Redfin Reports Third Quarter 2022 Financial Results

SEATTLE - November 9, 2022 - Redfin Corporation (NASDAQ: RDFN) today announced results for its third quarter ended September 30, 2022.

Third Quarter 2022

Third quarter revenue was $600.5 million, an increase of 11% compared to the third quarter of 2021. Gross profit was $58.1 million, a decrease of 54% year-over-year. Real estate services gross profit was $54.9 million, a decrease of 43% year-over-year, and real estate services gross margin was 26%, compared to 37% in the third quarter of 2021.

Net loss was $90.2 million, compared to a net loss of $18.9 million in the third quarter of 2021. Net loss attributable to common stock was $90.5 million. Net loss per share attributable to common stock, diluted, was $0.83, compared to net loss per share, diluted, of $0.20 in the third quarter of 2021.

Adjusted EBITDA loss was $51.0 million, compared to adjusted EBITDA income of $11.8 million in the third quarter of 2021.

“Laying off 862 colleagues and friends is heartbreaking,” said Redfin CEO Glenn Kelman. “But I feel relief about closing RedfinNow with relatively low losses. We’re profoundly grateful for the dazzling entrepreneurs who built that business on a knife’s edge, but its appeal to consumers has waned as the market turned. Home prices will at some point stabilize but the cost of capital isn’t going back to 2021 levels any time soon, and this is a major why RedfinNow offers had already gotten so low. Redfin will have more cash and sell more properties by focusing on growth in our online audience, low fees, and better brokerage, mortgage and title service. Already, our share of real estate traffic and home sales is increasing. Loyalty sales and the rate at which Redfin customers stuck with us for a sale also both increased in the third quarter, as did mortgage and title attach rates. The year after we bought it in bankruptcy, our Rent business is growing instead of declining. Housing companies are in the jungle now, but Redfin has been there before and come out stronger. We’ll generate adjusted EBITDA in 2023 and net income in 2024.”

Third Quarter Highlights

•Reached market share of 0.80% of U.S. existing home sales by units in the third quarter of 2022, an increase of 2 basis points from the third quarter of 2021.

•Redfin’s mobile apps and website reached more than 51 million average monthly users in the third quarter, an increase of 3% compared to the third quarter of 2021.

•Brought Redfin agent service to Hilton Head, South Carolina and expanded listing coverage to a total of 96% of the U.S. population.

•Streamlined Redfin Concierge service with a simpler pricing model that helps customers fix up their home to sell for top dollar. In our pilot markets, adoption in homes valued at more than $500,000 grew from 6.8% in the first quarter of 2022 to 24.0% in the third quarter.

•Increased representation of underrepresented racial or ethnic groups in senior leadership to 13% in the third quarter of 2022 from 10% in the prior year. Focused internal DEI resources on educating agents about the needs of Hispanic and Latinx homebuyers and better equipping them to serve customers with limited English proficiency.

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•Significant sequential step-up in mortgage cross-selling with 17% attach rates for the third quarter compared to 8% in the second quarter of 2022.

•Delivered software to improve the customers experience and employee productivity:

◦Added down payment assistance information to U.S. for-sale home listings, making it easier for consumers to discover assistance programs they may qualify for in order to make home ownership more affordable.

◦Added transit data to listing pages, showing renters and buyers the stops that serve each home.

◦Introduced a low-code tool that allows product teams and marketers to launch new Redfin.com resources quickly and easily.

◦Newly designed listing pages on Android, which increased buy-side contacts by more than 9% and scheduled tours by more than 8%.

Business Outlook

The following forward-looking statements reflect Redfin's expectations as of November 9, 2022, and are subject to substantial uncertainty.

For the fourth quarter of 2022 we expect:

•Total revenue between $430 million and $459 million, representing a year-over-year decline between (33)% and (29)% compared to the fourth quarter of 2021. Included within total revenue are real estate services segment revenue between $136 million and $144 million, properties segment revenue between $220 million and $240 million, rentals revenue between $39 million and $40 million and mortgage revenue between $29 million and $32 million.

•Total net loss is expected to be between $134 million and $118 million, compared to net loss of $27 million in the fourth quarter of 2021. This guidance includes approximately $25 million in total marketing expenses, $17 million of stock-based compensation, $18 million of depreciation and amortization, $23 million to $21 million in restructuring expenses, and $5 million to $4 million of net interest expense. Adjusted EBITDA loss is expected to be between $71 million and $58 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, 2021, as supplemented by our quarterly report for the quarter ended September 30, 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.

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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, on a consolidated basis and for each reportable segment, for the three months ended September 30, 2022 and 2021 is presented below, along with a reconciliation of adjusted EBITDA to net loss. The reconciliation of adjusted EBITDA to net loss for the three months ended September 30, 2022 is also below.

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 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 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 5,000 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)

			September 30, 2022						December 31, 2021
Assets
Current assets
Cash and cash equivalents			$	359,724					$	591,003
Restricted cash			43,992						127,278
Short-term investments			110,316						33,737
Accounts receivable, net of allowances for credit losses of $1,979 and $1,298			96,343						69,594
Inventory			301,231						358,221
Loans held for sale			256,339						35,759
Prepaid expenses			27,361						22,948
Other current assets			26,738						7,524
Total current assets			1,222,044						1,246,064
Property and equipment, net			59,238						58,671
Right-of-use assets, net			45,647						54,200
Mortgage servicing rights, at fair value			36,914						—
Long-term investments			41,677						54,828
Goodwill			461,349						409,382
Intangible assets, net			172,019						185,929
Other assets, noncurrent			12,054						12,898
Total assets			$	2,050,942					$	2,021,972
Liabilities, mezzanine equity, and stockholders' equity
Current liabilities
Accounts payable			$	12,422					$	12,546
Accrued and other liabilities			133,885						118,122
Warehouse credit facilities			252,529						33,043
Secured revolving credit facility			202,416						199,781
Convertible senior notes, net			23,393						23,280
Lease liabilities			21,094						15,040
Total current liabilities			645,739						401,812
Lease liabilities, noncurrent			39,803						55,222
Convertible senior notes, net, noncurrent			1,217,768						1,214,017
Deferred tax liabilities			344						1,201
Total liabilities			1,903,654						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 September 30, 2022 and December 31, 2021, respectively			39,902						39,868
Stockholders’ equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 108,716,990 and 106,308,767 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively			109						106
Additional paid-in capital			739,689						682,084
Accumulated other comprehensive loss			(1,051)						(174)
Accumulated deficit			(631,361)						(372,164)
Total stockholders’ equity			107,386						309,852
Total liabilities, mezzanine equity, and stockholders’ equity			$	2,050,942					$	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 September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Revenue
Service			$	300,854					$	301,657					$	862,756					$	776,120
Product			299,663						238,417						942,022						503,588
Total revenue			600,517						540,074						1,804,778						1,279,708
Cost of revenue(1)
Service			210,189						174,267						608,884						486,880
Product			332,251						238,505						947,277						497,032
Total cost of revenue			542,440						412,772						1,556,161						983,912
Gross profit			58,077						127,302						248,617						295,796
Operating expenses
Technology and development(1)			48,063						43,658						149,209						112,824
Marketing(1)			33,748						49,143						133,832						116,343
General and administrative(1)			61,005						54,395						191,704						151,352
Restructuring and reorganization			284						—						18,670						—
Total operating expenses			143,100						147,196						493,415						380,519
Loss from operations			(85,023)						(19,894)						(244,798)						(84,723)
Interest income			1,174						178						1,948						472
Interest expense			(5,359)						(3,672)						(12,841)						(7,822)
Income tax (expense) benefit			(132)						311						(425)						5,363
Other (expense) income, net			(905)						4,128						(3,081)						4,099
Net loss			$	(90,245)					$	(18,949)					$	(259,197)					$	(82,611)
Dividends on convertible preferred stock			(272)						(1,662)						(1,416)						(5,875)
Net loss attributable to common stock—basic and diluted			$	(90,517)					$	(20,611)					$	(260,613)					$	(88,486)
Net loss per share attributable to common stock—basic and diluted			$	(0.83)					$	(0.20)					$	(2.42)					$	(0.85)
Weighted-average shares to compute net loss per share attributable to common stock—basic and diluted			108,618,491						105,144,872						107,566,894						104,327,614
Net loss			$	(90,245)					$	(18,949)					$	(259,197)					$	(82,611)
Other comprehensive income
Foreign currency translation adjustments			27						3						65						3
Unrealized gain on available-for-sale debt securities			34						27						812						161
Comprehensive loss			$	(90,184)					$	(18,919)					$	(258,320)					$	(82,447)

(1) Includes stock-based compensation as follows:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Cost of revenue			$	4,387					$	3,283					$	11,644					$	10,019
Technology and development			7,371						5,455						23,036						16,987
Marketing			1,028						537						3,024						1,615
General and administrative			5,284						3,835						13,968						10,817
Total			$	18,070					$	13,110					$	51,672					$	39,438

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Redfin Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands, unaudited)

			Nine Months Ended September 30,
			2022						2021
Operating Activities
Net loss			$	(259,197)					$	(82,611)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			47,438						32,303
Stock-based compensation			51,672						39,438
Amortization of debt discount and issuance costs			4,358						3,583
Non-cash lease expense			11,313						8,510
Impairment costs			913						—
Net loss on IRLCs, forward sales commitments, and loans held for sale			4,228						342
Change in fair value of mortgage servicing rights, net			(1,472)
Other			3,254						(3,847)
Change in assets and liabilities:
Accounts receivable, net			(17,052)						(29,487)
Inventory			56,990						(385,986)
Prepaid expenses and other assets			(2,721)						(9,532)
Accounts payable			(1,875)						616
Accrued and other liabilities, deferred tax liabilities, and payroll tax liabilities, noncurrent			(24,202)						23,011
Lease liabilities			(12,435)						(9,644)
Origination of mortgage servicing rights			(2,774)						—
Proceeds from sale of mortgage servicing rights			1,314						—
Origination of loans held for sale			(3,091,099)						(745,703)
Proceeds from sale of loans originated as held for sale			3,082,858						744,886
Net cash used in operating activities			(148,489)						(414,121)
Investing activities
Purchases of property and equipment			(17,496)						(20,575)
Purchases of investments			(145,273)						(129,277)
Sales of investments			12,946						98,687
Maturities of investments			66,055						96,303
Cash paid for acquisition, net of cash, cash equivalents, and restricted cash acquired			(97,341)						(608,000)
Net cash used in investing activities			(181,109)						(562,862)
Financing activities
Proceeds from the issuance of common stock pursuant to employee equity plans			9,679						14,194
Tax payments related to net share settlements on restricted stock units			(6,650)						(21,088)
Borrowings from warehouse credit facilities			3,080,606						710,535
Repayments to warehouse credit facilities			(3,069,728)						(709,739)
Borrowings from secured revolving credit facility			552,051						431,717
Repayments to secured revolving credit facility			(549,416)						(256,039)
Proceeds from issuance of convertible senior notes, net of issuance costs			—						561,529
Purchases of capped calls related to convertible senior notes			—						(62,647)
Payments for repurchases and conversions of convertible senior notes			—						(2,159)
Other financing payables			—						3,161
Principal payments under finance lease obligations			(680)						(567)
Cash paid for secured revolving credit facility issuance costs			(764)						(485)
Net cash provided by financing activities			15,098						668,412
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(65)						(3)
Net change in cash, cash equivalents, and restricted cash			(314,565)						(308,574)
Cash, cash equivalents, and restricted cash:
Beginning of period			718,281						945,820
End of period			$	403,716					$	637,246

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Redfin Corporation and Subsidiaries

Supplemental Financial Information and Business Metrics

(unaudited)

			Three Months Ended
			Sep. 30, 2022						Jun. 30, 2022						Mar. 31, 2022						Dec. 31, 2021						Sep. 30, 2021						Jun. 30, 2021						Mar. 31, 2021						Dec. 31, 2020						Sep. 30 2020
Monthly average visitors (in thousands)			50,785						52,698						51,287						44,665						49,147						48,437						46,202						44,135						49,258
Real estate services transactions
Brokerage			18,245						20,565						15,001						19,428						21,929						21,006						14,317						16,951						18,980
Partner			3,507						3,983						3,417						4,603						4,755						4,597						3,944						4,940						5,180
Total			21,752						24,548						18,418						24,031						26,684						25,603						18,261						21,891						24,160
Real estate services revenue per transaction
Brokerage			$	11,103					$	11,692					$	11,191					$	10,900					$	11,107					$	11,307					$	10,927					$	10,751					$	10,241
Partner			2,556						2,851						2,814						2,819						2,990						3,195						3,084						3,123						2,988
Aggregate			9,725						10,258						9,637						9,352						9,661						9,850						9,233						9,030						8,686
U.S. market share by units(1)			0.80		%				0.82		%				0.79		%				0.78		%				0.78		%				0.77		%				0.75		%				0.68		%				0.70		%
Revenue from top-10 Redfin markets as a percentage of real estate services revenue			58		%				59		%				57		%				61		%				62		%				64		%				62		%				63		%				63		%
Average number of lead agents			2,293						2,640						2,750						2,485						2,370						2,456						2,277						1,981						1,820
RedfinNow homes sold			530						423						617						600						388						292						171						83						37
Revenue per RedfinNow home sold (in ones)			$	550,903					$	604,120					$	608,851					$	622,519					$	599,963					$	571,670					$	525,765					$	471,895					$	504,730
Mortgage originations by dollars (in millions)			$	1,557					$	1,565					$	159					$	242					$	258					$	261					$	227					$	206					$	185
Mortgage originations by units (in ones)			3,720						3,860						414						591						671						749						632						570						539

(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.

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Supplemental Financial Information

Segment Reporting and Reconciliation of Adjusted EBITDA to Net Income (Loss)

(unaudited, in thousands)

			Three Months Ended September 30, 2022
			Real estate services						Properties						Rentals						Mortgage						Other						Corporate Overhead and Intercompany Eliminations						Total
Revenue			$	211,540					$	299,663					$	38,686					$	48,469					$	7,079					$	(4,920)					$	600,517
Cost of revenue			156,632						332,251						8,676						43,783						6,018						(4,920)						542,440
Gross profit			54,908						(32,588)						30,010						4,686						1,061						—						58,077
Operating expenses
Technology and development			25,709						4,728						15,385						985						751						505						48,063
Marketing			18,772						506						12,678						1,653						48						91						33,748
General and administrative			20,244						3,029						22,722						7,073						784						7,153						61,005
Restructuring and reorganization			—						—						—						—						—						284						284
Total operating expenses			64,725						8,263						50,785						9,711						1,583						8,033						143,100
Loss from operations			(9,817)						(40,851)						(20,775)						(5,025)						(522)						(8,033)						(85,023)
Interest income, interest expense, income tax expense, and other expense, net			—						(2,814)						397						(129)						40						(2,716)						(5,222)
Net loss			$	(9,817)					$	(43,665)					$	(20,378)					$	(5,154)					$	(482)					$	(10,749)					$	(90,245)

			Three Months Ended September 30, 2022
			Real estate services						Properties						Rentals						Mortgage						Other						Corporate Overhead and Intercompany Eliminations						Total
Net loss			$	(9,817)					$	(43,665)					$	(20,378)					$	(5,154)					$	(482)					$	(10,749)					$	(90,245)
Interest income(1)			—						(330)						—						(4,049)						(42)						(786)						(5,207)
Interest expense(2)			—						3,140						—						3,364						—						2,215						8,719
Income tax expense			—						—						(355)						141						—						346						132
Depreciation and amortization			4,388						642						9,683						1,053						241						291						16,298
Stock-based compensation(3)			9,834						1,646						3,632						1,209						341						1,408						18,070
Acquisition-related costs(4)			—						—						—						—						—						13						13
Restructuring and reorganization(5)			—						—						—						—						—						284						284
Impairment(6)			—						—						—						—						—						913						913
Adjusted EBITDA			$	4,405					$	(38,567)					$	(7,418)					$	(3,436)					$	58					$	(6,065)					$	(51,023)

(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 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 2022 workforce reduction.

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

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			Three Months Ended September 30, 2021
			Real estate services						Properties						Rentals						Mortgage						Other						Corporate Overhead and Intercompany Eliminations						Total
Revenue			$	257,795					$	238,417					$	40,406					$	5,013					$	3,193					$	(4,750)					$	540,074
Cost of revenue			161,449						238,397						7,395						6,705						3,576						(4,750)						412,772
Gross profit			96,346						20						33,011						(1,692)						(383)						—						127,302
Operating expenses
Technology and development			20,732						3,602						13,849						2,910						586						1,979						43,658
Marketing			33,894						645						14,113						149						42						300						49,143
General and administrative			18,383						2,258						23,264						2,334						533						7,623						54,395
Total operating expenses			73,009						6,505						51,226						5,393						1,161						9,902						147,196
Income (loss) from operations			23,337						(6,485)						(18,215)						(7,085)						(1,544)						(9,902)						(19,894)
Interest income, interest expense, income tax expense, and other expense, net			(56)						(1,456)						311						1						1						2,144						945
Net income (loss)			$	23,281					$	(7,941)					$	(17,904)					$	(7,084)					$	(1,543)					$	(7,758)					$	(18,949)

			Three Months Ended September 30, 2021
			Real estate services						Properties						Rentals						Mortgage						Other						Corporate Overhead and Intercompany Eliminations						Total
Net income (loss)			$	23,281					$	(7,941)					$	(17,904)					$	(7,084)					$	(1,543)					$	(7,758)					$	(18,949)
Interest income(1)			—						(1)						—						(402)						(1)						(176)						(580)
Interest expense(2)			—						1,456						—						399						—						2,216						4,071
Income tax expense			—						—						(311)						—						—						—						(311)
Depreciation and amortization			3,470						530						9,189						427						181						488						14,285
Stock-based compensation(3)			8,138						1,312						143						721						167						2,629						13,110
Acquisition-related costs(4)			—						—						—						—						—						202						202
Restructuring and reorganization(5)			—						—						—						—						—						—						—
Adjusted EBITDA			$	34,889					$	(4,644)					$	(8,883)					$	(5,939)					$	(1,196)					$	(2,399)					$	11,828

(1) Interest income includes $0.4 million of interest income related to originated mortgage loans for the three months ended September 30, 2021.

(2) Interest expense includes $0.4 million of interest expense related to our warehouse credit facilities for the three months ended September 30, 2021.

(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 2022 workforce reduction.

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			Nine Months Ended September 30, 2022
			Real estate services						Properties						Rentals						Mortgage						Other						Corporate Overhead and Intercompany Eliminations						Total
Revenue			$	640,835					$	942,022					$	114,979					$	104,484					$	17,341					$	(14,883)					$	1,804,778
Cost of revenue			488,114						946,955						23,769						95,616						16,590						(14,883)						1,556,161
Gross profit			152,721						(4,933)						91,210						8,868						751						—						248,617
Operating expenses
Technology and development			80,144						13,531						44,539						5,236						2,975						2,784						149,209
Marketing			90,380						2,480						36,806						3,525						173						468						133,832
General and administrative			67,578						9,064						68,738						18,047						2,346						25,931						191,704
Restructuring and reorganization			—						—						—						—						—						18,670						18,670
Total operating expenses			238,102						25,075						150,083						26,808						5,494						47,853						493,415
Loss from operations			(85,381)						(30,008)						(58,873)						(17,940)						(4,743)						(47,853)						(244,798)
Interest income, interest expense, income tax expense, and other expense, net			(123)						(5,682)						1,098						(164)						51						(9,579)						(14,399)
Net loss			$	(85,504)					$	(35,690)					$	(57,775)					$	(18,104)					$	(4,692)					$	(57,432)					$	(259,197)

			Nine Months Ended September 30, 2022
			Real estate services						Properties						Rentals						Mortgage						Other						Corporate Overhead and Intercompany Eliminations						Total
Net loss			$	(85,504)					$	(35,690)					$	(57,775)					$	(18,104)					$	(4,692)					$	(57,432)					$	(259,197)
Interest income(1)			—						(514)						(1)						(7,296)						(55)						(1,361)						(9,227)
Interest expense(2)			—						6,192						—						5,599						—						6,642						18,433
Income tax expense			—						—						(789)						174						—						1,040						425
Depreciation and amortization			12,957						1,783						28,550						2,425						814						909						47,438
Stock-based compensation(3)			29,644						4,710						8,611						2,590						1,151						4,966						51,672
Acquisition-related costs(4)			—						—						—						—						—						2,437						2,437
Restructuring and reorganization(5)			—						—						—						—						—						18,670						18,670
Impairment(6)			—						—						—						—						—						913						913
Adjusted EBITDA			$	(42,903)					$	(23,519)					$	(21,404)					$	(14,612)					$	(2,782)					$	(23,216)					$	(128,436)

(1) Interest income includes $7.3 million of interest income related to originated mortgage loans for the nine months ended September 30, 2022.

(2) Interest expense includes $5.6 million of interest expense related to our warehouse credit facilities for the nine 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 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 2022 workforce reduction.

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

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			Nine Months Ended September 30, 2021
			Real estate services						Properties						Rentals						Mortgage						Other						Corporate Overhead and Intercompany Eliminations						Total
Revenue			$	678,602					$	503,588					$	82,954					$	15,823					$	10,261					$	(11,520)					$	1,279,708
Cost of revenue			453,790						496,948						14,965						19,406						10,323						(11,520)						983,912
Gross profit			224,812						6,640						67,989						(3,583)						(62)						—						295,796
Operating expenses
Technology and development			60,862						9,512						27,616						7,814						1,538						5,482						112,824
Marketing			86,823						1,423						26,724						413						105						855						116,343
General and administrative			60,813						6,765						46,413						5,686						1,466						30,209						151,352
Total operating expenses			208,498						17,700						100,753						13,913						3,109						36,546						380,519
Loss from operations			16,314						(11,060)						(32,764)						(17,496)						(3,171)						(36,546)						(84,723)
Interest income, interest expense, income tax expense, and other expense, net			(87)						(2,538)						523						2						2						4,210						2,112
Net loss			$	16,227					$	(13,598)					$	(32,241)					$	(17,494)					$	(3,169)					$	(32,336)					$	(82,611)

			Nine Months Ended September 30, 2021
			Real estate services						Properties						Rentals						Mortgage						Other						Corporate Overhead and Intercompany Eliminations						Total
Net loss			$	16,227					$	(13,598)					$	(32,241)					$	(17,494)					$	(3,169)					$	(32,336)					$	(82,611)
Interest income(1)			—						(8)						—						(1,174)						(2)						(459)						(1,643)
Interest expense(2)			—						2,546						—						1,235						—						5,277						9,058
Income tax expense			—						—						(523)						—						—						(4,840)						(5,363)
Depreciation and amortization			9,700						1,333						18,299						1,019						514						1,438						32,303
Stock-based compensation(3)			25,699						3,686						317						2,165						508						7,063						39,438
Acquisition-related costs(4)			—						—						—						—						—						7,925						7,925
Restructuring and reorganization(5)			—						—						—						—						—						—						—
Adjusted EBITDA			$	51,626					$	(6,041)					$	(14,148)					$	(14,249)					$	(2,149)					$	(15,932)					$	(893)

(1) Interest income includes $1.2 million of interest income related to originated mortgage loans for the nine months ended September 30, 2021.

(2) Interest expense includes $1.2 million of interest expense related to our warehouse credit facilities for the nine months ended September 30, 2021.

(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 2022 workforce reduction.

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Reconciliation of Adjusted EBITDA Guidance to Net Loss Guidance

(unaudited, in millions)

			Three Months Ended December 31, 2022
			Low						High
Net loss			$	(134)					$	(118)
Net interest expense			5						4
Income tax expense			—						—
Depreciation and amortization			18						18
Stock-based compensation			17						17
Acquisition-related costs			—						—
Restructuring and reorganization			23						21
Adjusted EBITDA			$	(71)					$	(58)

Note: Figures may not sum due to rounding.

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