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Redfin Reports Second Quarter 2021 Financial Results

SEATTLE - August 5, 2021 - Redfin Corporation (NASDAQ: RDFN) today announced financial results for the second quarter ended June 30, 2021. All financial measures, unless otherwise noted, are presented on a GAAP basis and include stock-based compensation, and depreciation and amortization.

Revenue increased 121% year-over-year to $471 million during the second quarter. Gross profit was $126 million, a increase of 174% from $46 million in the second quarter of 2020. Real estate services gross profit was $88 million, an increase of 90% from $46 million in the second quarter of 2020. Real estate services gross margin was 35%, compared to 34% in the second quarter of 2020. Operating expenses were $156 million, an increase of 210% from $50 million in the second quarter of 2020. Operating expenses were 33% of revenue, up from 24% in the second quarter of 2020.

Net loss was $27.9 million, compared to net loss of $6.6 million in the second quarter of 2020. The dividend on our convertible preferred stock was $1.9 million in the second quarter. Net loss attributable to common stock was $29.8 million. Stock-based compensation was $13.7 million, up from $7.2 million in the second quarter of 2020. Depreciation and amortization was $13.8 million, up from $3.6 million in the second quarter of 2020. Interest income was $0.1 million and interest expense was $2.8 million, compared to $0.4 million and $2.7 million, respectively, in the second quarter of 2020.

Net loss per share attributable to common stock, diluted, was $0.29, compared to net loss per share attributable to common stock, diluted, of $0.08 in the second quarter of 2020.

“Even in a rapidly expanding market, Redfin gained more market-share in the second quarter than at any point since our 2017 initial public offering,” said Redfin CEO Glenn Kelman. “And we took share where it mattered most: in markets where we offer Redfin Premier services, Redfin listings above a million dollars grew three times faster than listings below a million dollars. Despite increased pricing discipline and record gross margins, RedfinNow bought 40% more homes in the second quarter than we did in all of 2020; our properties revenue grew 139%. And even though this was our first quarter owning RentPath, we already hired a world-class RentPath CEO.”

Second Quarter Highlights
•Reached market share of 1.18% of U.S. existing home sales by value in the second quarter of 2021, an increase of 24 basis points from the second quarter of 2020.
•Saved homebuyers and sellers over $82 million in the second quarter. This includes the savings Redfin offers buyers through the Redfin Refund and sellers through Redfin’s lower listing fee when compared to a 2.5% listing commission typically charged by traditional agents.
•Redfin’s mobile application and website reached 48.4 million average monthly visitors in the second quarter, an increase of 14% compared to the second quarter of 2020.
•Continued RedfinNow expansion by launching in Tucson, Boston and Portland, Oregon.
•Closed the acquisition of RentPath on April 2; announced the appointment of Jon Ziglar as RentPath's Chief Executive Officer, effective August 16.
•Improved software for customers, agents, partners, home services and mortgage teams, including:
◦New data architecture in the cloud that will let Redfin’s software engineers move faster;
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◦New Loan Queue software for Redfin mortgage processors to improve workflow by providing a clear list of tasks, deadlines and documents in one place; and
◦Expanding Fast Offers software to Redfin agents in Seattle, making it easy to create offer paperwork on the go with a few clicks.



(1) We calculate the aggregate value of U.S. home sales by multiplying the total number of U.S. existing home sales by the mean sale price of these homes, each as reported by the National Association of REALTORS® ("NAR"). NAR data for the most recent period is preliminary and may subsequently be updated by NAR. We calculate our market share by aggregating the home value of brokerage and partner real estate services transactions. Then, in order to account for both the sell- and buy-side components of each transaction, we divide that value by two-times the estimated aggregate value of U.S. home sales.

Business Outlook
The following forward-looking statements reflect Redfin's expectations as of August 5, 2021, and are subject to substantial uncertainty.

For the third quarter of 2021 we expect:
•Total revenue between $530 million and $541 million, representing a year-over-year increase between 124% and 128% compared to the third quarter of 2020. Included within total revenue are properties segment revenue between $231 million and $236 million, and RentPath revenue between $40 million and $41 million.
•Total net loss between $24 million and $20 million, compared to total net income of $34 million in the third quarter of 2020. RentPath’s contribution to the net loss is expected to be approximately $17 million. This guidance includes approximately $14 million of expected stock-based compensation, $14 million of expected depreciation and amortization, and $4 million of expected net interest expense. Net income attributable to common stockholders will include the value of dividends on our convertible preferred stock, which we expect to pay in shares of our common stock.

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, and the anticipated benefits from our improved software. 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, 2020, as supplemented by our quarterly report for the quarter ended June 30, 2021, 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.

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About Redfin
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country's #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or 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. Since launching in 2006, we've saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 6,000 people.

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Contacts

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

Public Relations
Mariam Sughayer, 206-876-1322
press@redfin.com
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Redfin Corporation and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share amounts, unaudited)
June 30, 2021December 31, 2020
Assets
Current assets
Cash and cash equivalents$735,387 $925,276 
Restricted cash52,295 20,544 
Short-term investments29,605 131,561 
Accounts receivable, net of allowances for credit losses of $204 and $16084,757 54,719 
Inventory249,003 49,158 
Loans held for sale51,643 42,539 
Prepaid expenses18,028 12,131 
Other current assets7,152 4,898 
Total current assets1,227,870 1,240,826 
Property and equipment, net53,907 43,988 
Right-of-use assets, net58,144 44,149 
Long-term investments36,085 11,922 
Goodwill407,228 9,186 
Intangibles, net203,782 1,830 
Other assets, noncurrent14,059 8,619 
Total assets$2,001,075 $1,360,520 
Liabilities, mezzanine equity, and stockholders' equity
Current liabilities
Accounts payable$26,095 $5,644 
Accrued liabilities102,345 69,460 
Other payables17,367 13,184 
Warehouse credit facilities46,425 39,029 
Secured revolving credit facility123,770 23,949 
Convertible senior notes, net23,428 22,482 
Lease liabilities14,633 11,973 
Total current liabilities354,063 185,721 
Lease liabilities and deposits, noncurrent60,958 49,339 
Convertible senior notes, net, noncurrent1,211,517 488,268 
Payroll tax liabilities, noncurrent7,841 6,812 
Deferred tax liabilities1,254 — 
Total liabilities1,635,633 730,140 
Series A convertible preferred stock—par value $0.001 per share; 10,000,000 shares authorized; 40,000 shares issued and outstanding39,846 39,823 
Stockholders’ equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 104,838,095 and 103,000,594 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively105 103 
Additional paid-in capital651,627 860,556 
Accumulated other comprehensive income77 211 
Accumulated deficit(326,213)(270,313)
Total stockholders’ equity325,596 590,557 
Total liabilities, mezzanine equity, and stockholders’ equity$2,001,075 $1,360,520 


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Redfin Corporation and Subsidiaries
Consolidated Statements of Comprehensive Loss
(in thousands, except share and per share amounts, unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Revenue
Service$298,870 $141,135 $474,463 $252,613 
Product172,445 72,530 265,171 152,047 
Total revenue471,315 213,665 739,634 404,660 
Cost of revenue(1)
Service177,762 93,891 312,613 192,259 
Product167,417 73,735 258,527 153,483 
Total cost of revenue345,179 167,626 571,140 345,742 
Gross profit126,136 46,039 168,494 58,918 
Operating expenses
Technology and development(1)
41,488 17,961 69,166 38,235 
Marketing(1)
55,398 9,482 67,200 35,190 
General and administrative(1)
59,567 23,022 96,957 47,349 
Total operating expenses156,453 50,465 233,323 120,774 
Loss from operations(30,317)(4,426)(64,829)(61,856)
Interest income135 437 293 1,540 
Interest expense(2,813)(2,665)(4,151)(5,109)
Income tax benefit5,052 — 5,052 — 
Other income (expense), net65 43 (27)(1,303)
Net loss$(27,878)$(6,611)$(63,662)$(66,728)
Dividends on convertible preferred stock(1,877.865)(1,284)(4,213.733)(1,284)
Net loss attributable to common stock—basic and diluted$(29,756)$(7,895)$(67,876)$(68,012)
Net loss per share attributable to common stock—basic and diluted$(0.29)$(0.08)$(0.65)$(0.71)
Weighted average shares to compute net loss per share attributable to common stock—basic and diluted104,391,337 98,785,318 103,912,212 96,114,012 
Net Loss$(27,878)$(6,611)$(63,662)$(66,728)
Other comprehensive income (loss)
Foreign currency translation adjustments$0.246 $3 $(0.414)$(22)
Unrealized gain (loss) on available-for-sale debt securities84 (137)134 421 
Comprehensive loss$(27,794)$(6,745)$(63,528)$(66,329)

(1) Includes stock-based compensation as follows:
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Cost of revenue$3,758 $1,769 $6,736 $3,407 
Technology and development5,771 3,124 11,532 6,772 
Marketing535 352 1,078 727 
General and administrative3,679 1,960 6,981 3,510 
Total$13,743 $7,205 $26,327 $14,416 

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Redfin Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands, unaudited)
Six Months Ended June 30,
20212020
Operating Activities
Net loss
$(63,662)$(66,728)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization18,018 6,865 
Stock-based compensation26,327 14,416 
Amortization of debt discount and issuance costs2,203 3,477 
Non-cash lease expense5,448 4,522 
Impairment costs— 1,420 
Net loss (gain) on IRLCs, forward sales commitments, and loans held for sale238 (1,928)
Other169 (218)
Change in assets and liabilities:
Accounts receivable, net(22,312)(14,959)
Inventory(199,845)65,153 
Prepaid expenses and other assets(7,137)6,827 
Accounts payable15,766 1,040 
Accrued liabilities, other payables, deferred tax liabilities, and payroll tax liabilities, noncurrent26,915 13,819 
Lease liabilities (6,144)(5,481)
Origination of loans held for sale(488,274)(294,076)
Proceeds from sale of loans originated as held for sale478,652 274,595 
Net cash (used in) provided by operating activities(213,638)8,744 
Investing activities
Purchases of property and equipment(13,580)(6,072)
Purchases of investments(104,877)(88,724)
Sales of investments89,536 3,183 
Maturities of investments92,843 40,351 
Cash paid for acquisition(608,000)— 
Net cash used in investing activities(544,078)(51,262)
Financing activities
Proceeds from the issuance of convertible preferred stock, net of issuance costs— 39,801 
Proceeds from the issuance of common stock, net of issuance costs— 69,701 
Proceeds from the issuance of common stock pursuant to employee equity plans12,496 11,052 
Tax payments related to net share settlements on restricted stock units(16,530)(6,065)
Borrowings from warehouse credit facilities464,250 290,891 
Repayments to warehouse credit facilities(456,854)(271,627)
Borrowings from secured revolving credit facility230,608 39,587 
Repayments to secured revolving credit facility(130,788)(36,816)
Proceeds from issuance of convertible senior notes, net of issuance costs561,529 — 
Purchases of capped calls related to convertible senior notes(62,647)— 
Payments for repurchases and conversions of convertible senior notes(1,925)— 
Other payables—deposits held in escrow97 19,056 
Principal payments under finance lease obligations(353)(30)
Cash paid for secured revolving credit facility issuance costs(305)(4)
Net cash provided by financing activities599,578 155,546 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash— (22)
Net change in cash, cash equivalents, and restricted cash(158,138)113,006 
Cash, cash equivalents, and restricted cash:
Beginning of period945,820 247,448 
End of period
787,682 360,454 
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Redfin Corporation and Subsidiaries
Supplemental Financial Information and Business Metrics
(unaudited)

Three Months Ended
Jun. 30, 2021Mar. 31, 2021Dec. 31, 2020Sep. 30 2020Jun. 30, 2020Mar. 31, 2020Dec. 31, 2019Sep. 30, 2019Jun. 30, 2019
Monthly average visitors (in thousands)48,437 46,202 44,135 49,258 42,537 35,519 30,595 35,633 36,557 
Real estate services transactions
Brokerage21,006 14,317 16,951 18,980 13,828 10,751 13,122 16,098 15,580 
Partner4,597 3,944 4,940 5,180 2,691 2,479 2,958 3,499 3,357 
Total25,603 18,261 21,891 24,160 16,519 13,230 16,080 19,597 18,937 
Real estate services revenue per transaction
Brokerage$11,307 $10,927 $10,751 $10,241 $9,296 $9,520 $9,425 $9,075 $9,332 
Partner3,195 3,084 3,123 2,988 2,417 2,535 2,369 2,295 2,218 
Aggregate9,850 9,233 9,030 8,686 8,175 8,211 8,127 7,865 8,071 
Aggregate home value of real estate services transactions (in millions)$14,612 $9,621 $11,478 $12,207 $7,576 $6,098 $7,588 $9,157 $8,986 
U.S. market share by value
1.18 %1.16 %1.04 %1.04 %0.94 %0.92 %0.95 %0.96 %0.94 %
Revenue from top-10 Redfin markets as a percentage of real estate services revenue64 %62 %63 %63 %63 %61 %62 %63 %64 %
Average number of lead agents
2,456 2,277 1,981 1,820 1,399 1,826 1,526 1,579 1,603 
RedfinNow homes sold292 171 83 37 162 171 212 168 80 
Revenue per RedfinNow home sold$570,930 $525,173 $471,551 $504,583 $444,690 $461,916 $466,939 $476,770 $498,083 
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Redfin Corporation and Subsidiaries
Supplemental Financial Information
(unaudited, in thousands)
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Real estate services (brokerage)$237,511 $128,543 $393,957 $230,894 
Real estate services (partner)14,688 6,506 26,851 12,791 
Properties revenue172,445 72,184 265,171 151,282 
Rentals revenue42,548 — 42,548 — 
Other revenue8,521 7,246 17,878 11,496 
Intercompany elimination(4,398)(814)(6,771)(1,803)
Total revenue$471,315 $213,665 $739,634 $404,660 
Cost of revenue
Real estate services$164,125 $88,799 $292,342 $182,361 
Properties167,420 73,348 258,551 152,647 
Rentals7,570 — 7,570 — 
Other10,462 6,293 19,448 12,537 
Intercompany elimination(4,398)(814)(6,771)(1,803)
Total cost of revenue$345,179 $167,626 $571,140 $345,742 
Gross profit
Real estate services$88,074 $46,250 $128,466 $61,324 
Properties5,025 (1,164)6,620 (1,365)
Rentals34,978 — 34,978 — 
Other(1,941)953 (1,570)(1,041)
Total gross profit$126,136 $46,039 $168,494 $58,918 
Gross margin (percentage of revenue)
Real estate services34.9 %34.2 %30.5 %25.2 %
Properties2.9 (1.6)2.5 (0.9)
Rentals82.2 — 82.2 — 
Other(22.8)13.2 (8.8)(9.1)
Total gross margin26.8 21.5 22.8 14.6 

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