Redfin Reports Fourth Quarter and Full Year 2022 Financial Results

SEATTLE - February 16, 2023 - Redfin Corporation (NASDAQ: RDFN) today announced results for its fourth quarter and full year ended December 31, 2022.

Fourth Quarter 2022

Fourth quarter revenue was $479.7 million, a decrease of 25% compared to the fourth quarter of 2021. Gross profit was $37.4 million, a decrease of 65% year-over-year. Real estate services gross profit was $26.3 million, a decrease of 65% year-over-year, and real estate services gross margin was 18%, compared to 33% in the fourth quarter of 2021.

Net loss was $61.9 million, compared to a net loss of $27.0 million in the fourth quarter of 2021. Net loss attributable to common stock was $62.1 million. Net loss per share attributable to common stock, diluted, was $0.57, compared to net loss per share, diluted, of $0.27 in the fourth quarter of 2021.

Full Year 2022

Full year revenue was $2,284.4 million, an increase of 19% year-over-year. Gross profit was $286.1 million, a decrease of 29% year-over-year. Real estate services gross profit was $179.0 million, a decrease of 40% year-over-year, and real estate services gross margin was 23%, compared to 33% in 2021.

Net loss was $321.1 million, compared to a net loss of $109.6 million in 2021. Net loss attributable to common stock was $322.7 million. Net loss per share attributable to common stock, diluted, was $2.99, compared to a net loss per share, diluted, of $1.12 in 2021.

“Redfin in the fourth quarter of 2022 set ourselves up to earn adjusted EBITDA in 2023, which would be an improvement in profits of nearly $200 million, even in a major housing downturn,” said Redfin CEO Glenn Kelman. “We shifted to more digital-margin revenue, lowered expenses, increased our share of online real estate traffic, and improved the quality of our sales force. The discipline to make adjusted EBITDA this year can make us very profitable when the housing market recovers. We also bought $143 million of debt for $84 million in cash. We have either sold or accepted an offer to sell all but 19 of our RedfinNow homes. Our revenues and net income exceeded the guidance we gave investors in our November earnings report.”

Fourth Quarter and Full Year Highlights

•Reached market share of 0.76% of U.S. existing home sales by units in the fourth quarter. For the year, Redfin reached a market share of 0.80%, an increase of 3 bps compared to 2021.

•Redfin’s mobile apps and website reached nearly 44 million average monthly users in the fourth quarter. For the year, Redfin reached a record of nearly 50 million average monthly users, an increase of 5% compared to 2021.

•Brought Redfin agent service to Wilmington, North Carolina and Green Bay, Wisconsin and expanded listing coverage to a total of 98% of the U.S. population.

•Maintained momentum in mortgage cross-selling, with 17% attach rates for the fourth quarter which was flat compared to the third quarter of 2022.

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•Confirmed Redfin sells homes faster and for more money than other brokerages for the 7th year in a row. Nationwide Redfin listings sold about 3 days faster and for $1,800 more than comparable listings from other brokerages according to a third-party study that we commissioned.

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

◦Added energy cost estimates to U.S. home listings, helping consumers understand the full cost of living in a home and allowing homeowners to discover how much they could save by installing solar panels.

◦Added zoning and land-use data to U.S. home listings, making it easier for consumers to understand how properties may or may not be used.

◦Implemented a new design system for iOS home detail pages that increased homebuyer contact and tour completion rates.

◦Improved landlord referral process from Redfin.com to rentals.com, helping retain high-intent prospective landlords.

Business Outlook

The following forward-looking statements reflect Redfin's expectations as of February 16, 2023, and are subject to substantial uncertainty.

For the first quarter of 2023 we expect:

•Total revenue between $307 million and $324 million, representing a year-over-year decline between (49)% and (46)% compared to the first quarter of 2022. Included within total revenue are real estate services segment revenue between $122 million and $130 million, properties segment revenue between $108 million to $113 million, rentals revenue between $41 million and $42 million, and mortgage revenue between $29 million and $32 million.

•Total net loss is expected to be between $116 million and $105 million, compared to net loss of $91 million in the first quarter of 2022. This guidance includes approximately $45 million in total marketing expenses, $20 million of stock-based compensation, $17 million of depreciation and amortization, $7 million in gains on extinguishment of convertible senior notes and $1 million in restructuring expenses. Adjusted EBITDA loss is expected to be between $84 million and $73 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, which is 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, 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 $1.5 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)

			December 31,
			2022						2021
Assets
Current assets
Cash and cash equivalents			$	239,840					$	591,003
Restricted cash			2,406						127,278
Short-term investments			122,259						33,737
Accounts receivable, net of allowances for credit losses of $2,019 and $1,298			54,880						69,594
Inventory			114,273						358,221
Loans held for sale			199,604						35,759
Prepaid expenses			34,506						22,948
Other current assets			8,690						7,524
Total current assets			776,458						1,246,064
Property and equipment, net			55,105						58,671
Right-of-use assets, net			42,032						54,200
Mortgage servicing rights, at fair value			36,261						—
Long-term investments			29,480						54,828
Goodwill			461,349						409,382
Intangible assets, net			162,272						185,929
Other assets, noncurrent			11,247						12,898
Total assets			$	1,574,204					$	2,021,972
Liabilities, mezzanine equity, and stockholders' equity
Current liabilities
Accounts payable			$	11,819					$	12,546
Accrued and other liabilities			109,743						118,122
Warehouse credit facilities			190,509						33,043
Secured revolving credit facility			—						199,781
Convertible senior notes, net			23,431						23,280
Lease liabilities			19,137						15,040
Total current liabilities			354,639						401,812
Lease liabilities, noncurrent			37,298						55,222
Convertible senior notes, net, noncurrent			1,078,157						1,214,017
Deferred tax liabilities			243						1,201
Total liabilities			1,470,337						1,672,252
Series A convertible preferred stock—par value $0.001 per share; 10,000,000 shares authorized; 40,000 and 40,000 shares issued and outstanding at December 31, 2022 and 2021, respectively			39,914						39,868
Stockholders’ equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 109,696,178 and 106,308,767 shares issued and outstanding at December 31, 2022 and 2021, respectively			110						106
Additional paid-in capital			757,951						682,084
Accumulated other comprehensive loss			(801)						(174)
Accumulated deficit			(693,307)						(372,164)
Total stockholders’ equity			63,953						309,852
Total liabilities, mezzanine equity, and stockholders’ equity			$	1,574,204					$	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 December 31,												Year Ended December 31,
			2022						2021						2022						2021
Revenue
Service			$	219,121					$	265,992					$	1,081,877					$	1,042,112
Product			260,543						377,065						1,202,565						880,653
Total revenue			479,664						643,057						2,284,442						1,922,765
Cost of revenue(1)
Service			163,467						161,780						772,351						648,660
Product			278,762						373,253						1,226,038						870,285
Total cost of revenue			442,229						535,033						1,998,389						1,518,945
Gross profit			37,435						108,024						286,053						403,820
Operating expenses
Technology and development(1)			47,041						43,894						196,250						156,718
Marketing(1)			24,238						22,397						158,071						138,740
General and administrative(1)			62,889						66,962						254,593						218,315
Restructuring and reorganization			21,798						—						40,469						—
Total operating expenses			155,966						133,253						649,383						513,773
Loss from operations			(118,531)						(25,229)						(363,330)						(109,953)
Interest income			4,691						163						6,639						635
Interest expense			(4,905)						(3,939)						(17,745)						(11,762)
Income tax benefit (expense)			299						744						(126)						6,107
Gain on extinguishment of convertible senior notes			57,193						—						57,193						—
Other (expense) income, net			(693)						1,259						(3,774)						5,360
Net loss			$	(61,946)					$	(27,002)					$	(321,143)					$	(109,613)
Dividends on convertible preferred stock			(144)						(1,394)						(1,560)						(7,269)
Net loss attributable to common stock—basic and diluted			$	(62,090)					$	(28,396)					$	(322,703)					$	(116,882)
Net loss per share attributable to common stock—basic and diluted			$	(0.57)					$	(0.27)					$	(2.99)					$	(1.12)
Weighted average shares of common stock—basic and diluted			108,997,415						105,739,395						107,927,464						104,683,460
Net loss			$	(61,946)					$	(27,002)					$	(321,143)					$	(109,613)
Other comprehensive income
Foreign currency translation adjustments			29						4						94						6
Unrealized (loss) gain on available-for-sale securities			(279)						217						533						379
Comprehensive loss			(62,196)						(26,781)						(320,516)						(109,228)

(1) Includes stock-based compensation as follows:

			Three Months Ended December 31,												Year Ended December 31,
			2022						2021						2022						2021
Cost of revenue			$	4,307					$	3,595					$	15,950					$	13,614
Technology and development			6,572						6,288						29,608						23,275
Marketing			1,069						736						4,093						2,350
General and administrative			4,638						4,667						18,606						15,483
Total			$	16,586					$	15,286					$	68,257					$	54,722

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Redfin Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands, unaudited)

			Year Ended December 31,
			2022						2021
Operating Activities
Net loss			$	(321,143)					$	(109,613)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization			64,907						46,906
Stock-based compensation			68,257						54,722
Amortization of debt discount and issuance costs			6,137						4,989
Non-cash lease expense			16,234						11,630
Impairment costs			1,136						—
Net loss on IRLCs, forward sales commitments, and loans held for sale			14,427						815
Change in fair value of mortgage servicing rights, net			(801)						—
Gain on extinguishment of convertible senior notes			(57,193)						—
Other			3,791						(4,227)
Change in assets and liabilities:
Accounts receivable, net			24,411						(7,149)
Inventory			243,948						(309,063)
Prepaid expenses and other assets			(5,904)						(12,248)
Accounts payable			(2,472)						3,059
Accrued and other liabilities, deferred tax liabilities, and payroll tax liabilities, noncurrent			(46,454)						25,791
Lease liabilities			(18,452)						(13,268)
Origination of mortgage servicing rights			(3,140)						—
Proceeds from sale of mortgage servicing rights			1,662						—
Origination of loans held for sale			(3,949,442)						(986,982)
Proceeds from sale of loans originated as held for sale			4,000,582						993,070
Net cash provided by (used in) operating activities			40,491						(301,568)
Investing activities
Purchases of property and equipment			(21,531)						(27,492)
Purchases of investments			(182,466)						(146,274)
Sales of investments			17,545						98,687
Maturities of investments			99,455						106,773
Cash paid for acquisition, net of cash, cash equivalents, and restricted cash acquired			(97,341)						(608,000)
Net cash used in investing activities			(184,338)						(576,306)
Financing activities
Proceeds from the issuance of common stock pursuant to employee equity plans			11,528						22,772
Tax payments related to net share settlements on restricted stock units			(7,498)						(27,066)
Borrowings from warehouse credit facilities			3,938,265						942,993
Repayments to warehouse credit facilities			(3,989,407)						(948,979)
Borrowings from secured revolving credit facility			565,334						624,828
Repayments to secured revolving credit facility			(765,114)						(448,996)
Cash paid for secured revolving credit facility issuance costs			(733)						(527)
Proceeds from issuance of convertible senior notes, net of issuance costs			—						561,529
Purchases of capped calls related to convertible senior notes			—						(62,647)
Conversions of convertible senior notes			—						(2,159)
Principal payments under finance lease obligations			(855)						(796)
Repurchases of convertible senior notes			(83,614)						—
Other financing payables			—						(10,611)
Net cash (used in) provided by financing activities			(332,094)						650,341
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(94)						(6)
Net change in cash, cash equivalents, and restricted cash			(476,035)						(227,539)
Cash, cash equivalents, and restricted cash:
Beginning of period			718,281						945,820
End of period			$	242,246					$	718,281

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Redfin Corporation and Subsidiaries

Supplemental Financial Information and Business Metrics

(unaudited)

			Three Months Ended
			Dec. 31, 2022						Sep. 30, 2022						Jun. 30, 2022						Mar. 31, 2022						Dec. 31, 2021						Sep. 30, 2021						Jun. 30, 2021						Mar. 31, 2021
Monthly average visitors (in thousands)			43,847						50,785						52,698						51,287						44,665						49,147						48,437						46,202
Real estate services transactions
Brokerage			12,743						18,245						20,565						15,001						19,428						21,929						21,006						14,317
Partner			2,742						3,507						3,983						3,417						4,603						4,755						4,597						3,944
Total			15,485						21,752						24,548						18,418						24,031						26,684						25,603						18,261
Real estate services revenue per transaction
Brokerage			$	10,914					$	11,103					$	11,692					$	11,191					$	10,900					$	11,107					$	11,307					$	10,927
Partner			2,611						2,556						2,851						2,814						2,819						2,990						3,195						3,084
Aggregate			9,444						9,725						10,258						9,637						9,352						9,661						9,850						9,233
U.S. market share by units(1)			0.76		%				0.80		%				0.82		%				0.79		%				0.78		%				0.78		%				0.77		%				0.75		%
Revenue from top-10 Redfin markets as a percentage of real estate services revenue			57		%				58		%				59		%				57		%				61		%				62		%				64		%				62		%
Average number of lead agents			2,022						2,293						2,640						2,750						2,485						2,370						2,456						2,277
RedfinNow homes sold			474						530						423						617						600						388						292						171
Revenue per RedfinNow home sold			538,788						550,903						604,120						608,851						622,519						599,963						571,670						525,765
Mortgage originations by dollars (in millions)			$	1,036					$	1,557					$	1,565					$	159					$	242					$	258					$	261					$	227
Mortgage originations by units (in ones)			2,631						3,720						3,860						414						591						671						749						632

			Year Ended December 31,
			2022						2021
Monthly average visitors (in thousands)			49,654						47,113
Real estate services transactions
Brokerage			66,554						76,680
Partner			13,649						17,899
Total			80,203						94,579
Real estate services revenue per transaction
Brokerage			$	11,269					$	11,076
Partner			2,718						3,020
Aggregate			9,814						9,551
U.S. market share by units(1)			0.80		%				0.77		%
Revenue from top-10 markets as a percentage of real estate services revenue			58		%				62		%
Average number of lead agents			2,426						2,396
RedfinNow homes sold			2,044						1,451
Revenue per RedfinNow home sold			$	576,599					$	594,268
Mortgage originations by dollars (in millions)			$	4,317					$	988
Mortgage originations by units (in ones)			10,625						2,643

(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.

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Redfin Corporation and Subsidiaries

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

(unaudited, in thousands)

			Three Months Ended December 31, 2022
			Real estate services						Properties						Rentals						Mortgage						Other						Corporate Overhead and Intercompany Eliminations						Total
Revenue			$	146,242					$	260,629					$	40,931					$	28,420					$	6,342					$	(2,900)					$	479,664
Cost of revenue			119,913						278,761						9,647						30,936						5,872						(2,900)						442,229
Gross profit			26,329						(18,132)						31,284						(2,516)						470						—						37,435
Operating expenses
Technology and development			25,052						3,794						15,360						798						616						1,421						47,041
Marketing			8,293						282						14,258						1,364						26						15						24,238
General and administrative			20,594						2,138						23,990						7,633						960						7,574						62,889
Restructuring and reorganization			—						—						—						—						—						21,798						21,798
Total operating expenses			53,939						6,214						53,608						9,795						1,602						30,808						155,966
Loss from operations			(27,610)						(24,346)						(22,324)						(12,311)						(1,132)						(30,808)						(118,531)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net			—						(1,924)						291						50						88						58,080						56,585
Net loss			$	(27,610)					$	(26,270)					$	(22,033)					$	(12,261)					$	(1,044)					$	27,272					$	(61,946)

			Three Months Ended December 31, 2022
			Real estate services						Properties						Rentals						Mortgage						Other						Corporate Overhead and Intercompany Eliminations						Total
Net loss			$	(27,610)					$	(26,270)					$	(22,033)					$	(12,261)					$	(1,044)					$	27,272					$	(61,946)
Interest income(1)			—						(752)						(23)						(3,203)						(88)						(3,819)						(7,885)
Interest expense(2)			—						2,666						—						2,981						—						2,136						7,783
Income tax expense			—						10						(288)						(174)						—						153						(299)
Depreciation and amortization			4,569						552						10,133						1,013						274						927						17,468
Stock-based compensation(3)			7,008						528						2,709						1,542						345						4,454						16,586
Acquisition-related costs(4)			—						—						—						—						—						—						—
Restructuring and reorganization(5)			—						—						—						—						—						21,798						21,798
Impairment(6)			—						—						—						—						—						224						224
Gain on extinguishment of convertible senior notes			—						—						—						—						—						(57,193)						(57,193)
Adjusted EBITDA			$	(16,033)					$	(23,266)					$	(9,502)					$	(10,102)					$	(513)					$	(4,048)					$	(63,464)

(1) Interest income includes $3.2 million of interest income related to originated mortgage loans for the three months ended December 31, 2022.

(2) Interest expense includes $2.9 million of interest expense related to our warehouse credit facilities for the three months ended December 31, 2022.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program.

(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 and October 2022 workforce reductions.

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

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			Three Months Ended December 31, 2021
			Real estate services						Properties						Rentals						Mortgage						Other						Corporate Overhead and Intercompany Eliminations						Total
Revenue			$	224,732					$	377,065					$	38,923					$	3,996					$	3,347					$	(5,006)					$	643,057
Cost of revenue			149,529						373,105						6,774						6,690						3,941						(5,006)						535,033
Gross profit			75,203						3,960						32,149						(2,694)						(594)						—						108,024
Operating expenses
Technology and development			20,727						3,724						13,876						2,582						990						1,995						43,894
Marketing			11,923						466						9,450						149						104						305						22,397
General and administrative			23,842						2,828						25,530						2,620						823						11,319						66,962
Restructuring and reorganization			—						—						—						—						—						—						—
Total operating expenses			56,492						7,018						48,856						5,351						1,917						13,619						133,253
Loss from operations			18,711						(3,058)						(16,707)						(8,045)						(2,511)						(13,619)						(25,229)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net			—						(1,723)						2,777						1						1						(2,829)						(1,773)
Net loss			$	18,711					$	(4,781)					$	(13,930)					$	(8,044)					$	(2,510)					$	(16,448)					$	(27,002)

			Three Months Ended December 31, 2021
			Real estate services						Properties						Rentals						Mortgage						Other						Corporate Overhead and Intercompany Eliminations						Total
Net loss			$	18,711					$	(4,781)					$	(13,930)					$	(8,044)					$	(2,510)					$	(16,448)					$	(27,002)
Interest income(1)			—						(2)						—						(424)						(1)						(159)						(586)
Interest expense(2)			—						1,725						—						431						—						2,214						4,370
Income tax expense			—						—						(2,177)						—						—						1,433						(744)
Depreciation and amortization			3,583						554						9,307						387						247						525						14,603
Stock-based compensation(3)			8,963						1,492						994						820						348						2,669						15,286
Adjusted EBITDA			$	31,257					$	(1,012)					$	(5,806)					$	(6,830)					$	(1,916)					$	(9,766)					$	5,927

(1) Interest income includes $0.4 million of interest income related to originated mortgage loans for the three months ended December 31, 2021.

(2) Interest expense includes $0.4 million of interest expense related to our warehouse credit facilities for the three months ended December 31, 2021.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program.

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			Year ended December 31, 2022
			Real estate services						Properties						Rentals						Mortgage						Other						Corporate Overhead and Intercompany Eliminations						Total
Revenue			$	787,076					$	1,202,651					$	155,910					$	132,904					$	23,684					$	(17,783)					$	2,284,442
Cost of revenue			608,027						1,225,717						33,416						126,552						22,460						(17,783)						1,998,389
Gross profit			179,049						(23,066)						122,494						6,352						1,224						—						286,053
Operating expenses
Technology and development			105,196						17,326						59,899						6,034						3,591						4,204						196,250
Marketing			98,673						2,762						51,064						4,889						199						484						158,071
General and administrative			88,171						11,203						92,728						25,680						3,307						33,504						254,593
Restructuring and reorganization			—						—						—						—						—						40,469						40,469
Total operating expenses			292,040						31,291						203,691						36,603						7,097						78,661						649,383
Loss from operations			(112,991)						(54,357)						(81,197)						(30,251)						(5,873)						(78,661)						(363,330)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net			(123)						(7,607)						1,389						(114)						140						48,502						42,187
Net loss			$	(113,114)					$	(61,964)					$	(79,808)					$	(30,365)					$	(5,733)					$	(30,159)					$	(321,143)

			Year ended December 31, 2022
			Real estate services						Properties						Rentals						Mortgage						Other						Corporate Overhead and Intercompany Eliminations						Total
Net loss			$	(113,114)					$	(61,964)					$	(79,808)					$	(30,365)					$	(5,733)					$	(30,159)					$	(321,143)
Interest income(1)			—						(1,266)						(24)						(10,499)						(143)						(5,181)						(17,113)
Interest expense(2)			—						8,859						—						8,580						—						8,778						26,217
Income tax expense			—						10						(1,077)						—						—						1,193						126
Depreciation and amortization			17,526						2,335						38,683						3,438						1,089						1,836						64,907
Stock-based compensation(3)			36,652						5,238						11,319						4,132						1,496						9,420						68,257
Acquisition-related costs(4)			—						—						—						—						—						2,437						2,437
Restructuring and reorganization(5)			—						—						—						—						—						40,469						40,469
Impairment(6)			—						—						—						—						—						1,136						1,136
Gain on extinguishment of convertible senior notes			—						—						—						—						—						(57,193)						(57,193)
Adjusted EBITDA			$	(58,936)					$	(46,788)					$	(30,907)					$	(24,714)					$	(3,291)					$	(27,264)					$	(191,900)

(1) Interest income includes $10.5 million of interest income related to originated mortgage loans for the year ended December 31, 2022.

(2) Interest expense includes $8.5 million of interest expense related to our warehouse credit facilities for the year ended December 31, 2022.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program.

(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 and October 2022 workforce reductions.

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

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			Year ended December 31, 2021
			Real estate services						Properties						Rentals						Mortgage						Other						Corporate Overhead and Intercompany Eliminations						Total
Revenue			$	903,334					$	880,653					$	121,877					$	19,818					$	13,609					$	(16,526)					$	1,922,765
Cost of revenue			603,320						870,052						21,739						26,096						14,264						(16,526)						1,518,945
Gross profit			300,014						10,601						100,138						(6,278)						(655)						—						403,820
Operating expenses
Technology and development			81,588						13,237						41,492						10,396						2,528						7,477						156,718
Marketing			98,746						1,889						36,174						561						209						1,161						138,740
General and administrative			84,655						9,593						71,943						8,306						2,288						41,530						218,315
Restructuring and reorganization			—						—						—						—						—						—						—
Total operating expenses			264,989						24,719						149,609						19,263						5,025						50,168						513,773
Loss from operations			35,025						(14,118)						(49,471)						(25,541)						(5,680)						(50,168)						(109,953)
Interest income, interest expense, income tax benefit, and other expense, net			(87)						(4,261)						3,301						3						2						1,382						340
Net income (loss)			$	34,938					$	(18,379)					$	(46,170)					$	(25,538)					$	(5,678)					$	(48,786)					$	(109,613)

			Year ended December 31, 2021
			Real estate services						Properties						Rentals						Mortgage						Other						Corporate Overhead and Intercompany Eliminations						Total
Net loss			$	34,938					$	(18,379)					$	(46,170)					$	(25,538)					$	(5,678)					$	(48,786)					$	(109,613)
Interest income(1)			—						(9)						—						(1,598)						(2)						(619)						(2,228)
Interest expense(2)			—						4,271						—						1,666						—						7,490						13,427
Income tax expense			—						—						(2,699)						—						—						(3,408)						(6,107)
Depreciation and amortization			13,282						1,888						27,607						1,406						761						1,962						46,906
Stock-based compensation(3)			34,662						5,177						1,311						2,985						856						9,731						54,722
Acquisition-related costs(4)			—						—						—						—						—						7,925						7,925
Restructuring and reorganization(5)			—						—						—						—						—						—						—
Adjusted EBITDA			$	82,882					$	(7,052)					$	(19,951)					$	(21,079)					$	(4,063)					$	(25,705)					$	5,032

(1) Interest income includes $1.6 million of interest income related to originated mortgage loans for the year ended December 31, 2021.

(2) Interest expense includes $1.7 million of interest expense related to our warehouse credit facilities for the year ended December 31, 2021.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program.

(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 acquisition of Rent.

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Redfin Corporation and Subsidiaries

Reconciliation of Adjusted EBITDA Guidance to Net Loss Guidance

(unaudited, in millions)

			Three Months Ended March 31, 2023
			Low						High
Net loss			$	(116)					$	(105)
Depreciation and amortization			17						17
Stock-based compensation			20						20
Restructuring and reorganization			1						1
Gain on extinguishment of convertible senior notes			(7)						(7)
Adjusted EBITDA			$	(84)					$	(73)

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