• | Reached market share of .83% of U.S. existing home sales by value in the second quarter of 2018. Redfin’s second-quarter market share increased .19 percentage points year over year, an acceleration from the .15 percentage-point year-over-year increase in the first quarter. This gain shows continued acceleration of market-share gains from 2017, which saw year-over-year increases of .10 percentage points in the first quarter, .11 in the second, .14 in the third, and .15 in the fourth quarter.(3) |
• | Increased the percentage of Redfin transactions from repeat customers and personally referred customers by 35% in the second quarter compared to the second quarter of 2017. These customers closed at more than double the rate of those we met directly from the website. |
• | Outperformed competitors in retaining buy-side customers as sellers. Customers who bought a home with Redfin were 69% more likely to sell that home with Redfin, compared to traditional-brokerage buyers selling with the same brokerage. In 2016, Redfin buyers were just 42% more likely to sell that home with Redfin compared to the industry average, showing a widening advantage in customer loyalty. |
• | Earned a Net Promoter Score ("NPS"), a measure of customer satisfaction, that was 50% higher than competing brokerages’, as measured in a Redfin-commissioned May 2018 survey of people who bought or sold a home in the previous 12 months. In the May 2017 survey, Redfin’s NPS was just 32% better than other brokerages, so the gap is widening. This was the sixth consecutive survey in which Redfin’s customer satisfaction was higher than our competitors’. |
• | Introduced a new Home Values tab on all Redfin city and neighborhood pages. Redfin.com users can click on the Home Values tab to see price trends, recently sold homes, information about offers in the area, school rankings, and Walk Score. Home Values pages provide information to consumers while building future website traffic through high-ranking real estate search terms. |
• | Expanded Redfin Mortgage to Georgia and Ohio, now serving homebuyers in seven states and Washington D.C., with plans to launch in additional states in the coming months. Redfin Mortgage is part of the long-term vision of integrating lending with Redfin's existing brokerage and title businesses, ultimately leading to an entirely digital closing. |
• | Total revenue between $137.1 million and $141.3 million, representing year-over-year growth between 25% and 29% compared to the third quarter of 2017. Properties segment revenue between $10.1 million and $12.0 million is included in the guidance provided. |
• | Net income between $1.2 million and $2.8 million, compared to net income of $10.6 million in the third quarter of 2017. This guidance includes approximately $5.6 million of expected stock-based compensation, $2.0 million of expected depreciation and amortization, and $1.6 million of interest expense from the convertible notes issued in July 2018. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue | $ | 142,642 | $ | 104,935 | $ | 222,536 | $ | 164,802 | |||||||
Cost of revenue (1) | 97,429 | 67,975 | 171,626 | 121,467 | |||||||||||
Gross profit | 45,213 | 36,960 | 50,910 | 43,335 | |||||||||||
Operating expenses: | |||||||||||||||
Technology and development (1) | 13,033 | 10,090 | 25,796 | 19,762 | |||||||||||
Marketing (1) | 14,435 | 10,132 | 27,770 | 20,591 | |||||||||||
General and administrative (1) | 15,288 | 12,466 | 32,062 | 26,833 | |||||||||||
Total operating expenses | 42,756 | 32,688 | 85,628 | 67,186 | |||||||||||
Income (loss) from operations | 2,457 | 4,272 | (34,718 | ) | (23,851 | ) | |||||||||
Interest income and other income, net: | |||||||||||||||
Interest income | 729 | 32 | 1,307 | 76 | |||||||||||
Other income, net | 21 | — | 179 | 13 | |||||||||||
Total interest income and other income, net | 750 | 32 | 1,486 | 89 | |||||||||||
Net income (loss) | $ | 3,207 | $ | 4,304 | $ | (33,232 | ) | $ | (23,762 | ) | |||||
Accretion of redeemable convertible preferred stock | $ | — | $ | (110,921 | ) | $ | — | $ | (135,690 | ) | |||||
Net income (loss) attributable to common stock - basic and diluted | $ | 3,207 | $ | (106,617 | ) | $ | (33,232 | ) | $ | (159,452 | ) | ||||
Net income (loss) per share attributable to common stock - basic | $ | 0.04 | $ | (7.15 | ) | $ | (0.40 | ) | $ | (10.74 | ) | ||||
Net income (loss) per share attributable to common stock - diluted | $ | 0.04 | $ | (7.15 | ) | $ | (0.40 | ) | $ | (10.74 | ) | ||||
Weighted average shares - basic | 83,164,670 | 14,913,234 | 82,590,979 | 14,840,759 | |||||||||||
Weighted average shares - diluted | 90,743,178 | 14,913,234 | 82,590,979 | 14,840,759 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Cost of revenue | 1,392 | 699 | 2,691 | 1,414 | |||||||
Technology and development | 1,726 | 751 | 3,200 | 1,482 | |||||||
Marketing | 157 | 123 | 276 | 242 | |||||||
General and administrative | 1,503 | 1,065 | 2,808 | 2,182 | |||||||
Total | 4,778 | 2,638 | 8,975 | 5,320 |
June 30, 2018 | December 31, 2017 | ||||||
(unaudited) | |||||||
Assets: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 194,237 | $ | 208,342 | |||
Restricted cash | 17,408 | 4,316 | |||||
Prepaid expenses | 3,337 | 8,613 | |||||
Accrued revenue, net | 18,902 | 13,334 | |||||
Inventory | 14,519 | 3,382 | |||||
Other current assets | 1,828 | 328 | |||||
Loans held for sale | 3,584 | 1,891 | |||||
Total current assets | 253,815 | 240,206 | |||||
Property and equipment, net | 23,855 | 22,318 | |||||
Intangible assets, net | 3,050 | 3,294 | |||||
Goodwill | 9,186 | 9,186 | |||||
Other assets | 7,077 | 6,951 | |||||
Total assets: | 296,983 | 281,955 | |||||
Liabilities and stockholders' equity: | |||||||
Current liabilities: | |||||||
Accounts payable | 3,855 | 1,901 | |||||
Accrued liabilities | 34,045 | 26,605 | |||||
Other payables | 17,700 | 4,068 | |||||
Loan facility | 3,492 | 2,016 | |||||
Current portion of deferred rent | 1,467 | 1,267 | |||||
Total current liabilities | 60,559 | 35,857 | |||||
Deferred rent, net of current portion | 10,811 | 10,668 | |||||
Total liabilities | 71,370 | 46,525 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 83,785,251 and 81,468,891 shares issued and outstanding, respectively | 84 | 81 | |||||
Preferred stock—par value $0.001 per share; 10,000,000 shares authorized and no shares issued and outstanding | — | — | |||||
Additional paid-in capital | 387,764 | 364,352 | |||||
Accumulated deficit | (162,235 | ) | (129,003 | ) | |||
Total stockholders’ equity | 225,613 | 235,430 | |||||
Total liabilities and stockholders’ equity: | $ | 296,983 | $ | 281,955 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Operating activities | |||||||
Net loss | $ | (33,232 | ) | $ | (23,762 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 3,902 | 3,539 | |||||
Stock-based compensation | 8,974 | 5,320 | |||||
Change in assets and liabilities: | |||||||
Prepaid expenses | 5,277 | 1,842 | |||||
Accrued revenue | (5,568 | ) | (3,885 | ) | |||
Inventories | (11,137 | ) | (1,582 | ) | |||
Other current assets | (1,470 | ) | 8,064 | ||||
Other long-term assets | (125 | ) | 377 | ||||
Accounts payable | 1,934 | 901 | |||||
Accrued liabilities | 7,481 | 8,481 | |||||
Deferred lease liability | (583 | ) | 1,097 | ||||
Origination of loans held for sale | (29,249 | ) | (3,022 | ) | |||
Proceeds from sale of loans originated as held for sale | 27,555 | 2,477 | |||||
Net cash used in operating activities | (26,241 | ) | (153 | ) | |||
Investing activities | |||||||
Maturities and sales of short-term investments | — | 1,239 | |||||
Purchases of short-term investments | — | (992 | ) | ||||
Purchases of property and equipment | (4,045 | ) | (9,435 | ) | |||
Net cash used in investing activities | (4,045 | ) | (9,188 | ) | |||
Financing activities | |||||||
Proceeds from issuance of common stock | 14,394 | 1,017 | |||||
Tax payment related to net share settlements on restricted stock units | (227 | ) | — | ||||
Payment of initial public offering costs | — | (1,807 | ) | ||||
Borrowings from warehouse credit facilities | 28,551 | 2,932 | |||||
Repayments of warehouse credit facilities | (27,076 | ) | (2,403 | ) | |||
Other payables - customer escrow deposits related to title services | 13,631 | 7,814 | |||||
Net cash provided by financing activities | 29,273 | 7,553 | |||||
Net change in cash, cash equivalents, and restricted cash | (1,013 | ) | (1,788 | ) | |||
Cash, cash equivalents, and restricted cash: | |||||||
Beginning of period | 212,658 | 67,845 | |||||
End of period | $ | 211,645 | $ | 66,057 | |||
Supplemental disclosure of non-cash investing and financing activities | |||||||
Accretion of redeemable convertible preferred stock | $ | — | $ | (135,690 | ) | ||
Stock-based compensation capitalized in property and equipment | $ | (244 | ) | $ | (131 | ) | |
Initial public offering cost accruals | $ | — | $ | (343 | ) | ||
Property and equipment additions in accounts payable and accrued expenses | $ | (21 | ) | $ | — | ||
Leasehold improvements paid directly by lessor | $ | (926 | ) | $ | (104 | ) | |
Cash in transit for exercised stock options | $ | (30 | ) | $ | — |
Three Months Ended | |||||||||||||||||||||||||||||||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | |||||||||||||||||||||||||||
Monthly average visitors (in thousands) | 28,777 | 25,820 | 21,377 | 24,518 | 24,400 | 20,162 | 16,058 | 17,795 | 17,021 | ||||||||||||||||||||||||||
Real estate services transactions: | |||||||||||||||||||||||||||||||||||
Brokerage | 12,971 | 7,285 | 8,598 | 10,527 | 10,221 | 5,692 | 6,432 | 7,934 | 7,497 | ||||||||||||||||||||||||||
Partner | 3,289 | 2,237 | 2,739 | 3,101 | 2,874 | 2,041 | 2,281 | 2,663 | 2,602 | ||||||||||||||||||||||||||
Total | 16,260 | 9,522 | 11,337 | 13,628 | 13,095 | 7,733 | 8,713 | 10,597 | 10,099 | ||||||||||||||||||||||||||
Real estate services revenue per transaction: | |||||||||||||||||||||||||||||||||||
Brokerage | $ | 9,510 | $ | 9,628 | $ | 9,659 | $ | 9,289 | $ | 9,301 | $ | 9,570 | $ | 9,428 | $ | 9,333 | $ | 9,524 | |||||||||||||||||
Partner | 2,281 | 2,137 | 2,056 | 1,960 | 1,945 | 1,911 | 1,991 | 1,932 | 1,633 | ||||||||||||||||||||||||||
Aggregate | $ | 8,048 | $ | 7,869 | $ | 7,822 | $ | 7,621 | $ | 7,687 | $ | 7,548 | $ | 7,481 | $ | 7,474 | $ | 7,491 | |||||||||||||||||
Aggregate home value of real estate services transactions (in millions) | $ | 7,910 | $ | 4,424 | $ | 5,350 | $ | 6,341 | $ | 6,119 | $ | 3,470 | $ | 4,018 | $ | 4,898 | $ | 4,684 | |||||||||||||||||
U.S. market share by value | 0.83 | % | 0.73 | % | 0.71 | % | 0.71 | % | 0.64 | % | 0.58 | % | 0.56 | % | 0.57 | % | 0.53 | % | |||||||||||||||||
Revenue from top-10 Redfin markets as a percentage of real estate services revenue | 68 | % | 66 | % | 69 | % | 69 | % | 69 | % | 68 | % | 71 | % | 72 | % | 74 | % | |||||||||||||||||
Average number of lead agents | 1,415 | 1,327 | 1,118 | 1,028 | 1,010 | 935 | 796 | 756 | 756 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue by segment: | |||||||||||||||
Brokerage revenue | $ | 123,355 | $ | 95,069 | $ | 193,498 | $ | 149,540 | |||||||
Partner revenue | 7,503 | 5,589 | 12,285 | 9,490 | |||||||||||
Total real estate services revenue | 130,858 | 100,658 | 205,783 | 159,030 | |||||||||||
Properties revenue | $ | 8,986 | $ | 1,981 | $ | 12,038 | $ | 1,981 | |||||||
Other revenue | $ | 2,798 | $ | 2,296 | $ | 4,715 | $ | 3,791 | |||||||
Total revenue | $ | 142,642 | $ | 104,935 | $ | 222,536 | $ | 164,802 | |||||||
Cost of revenue by segment: | |||||||||||||||
Real estate services cost of revenue | 85,337 | 63,436 | 153,501 | 114,592 | |||||||||||
Properties cost of revenue | 9,088 | 2,030 | 12,430 | 2,036 | |||||||||||
Other cost of revenue | 3,004 | 2,509 | 5,695 | 4,839 | |||||||||||
Total cost of revenue | $ | 97,429 | $ | 67,975 | $ | 171,626 | $ | 121,467 | |||||||
Gross profit by segment: | |||||||||||||||
Real estate services gross profit | $ | 45,521 | $ | 37,222 | 52,282 | 44,438 | |||||||||
Properties gross profit | (102 | ) | (49 | ) | (392 | ) | (55 | ) | |||||||
Other gross profit | (206 | ) | (213 | ) | (980 | ) | (1,048 | ) | |||||||
Total gross profit | $ | 45,213 | $ | 36,960 | $ | 50,910 | $ | 43,335 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018* | 2017 | 2018* | 2017 | ||||||||||||
Net income (loss) attributable to common stock, as reported | $ | 3,207 | $ | (106,617 | ) | $ | (33,232 | ) | $ | (159,452 | ) | ||||
Adjustments: | |||||||||||||||
Add-back: Accretion of redeemable convertible preferred stock | — | 110,921 | — | 135,690 | |||||||||||
Net income (loss) attributable to common stock, adjusted | $ | 3,207 | $ | 4,304 | $ | (33,232 | ) | $ | (23,762 | ) | |||||
Non-GAAP adjusted net income (loss) per share - basic | $ | 0.04 | $ | 0.06 | $ | (0.40 | ) | $ | (0.34 | ) | |||||
Non-GAAP adjusted net income (loss) per share - diluted | $ | 0.04 | $ | 0.06 | $ | (0.40 | ) | $ | (0.34 | ) | |||||
Weighted-average shares used to compute non-GAAP adjusted net income (loss) per share — basic | 83,164,670 | 70,335,236 | 82,590,979 | 70,262,761 | |||||||||||
Weighted-average shares used to compute non-GAAP adjusted net income (loss) per share — diluted | 90,743,178 | 74,177,876 | 82,590,979 | 70,262,761 | |||||||||||
Reconciliation of weighted-average shares used to compute net income (loss) per share attributable to common stockholders, from GAAP to non-GAAP —basic and diluted: | |||||||||||||||
Weighted-average shares used to compute GAAP net income (loss) per share attributable to common stockholders — basic | 83,164,670 | 14,913,234 | 82,590,979 | 14,840,759 | |||||||||||
Conversion of redeemable convertible preferred stock as of beginning of period presented | — | 55,422,002 | — | 55,422,002 | |||||||||||
Weighted-average shares used to compute non-GAAP adjusted net income (loss) per share — basic | 83,164,670 | 70,335,236 | 82,590,979 | 70,262,761 | |||||||||||
Weighted-average shares used to compute GAAP net income (loss) per share attributable to common stockholders — diluted | 90,743,178 | 14,913,234 | 82,590,979 | 14,840,759 | |||||||||||
Conversion of redeemable convertible preferred stock as of beginning of period presented | — | 55,422,002 | — | 55,422,002 | |||||||||||
Incremental options to purchase common stock | 3,842,640 | ||||||||||||||
Weighted-average shares used to compute non-GAAP adjusted net income (loss) per share — diluted | 90,743,178 | 74,177,876 | 82,590,979 | 70,262,761 |