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Redfin Reports Third Quarter 2023 Financial Results

November 2, 2023 4:00 PM EDT

SEATTLE--(BUSINESS WIRE)-- Redfin Corporation (NASDAQ: RDFN) today announced results for its third quarter ended September 30, 2023.

Third Quarter 2023

Third quarter revenue was $269.0 million, a decrease of 12% compared to the third quarter of 2022. Gross profit was $98.3 million, an increase of 8% year-over-year. Real estate services gross profit was $54.1 million, a decrease of 2% year-over-year, and real estate services gross margin was 30%, compared to 26% in the third quarter of 2022.

Net loss was $19.0 million, compared to a net loss of $90.2 million in the third quarter of 2022. Net loss attributable to common stock was $19.3 million. Net loss per share attributable to common stock, diluted, was $0.17, compared to net loss per share, diluted, of $0.83 in the third quarter of 2022.

“In a worsening housing market, Redfin earned an adjusted EBITDA profit, a $59 million improvement over the third quarter of 2022, all while growing traffic and gaining share,” said Redfin CEO Glenn Kelman. “In October, we raised capital, began generating revenues from a new digital business, and launched all-variable agent pay in California. This downturn has only made us stronger.”

Third Quarter Highlights

  • Third quarter market share was 0.78% of U.S. existing home sales by units, compared to 0.75% in the second quarter of 2023.
  • Redfin’s mobile apps and website reached more than 51 million average monthly users, up 1% compared to the third quarter of 2022.
  • Achieved mortgage cross-selling attach rate of 18% in the third quarter, despite strong headwinds.
  • Sustained momentum in loyalty sales, with 36% of sales coming from loyalty customers in Q3 2023 compared to 33% in Q3 2022.
  • Announced a new construction partnership that will add thousands of new listings to Redfin and provide customers with richer information about newly built homes and communities.
  • Delivered software to improve customer and agent experience while driving customer contacts and boosting traffic to Redfin:
    • Added wind risk data to home description pages, making Redfin the first brokerage to publish wind risk information for nearly every for-sale home in the U.S.
    • Launched a new design system for rental detail pages, improving the visual appearance and driving significant increases in user engagement. We applied the same design system to the tour checkout process for customers touring with a Redfin partner agent, leading to an increase in contacts.
    • Improved call filters on our customer service line, allowing Redfin sales advisors to spend more time helping high-intent customers.
    • Simplified Redfin Estimate section for off-market home detail pages, making it easier for consumers to find the information they need and generating a 5% increase in listing contacts.

Business Outlook

The following forward-looking statements reflect Redfin's expectations as of November 2, 2023, and are subject to substantial uncertainty.

For the fourth quarter of 2023 we expect:

  • Total revenue between $211 million and $226 million, representing a year-over-year change between (5)% and 2% compared to the fourth quarter of 2022. Included within total revenue are real estate services revenue between $127 million and $137 million, rentals revenue between $49 million and $50 million, mortgage revenue between $26 million and $29 million and other revenue of $9 million to $10 million.
  • Total net loss is expected to be between $27 million and $18 million, compared to net loss of $62 million in the fourth quarter of 2022. This guidance includes approximately $20 million in total marketing expenses, $18 million of stock-based compensation, $15 million in depreciation and amortization, $27 million in gains on extinguishment of convertible senior notes and $2 million to $3 million in net interest expense. Adjusted EBITDA loss is expected to be between $19 million and $9 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 September 30, 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 September 30, 2023 and 2022 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 4,000 people.

Redfin-F

Redfin Corporation and Subsidiaries

Consolidated Balance Sheets

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

 

 

September 30, 2023

 

December 31, 2022

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

125,803

 

 

$

232,200

 

Restricted cash

 

1,414

 

 

 

2,406

 

Short-term investments

 

41,752

 

 

 

122,259

 

Accounts receivable, net of allowances for credit losses of $2,529 and $2,223

 

55,118

 

 

 

46,375

 

Loans held for sale

 

137,680

 

 

 

199,604

 

Prepaid expenses

 

26,248

 

 

 

34,006

 

Other current assets

 

8,811

 

 

 

7,449

 

Current assets of discontinued operations

 

 

 

 

132,159

 

Total current assets

 

396,826

 

 

 

776,458

 

Property and equipment, net

 

48,405

 

 

 

54,939

 

Right-of-use assets, net

 

35,150

 

 

 

40,889

 

Mortgage servicing rights, at fair value

 

34,773

 

 

 

36,261

 

Long-term investments

 

5,474

 

 

 

29,480

 

Goodwill

 

461,349

 

 

 

461,349

 

Intangible assets, net

 

133,031

 

 

 

162,272

 

Other assets, noncurrent

 

10,857

 

 

 

11,247

 

Noncurrent assets of discontinued operations

 

 

 

 

1,309

 

Total assets

$

1,125,865

 

 

$

1,574,204

 

Liabilities, mezzanine equity, and stockholders' equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

11,996

 

 

$

11,065

 

Accrued and other liabilities

 

88,191

 

 

 

106,763

 

Warehouse credit facilities

 

132,320

 

 

 

190,509

 

Convertible senior notes, net

 

 

 

 

23,431

 

Lease liabilities

 

16,317

 

 

 

18,560

 

Current liabilities of discontinued operations

 

 

 

 

4,311

 

Total current liabilities

 

248,824

 

 

 

354,639

 

Lease liabilities, noncurrent

 

31,416

 

 

 

36,906

 

Convertible senior notes, net, noncurrent

 

799,665

 

 

 

1,078,157

 

Deferred tax liabilities

 

260

 

 

 

243

 

Noncurrent liabilities of discontinued operations

 

 

 

 

392

 

Total liabilities

 

1,080,165

 

 

 

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 September 30, 2023 and December 31, 2022, respectively

 

39,947

 

 

 

39,914

 

Stockholders’ equity

 

 

 

Common stock—par value $0.001 per share; 500,000,000 shares authorized; 115,210,998 and 109,696,178 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

 

115

 

 

 

110

 

Additional paid-in capital

 

806,330

 

 

 

757,951

 

Accumulated other comprehensive loss

 

(257

)

 

 

(801

)

Accumulated deficit

 

(800,435

)

 

 

(693,307

)

Total stockholders’ equity

 

5,753

 

 

 

63,953

 

Total liabilities, mezzanine equity, and stockholders’ equity

$

1,125,865

 

 

$

1,574,204

 

Redfin Corporation and Subsidiaries

Consolidated Statements of Comprehensive Loss

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

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

$

268,956

 

 

$

305,774

 

 

$

758,595

 

 

$

877,639

 

Cost of revenue

 

170,616

 

 

 

215,109

 

 

 

501,927

 

 

 

624,089

 

Gross profit

 

98,340

 

 

 

90,665

 

 

 

256,668

 

 

 

253,550

 

Operating expenses

 

 

 

 

 

 

 

Technology and development

 

44,392

 

 

 

43,335

 

 

 

139,196

 

 

 

135,678

 

Marketing

 

24,095

 

 

 

33,242

 

 

 

97,531

 

 

 

131,352

 

General and administrative

 

55,380

 

 

 

57,976

 

 

 

186,584

 

 

 

182,640

 

Restructuring and reorganization

 

 

 

 

284

 

 

 

7,159

 

 

 

18,399

 

Total operating expenses

 

123,867

 

 

 

134,837

 

 

 

430,470

 

 

 

468,069

 

Loss from continuing operations

 

(25,527

)

 

 

(44,172

)

 

 

(173,802

)

 

 

(214,519

)

Interest income

 

2,060

 

 

 

1,174

 

 

 

8,170

 

 

 

1,948

 

Interest expense

 

(1,603

)

 

 

(2,219

)

 

 

(5,291

)

 

 

(6,648

)

Income tax expense

 

(239

)

 

 

(132

)

 

 

(882

)

 

 

(425

)

Gain on extinguishment of convertible senior notes

 

6,495

 

 

 

 

 

 

68,848

 

 

 

 

Other expense, net

 

(158

)

 

 

(902

)

 

 

(537

)

 

 

(3,077

)

Net loss from continuing operations

 

(18,972

)

 

 

(46,251

)

 

 

(103,494

)

 

 

(222,721

)

Net loss from discontinued operations

 

 

 

 

(43,994

)

 

 

(3,634

)

 

 

(36,476

)

Net loss

$

(18,972

)

 

$

(90,245

)

 

$

(107,128

)

 

$

(259,197

)

 

 

 

 

 

 

 

 

Dividends on convertible preferred stock

 

(335

)

 

 

(272

)

 

 

(858

)

 

 

(1,416

)

 

 

 

 

 

 

 

 

Net loss from continuing operations attributable to common stock—basic and diluted

$

(19,307

)

 

$

(46,523

)

 

$

(104,352

)

 

$

(224,137

)

Net loss attributable to common stock—basic and diluted

$

(19,307

)

 

$

(90,517

)

 

$

(107,986

)

 

$

(260,613

)

 

 

 

 

 

 

 

 

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

$

(0.17

)

 

$

(0.43

)

 

$

(0.93

)

 

$

(2.08

)

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

$

(0.17

)

 

$

(0.83

)

 

$

(0.96

)

 

$

(2.42

)

 

 

 

 

 

 

 

 

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

 

114,592,679

 

 

 

108,618,491

 

 

 

112,141,342

 

 

 

107,566,894

 

 

 

 

 

 

 

 

 

Net loss

$

(18,972

)

 

$

(90,245

)

 

$

(107,128

)

 

$

(259,197

)

Other comprehensive income

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

(15

)

 

 

27

 

 

 

(73

)

 

 

65

 

Unrealized gain on available-for-sale debt securities

 

210

 

 

 

34

 

 

 

617

 

 

 

812

 

Comprehensive loss

$

(18,777

)

 

$

(90,184

)

 

$

(106,584

)

 

$

(258,320

)

 

(1) Includes stock-based compensation as follows:

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Cost of revenue

$

3,037

 

 

$

4,165

 

 

$

10,173

 

 

$

10,771

 

Technology and development

 

8,391

 

 

 

6,353

 

 

 

24,759

 

 

 

20,230

 

Marketing

 

1,337

 

 

 

1,002

 

 

 

3,836

 

 

 

2,939

 

General and administrative

 

6,035

 

 

 

4,904

 

 

 

16,380

 

 

 

13,022

 

Total

$

18,800

 

 

$

16,424

 

 

$

55,148

 

 

$

46,962

 

Redfin Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands, unaudited)

 

 

Nine Months Ended September 30,

 

 

2023

 

 

 

2022

 

Operating Activities

 

 

 

Net loss

$

(107,128

)

 

$

(259,197

)

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

 

 

 

Depreciation and amortization

 

48,443

 

 

 

47,438

 

Stock-based compensation

 

55,382

 

 

 

51,672

 

Amortization of debt discount and issuance costs

 

2,873

 

 

 

4,358

 

Non-cash lease expense

 

12,909

 

 

 

11,313

 

Impairment costs

 

113

 

 

 

913

 

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

 

(1,767

)

 

 

4,228

 

Change in fair value of mortgage servicing rights, net

 

1,065

 

 

 

(1,472

)

Gain on extinguishment of convertible senior notes

 

(68,848

)

 

 

 

Other

 

(2,013

)

 

 

3,254

 

Change in assets and liabilities:

 

 

 

Accounts receivable, net

 

(238

)

 

 

(17,052

)

Inventory

 

114,232

 

 

 

56,990

 

Prepaid expenses and other assets

 

9,696

 

 

 

(2,721

)

Accounts payable

 

177

 

 

 

(1,875

)

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

 

(19,346

)

 

 

(24,202

)

Lease liabilities

 

(14,864

)

 

 

(12,435

)

Origination of mortgage servicing rights

 

(699

)

 

 

(2,774

)

Proceeds from sale of mortgage servicing rights

 

1,122

 

 

 

1,314

 

Origination of loans held for sale

 

(2,798,337

)

 

 

(3,091,099

)

Proceeds from sale of loans originated as held for sale

 

2,858,656

 

 

 

3,082,858

 

Net cash provided by (used in) operating activities

 

91,428

 

 

 

(148,489

)

Investing activities

 

 

 

Purchases of property and equipment

 

(9,235

)

 

 

(17,496

)

Purchases of investments

 

(76,866

)

 

 

(145,273

)

Sales of investments

 

124,681

 

 

 

12,946

 

Maturities of investments

 

59,383

 

 

 

66,055

 

Cash paid for acquisition, net of cash, cash equivalents, and restricted cash acquired

 

 

 

 

(97,341

)

Net cash provided by (used in) investing activities

 

97,963

 

 

 

(181,109

)

Financing activities

 

 

 

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

 

5,790

 

 

 

9,679

 

Tax payments related to net share settlements on restricted stock units

 

(15,961

)

 

 

(6,650

)

Borrowings from warehouse credit facilities

 

2,803,589

 

 

 

3,080,606

 

Repayments to warehouse credit facilities

 

(2,861,779

)

 

 

(3,069,728

)

Borrowings from secured revolving credit facility

 

 

 

 

552,051

 

Repayments to secured revolving credit facility

 

 

 

 

(549,416

)

Cash paid for secured revolving credit facility issuance costs

 

 

 

 

(764

)

Principal payments under finance lease obligations

 

(73

)

 

 

(680

)

Repurchases of convertible senior notes

 

(212,401

)

 

 

 

Repayments of convertible senior notes

 

(23,512

)

 

 

 

Net cash (used in) provided by financing activities

 

(304,347

)

 

 

15,098

 

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

 

(73

)

 

 

(65

)

Net change in cash, cash equivalents, and restricted cash

 

(115,029

)

 

 

(314,565

)

Cash, cash equivalents, and restricted cash:

 

 

 

Beginning of period

 

242,246

 

 

 

718,281

 

End of period

$

127,217

 

 

$

403,716

 

Redfin Corporation and Subsidiaries

Supplemental Financial Information and Business Metrics

(unaudited)

 

 

Three Months Ended

 

Sep. 30,
2023

 

Jun. 30,
2023

 

Mar. 31,
2023

 

Dec. 31,
2022

 

Sep. 30,
2022

 

Jun. 30,
2022

 

Mar. 31,
2022

 

Dec. 31,
2021

Monthly average visitors (in thousands)

 

51,309

 

 

 

52,308

 

 

 

50,440

 

 

 

43,847

 

 

 

50,785

 

 

 

52,698

 

 

 

51,287

 

 

 

44,665

 

Real estate services transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage

 

13,075

 

 

 

13,716

 

 

 

10,301

 

 

 

12,743

 

 

 

18,245

 

 

 

20,565

 

 

 

15,001

 

 

 

19,428

 

Partner

 

4,351

 

 

 

3,952

 

 

 

3,187

 

 

 

2,742

 

 

 

3,507

 

 

 

3,983

 

 

 

3,417

 

 

 

4,603

 

Total

 

17,426

 

 

 

17,668

 

 

 

13,488

 

 

 

15,485

 

 

 

21,752

 

 

 

24,548

 

 

 

18,418

 

 

 

24,031

 

Real estate services revenue per transaction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage

$

12,704

 

 

$

12,376

 

 

$

11,556

 

 

$

10,914

 

 

$

11,103

 

 

$

11,692

 

 

$

11,191

 

 

$

10,900

 

Partner

 

2,677

 

 

 

2,756

 

 

 

2,592

 

 

 

2,611

 

 

 

2,556

 

 

 

2,851

 

 

 

2,814

 

 

 

2,819

 

Aggregate

 

10,200

 

 

 

10,224

 

 

 

9,438

 

 

 

9,444

 

 

 

9,725

 

 

 

10,258

 

 

 

9,637

 

 

 

9,352

 

U.S. market share by units(1)

 

0.78

%

 

 

0.75

%

 

 

0.79

%

 

 

0.76

%

 

 

0.80

%

 

 

0.83

%

 

 

0.79

%

 

 

0.78

%

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

 

56

%

 

 

55

%

 

 

53

%

 

 

57

%

 

 

58

%

 

 

59

%

 

 

57

%

 

 

61

%

Average number of lead agents

 

1,744

 

 

 

1,792

 

 

 

1,876

 

 

 

2,022

 

 

 

2,293

 

 

 

2,640

 

 

 

2,750

 

 

 

2,485

 

Mortgage originations by dollars (in millions)

$

1,110

 

 

$

1,282

 

 

$

991

 

 

$

1,036

 

 

$

1,557

 

 

$

1,565

 

 

$

159

 

 

$

242

 

Mortgage originations by units (in ones)

 

2,786

 

 

 

3,131

 

 

 

2,444

 

 

 

2,631

 

 

 

3,720

 

 

 

3,860

 

 

 

414

 

 

 

591

 

(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 September 30, 2023

 

Real estate
services

 

Rentals

 

Mortgage

 

Other

 

Corporate
overhead

 

Total

Revenue

$

177,750

 

 

$

47,410

 

 

$

32,923

 

 

$

10,873

 

$

 

 

$

268,956

 

Cost of revenue

 

123,684

 

 

 

10,824

 

 

 

29,629

 

 

 

6,479

 

 

 

 

 

 

170,616

 

Gross profit

 

54,066

 

 

 

36,586

 

 

 

3,294

 

 

 

4,394

 

 

 

 

 

 

98,340

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Technology and development

 

25,711

 

 

 

15,813

 

 

 

800

 

 

 

1,133

 

 

 

935

 

 

 

44,392

 

Marketing

 

10,785

 

 

 

12,245

 

 

 

1,088

 

 

 

20

 

 

 

(43

)

 

 

24,095

 

General and administrative

 

18,418

 

 

 

21,838

 

 

 

6,670

 

 

 

952

 

 

 

7,502

 

 

 

55,380

 

Total operating expenses

 

54,914

 

 

 

49,896

 

 

 

8,558

 

 

 

2,105

 

 

 

8,394

 

 

 

123,867

 

(Loss) income from continuing operations

 

(848

)

 

 

(13,310

)

 

 

(5,264

)

 

 

2,289

 

 

 

(8,394

)

 

 

(25,527

)

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

 

41

 

 

 

42

 

 

 

(73

)

 

 

207

 

 

 

6,338

 

 

 

6,555

 

Net (loss) income from continuing operations

$

(807

)

 

$

(13,268

)

 

$

(5,337

)

 

$

2,496

 

 

$

(2,056

)

 

$

(18,972

)

 

Three Months Ended September 30, 2023

 

Real estate
services

 

Rentals

 

Mortgage

 

Other

 

Corporate
overhead

 

Total

Net (loss) income from continuing operations

$

(807

)

 

$

(13,268

)

 

$

(5,337

)

 

$

2,496

 

 

$

(2,056

)

 

$

(18,972

)

Interest income(1)

 

(41

)

 

 

(81

)

 

 

(2,886

)

 

 

(207

)

 

 

(1,732

)

 

 

(4,947

)

Interest expense(2)

 

 

 

 

 

 

 

3,132

 

 

 

 

 

 

1,598

 

 

 

4,730

 

Income tax expense

 

 

 

 

37

 

 

 

70

 

 

 

 

 

 

132

 

 

 

239

 

Depreciation and amortization

 

3,123

 

 

 

9,681

 

 

 

947

 

 

 

233

 

 

 

312

 

 

 

14,296

 

Stock-based compensation(3)

 

11,151

 

 

 

4,255

 

 

 

473

 

 

 

574

 

 

 

2,347

 

 

 

18,800

 

Gain on extinguishment of convertible senior notes

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,495

)

 

 

(6,495

)

Adjusted EBITDA

$

13,426

 

 

$

624

 

 

$

(3,601

)

 

$

3,096

 

 

$

(5,894

)

 

$

7,651

 

(1) Interest income includes $2.9 million of interest income related to originated mortgage loans for the three months ended September 30, 2023.

(2) Interest expense includes $3.1 million of interest expense related to our warehouse credit facilities for the three months ended September 30, 2023.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 11 to our consolidated financial statements for more information.

 

Three Months Ended September 30, 2022

 

Real estate
services

 

Rentals

 

Mortgage

 

Other

 

Corporate
overhead

 

Total

Revenue(1)

$

211,540

 

 

$

38,686

 

 

$

48,469

 

 

$

7,079

 

 

$

 

 

$

305,774

 

Cost of revenue

 

156,632

 

 

 

8,676

 

 

 

43,783

 

 

 

6,018

 

 

 

 

 

 

215,109

 

Gross profit

 

54,908

 

 

 

30,010

 

 

 

4,686

 

 

 

1,061

 

 

 

 

 

 

90,665

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Technology and development

 

25,709

 

 

 

15,385

 

 

 

985

 

 

 

751

 

 

 

505

 

 

 

43,335

 

Marketing

 

18,772

 

 

 

12,678

 

 

 

1,653

 

 

 

48

 

 

 

91

 

 

 

33,242

 

General and administrative

 

20,244

 

 

 

22,722

 

 

 

7,073

 

 

 

784

 

 

 

7,153

 

 

 

57,976

 

Restructuring and reorganization

 

 

 

 

 

 

 

 

 

 

 

 

 

284

 

 

 

284

 

Total operating expenses

 

64,725

 

 

 

50,785

 

 

 

9,711

 

 

 

1,583

 

 

 

8,033

 

 

 

134,837

 

Loss from continuing operations

 

(9,817

)

 

 

(20,775

)

 

 

(5,025

)

 

 

(522

)

 

 

(8,033

)

 

 

(44,172

)

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

 

 

 

 

397

 

 

 

(129

)

 

 

40

 

 

 

(2,387

)

 

 

(2,079

)

Net loss from continuing operations

$

(9,817

)

 

$

(20,378

)

 

$

(5,154

)

 

$

(482

)

 

$

(10,420

)

 

$

(46,251

)

(1) Included in revenue is $4.9 million from providing services to our discontinued properties segment.

 

Three Months Ended September 30, 2022

 

Real estate
services

 

Rentals

 

Mortgage

 

Other

 

Corporate
overhead

 

Total

Net loss from continuing operations

$

(9,817

)

 

$

(20,378

)

 

$

(5,154

)

 

$

(482

)

 

$

(10,420

)

 

$

(46,251

)

Interest income(1)

 

 

 

 

 

 

 

(4,049

)

 

 

(42

)

 

 

(1,115

)

 

 

(5,206

)

Interest expense(2)

 

 

 

 

 

 

 

3,364

 

 

 

 

 

 

2,215

 

 

 

5,579

 

Income tax expense

 

 

 

 

(355

)

 

 

141

 

 

 

 

 

 

346

 

 

 

132

 

Depreciation and amortization

 

4,388

 

 

 

9,683

 

 

 

1,053

 

 

 

241

 

 

 

291

 

 

 

15,656

 

Stock-based compensation(3)

 

9,834

 

 

 

3,632

 

 

 

1,209

 

 

 

341

 

 

 

1,408

 

 

 

16,424

 

Acquisition-related costs(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

 

 

13

 

Restructuring and reorganization(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

284

 

 

 

284

 

Impairment(6)

 

 

 

 

 

 

 

 

 

 

 

 

 

913

 

 

 

913

 

Adjusted EBITDA

$

4,405

 

 

$

(7,418

)

 

$

(3,436

)

 

$

58

 

 

$

(6,065

)

 

$

(12,456

)

(1) Interest income includes $4.0 million of interest income related to originated mortgage loans for the three months ended September 30, 2022.

(2) Interest expense includes $3.4 million of interest expense related to our warehouse credit facilities for the three months ended September 30, 2022.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 11 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 for our rentals segment due to the restructuring and reorganization activities from our acquisition of Rent.

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

 

Nine Months Ended September 30, 2023

 

Real estate
services

 

Rentals

 

Mortgage

 

Other

 

Corporate
overhead

 

Total

Revenue(1)

$

485,687

 

 

$

135,636

 

 

$

107,838

 

 

$

29,434

 

$

 

 

$

758,595

 

Cost of revenue

 

359,625

 

 

 

31,016

 

 

 

93,108

 

 

 

18,178

 

 

 

 

 

 

501,927

 

Gross profit

 

126,062

 

 

 

104,620

 

 

 

14,730

 

 

 

11,256

 

 

 

 

 

 

256,668

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Technology and development

 

82,650

 

 

 

48,081

 

 

 

2,177

 

 

 

3,475

 

 

 

2,813

 

 

 

139,196

 

Marketing

 

51,849

 

 

 

42,509

 

 

 

3,122

 

 

 

46

 

 

 

5

 

 

 

97,531

 

General and administrative

 

58,997

 

 

 

73,445

 

 

 

20,323

 

 

 

3,049

 

 

 

30,770

 

 

 

186,584

 

Restructuring and reorganization

 

 

 

 

 

 

 

 

 

 

 

 

 

7,159

 

 

 

7,159

 

Total operating expenses

 

193,496

 

 

 

164,035

 

 

 

25,622

 

 

 

6,570

 

 

 

40,747

 

 

 

430,470

 

(Loss) income from continuing operations

 

(67,434

)

 

 

(59,415

)

 

 

(10,892

)

 

 

4,686

 

 

 

(40,747

)

 

 

(173,802

)

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

 

41

 

 

 

115

 

 

 

(224

)

 

 

475

 

 

 

69,901

 

 

 

70,308

 

Net (loss) income from continuing operations

$

(67,393

)

 

$

(59,300

)

 

$

(11,116

)

 

$

5,161

 

 

$

29,154

 

 

$

(103,494

)

(1) Included in revenue is $1.2 million from providing services to our discontinued properties segment.

 

Nine Months Ended September 30, 2023

 

Real estate
services

 

Rentals

 

Mortgage

 

Other

 

Corporate
overhead

 

Total

Net (loss) income from continuing operations

$

(67,393

)

 

$

(59,300

)

 

$

(11,116

)

 

$

5,161

 

 

$

29,154

 

 

$

(103,494

)

Interest income(1)

 

(41

)

 

 

(238

)

 

 

(9,062

)

 

 

(475

)

 

 

(7,400

)

 

 

(17,216

)

Interest expense(2)

 

 

 

 

 

 

 

9,737

 

 

 

 

 

 

5,285

 

 

 

15,022

 

Income tax expense

 

 

 

 

123

 

 

 

222

 

 

 

 

 

 

537

 

 

 

882

 

Depreciation and amortization

 

12,819

 

 

 

30,068

 

 

 

2,929

 

 

 

756

 

 

 

1,745

 

 

 

48,317

 

Stock-based compensation(3)

 

33,041

 

 

 

11,580

 

 

 

2,554

 

 

 

1,696

 

 

 

6,277

 

 

 

55,148

 

Acquisition-related costs(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

 

 

8

 

Restructuring and reorganization(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

7,159

 

 

 

7,159

 

Impairment(6)

 

 

 

 

 

 

 

 

 

 

 

 

 

113

 

 

 

113

 

Gain on extinguishment of convertible senior notes

 

 

 

 

 

 

 

 

 

 

 

 

 

(68,848

)

 

 

(68,848

)

Adjusted EBITDA

$

(21,574

)

 

$

(17,767

)

 

$

(4,736

)

 

$

7,138

 

 

$

(25,970

)

 

$

(62,909

)

(1) Interest income includes $9.0 million of interest income related to originated mortgage loans for the nine months ended September 30, 2023.

(2) Interest expense includes $9.7 million of interest expense related to our warehouse credit facilities for the nine months ended September 30, 2023.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 11 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 2022, October 2022, and March 2023 workforce reductions.

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

 

Nine Months Ended September 30, 2022

 

Real estate
services

 

Rentals

 

Mortgage

 

Other

 

Corporate
overhead

 

Total

Revenue(1)

$

640,835

 

 

$

114,979

 

 

$

104,484

 

 

$

17,341

 

 

$

 

 

$

877,639

 

Cost of revenue

 

488,114

 

 

 

23,769

 

 

 

95,616

 

 

 

16,590

 

 

 

 

 

 

624,089

 

Gross profit

 

152,721

 

 

 

91,210

 

 

 

8,868

 

 

 

751

 

 

 

 

 

 

253,550

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Technology and development

 

80,144

 

 

 

44,539

 

 

 

5,236

 

 

 

2,975

 

 

 

2,784

 

 

 

135,678

 

Marketing

 

90,380

 

 

 

36,806

 

 

 

3,525

 

 

 

173

 

 

 

468

 

 

 

131,352

 

General and administrative

 

67,578

 

 

 

68,738

 

 

 

18,047

 

 

 

2,346

 

 

 

25,931

 

 

 

182,640

 

Restructuring and reorganization

 

 

 

 

 

 

 

 

 

 

 

 

 

18,399

 

 

 

18,399

 

Total operating expenses

 

238,102

 

 

 

150,083

 

 

 

26,808

 

 

 

5,494

 

 

 

47,582

 

 

 

468,069

 

Loss from operations

 

(85,381

)

 

 

(58,873

)

 

 

(17,940

)

 

 

(4,743

)

 

 

(47,582

)

 

 

(214,519

)

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

 

(123

)

 

 

1,098

 

 

 

(164

)

 

 

51

 

 

 

(9,064

)

 

 

(8,202

)

Net loss from continuing operations

$

(85,504

)

 

$

(57,775

)

 

$

(18,104

)

 

$

(4,692

)

 

$

(56,646

)

 

$

(222,721

)

(1) Included in revenue is $14.9 million from providing services to our discontinued properties segment.

 

Nine Months Ended September 30, 2022

 

Real estate
services

 

Rentals

 

Mortgage

 

Other

 

Corporate
overhead

 

Total

Net loss from continuing operations

$

(85,504

)

 

$

(57,775

)

 

$

(18,104

)

 

$

(4,692

)

 

$

(56,646

)

 

$

(222,721

)

Interest income(1)

 

 

 

 

(1

)

 

 

(7,296

)

 

 

(55

)

 

 

(1,876

)

 

 

(9,228

)

Interest expense(2)

 

 

 

 

 

 

 

5,599

 

 

 

 

 

 

6,642

 

 

 

12,241

 

Income tax expense

 

 

 

 

(789

)

 

 

174

 

 

 

 

 

 

1,040

 

 

 

425

 

Depreciation and amortization

 

12,957

 

 

 

28,550

 

 

 

2,425

 

 

 

814

 

 

 

909

 

 

 

45,655

 

Stock-based compensation(3)

 

29,644

 

 

 

8,611

 

 

 

2,590

 

 

 

1,151

 

 

 

4,966

 

 

 

46,962

 

Acquisition-related costs(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

2,437

 

 

 

2,437

 

Restructuring and reorganization(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

18,399

 

 

 

18,399

 

Impairment(6)

 

 

 

 

 

 

 

 

 

 

 

 

 

913

 

 

 

913

 

Adjusted EBITDA

$

(42,903

)

 

$

(21,404

)

 

$

(14,612

)

 

$

(2,782

)

 

$

(23,216

)

 

$

(104,917

)

(1) Interest income includes $7.3 million of interest income related to originated mortgage loans for the nine months ended September 30, 2023.

(2) Interest expense includes $5.6 million of interest expense related to our warehouse credit facilities for the nine months ended September 30, 2023.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 11 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 2022, October 2022, and March 2023 workforce reductions.

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

Reconciliation of Adjusted EBITDA Guidance to Net Loss Guidance

(unaudited, in millions)

 

 

Q4 2023

 

Low

 

High

Net loss

(27

)

 

(18

)

Net interest expense

3

 

 

2

 

Depreciation and amortization

15

 

 

15

 

Stock-based compensation

18

 

 

18

 

Gain on extinguishment of notes

(27

)

 

(27

)

Adjusted EBITDA

(19

)

 

(9

)

 

Note: Figures may not sum due to rounding.

 

Investor Relations
Meg Nunnally, 206-576-8610
[email protected]

Public Relations
Mariam Sughayer, 206-876-1322
[email protected]

Source: Redfin Corporation



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