Zillow Group Inc. (Z) had a solid second quarter, but investors are focusing on what's ahead, and they're not thrilled. Shares slid 10.25% in Wednesday's after-hours session, trading at $32.40, after the company reported results and issued guidance that came in below expectations.

Let's start with the good news. The company beat on both the top and bottom lines. Q2 revenue came in at $772 million, ahead of the $758.04 million analysts were looking for. Adjusted earnings per share were 52 cents, comfortably above the 44-cent estimate.

Revenue grew 18% year-over-year, with notable strength across segments. Residential revenue was up 7%, Mortgages jumped 75%, and Rentals rose 31%. The company was quick to point out that its growth outpaced the broader residential real estate industry, which grew by just 6%.

CEO Jeremy Wacksman struck a confident tone: "Zillow delivered another quarter of strong results and consistent execution. We outperformed the broader housing market and our outlook, and we are on track toward our full-year goals."

So why the sell-off? Guidance. For the third quarter, Zillow expects revenue between $745 million and $760 million, while analysts were modeling $760.90 million. The company also trimmed its full-year 2026 revenue outlook to $2.92 billion to $2.96 billion, versus the $2.98 billion consensus.

It's a classic case of good news being overshadowed by what's next. The market doesn't like surprises, especially on the downside, and even a slight miss on guidance can trigger a sharp reaction. For Zillow, the question now is whether the softer outlook is a temporary blip or a sign of a cooling housing market. Either way, investors are voting with their feet tonight.