There's a saying that "the internet never forgets, "which is a nice soundbite, but in truth some things are lost forever on the net. Once a server goes down and the last copy of that data is disconnected, that's it.
Zillow Group’s revenue rose 18% to $772 million in the second quarter, beating its own forecast, but a $36 million restructuring charge from severance and other costs stemming from this week’s layoffs pushed it to a $4 million net loss.
The Seattle-based online real estate company, which on Tuesday laid off more than 500 people, or 7% of its workforce, expects the restructuring to cost $59 million to $64 million in total, with the rest recorded in the third quarter, according to the company’s 10-Q regulatory filing.
Zillow also announced a series of executive changes, including expanding CFO Jeremy Hofmann‘s role to include chief operating officer. Jun Choo, who became COO in 2024, is stepping down to focus on his health, serving as an advisor through the end of the year.
The company created a chief legal and policy officer role and hired Cassandra “Sandi” Knight, a Google vice president of litigation and discovery, who was previously PayPal chief litigation counsel. Knight starts next week.
Zillow and Redfin are set to go to trial Aug. 24 as defendants in an antitrust case brought by the FTC and five state attorneys general over the $100 million rental listings deal between the two companies. Zillow has spent $26 million on the case so far this year, including $10 million in the second quarter.
In addition, Zillow promoted Kathleen Berroth to senior vice president of strategy and operations, and Eric Wilson to senior vice president and GM of mortgages.
For the second quarter, Zillow said the residential real estate industry grew 6%, while industry-wide lending for home purchases was roughly flat compared with a year ago. The number of people visiting real estate sites and apps declined overall as mortgage rates rose, the company said, citing Comscore. Zillow’s own traffic fell 2%, to an average of 239 million monthly users.
Most of the revenue growth came from Zillow’s newer businesses. Mortgage revenue rose 75% to $84 million as Zillow directed buyers on its site to its own lending arm, and rentals revenue rose 31% to $209 million. Residential revenue, from advertising sold to real estate agents, grew 7% to $465 million.
The satellites rolling off the line in Redmond, Wash., are paying for Elon Musk’s AI ambitions — and he says the company’s satellite internet business is only getting started.
SpaceX’s Starlink connectivity division posted $1.7 billion in operating income for the second quarter, maintaining its status as the company’s only profitable business, according to numbers released Tuesday afternoon as part of its inaugural earnings report as a public company.
The AI division, built around the Grok model and the X social media and technology platform, lost $1.3 billion while spending $15.8 billion on capital projects. That capital spending amounted to more than three times Starlink’s quarterly revenue of $4.3 billion (up 66%).
Musk, the company’s founder and CEO, used the first SpaceX earnings call to make the case that investors are badly underestimating Starlink.
He said a new generation of satellites could increase Starlink revenue tenfold, and the network could deliver “a majority of the world’s internet” in less than 10 years. Musk said AI and robots will drive demand for bandwidth far beyond anything people generate on their own.
“I think Starlink is the only thing that can actually service that bandwidth,” he said.
Amazon is getting in the race, building its own satellite internet network at a factory in nearby Kirkland, Wash. Its Leo constellation has “close to 400 satellites in orbit, enough to begin initial satellite internet service this year,” CEO Andy Jassy told analysts last week.
Overall, SpaceX topped Wall Street expectations with revenue of $7.8 billion for the quarter, up 92% from $4.1 billion a year earlier. It also narrowed its net loss to $541 million from $1 billion.
SpaceX shares closed at $125.33, up 9.4% on the day, then fell nearly 5% in after-hours trading following the report, apparently on concerns about the company’s capital spending.
SpaceX builds its Starlink satellites at a Seattle-area factory that produced about 70 a week from December 2025 to April 2026, according to the company’s IPO filing. The output has put roughly 9,600 Starlink satellites in orbit, about 75% of all active maneuverable satellites circling the planet.
For the second quarter, SpaceX reported 12 million Starlink subscribers, double the number a year earlier and an increase of 1.7 million from the first quarter. The revenue increase in the Starlink division (officially known as “Connectivity”) was driven by a 108% jump in enterprise and government business, which now accounts for more than 40% of the segment’s sales.
The subscriber total was just under the 12.19 million Wall Street had projected, but the segment’s revenue exceeded expectations by about $460 million, more than any other part of the company.
Starlink now brings in $66 a month per subscriber, down from $85 a year ago as it expands overseas and adds cheaper plans. The good news for SpaceX: the figure stopped falling, holding flat from the first quarter, despite the company’s warning to IPO investors that it would keep sliding.
Microsoft and Amazon both saw their stocks surge again Monday, riding a post-earnings tech wave across the stock market that pushed Amazon past $3 trillion in value for the first time.
The gains follow earnings reports last week in which both companies’ cloud platforms exceeded expectations. Microsoft said Azure grew 43%, passing $100 billion in annual revenue for the first time. Amazon said AWS grew 37%, its fastest pace in 18 quarters.
Microsoft and Amazon are now the world’s fourth and fifth most valuable companies, respectively. The three ahead of them (Nvidia, Alphabet and Apple) are all headquartered in the Bay Area, although each has sizeable engineering centers in the Seattle region.
Amazon rose 4.6% in intraday trading to $284.15 as of publication time, after touching an all-time high of $287.20 earlier in the session, giving it a market value of $3.06 trillion.
Microsoft climbed 5.2% to $488.97, worth $3.63 trillion. Its rally began Thursday, when it added nearly $450 billion in market value, the largest one-day gain by any company on record.
The rallies came despite AI spending plans that have unsettled investors for much of the year. Microsoft went into earnings near a one-year low, after a $357 billion wipeout to start the year.
It’s all still coming at a huge cost. Microsoft spent a record $41 billion on capital projects last quarter and told investors to expect more than $50 billion in the current quarter. Amazon raised its 2026 forecast to about $220 billion from $200 billion, citing rising memory chip prices.
In one sign of the impact of the spending, Microsoft’s free cash flow fell 23% last quarter. Amazon’s free cash flow turned negative for the first time since 2023.
But cloud growth and other signs of demand for AI seem to have appeased investors for now.
Amazon CEO Andy Jassy told investors the spending reflects unmet demand: “Even at that amount, we will still not have enough capacity to meet all the demand we have in 2026, and I believe this dynamic will also be true in 2027 too. In fact, the demand we already have for 2028 is striking.”
The gains come as both companies operate with fewer people. Amazon confirmed 16,000 more corporate job cuts in January, bringing the total to 30,000 since October, along with more recent reductions in its robotics and artificial general intelligence groups.
Microsoft cut 4,800 jobs in July, revamping its salesforce and overhauling Xbox.
This week on the GeekWire podcast: Microsoft and Amazon both reported quarterly numbers, and both stocks rose on cloud results that beat expectations. Is all that AI spending paying off? And in related news, Microsoft sees a rare annual headcount decline, hitting product R&D hardest.
Plus: Satya Nadella builds a Power BI dashboard out of an analyst’s research report, and touts it on the earnings call to make a bigger point. Jeff Bezos names Amazon’s chips business as the long-awaited fourth pillar. And AI House managing director Jacob Colker delivers a much-needed pep talk for Seattle tech, calling on the region to recognize and build on its strengths.
Microsoft and Amazon earnings
Amazon’s fourth pillar
A rallying cry for Seattle tech
The Washington tech ecosystem
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The number of product research and development roles at Microsoft declined for the second straight year, according to the company’s annual regulatory filing, offering a new indication of how the tech giant is reshaping its workforce in the AI era.
Microsoft’s total headcount declined by 5,000 people to 223,000 as of June 30, according to its Form 10-K, filed with the SEC this week. It’s the first annual employment decline for Microsoft since 2016, when the company was writing off and winding down its Nokia smartphone business.
The trend is notable in part because, over the same time period, Microsoft’s revenue rose 18%, or $50.1 billion, to $331.8 billion — the largest one-year increase in the company’s history.
Here’s how the employment trends break down:
The numbers reflect the roughly 9,000 jobs Microsoft cut on July 2, 2025, two days into its fiscal year. They do not reflect the 4,800 cuts announced July 6 of this year — spanning sales, consulting and Xbox — or the thousands of U.S. employees who left in early July under the company’s first voluntary retirement program.
On the earnings call Wednesday, CFO Amy Hood confirmed that “total company headcount declined 2% year over year.” She linked a 10% increase in operating expenses to “continued investment in R&D compute capacity, talent, and data to support product development across the portfolio.”
AI coding tools — including Microsoft’s own GitHub Copilot — have become a standard part of how software is built at Microsoft and across the industry, reducing the number of people and the amount of time it takes to ship products, while often expanding the total scope of the work.
Microsoft has repeatedly declined to link its job cuts to AI. Chief People Officer Amy Coleman said in a memo earlier this month that the roles being eliminated were not being directly replaced by AI, while acknowledging that “AI is changing how work gets done.”
Tech companies have been keeping a tighter rein on operating expenses, primarily through job cuts, in part to offset soaring capital expenses to support their AI infrastructure buildouts. Microsoft’s capex reached $41 billion in the June quarter alone.
Microsoft is also moving engineers out of product development and into customer-facing roles. The Microsoft Frontier Company, a $2.5 billion initiative announced July 2, brings together more than 6,000 people to embed engineers inside customers building AI systems — a group drawn “primarily from Microsoft’s existing engineering and forward-deployed teams,” according to the company.
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