in line with our outlook and allowed our Q3 revenue upside to flow to the bottom line. Additionally, our Q3 share-based compensation expense of $108 million was down year over year, and we are on track for these full year 2024 expenses to decline from 2023 levels.
As we execute on our growth strategy, we are successfully driving operating leverage. Looking ahead, as we continue to grow revenue, we expect this leverage to play out in both expanding EBITDA margins and sustainable profitable growth over time.
We ended Q3 with $2.2 billion of cash and investments, down from $2.6 billion at the end of Q2, primarily due to the maturity and settlement of our 2024 convertible debt in September, which included aggregate cash payments of $610 million. This was partially offset by Q3 net cash provided by operating activities of $171 million.
As of the end of Q3, we had $918 million of outstanding convertible senior notes. In December of this year, we will settle the $499 million of our outstanding convertible senior notes due in 2026. We issued a notice of redemption for these notes on October 8, and we plan to repay the principal in cash and issue shares to satisfy any conversion premium. We have outstanding cap call hedges related to these notes and we expect any dilution from settling the 2026 notes ultimately to be offset by settlement of the cap calls upon unwind or at maturity.
Because the cap calls have additional value, as our Class C share price appreciates up to approximately $81 per share, we don't expect to settle the cap calls at this time and we will continue to monitor and evaluate the economics of unwinding prior to maturity. After our Q4 debt settlement, we will have only the [$419] million of senior convertible notes due in May 2025 outstanding.
Our current expectation is that we will also settle the principal balance of these notes in cash, and any conversion premiums and shares of Class C capital stock. Once these notes are retired, we expect to be convertible debt free in Q2 2025.
As we look in aggregate, 2024 has been an important year for our capital allocation strategy. $1.2 billion of cash has or will soon be returned to shareholders via the settlement of our convertible senior notes. We have also had $301 million of share repurchases at a weighted average price of roughly $42. We are pleased with our execution this year. From the end of 2021 to today, we have repurchased approximately $2 billion of stock at a weighted average price of roughly $45.
Our balance sheet is rock solid, and we believe the share repurchases we've made since the end of 2021 have been a great use of capital as we execute on our growth strategy and drive share price appreciation over time.
Turning to our outlook for Q4. We expect total company revenue to be between $525 million and $540 million, implying a year over year increase of 12% at the midpoint of our outlook range. We expect residential revenue to be between $364 million and $374 million. Our residential revenue outlook for Q4 is driven by the normal seasonality of our Premier Agent revenue as well as the continued strength of revenue contributions from Zillow Showcase, ShowingTime+, new construction and follow-up loss. We expect that the housing market will continue to bounce around at current levels, implying modest year-over-year growth in the fourth quarter.
While there continues to be pent-up desire to move, affordability remains a challenge. Our Q4 outlook takes this into consideration. We expect our rentals revenue to grow in the mid-20% range year over year in Q4 as we benefit from our execution on building our two-sided marketplace. Our multifamily rentals revenue is expected to grow faster than our overall rental revenue as we see the benefits of continued property expansion, our national Rentals brand awareness campaign and our partnership with Realtor.com.
For mortgages, we expect revenue growth to be in the mid-60% range year over year. For Q4, we expect EBITDA to be between $90 million and $105 million, equating to an 18% margin at the midpoint of our outlook range, up approximately 300 basis points year over year. This implies EBITDA expenses will decrease from $454 million in Q3 to an estimated $435 million in Q4. The majority of the sequential decrease in EBITDA expenses from Q3 to Q4 is expected to be driven by seasonally lower advertising spend.
Additionally, we expect our annual fixed cost run rate will continue to be approximately $1 billion, consistent with where we stood at the end of 2023. We are on track to deliver our original 2024 full year target of double-digit revenue growth with EBITDA margin expansion. At the midpoint of our Q4 outlook ranges, our total company revenue in 2024 would be up 14%, and our total company EBITDA margin in 2024 would be 22%, which implies approximately 200 basis points of margin expansion versus 2023.
Before we close, I would like to take a moment to highlight the results we're seeing from the investments we've made over the past two years in our for-sales strategy.
As you'll recall, we look at revenue per total transaction value, or TTV, on a trailing 12-month basis as a comprehensive indicator of relative growth against the residential real estate industry. When we combine our residential and mortgages revenue categories, which in aggregate represent our for-sale revenue, our revenue per TTV in Q3 was up 800 basis points year over year, and more than 2,000 basis points since the beginning of 2023. This is the culmination of investments we have been making over the past couple of years to improve our customer experiences so that we can identify high intent movers and connect them with high-performing agents.
This has helped us drive more connections and convert more buyers and sellers to transact with us and our partners. We are also beginning to benefit from the early stages of scaling our newer products to more markets, most notably with Zillow Home Loans, which has grown purchase loan origination volume by over 3x from the beginning of 2023 to now.
We expect continued success in 2025 as we expand into more enhanced markets and provide more services within those markets, including offering more of our unique software solutions such as Zillow Showcase and Follow Up Boss.
On the cost side, we understand it is important for us to demonstrate to our investors that the investments we've been making to increase top line growth will result in expanding margins. As we have been saying for some time, we believe we are at the right fixed investment level to achieve our 2025 transaction share target and expect fixed investment costs to grow modestly with inflation.
Our fixed costs remain just under $1 billion annualized run rate in Q3, growing only 4% year over year, and decreasing as a percentage of revenue by 500 basis points year over year despite three acquisitions: Aryeo, Follow Up Boss, and Spruce.
Looking at variable costs, we have intentionally increased these costs as a percentage of revenue during 2024 as we invest in our rentals and Zillow Showcase sales teams as well as additional DHL loan officers to support future expected growth.
For marketing and advertising, we have been clear that we make discrete decisions to dial our efforts up or down based on the opportunities we see. The most obvious opportunity we've had on the marketing front has been for our Rentals marketplace, and we have invested in a national campaign this year. This investment in Q2 and Q3 has noticeably expanded Zillow brand awareness for apartment seekers and we are pleased with the early results.
To close, it is clear we are executing on our strategy, and we are very excited about the opportunity ahead of us. We have a beloved brand with the largest, most engaged audience of movers, a partner network made up of some of the best and most productive agents and teams in the country, a solid financial foundation and unmatched tech expertise to tackle the hard problems necessary to digitize this analog industry.
As I look forward, we are growing across every part of our business with investments in place to drive future growth. We are disciplined on our costs, and we expect to drive sustainable profitable growth on our way to strong GAAP profits over time.
And with that, operator, we'll open the line for questions.

Question and Answer Session

Operator

(Operator Instructions) John Colantuoni, Jefferies.

John Colantuoni

Great. Thaks for taking my questions. A multi-parter on real-time touring. Can you give us some perspective on how lead conversion for Real-Time Touring is comparing to other types of connections. And I believe Real-Time Touring generally lends itself to agents transitioning to the Flex model. So I'm curious if you could detail how agents -- how many agents are transitioning to Flex in markets you rolled out Real Time Touring. And if that transition is providing additional tailwinds to revenue given you're now more directly monetizing the commission through a product that has a higher lead conversion.

Jeremy Wacksman

John, this is Jeremy Wacksman. On Real-Time Touring, we haven't broken out Real-Time Touring versus other touring types, but we have, for a while, talked about how the touring customer in general converts to transaction at about 3 times the rate. And the other color I can give is Real-Time Touring is going to be north of 25% of our connections at the end of the year, that's been our goal, and we're going to be ahead of that.
We did talk a bit in the prepared remarks about seeing conversion improvements generally. Touring is obviously a piece of that. And so that's driving obviously the increased conversion generally as a component.
In terms of payment model and kind of business model mix, Real-Time Touring actually is available across both. And again, it just goes back to our strategy of trying to help identify higher-intent customers, Real-Time Touring does a pretty big job of that and then trying to help land them with our best agent partners. As a reminder, we don't work with -- I mean we work with lots of agents, but they represent the top end of the industry. The top 20% of the industry is the majority of our Premier Agent base.
So we're really pleased as we're able to identify and hand them higher intent customers. You're seeing the benefits of that play out in conversion.

Operator

Brad Erickson, RBC Capital Markets.

Bradley Erickson

I guess two. First, on the regulatory changes and just curious, you guys have obviously rolled out a light version of the mandated buyers agreements for agents. Just curious if you're seeing any structural changes to conversion where particularly those markets where that's kind of a brand-new practice. I'm just curious if that's maybe at all affecting your market share on everything?
And then second just on the Zillow Showcase, can you just remind us, you gave the overall share of new listings. I know in the prepared remarks and everything. But just remind us where you've kind of seen your market share of total listings or new listings go in some of the more mature markets like the individual markets, if you could? Thanks.

Jeremy Wacksman

Sure. So let me take Zillow Showcase first and then maybe we'll go in reverse order. So on Zillow Showcase, yes, we said in the prepared remarks, it's now nearly 1.5% share of new listings. We just rolled it out nationwide earlier this year. And so the growth while has some dispersing in markets, we haven't given out any kind of market mix details. I will say across the board, we continue to be really impressed that the product market fit holds as we grow that scale.
So that higher engagement that we talked about, 80% more page views, 75% more save, 75% more shares, those stats hold across markets as we grow availability. And we're continuing to see homes sell faster and for more money. So 2% more, which is about $9,000 on average per home, and we continue to see agents who use it, as we talked about in the remarks, win more listings. They're winning about 20% more listings than similar agents who are not using Zillow Showcase.
So we're still really early. We just went nationwide earlier this year, and we see a long runway ahead of us. We talked about a 5% to 10% total active listing goal over time. And I think as we get to that level, Brad, I think we'll have more maturity in markets to talk about the machinations across price points or geographies. But right now, it's still really early.
And then on the buyer's agreement, we don't have any concrete data to share other than to say, we look at it as really helpful friction for the buyer.
It's an education process. It's getting them through a really necessary education step and it better prepares them to meet the agent. As we talked about in the prepared remarks, it's available on more than 90% of touring connections nationwide, and we've worked really hard to customize it where necessary by state.
And we see this as a really healthy evolution in processing all these settlement changes to help start to educate the buyers on how this process works to make sure when they meet these great agents, they're even more educated on what you expect, both in the initial tour and then in what to expect in the relationship if they choose to move forward.

Bradley Erickson

Got it. That's great. Thanks.

Operator

Ron Josey, Citi.

Jeremy, I wanted to ask a little bit more just about residential revenue. And 3Q was another quarter where revenue growth outperformed the broader industry. And I wanted to understand just the drivers of this outperformance and obviously, enhanced markets now in 43 markets, Showcase listing you just talk about. Any insights on what's driving just the better overall outperformance would be helpful, I think.
And then another sort of maybe bigger picture question on the overall go-to-market strategy. I think we saw a new head of agent sales has hired back in July. I wanted to understand just how Premier Agent sales might interact with Showcase listing sales and just the overall -- and also the software and services sales team and just understand the go-to-market strategy overall going forward. Thakn you.

Jeremy Hofmann

Yes. Thanks, Ron. It's Jeremy Hoffman. I'll take the first one, and then I'll pass it to Jeremy Wacksman for the second one. I think across the business, we performed quite well in Q3. We grew double digits in residential rentals and mortgages. And obviously, total growth of 17% year over year, we're quite pleased with.
Within residential, the drivers are a few fold. So one, PA just benefited from continued conversion improvements. We've been investing pretty heavily in honing our funnel for a while at this point, and we're just seeing the benefits of those, particularly as we go into more enhanced markets, and we get more contributions from Real-Time Touring.
And then beyond that, we had another strong quarter of growth from Zillow Showcase, which is now nearly 1.5% of all new listings in the country. And that was all supplemented by the new construction marketplace continues to perform well. And the software solutions we're providing from ShowingTime+ and Follow Up Boss are being well received, too. So it really has been across the board and something we're quite pleased with.
And then Jeremy, you want to hit the second one?

Jeremy Wacksman

Yeah. On the new sales leader, yes, that is the start of maybe more integration and scale for our sales organization to offer just a more seamless go-to-market to our agent community. And so you should expect to see us scale some of our products across that larger sales force and start to bring them to market in a more integrated fashion.
To date, we've been doing that in pockets and places, but our goal over time is to have one face to the industry to represent all of our products. That will most notably show up in kind of our market-based pricing and Showcase offerings. But over time, you can imagine that will scale beyond that.
Great. Thank you, guys.

Operator

Mark Mahaney, Evercore ISI.

Mark Mahaney

Okay. Great, thanks. I want to ask two things. I want to follow up on Brad's question about these NAR settlement changes and you just talk about what you've seen in the market so far, I guess, for three or four months into this, from your perspective, is greater friction occurred in the market? Or has it been largely immaterial so far.
And then your comments also on stock-based compensation being down year over year. What's your goal with stock-based compensation kind of going forward the next two years? I ask that from a perspective of trying to figure out when you get to kind of sustained GAAP profitability. And stock-based compensation will be one key lever for that. So just talk about how do you plan to manage that going forward?

Jeremy Hofmann

Great. Thanks, Mark. It's Jeremy Hoffman. I'll take both of those. So I think on the NAR settlement impact, we can't speak to broad commission trends just because 80% of our Premier Agent base is in that top 20% of all producers. So we're really working with top agents versus a broad swath of folks in PA. And for our agents across our PA business, we've seen commission rates stay in a tight band.
Obviously, Q3 performance was quite strong, being able to grow the total company revenue 17%, 12% across residential and pretty substantially outperforming the category. We were really pleased. Beyond that, I'd say we've been pretty consistent here for a while. We believe we and our partners are the outsized beneficiaries of any changes in the real estate industry.
We have the most customers. We work with the best partners and we provide the most technology. So we expect our PAs will deliver value and get paid because they provide great service. And that we and they are share-takers in really any evolution or dispersion of the industry. So that's how we're feeling on that front.
And then the second question around stock-based compensation. We plan to leverage it going forward. So just as a reminder, our fixed cost base is in about the $1 billion range on an annualized basis. And 90% of our stock-based comp sits within that bucket. So as we are controlled on the fixed cost front and grow revenue, we will get more and more leverage on the SBC line, that will drive to greater GAAP profitability over time.

Mark Mahaney

Okay. Thank you.

Operator

Nicholas Jones, JPM Securities.

Nicholas Jones

Great. Thanks for taking he question. I guess a follow-up on the Showcase. As you roll this out, can you kind of speak to the demand you're seeing in market for the product? And I guess, what are you learning about how you're pricing it today? And potentially, where that can go against kind of the intermediate or longer-term targets you have for that business?

Jeremy Wacksman

Yeah. Nick, happy to take that. So as we said a couple of times, it's early. We're really pleased that this earlier. We're at nearly 1.5% share of new listings.
And the two things I would say we've learned so far is price, which is variable by home price and geography, lands well with agents and teams. The big challenge is helping them work through their workflow and operations to scale listings across them, right?
So we have folks who have a listing at a time. We have folks who are teams that have hundreds of listings on their team and across our agent force and just working with them to operationalize the change. It's new media, it's new media capture. It's a new client sales experience with sellers. That's what we're working through. And doing that with different size types of teams across the country is something we'll continue to learn and mature as we go.
We continue to see great results from it. I talked about the stats earlier. It continues to remain really engaging with buyers and with sellers, and we continue to see agents benefit it to win more business. That's why we remain confident in that intermediate-term goal, right?
Our mid- or medium-term target is 5% to 10% of total active listings, and that's a $150 million to $300 million annual business for us. And of course, we think there's potential beyond that. We want to give you all kind of a mile marker in the road.
What excites us about Zillow Showcase and the tech powering it is once a buyer and a seller experience it, they don't really want to go back to a traditional listing of just photos and text. They kind of have this expectation that, that's how listings should behave, they should be able to really immersively tour the home that way as a buyer, and a seller sold be able to show off their home that way.
So we get excited about the ability to drive adoption of the tech and the product far beyond the goal we've shared with you. That will, of course, take time to retrain the industry, but you can see the potential of it in the product. And as you guys do your channel checks with our agents who have experienced it, I think you'll see the same.

Nicholas Jones

Great.

Operator

Chris Kuntarich, UBS.

Chris Kuntarich

Great. Maybe just oneon the market share doubling within the four oldest Enhanced Markets. I think if I'm looking at the right chart from an investor deck a while back, that was closer to 3.5% in January of 2023. So that implies, I guess we're closer to 7% and above that average now. Can you maybe talk to us a bit about this oldest cohort of enhanced markets and how kind of the puts and takes we should be thinking about as it relates to using that as a case study for some of these newer cohorts of enhanced markets ramping?

Jeremy Hofmann

Yes. I can take that, it's Jeremy Hoffman. What we're referring to in the shareholder letter and then also in Jeremy, Waxman's prepared remarks, is that we've grown in our oldest four enhanced markets, we grew revenue per total transaction value. So it's a combination of residential and mortgages grew versus total transaction value in those markets by 50% through the course of 2023, by 80% in aggregate through the end of June and then doubled by the end of September of this year.
So that's really good proof point for why we've continued to roll out these enhanced markets at the pace that we have. We went from nine at the end of last year to 43 as of October. And what we're seeing from a trend perspective in the earlier enhanced markets are quite consistent with the older ones, which gives us confidence to keep landing and expanding from here.

Chris Kuntarich

Got it. And maybe just one on the virtual staging AI, the acquisition that you made in early October. Apologies if you touched on this earlier, but just could you maybe talk to us about how you're thinking about letting this value and integration into Zillow Showcase, like how you may let that value accrue to the seller agents versus potentially offering different tiers as Zillow showcase?

Jeremy Wacksman

Yes, this is Jeremy Wacksman. I'll take that. We continue to look for ways to improve and expand our offerings for sellers and for buyers. And I just talked a bunch about Zillow Showcase as it exists today. Virtual staging is a fantastic capability that we're excited to bring to both sellers and agents as well as their photographers, right?
Because you can digitally stage listing images in seconds. So we're not sharing any changes to go to market other than I think you should expect us to bring that to market on listings in a broad way. I'll comment. We also announced an agreement to share our Zillow 3D home tours and interactive floor plans to Realtor.com this quarter as well.
Again, just back to trying to get the technology out there and well understood by buyers and sellers as they enter the category and experience content and create this new norm and expectation for what a digital listing should look like.
Got it. Thank you.

Operator

Michael Ng, Goldman Sachs.

Michael Ng

Hey, good afternoon. I just have two. I guess the first one is just on rentals. Really impressive rentals traffic growth, and it sounds like the marketing campaign that you're leaning into is working well. As we head into 2025, do you see opportunities to further expand that marketing campaign or other advertising levers that you could pull that you see as potential high returns. I'm just thinking about the OpEx outlook for next year? Thanks.

Jeremy Wacksman

Why don't I start on rentals, and then maybe, Jeremy, you can talk about maybe how to think about future. Yes, as Jeremy Hofmann said, we're really pleased with the results of our demand efforts here. That is both our multifamily advertising campaign and our partnership with Realtor.com. It's really helping develop and mature our strategy, right, which is the sustainable supply of unique listings to drive the largest audience right?
And that audience, like you mentioned, largest audience of renters in the country, up 20% year over year and well ahead of the competition. And that, in turn, as a strategy, bringing high-quality renter solving their major problem which is finding as much inventory as possible, it's what's leading advertisers to want to get in front of that audience. And that's what's driving not just the revenue growth in rentals, but the multifamily revenue growth up 38% year over year.
So we expect that growth to continue. We saw a strong growth in Q3. We expect to in Q4. And Jeremy, I don't know if you want to talk at all about how to think about 2025.

Jeremy Hofmann

Yeah, Mike, all I would say there is we're pretty excited about the opportunity in rentals, not just towards the $1 billion-plus mile marker we gave you all, which we think will really be on the back of multifamily growth, but beyond that as well. We just think the strategy that we are going after really aggregating both single-family homes and multifamily properties and one experience is quite unique and quite differentiated.
So the long-term opportunity is one we think is well beyond the $1 billion revenue mile marker we put out there. And I think marketing will be a mix -- will be part of that mix. I think we've always been the types of folks that start with product and then add marketing to accelerate growth, and I would assume the same type of strategy going forward.

Michael Ng

Great. Thank you. That's all very helpful color. And my second question I was wondering if you could speak to any risks to changes in clear cooperation. I think you made some comments in your prepared remarks, but would just love your view on where we stand today and how you're thinking about any potential changes in the future? Thank you.

Jeremy Wacksman

Happy to. Yes. I outlined in our prepared remarks, I mean, our advocacy principles have been consistent for some time. They start with access. Zillow was founded to help turn on the lights and provide free access to buyer sellers in the real estate industry. And changes to rules and cooperation that would pull listings off MLSs, so that Zillow and others couldn't share as many of them, that's just not good for buyers or sellers.
It's also not good for agents. Putting listings in private networks mean buyers' agents can't show all the available inventory. So it's not as much of a business issue for us right now, especially as the largest audience and the largest brand, we will always find ways to get our share of inventory to create that experience for buyer sellers and connect them with great agents.
It's more about the consumer good for the industry. The US real estate market is the most transparent market in the world because of policies like this, and we'd love to see those policies strengthen so we can build great businesses and consumer experiences on top of them versus weekend so that some can benefit from trying to pull what is a pretty small share of listings behind development rope for their own benefit.

Michael Ng

Thank you, Jeremy.

Operator

John Campbell, Stephens.

John Campbell

Thanks, guys. Congrats on a great quarter. Just want to stick on the 4Q revenue guidance. You guys have obviously provided some direction for pretty sharp growth continuation of growth out of rentals and mortgage. So just isolating residential, it seems like you have a fairly large subscription mix there. So I'm thinking the swing factor is probably going to be Flex.
But from just what you guys have given and if just kind of taking the back of the napkin here, I'm thinking going to have to assume that Premier Agent revenue is going to be down year over year. I know you guys don't report on that anymore, but maybe just directionally, if you could help us, does the guide imply a premier agent decline year over year?

Jeremy Hofmann

Yeah. Thanks, John, it's Jeremy Hoffman. I would think of it as seasonality in the business from Q3 to Q4 and went overfocus on that. I think overarchingly, we're pleased with our Q4 guide. 12% growth at the midpoint for the company and a continued challenged housing market, we think, is quite solid. And the macro has been and we expect to continue to remain choppy just because affordability remains a challenge.
And in the meantime, we're consistently outperforming the industry, just given how many product and partner improvements we're making. And then stepping kind of further back, we're on track to deliver double-digit growth and margin expansion in both Q4 and full year '24. So assuming the midpoint of the range, we'll grow revenue 14% year over year in 2024 for the company; and 22% EBITDA margins, which implies 200 basis points of margin expansion, so overarchingly feeling quite good.
And then as you think about what we're doing on the residential side, which obviously, Premier Agent is a huge piece of that, we're really gaining our share versus total transaction value. We were up 800 basis points year over year in Q3, and we've had 2,000 basis points of share gains since the beginning of '23. We expect continued growth just on the back of the enhanced market rollouts we're having and the success we're having there, along with things like listing showcase, rentals, Follow Up Boss and ShowingTime+. So I think overarchingly, I think we're well set up, not just in Q4 but beyond that.

John Campbell

Okay. Makes sense. And then a quick follow-up, just on Follow Up Boss. It seems like the adoption uptick has been pretty sharp of late. I don't know how much of that is due to the enhanced market expansion.
So maybe if you could touch on that. And then I saw that you raised the contingent consideration for Follow Up Boss. It seems like you're doing really well there. So maybe if you can talk about how you've been able to change to what extent you'll be able to change the Follow Up Boss growth trajectory?

Jeremy Wacksman

Maybe I'll hit adoption, and Hoffman, you can hit his second piece. The Yes, John, we are seeing really great success with Follow Up Boss. And as you remember, it's really a two-part strategy. One is just continuing to help the Follow Up Boss team grow their efforts to attract more agent teams, having the power of Zillow behind them and helping them grow and onboard more partners broadly.
That's a big part of the strategy. And then the other part of our strategy is to help get our enhanced market partners using Follow Up Boss as we start to build really good integrations between Zillow customers and as our Enhanced Market partners. And we shared 80% of connections in our enhanced markets now are flowing through Follow Up Boss.
So that you're just seeing the adoption of Follow Up Boss by the lion's share of those partners right alongside just a healthy organic Follow Up Boss growth. So it's just now coming up on a year since acquisition, and we're just so pleased both with how the team is executing on that dual charter mandate and how the integration has gone. And we continue to hear just great feedback from our agent partners on how Follow Up Boss is helping them power their business.

Jeremy Hofmann

Yes. And then, John, on your second question around the contingent consideration, there's no change to expected payout. We just have a change in fair value based on the (inaudible) of money and getting closer to those payout dates. So I went over overlook at that, I think what Jeremy just highlighted is what we're most excited about. And we think it's a really great piece of software that our agents are really enjoying.

Operator

Ryan McKeveny, Zelman & Associates.

Ryan McKeveny

Hey, thanks, guys. Congrats on the results. Just one for me related to how you're thinking about expense growth going forward. So Jeremy, you talked about the variable cost side and the investments outpacing revenue growth in '24. Obviously, still resulting in margin expansion with low fixed cost growth.
I know it's early to give any 2025 guidance in terms of revenue or margin. But if we do assume mortgage rates stay high and we're in this kind of stuck slow housing market, should we generally expect that trend to continue in terms of variable costs relative to revenue cost growth? Or are you reaching a point where some of those initiatives have scaled to the point where maybe that will no longer be the case? Thank you.

Jeremy Hofmann

Yes. Ryan, it's Jeremy Hoffman. I'll take it. You said it right. No guidance on 2025, we're quite pleased with execution this year. I think 2025, you should assume more of the same strategy and go to market, right?
We're going to continue to land in new enhanced markets, expand into existing ones, and that will drive residential revenue, drive mortgages revenue alongside showcase new construction and then we keep executing on rentals as well. At the same time, we're going to continue to be disciplined on the cost side.
We have been, I think, fairly consistent here that macro has been choppy, we expect it continues to be choppy, and we'll plan the cost structure accordingly. So you shouldn't expect much different in terms of how we think about our cost structure. And obviously, we'll dial up and down opportunities on the variable and marketing side, depending on what we see fit, but that fixed cost level that we've been at, we feel comfortable with to go hit our 2025 share targets.

Ryan McKeveny

Sounds good. Thank you very much.

Operator

This completes the allotted time for questions. I will now turn the call back over to Jeremy Wacksman for any closing remarks.

Jeremy Wacksman

I just want to close by saying thank you all. We really appreciate your time this quarter. Thanks for all the questions, and we'll see you all next quarter.

Operator

Thank you for joining the Zillow Group third-quarter 2024 call. This concludes today's conference call. You may now disconnect.