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Redfin Reports First Quarter 2022 Financial Results

SEATTLE - May 5, 2022 - Redfin Corporation (NASDAQ: RDFN) today announced results for its first quarter ended March 31, 2022.

First Quarter 2022
First quarter revenue was $597.3 million, an increase of 123% compared to the first quarter of 2021. Gross profit was $72.5 million, an increase of 71% year-over-year. Real estate services gross profit was $23.7 million, a decrease of 41% year-over-year, and real estate services gross margin was 13%, compared to 24% in the first quarter of 2021.

Net loss was $90.8 million, compared to a net loss of $35.8 million in the first quarter of 2021. Net loss attributable to common stock was $91.6 million. Net loss per share attributable to common stock, diluted, was $0.86, compared to net loss per share, diluted, of $0.37 in the first quarter of 2021.

"Redfin exceeded our first-quarter revenues and earnings guidance by tens of millions of dollars,” said Redfin CEO Glenn Kelman. “Online traffic accelerated significantly. Our core business gained share, and we expect those gains to accelerate throughout the year. RedfinNow had another blow-out quarter. We closed the Bay Equity acquisition on April 1, and already we’re on pace to nearly double the percentage of Redfin homebuyers who get a Redfin loan, at roughly double the gross profits from each customer. We’re more optimistic than ever about our strategy, which is to drive customer demand by building Redfin.com into a complete destination for real estate information, and to make more money from each customer by becoming a one-stop shop for buying or selling a home."

First Quarter Highlights
•Reached market share of 1.18% of U.S. existing home sales by value in the first quarter of 2022, an increase of 2 basis points from the first quarter of 2021.(1)
•Saved homebuyers and sellers over $59 million in the first quarter of 2022. 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 apps and website reached nearly 51 million average monthly users in the first quarter, an increase of 11% compared to the first quarter of 2021.
•Announced the acquisition of Bay Equity Home Loans, which closed on April 1, accelerating Redfin’s strategy to become a one-stop shop for consumers to buy, sell, rent and finance a home.
•Launched nationwide rental search, making Redfin a destination for all U.S. home searchers, whether they’re looking to rent or buy, and significantly expanding the reach of the RentPath network.
•Appointed Brad Singer to the Redfin Board of Directors, bringing decades of finance and investment experience to the organization.
•Shared updated statistics on the diversity of Redfin’s workforce and the results of our ongoing diversity initiatives. In 2021, we increased the percentage of employees who are people of color by 3 points, the percentage of managers who are people of color by 2 points and the percentage of women in management by 1 point.
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•Delivered improved software for customers, agents, partners and renovations staff including:
◦An on-demand marketing platform that allows agents and coordinators to quickly produce professionally designed marketing materials, giving them more flexibility and creativity in how they market themselves and their listings.
◦Offer Summary Pages that aggregate valuation data for Redfin-owned homes and allow RedfinNow employees to easily understand the reasoning behind each home offer.
◦Updated customer lists that give agents more insight into which customers are buying and selling and helps create a more seamless moving experience for customers.
◦Integrated mortgage software that allows Redfin agents to seamlessly introduce their customers to Bay Equity loan officers.
◦A machine learning model to forecast how many days a RedfinNow home will spend on the market, improving our ability to predict holding costs.
◦More prominent search filters that help Redfin users find more homes that meet their criteria, and an improved search results module that minimizes how often a search returns “no results”.

(1) 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. 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®.

Business Outlook
The following forward-looking statements reflect Redfin's expectations as of May 5, 2022, and are subject to substantial uncertainty.

For the second quarter of 2022 we expect:
•Total revenue between $613 million and $650 million, representing a year-over-year growth between 30% and 38% compared to the second quarter of 2021. Included within total revenue are real estate services segment revenue between $249 million and $256 million, properties segment revenue between $256 million and $281 million, mortgage revenue between $68 million and $73 million and rentals revenue of $38 million.
•Total net loss is expected to be between $72 million and $60 million, compared to net loss of $28 million in the second quarter of 2021. This guidance includes approximately $61 million in total marketing expenses, $21 million of stock-based compensation, $17 million of depreciation and amortization, and $4 million of net interest expense. In addition, 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
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Factors" in our annual report for the year ended December 31, 2021, as supplemented by our quarterly report for the quarter ended March 31, 2022, 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, 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.

Redfin-F

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)

March 31, 2022December 31, 2021
Assets
Current assets
Cash and cash equivalents$612,680 $591,003 
Restricted cash36,047 127,278 
Short-term investments95,458 33,737 
Accounts receivable, net of allowances for credit losses of $1,464 and $1,29852,282 69,594 
Inventory245,487 358,221 
Loans held for sale23,693 35,759 
Prepaid expenses26,836 22,948 
Other current assets6,748 7,524 
Total current assets1,099,231 1,246,064 
Property and equipment, net60,836 58,671 
Right-of-use assets, net51,417 54,200 
Long-term investments56,194 54,828 
Goodwill409,382 409,382 
Intangible assets, net177,003 185,929 
Other assets, noncurrent13,090 12,898 
Total assets$1,867,153 $2,021,972 
Liabilities, mezzanine equity, and stockholders' equity
Current liabilities
Accounts payable$22,693 $12,546 
Accrued and other liabilities103,449 118,122 
Warehouse credit facilities22,285 33,043 
Secured revolving credit facility136,869 199,781 
Convertible senior notes, net— 23,280 
Lease liabilities15,070 15,040 
Total current liabilities300,366 401,812 
Lease liabilities, noncurrent51,719 55,222 
Convertible senior notes, net, noncurrent1,238,585 1,214,017 
Deferred tax liabilities981 1,201 
Total liabilities1,591,651 1,672,252 
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, 2022 and December 31, 2021, respectively39,879 39,868 
Stockholders’ equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 107,025,691 and 106,308,767 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively107 106 
Additional paid-in capital699,225 682,084 
Accumulated other comprehensive loss(739)(174)
Accumulated deficit(462,970)(372,164)
Total stockholders’ equity235,623 309,852 
Total liabilities, mezzanine equity, and stockholders’ equity$1,867,153 $2,021,972 
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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 March 31,
20222021
Revenue
Service$217,593 $175,593 
Product379,753 92,726 
Total revenue597,346 268,319 
Cost of revenue(1)
Service165,809 134,851 
Product358,999 91,110 
Total cost of revenue524,808 225,961 
Gross profit72,538 42,358 
Operating expenses
Technology and development(1)
49,640 27,678 
Marketing(1)
43,342 11,802 
General and administrative(1)
58,966 37,391 
Restructuring and reorganization5,710 — 
Total operating expenses157,658 76,871 
(Loss) income from operations(85,120)(34,513)
Interest income220 159 
Interest expense(3,861)(1,338)
Income tax benefit(134)— 
Other expense, net(1,911)(92)
Net loss$(90,806)$(35,784)
Dividend on convertible preferred stock(793)(2,336)
Net loss attributable to common stock—basic and diluted$(91,599)$(38,120)
Net loss per share attributable to common stock—basic and diluted$(0.86)$(0.37)
Weighted-average shares to compute net loss per share attributable to common stock—basic and diluted106,664,140 103,427,764 
Net loss$(90,806)$(35,784)
Other comprehensive income (loss)
Foreign currency translation adjustments4 — 
Unrealized gain (loss) on available-for-sale debt securities561 (50)
Comprehensive loss$(90,241)$(35,834)

(1) Includes stock-based compensation as follows:
Three Months Ended March 31,
20222021
Cost of revenue$3,377 $2,978 
Technology and development7,965 5,761 
Marketing1,072 542 
General and administrative4,374 3,302 
Total$16,788 $12,583 

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Redfin Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands, unaudited)
Three Months Ended March 31,
20222021
Operating Activities
Net loss
$(90,806)$(35,784)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization14,813 4,341 
Stock-based compensation16,788 12,583 
Amortization of debt discount and issuance costs1,440 855 
Non-cash lease expense3,169 2,533 
Net loss (gain) on IRLCs, forward sales commitments, and loans held for sale60 (1,052)
Other2,290 109 
Change in assets and liabilities:
Accounts receivable, net17,312 7,303 
Inventory112,734 (48,213)
Prepaid expenses and other assets(1,982)(3,359)
Accounts payable9,876 5,947 
Accrued and other liabilities, deferred tax liabilities, and payroll tax liabilities, noncurrent(14,442)8,873 
Lease liabilities (3,642)(2,951)
Origination of loans held for sale(159,186)(227,090)
Proceeds from sale of loans originated as held for sale170,577 225,140 
Net cash provided by (used in) operating activities79,001 (50,765)
Investing activities
Purchases of property and equipment(7,442)(5,285)
Purchases of investments(77,596)(67,877)
Sales of investments5,346 — 
Maturities of investments6,500 63,589 
Net cash used in investing activities(73,192)(9,573)
Financing activities
Proceeds from the issuance of common stock pursuant to employee equity plans1,887 3,411 
Tax payments related to net share settlements on restricted stock units(2,595)(10,860)
Borrowings from warehouse credit facilities152,386 216,382 
Repayments to warehouse credit facilities(163,144)(214,747)
Borrowings from secured revolving credit facility156,799 71,177 
Repayments to secured revolving credit facility(219,711)(46,275)
Proceeds from issuance of convertible senior notes, net of issuance costs— 488,691 
Purchases of capped calls related to convertible senior notes— (54,480)
Payments for repurchases and conversions of convertible senior notes— (1,886)
Other financing payables— 6,521 
Principal payments under finance lease obligations(217)(67)
Cash paid for secured revolving credit facility issuance costs(764)(305)
Net cash (used in) provided by financing activities(75,359)457,562 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(4)1 
Net change in cash, cash equivalents, and restricted cash(69,554)397,225 
Cash, cash equivalents, and restricted cash:
Beginning of period718,281 945,820 
End of period
$648,727 $1,343,045 
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Redfin Corporation and Subsidiaries
Supplemental Financial Information and Business Metrics
(unaudited)
Three Months Ended
Mar. 31, 2022Dec. 31, 2021Sep. 30, 2021Jun. 30, 2021Mar. 31, 2021Dec. 31, 2020Sep. 30 2020Jun. 30, 2020
Monthly average visitors (in thousands)51,287 44,665 49,147 48,437 46,202 44,135 49,258 42,537 
Real estate services transactions
Brokerage15,001 19,428 21,929 21,006 14,317 16,951 18,980 13,828 
Partner3,417 4,603 4,755 4,597 3,944 4,940 5,180 2,691 
Total18,418 24,031 26,684 25,603 18,261 21,891 24,160 16,519 
Real estate services revenue per transaction
Brokerage$11,191 $10,900 $11,107 $11,307 $10,927 $10,751 $10,241 $9,296 
Partner2,814 2,819 2,990 3,195 3,084 3,123 2,988 2,417 
Aggregate9,637 9,352 9,661 9,850 9,233 9,030 8,686 8,175 
Aggregate home value of real estate services transactions (in millions)$10,346 $13,255 $14,926 $14,612 $9,710 $11,478 $12,207 $7,576 
U.S. market share by value
1.18 %1.15 %1.16 %1.18 %1.16 %1.04 %1.04 %0.94 %
Revenue from top-10 Redfin markets as a percentage of real estate services revenue57 %61 %62 %64 %62 %63 %63 %63 %
Average number of lead agents
2,750 2,485 2,370 2,456 2,277 1,981 1,820 1,399 
RedfinNow homes sold617 600 388 292 171 83 37 162 
Revenue per RedfinNow home sold (in ones)$608,851 $622,519 $599,963 $571,670 $525,765 $471,895 $504,730 $444,757 
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Redfin Corporation and Subsidiaries
Supplemental Financial Information
(unaudited, in thousands)
Three Months Ended March 31,
20222021
Revenue
Real estate services (brokerage)$167,872 $156,447 
Real estate services (partner)9,615 12,162 
Properties379,753 92,726 
Rentals38,044 — 
Mortgage2,917 5,711 
Other4,368 3,646 
Intercompany eliminations(5,223)(2,373)
Total$597,346 $268,319 
Cost of revenue
Real estate services$153,784 $128,216 
Properties358,866 91,130 
Rentals7,193 — 
Mortgage5,517 5,869 
Other4,671 3,119 
Intercompany eliminations(5,223)(2,373)
Total$524,808 $225,961 
Gross Profit
Real estate services$23,703 $40,393 
Properties20,887 1,596 
Rentals30,851 — 
Mortgage(2,600)(158)
Other(303)527 
Total$72,538 $42,358 
Real estate services, properties, mortgage, and other operating expenses$109,781 $76,871 
Rentals operating expenses47,877 — 
Loss from operations(85,120)(34,513)
Interest income220 159 
Interest expense(3,861)(1,338)
Income tax expense(134)— 
Other expense, net(1,911)(92)
Net loss$(90,806)$(35,784)






















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Reconciliation of Adjusted EBITDA to Net Loss
(unaudited, in thousands)

Three Months Ended March 31,
20222021
Net loss(90,806)(35,784)
Interest income(1)
(538)(515)
Interest expense(2)
4,138 1,767 
Income tax expense134 — 
Depreciation and amortization14,813 4,341 
Stock-based compensation(3)
16,788 12,583 
Acquisition-related costs(4)
917 2,107 
Restructuring and reorganization(5)
5,710 — 
Adjusted EBITDA(48,844)(15,501)

(1) Interest income includes $0.3 million and $0.4 million of interest income related to originated mortgage loans for the three months ended March 31, 2022 and 2021, respectively.
(2) Interest expense includes $0.3 million and $0.4 million of interest expense related to our warehouse credit facilities for the three months ended March 31, 2022 and 2021, respectively.
(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 for our mortgage and rentals segments due to the restructuring and reorganization activities from our acquisitions of Bay Equity and RentPath, respectively.


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