Redfin Reports First Quarter 2023 Financial Results

SEATTLE--()--Redfin Corporation (NASDAQ: RDFN) today announced results for its first quarter ended March 31, 2023.

First Quarter 2023

First quarter revenue was $325.7 million, a decrease of 45% compared to the first quarter of 2022. Gross profit was $56.2 million, a decrease of 23% year-over-year. Real estate services gross profit was $15.8 million, a decrease of 33% year-over-year, and real estate services gross margin was 12%, compared to 13% in the first quarter of 2022.

Net loss was $60.8 million, compared to a net loss of $90.8 million in the first quarter of 2022. Net loss attributable to common stock was $61.0 million. Net loss per share attributable to common stock, diluted, was $0.55, compared to net loss per share, diluted, of $0.86 in the first quarter of 2022.

“Redfin’s first-quarter revenues and earnings exceeded our expectations, keeping us on track for full-year adjusted EBITDA in 2023,” said Redfin CEO Glenn Kelman. “We’re drawing online visitors away from our main rivals, and our brokerage has gotten more efficient. For the second quarter, we expect gross-margins gains in our core business for the first time since 2021. The two companies we acquired over the past two years to earn additional revenue from the people using our site and our brokerage are also starting to deliver results: Rent’s revenue growth is accelerating, and Bay Equity’s net income improved, with more than one in five Redfin homebuyers getting a mortgage from Bay Equity in the first quarter. And finally, our competitive position has materially improved, as we’ve reduced our debt by more than $300 million, and sold all but five of our RedfinNow homes. We wouldn’t wish a housing downturn on anyone, but it has made Redfin leaner, hungrier and better.”

First Quarter Highlights

  • First quarter market share was 0.78% of U.S. existing home sales by units, compared to 0.79% in the first quarter of 2022.
  • Redfin’s mobile apps and website reached more than 50 million average monthly users, compared to 51 million in the first quarter of 2022.
  • Expanded Redfin Premier nationwide and made the service available to homebuyers for the first time. With this launch, we made significant branding, marketing and website improvements that make it easier for customers to identify and connect with Premier agents.
  • Brought Redfin agent service to the Colorado Rockies, which was announced on April 13; listings currently cover more than 98% of the U.S. population.
  • Increased momentum in mortgage cross-selling, with 20% attach rates for the first quarter, up 16 points from the first quarter of 2022.
  • Launched Title Forward in northern California on April 3, expanding Title Forward coverage of Redfin’s sales from 48% to 55%.
  • Released our inaugural 2023 Sustainability Report (https://investors.redfin.com/esg) outlining our environmental, social and governance (ESG) commitments, along with updated statistics (https://www.redfin.com/news/diversity-at-redfin-in-2022/) on the diversity of Redfin’s workforce.
  • Delivered software to improve customer and agent experience while boosting traffic to Redfin:
    • Favorites Lists, which help bring order to customers’ home searches by allowing them to organize their favorite homes into lists.
    • New cost of living calculator, which helps users compare the cost of living between different cities across the U.S.
    • Agent loyalty links, which make it easier for Redfin agents to share their profile with their network and generate more loyalty deals.
    • An improved home recommendation model which surfaces more listings for customers, learns their preferences faster, and boosts traffic to Redfin.
    • Updates to the rentals search experience, including a tour scheduling tool that allows renters to see a property’s calendar and directly book a tour time. We also added messaging to rental details pages that helps renters identify popular homes and move quickly in order to access them.

Business Outlook

The following forward-looking statements reflect Redfin's expectations as of May 4, 2023, and are subject to substantial uncertainty.

For the second quarter of 2023 we expect:

  • Total revenue between $268 million and $281 million, representing a year-over-year decline between (24)% and (20)% compared to the second quarter of 2022. Included within total revenue are real estate services revenue between $175 million and $183 million, rentals revenue between $45 million and $46 million, mortgage revenue between $38 million and $41 million and other revenue between $10 million and $11 million. We expect to report our properties segment as discontinued operations in the second quarter, and these results are not included in total revenue.
  • Total net loss is expected to be between $44 million and $35 million, compared to net loss of $78 million in the second quarter of 2022. Discontinued operations are included in net loss, but are expected to have no impact on the total. This guidance includes approximately $31 million in total marketing expenses, $17 million of stock-based compensation, $17 million of depreciation and amortization, $4 million in gains on the extinguishment of convertible senior notes and $5 million in restructuring expenses. Adjusted EBITDA is expected to be between a loss of $9 million and positive $1 million. Furthermore, we expect to pay a quarterly dividend of 30,640 shares of common stock to our preferred stockholder.

Conference Call

Redfin will webcast a conference call to discuss the results at 1:30 p.m. Pacific Time today. The webcast will be open to the public at http://investors.redfin.com. The webcast will remain available on the investor relations website for at least three months following the conference call.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws, including our future operating results, as described under Business Outlook. We believe our expectations related to these forward-looking statements are reasonable, but actual results may turn out to be materially different. For factors that could cause actual results to differ materially from the forward-looking statements in this press release, please see the risks and uncertainties identified under the heading "Risk Factors" in our annual report for the year ended December 31, 2022, as supplemented by our quarterly report for the quarter ended March 31, 2023, both of which are available on our Investor Relations website at http://investors.redfin.com and on the SEC website at www.sec.gov. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances.

Non-GAAP Financial Measure

To supplement our consolidated financial statements that are prepared and presented in accordance with GAAP, we also compute and present adjusted EBITDA, which is a non-GAAP financial measure. We believe adjusted EBITDA is useful for investors because it enhances period-to-period comparability of our financial statements on a consistent basis and provides investors with useful insight into the underlying trends of the business. The presentation of this financial measure is not intended to be considered in isolation or as a substitute of, or superior to, our financial information prepared and presented in accordance with GAAP. Our calculation of adjusted EBITDA may be different from adjusted EBITDA or similar non-GAAP financial measures used by other companies, limiting its usefulness for comparison purposes. Our adjusted EBITDA for the three months ended March 31, 2022 and 2021 is presented below, along with a reconciliation of adjusted EBITDA to net loss.

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We also run the country's #1 real estate brokerage site. Our home-buying customers see homes first with same day tours, and our lending and title services help them close quickly. Customers selling a home in certain markets can have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Customers who buy and sell with Redfin pay a 1% listing fee, subject to minimums, less than half of what brokerages commonly charge. Since launching in 2006, we've saved customers more than $1.5 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 5,000 people.

Redfin-F

Redfin Corporation and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share and per share amounts, unaudited)

 

 

March 31, 2023

 

December 31, 2022

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

149,940

 

 

$

239,840

 

Restricted cash

 

2,416

 

 

 

2,406

 

Short-term investments

 

140,531

 

 

 

122,259

 

Accounts receivable, net of allowances for credit losses of $2,277 and $2,019

 

48,142

 

 

 

54,880

 

Inventory

 

10,685

 

 

 

114,273

 

Loans held for sale

 

192,622

 

 

 

199,604

 

Prepaid expenses

 

33,784

 

 

 

34,506

 

Other current assets

 

14,918

 

 

 

8,690

 

Total current assets

 

593,038

 

 

 

776,458

 

Property and equipment, net

 

52,551

 

 

 

55,105

 

Right-of-use assets, net

 

38,932

 

 

 

42,032

 

Mortgage servicing rights, at fair value

 

35,061

 

 

 

36,261

 

Long-term investments

 

9,572

 

 

 

29,480

 

Goodwill

 

461,349

 

 

 

461,349

 

Intangible assets, net

 

152,525

 

 

 

162,272

 

Other assets, noncurrent

 

11,413

 

 

 

11,247

 

Total assets

$

1,354,441

 

 

$

1,574,204

 

Liabilities, mezzanine equity, and stockholders' equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

10,154

 

 

$

11,819

 

Accrued and other liabilities

 

92,275

 

 

 

109,743

 

Warehouse credit facilities

 

185,283

 

 

 

190,509

 

Convertible senior notes, net

 

23,468

 

 

 

23,431

 

Lease liabilities

 

18,015

 

 

 

19,137

 

Total current liabilities

 

329,195

 

 

 

354,639

 

Lease liabilities, noncurrent

 

35,757

 

 

 

37,298

 

Convertible senior notes, net, noncurrent

 

928,651

 

 

 

1,078,157

 

Deferred tax liabilities

 

249

 

 

 

243

 

Total liabilities

 

1,293,852

 

 

 

1,470,337

 

Series A convertible preferred stock—par value $0.001 per share; 10,000,000 shares authorized; 40,000 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

 

39,925

 

 

 

39,914

 

Stockholders’ equity

 

 

 

Common stock—par value $0.001 per share; 500,000,000 shares authorized; 110,526,884 and 109,696,178 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

 

110

 

 

 

110

 

Additional paid-in capital

 

775,094

 

 

 

757,951

 

Accumulated other comprehensive loss

 

(435

)

 

 

(801

)

Accumulated deficit

 

(754,105

)

 

 

(693,307

)

Total stockholders’ equity

 

20,664

 

 

 

63,953

 

Total liabilities, mezzanine equity, and stockholders’ equity

$

1,354,441

 

 

$

1,574,204

 

Redfin Corporation and Subsidiaries

Consolidated Statements of Comprehensive Loss

(in thousands, except share and per share amounts, unaudited)

 

 

Three Months Ended March 31,

 

 

2023

 

 

 

2022

 

Revenue

 

 

 

Service

$

212,934

 

 

$

217,593

 

Product

 

112,727

 

 

 

379,753

 

Total revenue

 

325,661

 

 

 

597,346

 

Cost of revenue(1)

 

 

 

Service

 

154,796

 

 

 

165,809

 

Product

 

114,658

 

 

 

358,999

 

Total cost of revenue

 

269,454

 

 

 

524,808

 

Gross profit

 

56,207

 

 

 

72,538

 

Operating expenses

 

 

 

Technology and development(1)

 

48,192

 

 

 

49,640

 

Marketing(1)

 

40,908

 

 

 

43,342

 

General and administrative(1)

 

69,962

 

 

 

58,966

 

Restructuring and reorganization

 

1,053

 

 

 

5,710

 

Total operating expenses

 

160,115

 

 

 

157,658

 

Loss from operations

 

(103,908

)

 

 

(85,120

)

Interest income

 

3,406

 

 

 

220

 

Interest expense

 

(1,922

)

 

 

(3,861

)

Income tax expense

 

(410

)

 

 

(134

)

Gain on extinguishment of convertible senior notes

 

42,270

 

 

 

 

Other expense, net

 

(234

)

 

 

(1,911

)

Net loss

$

(60,798

)

 

$

(90,806

)

Dividends on convertible preferred stock

 

(226

)

 

 

(793

)

Net loss attributable to common stock—basic and diluted

$

(61,024

)

 

$

(91,599

)

Net loss per share attributable to common stock—basic and diluted

$

(0.55

)

 

$

(0.86

)

Weighted-average shares to compute net loss per share attributable to common stock—basic and diluted

 

110,103,598

 

 

 

106,664,140

 

 

 

 

 

Net loss

$

(60,798

)

 

$

(90,806

)

Other comprehensive (loss) income

 

 

 

Foreign currency translation adjustments

 

58

 

 

 

4

 

Unrealized (loss) gain on available-for-sale debt securities

 

(424

)

 

 

561

 

Comprehensive loss

$

(61,164

)

 

$

(90,241

)

(1) Includes stock-based compensation as follows:

 

 

Three Months Ended March 31,

 

 

2023

 

 

2022

Cost of revenue

$

4,181

 

$

3,377

Technology and development

 

8,209

 

 

7,965

Marketing

 

1,263

 

 

1,072

General and administrative

 

5,375

 

 

4,374

Total

$

19,028

 

$

16,788

Redfin Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands, unaudited)

 

 

Three Months Ended March 31,

 

 

2023

 

 

 

2022

 

Operating Activities

 

 

 

Net loss

$

(60,798

)

 

$

(90,806

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

17,013

 

 

 

14,813

 

Stock-based compensation

 

19,028

 

 

 

16,788

 

Amortization of debt discount and issuance costs

 

1,087

 

 

 

1,440

 

Non-cash lease expense

 

4,816

 

 

 

3,169

 

Impairment costs

 

113

 

 

 

 

Net (gain) loss on IRLCs, forward sales commitments, and loans held for sale

 

(8,326

)

 

 

60

 

Change in fair value of mortgage servicing rights, net

 

1,208

 

 

 

 

Gain on extinguishment of convertible senior notes

 

(42,270

)

 

 

 

Other

 

(1,174

)

 

 

2,290

 

Change in assets and liabilities:

 

 

 

Accounts receivable, net

 

6,738

 

 

 

17,312

 

Inventory

 

103,588

 

 

 

112,734

 

Prepaid expenses and other assets

 

1,110

 

 

 

(1,982

)

Accounts payable

 

(1,675

)

 

 

9,876

 

Accrued and other liabilities, deferred tax liabilities, and payroll tax liabilities, noncurrent

 

(16,813

)

 

 

(14,442

)

Lease liabilities

 

(4,619

)

 

 

(3,642

)

Origination of mortgage servicing rights

 

(347

)

 

 

 

Proceeds from sale of mortgage servicing rights

 

339

 

 

 

 

Origination of loans held for sale

 

(854,085

)

 

 

(159,186

)

Proceeds from sale of loans originated as held for sale

 

861,771

 

 

 

170,577

 

Net cash provided by operating activities

 

26,704

 

 

 

79,001

 

Investing activities

 

 

 

Purchases of property and equipment

 

(2,919

)

 

 

(7,442

)

Purchases of investments

 

(57,556

)

 

 

(77,596

)

Sales of investments

 

12,014

 

 

 

5,346

 

Maturities of investments

 

48,483

 

 

 

6,500

 

Net cash provided by (used in) investing activities

 

22

 

 

 

(73,192

)

Financing activities

 

 

 

Proceeds from the issuance of common stock pursuant to employee equity plans

 

143

 

 

 

1,887

 

Tax payments related to net share settlements on restricted stock units

 

(3,161

)

 

 

(2,595

)

Borrowings from warehouse credit facilities

 

852,988

 

 

 

152,386

 

Repayments to warehouse credit facilities

 

(858,214

)

 

 

(163,144

)

Borrowings from secured revolving credit facility

 

 

 

 

156,799

 

Repayments to secured revolving credit facility

 

 

 

 

(219,711

)

Cash paid for secured revolving credit facility issuance costs

 

 

 

 

(764

)

Principal payments under finance lease obligations

 

(40

)

 

 

(217

)

Repurchases of convertible senior notes

 

(108,274

)

 

 

 

Net cash used in financing activities

 

(116,558

)

 

 

(75,359

)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

(58

)

 

 

(4

)

Net change in cash, cash equivalents, and restricted cash

 

(89,890

)

 

 

(69,554

)

Cash, cash equivalents, and restricted cash:

 

 

 

Beginning of period

 

242,246

 

 

 

718,281

 

End of period

$

152,356

 

 

$

648,727

 

Redfin Corporation and Subsidiaries

Supplemental Financial Information and Business Metrics

(unaudited)

 

 

Three Months Ended

 

Mar. 31,

2023

 

Dec. 31,

2022

 

Sep. 30,

2022

 

Jun. 30,

2022

 

Mar. 31,

2022

 

Dec. 31,

2021

 

Sep. 30,

2021

 

Jun. 30,

2021

Monthly average visitors (in thousands)

 

50,440

 

 

 

43,847

 

 

 

50,785

 

 

 

52,698

 

 

 

51,287

 

 

 

44,665

 

 

 

49,147

 

 

 

48,437

 

Real estate services transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage

 

10,301

 

 

 

12,743

 

 

 

18,245

 

 

 

20,565

 

 

 

15,001

 

 

 

19,428

 

 

 

21,929

 

 

 

21,006

 

Partner

 

3,187

 

 

 

2,742

 

 

 

3,507

 

 

 

3,983

 

 

 

3,417

 

 

 

4,603

 

 

 

4,755

 

 

 

4,597

 

Total

 

13,488

 

 

 

15,485

 

 

 

21,752

 

 

 

24,548

 

 

 

18,418

 

 

 

24,031

 

 

 

26,684

 

 

 

25,603

 

Real estate services revenue per transaction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage

$

11,556

 

 

$

10,914

 

 

$

11,103

 

 

$

11,692

 

 

$

11,191

 

 

$

10,900

 

 

$

11,107

 

 

$

11,307

 

Partner

 

2,592

 

 

 

2,611

 

 

 

2,556

 

 

 

2,851

 

 

 

2,814

 

 

 

2,819

 

 

 

2,990

 

 

 

3,195

 

Aggregate

 

9,438

 

 

 

9,444

 

 

 

9,725

 

 

 

10,258

 

 

 

9,637

 

 

 

9,352

 

 

 

9,661

 

 

 

9,850

 

U.S. market share by units(1)

 

0.78

%

 

 

0.76

%

 

 

0.80

%

 

 

0.82

%

 

 

0.79

%

 

 

0.78

%

 

 

0.78

%

 

 

0.77

%

Revenue from top-10 Redfin markets as a percentage of real estate services revenue

 

53

%

 

 

57

%

 

 

58

%

 

 

59

%

 

 

57

%

 

 

61

%

 

 

62

%

 

 

64

%

Average number of lead agents

 

1,876

 

 

 

2,022

 

 

 

2,293

 

 

 

2,640

 

 

 

2,750

 

 

 

2,485

 

 

 

2,370

 

 

 

2,456

 

RedfinNow homes sold

 

191

 

 

 

474

 

 

 

530

 

 

 

423

 

 

 

617

 

 

 

600

 

 

 

388

 

 

 

292

 

Revenue per RedfinNow home sold (in ones)

$

573,571

 

 

$

538,788

 

 

$

550,903

 

 

$

604,120

 

 

$

608,851

 

 

$

622,519

 

 

$

599,963

 

 

$

571,670

 

Mortgage originations by dollars (in millions)

$

991

 

 

$

1,036

 

 

$

1,557

 

 

$

1,565

 

 

$

159

 

 

$

242

 

 

$

258

 

 

$

261

 

Mortgage originations by units (in ones)

 

2,444

 

 

 

2,631

 

 

 

3,720

 

 

 

3,860

 

 

 

414

 

 

 

591

 

 

 

671

 

 

 

749

 

 

(1) Prior to the second quarter of 2022, we reported our U.S. market share based on the aggregate home value of our real estate services transactions, relative to the aggregate value of all U.S. home sales, which we computed based on the mean sale price of U.S. homes provided by the National Association of REALTORS® (“NAR”). Beginning in the second quarter of 2022, NAR (1) revised its methodology of computing the mean sale price, (2) restated its previously reported mean sale price beginning from January 2020 (and indicated that previously reported mean sale price prior to January 2020 is not comparable), and (3) discontinued publication of the mean sale price as part of its primary data set. Due to these changes, as of the second quarter of 2022, we report our U.S. market share based on the number of homes sold, rather than the dollar value of homes sold. Our market share by number of homes sold has historically been lower than our market share by dollar value of homes sold. We also stopped reporting the aggregate home value of our real estate services transactions.

Redfin Corporation and Subsidiaries

Supplemental Financial Information

(unaudited, in thousands)

 

 

Three Months Ended March 31, 2023

 

Real estate services

 

Properties

 

Rentals

 

Mortgage

 

Other

 

Corporate Overhead and Intercompany Eliminations

 

Total

Revenue

$

127,296

 

 

$

112,727

 

 

$

42,870

 

 

$

36,489

 

 

$

7,428

 

 

$

(1,149

)

 

$

325,661

 

Cost of revenue

 

111,494

 

 

 

114,658

 

 

 

9,765

 

 

 

29,213

 

 

 

5,473

 

 

 

(1,149

)

 

 

269,454

 

Gross profit

 

15,802

 

 

 

(1,931

)

 

 

33,105

 

 

 

7,276

 

 

 

1,955

 

 

 

 

 

 

56,207

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and development

 

28,895

 

 

 

529

 

 

 

15,964

 

 

 

643

 

 

 

1,224

 

 

 

937

 

 

 

48,192

 

Marketing

 

25,060

 

 

 

505

 

 

 

14,326

 

 

 

980

 

 

 

10

 

 

 

27

 

 

 

40,908

 

General and administrative

 

19,618

 

 

 

523

 

 

 

26,302

 

 

 

6,929

 

 

 

1,053

 

 

 

15,537

 

 

 

69,962

 

Restructuring and reorganization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,053

 

 

 

1,053

 

Total operating expenses

 

73,573

 

 

 

1,557

 

 

 

56,592

 

 

 

8,552

 

 

 

2,287

 

 

 

17,554

 

 

 

160,115

 

Loss from operations

 

(57,771

)

 

 

(3,488

)

 

 

(23,487

)

 

 

(1,276

)

 

 

(332

)

 

 

(17,554

)

 

 

(103,908

)

Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net

 

 

 

 

814

 

 

 

45

 

 

 

(60

)

 

 

115

 

 

 

42,196

 

 

 

43,110

 

Net loss

$

(57,771

)

 

$

(2,674

)

 

$

(23,442

)

 

$

(1,336

)

 

$

(217

)

 

$

24,642

 

 

$

(60,798

)

 

Three Months Ended March 31, 2023

 

Real estate services

 

Properties

 

Rentals

 

Mortgage

 

Other

 

Corporate Overhead and Intercompany Eliminations

 

Total

Net loss

$

(57,771

)

 

$

(2,674

)

 

$

(23,442

)

 

$

(1,336

)

 

$

(217

)

 

$

24,642

 

 

$

(60,798

)

Interest income(1)

 

 

 

 

(814

)

 

 

(80

)

 

 

(2,490

)

 

 

(115

)

 

 

(2,387

)

 

 

(5,886

)

Interest expense(2)

 

 

 

 

 

 

 

 

 

 

2,615

 

 

 

 

 

 

1,921

 

 

 

4,536

 

Income tax expense

 

 

 

 

 

 

 

43

 

 

 

68

 

 

 

 

 

 

299

 

 

 

410

 

Depreciation and amortization

 

4,432

 

 

 

122

 

 

 

10,152

 

 

 

988

 

 

 

216

 

 

 

1,103

 

 

 

17,013

 

Stock-based compensation(3)

 

9,593

 

 

 

248

 

 

 

3,616

 

 

 

1,258

 

 

 

561

 

 

 

3,752

 

 

 

19,028

 

Restructuring and reorganization(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,053

 

 

 

1,053

 

Impairment(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

113

 

 

 

113

 

Gain on extinguishment of convertible senior notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(42,270

)

 

 

(42,270

)

Adjusted EBITDA

$

(43,746

)

 

$

(3,118

)

 

$

(9,711

)

 

$

1,103

 

 

$

445

 

 

$

(11,774

)

 

$

(66,801

)

 

(1) Interest income includes $2.5 million of interest income related to originated mortgage loans for the three months ended March 31, 2023.

(2) Interest expense includes $2.6 million of interest expense related to our warehouse credit facilities for the three months ended March 31, 2023.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 12 to our consolidated financial statements for more information.

(4) Restructuring and reorganization expenses primarily consist of personnel-related costs associated with employee terminations, furloughs, or retention due to the restructuring and reorganization activities from our acquisitions of Bay Equity and Rent., and from our June 2022, October 2022, and March 2023 workforce reductions.

(5) Impairment consists of an impairment loss due to subleasing one of our operating leases.

 

Three Months Ended March 31, 2022

 

Real estate services

 

Properties

 

Rentals

 

Mortgage

 

Other

 

Corporate Overhead and Intercompany Eliminations

 

Total

Revenue

$

177,487

 

 

$

379,753

 

 

$

38,044

 

 

$

2,917

 

 

$

4,368

 

 

$

(5,223

)

 

$

597,346

 

Cost of revenue

 

153,784

 

 

 

358,866

 

 

 

7,193

 

 

 

5,517

 

 

 

4,671

 

 

 

(5,223

)

 

 

524,808

 

Gross profit

 

23,703

 

 

 

20,887

 

 

 

30,851

 

 

 

(2,600

)

 

 

(303

)

 

 

 

 

 

72,538

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and development

 

26,739

 

 

 

4,119

 

 

 

14,282

 

 

 

2,347

 

 

 

1,036

 

 

 

1,117

 

 

 

49,640

 

Marketing

 

30,844

 

 

 

1,153

 

 

 

11,042

 

 

 

28

 

 

 

53

 

 

 

222

 

 

 

43,342

 

General and administrative

 

22,992

 

 

 

2,825

 

 

 

24,192

 

 

 

1,524

 

 

 

712

 

 

 

6,721

 

 

 

58,966

 

Restructuring and reorganization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,710

 

 

 

5,710

 

Total operating expenses

 

80,575

 

 

 

8,097

 

 

 

49,516

 

 

 

3,899

 

 

 

1,801

 

 

 

13,770

 

 

 

157,658

 

Income (loss) from operations

 

(56,872

)

 

 

12,790

 

 

 

(18,665

)

 

 

(6,499

)

 

 

(2,104

)

 

 

(13,770

)

 

 

(85,120

)

Interest income, interest expense, income tax expense, and other expense, net

 

 

 

 

(1,624

)

 

 

469

 

 

 

1

 

 

 

1

 

 

 

(4,533

)

 

 

(5,686

)

Net loss

$

(56,872

)

 

$

11,166

 

 

$

(18,196

)

 

$

(6,498

)

 

$

(2,103

)

 

$

(18,303

)

 

$

(90,806

)

 

Three Months Ended March 31, 2022

 

Real estate services

 

Properties

 

Rentals

 

Mortgage

 

Other

 

Corporate Overhead and Intercompany Eliminations

 

Total

Net loss

$

(56,872

)

 

$

11,166

 

 

$

(18,196

)

 

$

(6,498

)

 

$

(2,103

)

 

$

(18,303

)

 

$

(90,806

)

Interest income(1)

 

 

 

 

(25

)

 

 

 

 

 

(318

)

 

 

(1

)

 

 

(194

)

 

 

(538

)

Interest expense(2)

 

 

 

 

1,649

 

 

 

 

 

 

277

 

 

 

 

 

 

2,212

 

 

 

4,138

 

Income tax expense

 

 

 

 

 

 

 

(203

)

 

 

 

 

 

 

 

 

337

 

 

 

134

 

Depreciation and amortization

 

4,018

 

 

 

537

 

 

 

9,356

 

 

 

302

 

 

 

255

 

 

 

345

 

 

 

14,813

 

Stock-based compensation(3)

 

10,140

 

 

 

1,537

 

 

 

2,240

 

 

 

601

 

 

 

369

 

 

 

1,901

 

 

 

16,788

 

Acquisition-related costs(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

917

 

 

 

917

 

Restructuring and reorganization(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,710

 

 

 

5,710

 

Adjusted EBITDA

$

(42,714

)

 

$

14,864

 

 

$

(6,803

)

 

$

(5,636

)

 

$

(1,480

)

 

$

(7,075

)

 

$

(48,844

)

 

(1) Interest income includes $0.3 million of interest income related to originated mortgage loans for the three months ended March 31, 2022.

(2) Interest expense includes $0.3 million of interest expense related to our warehouse credit facilities for the three months ended March 31, 2022.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 12 to our consolidated financial statements for more information.

(4) Acquisition-related costs consist of fees for external advisory, legal, and other professional services incurred in connection with our acquisition of other companies.

(5) Restructuring and reorganization expenses primarily consist of personnel-related costs associated with employee terminations, furloughs, or retention due to the restructuring and reorganization activities from our acquisitions of Bay Equity and Rent., and from our June and October 2022 workforce reductions.

Reconciliation of Adjusted EBITDA Guidance to Net Loss Guidance

(unaudited, in millions)

 

 

Q2 2023

 

Low

 

High

Net loss

(44

)

 

(35

)

Depreciation and amortization

17

 

 

17

 

Stock-based compensation

17

 

 

17

 

Restructuring and reorganization

5

 

 

5

 

Gain on extinguishment of convertible senior notes

(4

)

 

(4

)

Adjusted EBITDA

(9

)

 

1

 

 

Contacts

Investor Relations
Meg Nunnally, 206-576-8610
ir@redfin.com

Public Relations
Mariam Sughayer, 206-876-1322
press@redfin.com

Contacts

Investor Relations
Meg Nunnally, 206-576-8610
ir@redfin.com

Public Relations
Mariam Sughayer, 206-876-1322
press@redfin.com