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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2023
or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission file number 001-38160
Redfin Corporation
(Exact name of registrant as specified in its charter)

Delaware
74-3064240
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
1099 Stewart Street
Suite 600
Seattle
WA
98101
(Address of Principal Executive Offices)
(Zip Code)
(206)
576-8333
Registrant's telephone number, including area code
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.001 par value per shareRDFNThe Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
 No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
 No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer
Non-accelerated filer  
Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 Yes
 No

The registrant had 113,975,191 shares of common stock outstanding as of July 28, 2023.



Redfin Corporation

Quarterly Report on Form 10-Q
For the Quarter Ended June 30, 2023

Table of Contents
PART I
Page
Item 1.
Item 2.
Item 3.
Item 4.
PART II
Item 1
Item 1A.
Item 5.
Item 6.



As used in this quarterly report, the terms "Redfin," "we," "us," and "our" refer to Redfin Corporation and its subsidiaries taken as a whole, unless otherwise noted or unless the context indicates otherwise. However, when referencing (i) the 2023 notes, the 2025 notes, and the 2027 notes, the terms “we,” “us,” and “our” refer only to Redfin Corporation and not to Redfin Corporation and its subsidiaries taken as a whole, and (ii) each warehouse credit facility, the terms "we," "us," and "our" refer to Redfin Mortgage, LLC or Bay Equity LLC, as the context dictates.

Note Regarding Forward-Looking Statements

This quarterly report contains forward-looking statements. All statements contained in this report other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, our market growth and trends, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” "hope,” “potentially,” “preliminary,” “likely,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described under Item 1A of our annual report for the year ended December 31, 2022, as supplemented by Part II, Item 1A of this report. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the effect of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, you should not rely on forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this report or to conform these statements to actual results or revised expectations.

Note Regarding Industry and Market Data

This quarterly report contains information using industry publications that generally state that the information contained therein has been obtained from sources believed to be reliable, but such information may not be accurate or complete. While we are not aware of any misstatements regarding the information from these industry publications, we have not independently verified any of the data from third-party sources nor have we ascertained the underlying economic assumptions relied on therein.
i

Table of Contents
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Redfin Corporation and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share amounts, unaudited)
June 30, 2023December 31, 2022
Assets
Current assets
Cash and cash equivalents$118,776 $232,200 
Restricted cash2,377 2,406 
Short-term investments100,643 122,259 
Accounts receivable, net of allowances for credit losses of $2,206 and $2,223
67,753 46,375 
Loans held for sale233,550 199,604 
Prepaid expenses26,042 34,006 
Other current assets9,979 7,449 
Current assets of discontinued operations1,378 132,159 
Total current assets560,498 776,458 
Property and equipment, net49,241 54,939 
Right-of-use assets, net37,270 40,889 
Mortgage servicing rights, at fair value35,503 36,261 
Long-term investments5,473 29,480 
Goodwill461,349 461,349 
Intangible assets, net142,778 162,272 
Other assets, noncurrent11,493 11,247 
Noncurrent assets of discontinued operations 1,309 
Total assets$1,303,605 $1,574,204 
Liabilities, mezzanine equity, and stockholders' equity
Current liabilities
Accounts payable$14,661 $11,065 
Accrued and other liabilities102,568 106,763 
Warehouse credit facilities227,801 190,509 
Convertible senior notes, net23,506 23,431 
Lease liabilities16,234 18,560 
Current liabilities of discontinued operations44 4,311 
Total current liabilities384,814 354,639 
Lease liabilities, noncurrent34,383 36,906 
Convertible senior notes, net, noncurrent834,716 1,078,157 
Deferred tax liabilities255 243 
Noncurrent liabilities of discontinued operations 392 
Total liabilities1,254,168 1,470,337 
Commitments and contingencies (Note 7)
Series A convertible preferred stock—par value $0.001 per share; 10,000,000 shares authorized; 40,000 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively
39,936 39,914 
Stockholders’ equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 113,934,673 and 109,696,178 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively
114 110 
Additional paid-in capital791,302 757,951 
Accumulated other comprehensive loss(452)(801)
Accumulated deficit(781,463)(693,307)
Total stockholders’ equity9,501 63,953 
Total liabilities, mezzanine equity, and stockholders’ equity$1,303,605 $1,574,204 

See Notes to the consolidated financial statements.
1

Table of Contents
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,
2023202220232022
Revenue$275,556 $349,049 $489,639 $571,865 
Cost of revenue175,366 237,813 331,311 408,980 
Gross profit100,190 111,236 158,328 162,885 
Operating expenses
Technology and development47,141 46,822 94,804 92,343 
Marketing33,033 55,922 73,436 98,111 
General and administrative61,765 68,523 131,204 124,664 
Restructuring and reorganization6,106 12,406 7,159 18,115 
Total operating expenses148,045 183,673 306,603 333,233 
Loss from continuing operations(47,855)(72,437)(148,275)(170,348)
Interest income2,704 554 6,110 774 
Interest expense(1,766)(2,217)(3,688)(4,429)
Income tax expense(233)(159)(643)(293)
Gain on extinguishment of convertible senior notes20,083  62,353  
Other expense, net(145)(264)(379)(2,175)
Net loss from continuing operations(27,212)(74,523)(84,522)(176,471)
Net (loss) income from discontinued operations(146)(3,623)(3,634)7,519 
Net loss$(27,358)$(78,146)$(88,156)$(168,952)
Net loss from continuing operations$(27,212)$(74,523)$(84,522)$(176,471)
Dividends on convertible preferred stock(297)(350)(523)(1,144)
Net loss from continuing operations attributable to common stock—basic and diluted$(27,509)$(74,873)$(85,045)$(177,615)
Net loss from continuing operations per share attributable to common stock—basic and diluted$(0.25)$(0.70)$(0.77)$(1.66)
Weighted-average shares to compute net loss per share attributable to common stock—basic and diluted111,678,417 107,396,575 110,895,358 107,032,381 
Net loss attributable to common stock—basic and diluted$(27,655)$(78,496)$(88,679)$(170,096)
Net loss attributable to common stock per share—basic and diluted$(0.25)$(0.73)$(0.80)$(1.59)
Net loss$(27,358)$(78,146)$(88,156)$(168,952)
Other comprehensive (loss) income
Foreign currency translation adjustments 34 (58)38 
Unrealized (loss) gain on available-for-sale debt securities(17)217 407 778 
Comprehensive loss$(27,375)$(77,895)$(87,807)$(168,136)

See Notes to the consolidated financial statements.

2

Table of Contents
Redfin Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands, unaudited)
Six Months Ended June 30,
20232022
Operating Activities
Net loss
$(88,156)$(168,952)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization34,146 31,140 
Stock-based compensation36,582 33,601 
Amortization of debt discount and issuance costs2,029 2,899 
Non-cash lease expense9,578 7,096 
Impairment costs113  
Net (gain) loss on IRLCs, forward sales commitments, and loans held for sale(4,565)2,721 
Change in fair value of mortgage servicing rights, net599 (878)
Gain on extinguishment of convertible senior notes(62,353) 
Other(1,794)3,170 
Change in assets and liabilities:
Accounts receivable, net(14,069)(6,791)
Inventory114,232 (19,297)
Prepaid expenses and other assets8,868 (2,852)
Accounts payable2,812 5,964 
Accrued and other liabilities, deferred tax liabilities, and payroll tax liabilities, noncurrent(4,522)5,529 
Lease liabilities(10,790)(8,042)
Origination of mortgage servicing rights(579)(964)
Proceeds from sale of mortgage servicing rights738 774 
Origination of loans held for sale(1,922,690)(1,641,377)
Proceeds from sale of loans originated as held for sale1,888,706 1,587,759 
Net cash used in operating activities(11,115)(168,500)
Investing activities
Purchases of property and equipment(6,213)(12,131)
Purchases of investments(76,866)(82,184)
Sales of investments65,099 12,946 
Maturities of investments59,383 19,425 
Cash paid for acquisition, net of cash, cash equivalents, and restricted cash acquired (97,341)
Net cash provided by (used in) investing activities41,403 (159,285)
Financing activities
Proceeds from the issuance of common stock pursuant to employee equity plans5,665 9,258 
Tax payments related to net share settlements on restricted stock units(11,096)(3,743)
Borrowings from warehouse credit facilities1,920,487 1,628,684 
Repayments to warehouse credit facilities(1,883,196)(1,572,033)
Borrowings from secured revolving credit facility 326,025 
Repayments to secured revolving credit facility (369,266)
Cash paid for secured revolving credit facility issuance costs (764)
Principal payments under finance lease obligations(53)(414)
Repurchases of convertible senior notes(183,019) 
Net cash (used in) provided by financing activities(151,212)17,747 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(58)(42)
Net change in cash, cash equivalents, and restricted cash(120,982)(310,080)
Cash, cash equivalents, and restricted cash:
Beginning of period(1)
242,246 718,281 
End of period(2)
$121,264 $408,201 
Supplemental disclosure of cash flow information
Cash paid for interest
$8,370 $6,581 
Non-cash transactions
Stock-based compensation capitalized in property and equipment2,204 2,053 
Property and equipment additions in accounts payable and accrued liabilities64 69 

(1) Cash, cash equivalents, and restricted cash consisted of the following (beginning of period):
As of December 31,
20222021
Continuing operations
Cash and cash equivalents$232,200 $571,384 
Restricted cash2,406 5,244 
Total 234,606 576,628 
Discontinued operations
Cash and cash equivalents7,640 19,619 
Restricted cash 122,034 
Total7,640 141,653 
Total cash, cash equivalents, and restricted cash$242,246 $718,281 

(2) Cash, cash equivalents, and restricted cash consisted of the following (end of period):
As of June 30,
20232022
Continuing operations
Cash and cash equivalents$118,776 $356,510 
Restricted cash2,377 5,771 
Total121,153 362,281 
Discontinued operations
Cash and cash equivalents111 23,412 
Restricted cash 22,508 
Total111 45,920 
Total cash, cash equivalents, and restricted cash$121,264 $408,201 
See Notes to the consolidated financial statements.
3

Table of Contents
Redfin Corporation and Subsidiaries
Consolidated Statements of Changes in Mezzanine Equity and Stockholders’ Equity
(in thousands, except share amounts, unaudited)

Series A Convertible Preferred StockCommon StockAdditional Paid-in CapitalAccumulated DeficitAccumulated Other Comprehensive LossTotal Stockholders' Equity
SharesAmountSharesAmount
Balance, March 31, 202340,000 $39,925 110,526,884 $110 $775,094 $(754,105)$(435)$20,664 
Issuance of convertible preferred stock, net— 11 — — — — — — 
Issuance of common stock as dividend on convertible preferred stock— — 30,640 — — — — — 
Issuance of common stock pursuant to employee stock purchase program— — 1,150,703 1 4,214 — — 4,215 
Issuance of common stock pursuant to exercise of stock options— — 545,127 2 1,310 — — 1,312 
Issuance of common stock pursuant to settlement of restricted stock units— — 2,412,813 2 (2)— —  
Common stock surrendered for employees' tax liability upon settlement of restricted stock units— — (731,494)(1)(7,936)— — (7,937)
Stock-based compensation— — — — 18,622 — — 18,622 
Other comprehensive loss— — — — — — (17)(17)
Net loss— — — — — (27,358)— (27,358)
Balance, June 30, 2023
40,000 $39,936 113,934,673 $114 $791,302 $(781,463)$(452)$9,501 
Balance, December 31, 2022
40,000 $39,914 109,696,178 $110 $757,951 $(693,307)$(801)$63,953 
Issuance of convertible preferred stock, net— 22 — — — — — — 
Issuance of common stock as dividend on convertible preferred stock— — 61,280 — — — — — 
Issuance of common stock pursuant to employee stock purchase program— — 1,150,703 1 4,214 — — 4,215 
Issuance of common stock pursuant to exercise of stock options— — 563,164  1,450 — — 1,450 
Issuance of common stock pursuant to settlement of restricted stock units— — 3,568,639 4 (4)— —  
Common stock surrendered for employees' tax liability upon settlement of restricted stock units— — (1,105,291)(1)(11,095)— — (11,096)
Stock-based compensation— — — — 38,786 — — 38,786 
Other comprehensive income— — — — — — 349 349 
Net loss— — — — — (88,156)— (88,156)
Balance, June 30, 2023
40,000 $39,936 113,934,673 $114 $791,302 $(781,463)$(452)$9,501 
Series A Convertible Preferred StockCommon StockAdditional Paid-in CapitalAccumulated DeficitAccumulated Other Comprehensive LossTotal Stockholders' Equity
SharesAmountSharesAmount
Balance, March 31, 202240,000 $39,879 107,025,691 $107 $699,225 $(462,970)$(739)$235,623 
Issuance of convertible preferred stock, net— 12 — — — — —  
Issuance of common stock as dividend on convertible preferred stock— — 30,640 — — — — — 
Issuance of common stock pursuant to employee stock purchase program— — 661,054 1 4,629 — — 4,630 
Issuance of common stock pursuant to exercise of stock options— — 436,621 — 2,813 — — 2,813 
Issuance of common stock pursuant to settlement of restricted stock units— — 372,111 — — — — — 
Common stock surrendered for employees' tax liability upon settlement of restricted stock units— — (110,178)— (1,148)— — (1,148)
Stock-based compensation— — — — 17,732 — — 17,732 
Other comprehensive loss— — — — — — (251)(251)
Net loss— — — — — (78,146)— (78,146)
Balance, June 30, 2022
40,000 $39,891 108,415,939 $108 $723,251 $(541,116)$(990)$181,253 
Balance, December 31, 202140,000 $39,868 106,308,767 $106 $682,084 $(372,164)$(174)$309,852 
Issuance of convertible preferred stock, net— 23 — — — — — — 
Issuance of common stock as dividend on convertible preferred stock— — 61,280 — — — — — 
Issuance of common stock pursuant to employee stock purchase program— — 661,054 1 4,629 — — 4,630 
Issuance of common stock pursuant to exercise of stock options— — 645,120 — 4,628 — — 4,628 
Issuance of common stock pursuant to settlement of restricted stock units— — 1,056,468 1 (1)— —  
Common stock surrendered for employees' tax liability upon settlement of restricted stock units— — (316,750)— (3,743)— — (3,743)
Stock-based compensation— — — — 35,654 — — 35,654 
Other comprehensive loss— — — — — — (816)(816)
Net loss— — — — — (168,952)— (168,952)
Balance, June 30, 2022
40,000 $39,891 108,415,939 $108 $723,251 $(541,116)$(990)$181,253 

See Notes to the consolidated financial statements.
4

Table of Contents
Index to Notes to Consolidated Financial Statements

Note 1:
Note 2:
Note 3:
Note 4:
Note 5:
Note 6:
Note 7:
Note 8:
Note 9:
Note 10:
Note 11:
Note 12:
Note 13:
Note 14:
5

Index to Notes to Financial Statements
Redfin Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(in thousands, except share and per share amounts, unaudited)

Note 1: Summary of Accounting Policies

Basis of Presentation—The consolidated financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

The financial information as of December 31, 2022 that is included in this quarterly report is derived from the audited consolidated financial statements and notes for the year ended December 31, 2022 included in Item 8 in our annual report for the year ended December 31, 2022. Such financial information should be read in conjunction with the notes and management’s discussion and analysis of the consolidated financial statements included in our annual report.

The unaudited consolidated interim financial statements, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position as of June 30, 2023, our statements of comprehensive loss, and statements of changes in mezzanine equity and stockholders’ equity for the three and six months ended June 30, 2023 and 2022, as well as our statements of cash flows for the six months ended June 30, 2023 and 2022. The results for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any interim period or for any other future year.

We completed the wind-down of our properties segment as of June 30, 2023, at which time it met the criteria for discontinued operations in our consolidated financial statements. As a result, certain amounts presented in prior period consolidated balance sheets and statements of comprehensive loss have been reclassified to conform to the current period financial statement presentation. The changes do not affect previously reported consolidated net loss or previously reported total assets, liabilities, or stockholders’ equity on our consolidated balance sheets. See Note 2 for additional information.

Principles of Consolidation—The unaudited consolidated interim financial statements include the accounts of Redfin Corporation and its wholly owned subsidiaries, including those entities in which we have a variable interest and of which we are the primary beneficiary. Intercompany transactions and balances have been eliminated.

Use of Estimates—The preparation of consolidated financial statements, in conformity with GAAP, requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and results of operations during the respective periods. Our estimates include, but are not limited to, valuation of deferred income taxes, stock-based compensation, capitalization of website and software development costs, the incremental borrowing rate for the determination of the present value of lease payments, recoverability of intangible assets with finite lives, fair value of our mortgage loans held for sale (“LHFS”) and mortgage servicing rights, estimated useful life of intangible assets, fair value of reporting units for purposes of allocating and evaluating goodwill for impairment, and current expected credit losses on certain financial assets. The amounts ultimately realized from the affected assets or ultimately recognized as liabilities will depend on, among other factors, general business conditions and could differ materially in the near term from the carrying amounts reflected in the consolidated financial statements.

Recently Adopted Accounting Pronouncements—None applicable.

Recently Issued Accounting Pronouncements—None applicable.

6

Index to Notes to Financial Statements
Note 2: Discontinued Operations

In November 2022, our management and board of directors made the decision to wind down RedfinNow. The financial results of RedfinNow have historically been included in our properties segment. Winding-down RedfinNow was a strategic decision we made in order to focus our resources on our core businesses in the face of the rising cost of capital. The wind-down of our properties segment was complete as of June 30, 2023, at which time it met the criteria for discontinued operations in our consolidated financial statements.

The major classes of assets and liabilities of our discontinued operations were as follows:
June 30, 2023December 31, 2022
Assets
Current assets
Cash and cash equivalents$111 $7,640 
Accounts receivable, net1,195 8,504 
Inventory 114,232 
Prepaid expenses7 500 
Other current assets65 1,283 
Total current assets of discontinued operations1,378 132,159 
Property and equipment, net 167 
Right-of-use assets, net 1,142 
Total assets of discontinued operations$1,378 $133,468 
Liabilities
Current liabilities
Accounts payable$6 $754 
Accrued and other liabilities38 2,980 
Lease liabilities 577 
Total current liabilities of discontinued operations44 4,311 
Lease liabilities, noncurrent 392 
Total liabilities of discontinued operations$44 $4,703 

7

Index to Notes to Financial Statements
The major classes of line items of the discontinued operations included in our consolidated statement of comprehensive loss were as follows:
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Revenue$10,998 $257,866 $122,576 $632,396 
Cost of revenue(1)
10,913 251,100 124,422 604,741 
Gross profit (loss)85 6,766 (1,846)27,655 
Operating expenses
Technology and development(1)
23 4,684 552 8,803 
Marketing(1)
18 821 523 1,974 
General and administrative(1)
115 3,209 638 6,035 
Restructuring and reorganization75 271 75 271 
Total operating expenses
231 8,985 1,788 17,083 
(Loss) income from discontinued operations(146)(2,219)(3,634)10,572 
Interest expense (1,403) (3,052)
Other expense, net (1) (1)
Net (loss) income from discontinued operations$(146)$(3,623)$(3,634)$7,519 
Net (loss) income from discontinued operations per share—basic and diluted$0.00 $(0.03)$(0.03)$0.07 
(1) Includes stock-based compensation as follows:
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
(in thousands)
Cost of revenue$1 $265 $46 $651 
Technology and development4 933 86 1,788 
Marketing1 30 19 59 
General and administrative25 299 83 566 
Total stock-based compensation$31 $1,527 $234 $3,064 

Significant non-cash items and capital expenditures of the discontinued operations were as follows:
Six Months Ended June 30,
20232022
Amortization of debt discount and debt issuance costs$ $301 
Stock-based compensation234 3,064 
Depreciation and amortization89 1,142 
Capital expenditures 765 
Cash paid for interest 2,751 
8

Index to Notes to Financial Statements

Charges specifically relating to the wind-down of our properties segment were as follows:
Cost typeFinancial statement line itemSix Months Ended June 30, 2023Cumulative amount recognized
Employee termination costsRestructuring and reorganization$539 $8,587 
Asset write-offsRestructuring and reorganization 493 
OtherRestructuring and reorganization(465)(890)
Acceleration of debt issuance costsInterest expense 481 
Total$74 $8,671 

Restructuring and reorganization charges related to our continuing operations primarily consist of employee termination costs (including severance, retention, benefits, and payroll taxes) associated with the restructuring and reorganization activities from our acquisitions of Bay Equity LLC (“Bay Equity”), our mortgage business, and Rent Group Inc. (“Rent.”), our rentals business, and from our June 2022 and April 2023 workforce reductions. These expenses are included in restructuring and reorganization in our consolidated statements of comprehensive loss and in accrued and other liabilities on our consolidated balance sheets.

Note 3: Segment Reporting and Revenue

In its operation of our business, our management, including our chief operating decision maker ("CODM"), who is also our chief executive officer, evaluates the performance of our operating segments based on revenue and gross profit. We do not analyze discrete segment balance sheet information related to long-term assets, substantially all of which are located in the United States. We have five operating segments and three reportable segments, real estate services, rentals, and mortgage. As a result of our decision to wind-down RedfinNow operations in November 2022, we report our properties segment as a discontinued operation as we completed wind-down of the business during the three months ended June 30, 2023.

We generate revenue primarily from commissions and fees charged on each real estate services transaction closed by our lead agents or partner agents, from subscription-based product offerings for our rentals business, and from the origination, sales, and servicing of mortgages. Our key revenue components are brokerage revenue, partner revenue, rentals revenue, mortgage revenue, and other revenue.

9

Index to Notes to Financial Statements
Information on each of our reportable and other segments and reconciliation to net (loss) income from continuing operations is presented in the tables below. We have assigned certain previously reported expenses to each segment to conform to the way we internally manage and monitor our business. We allocated indirect costs to each segment based on a reasonable allocation methodology, when such costs are significant to the performance measures of the segments.
Three Months Ended June 30, 2023
Real estate servicesRentalsMortgageOtherCorporate overheadTotal
Revenue(1)
$180,641 $45,356 $38,426 $11,133 $ $275,556 
Cost of revenue124,447 10,427 34,266 6,226  175,366 
Gross profit56,194 34,929 4,160 4,907  100,190 
Operating expenses
Technology and development28,044 16,304 734 1,118 941 47,141 
Marketing16,004 15,938 1,054 16 21 33,033 
General and administrative20,961 25,305 6,724 1,044 7,731 61,765 
Restructuring and reorganization    6,106 6,106 
Total operating expenses65,009 57,547 8,512 2,178 14,799 148,045 
(Loss) income from continuing operations(8,815)(22,618)(4,352)2,729 (14,799)(47,855)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net 28 (91)153 20,553 20,643 
Net (loss) income from continuing operations$(8,815)$(22,590)$(4,443)$2,882 $5,754 $(27,212)
(1) Included in revenue is $95 from providing services to our discontinued properties segment.
Three Months Ended June 30, 2022
Real estate servicesRentalsMortgageOtherCorporate overheadTotal
Revenue(1)
$251,809 $38,248 $53,098 $5,894 $ $349,049 
Cost of revenue177,698 7,901 46,316 5,898  237,813 
Gross profit74,111 30,347 6,782 (4) 111,236 
Operating expenses
Technology and development27,696 14,871 1,904 1,189 1,162 46,822 
Marketing40,765 13,086 1,843 71 157 55,922 
General and administrative24,341 21,824 9,450 850 12,058 68,523 
Restructuring and reorganization    12,406 12,406 
Total operating expenses92,802 49,781 13,197 2,110 25,783 183,673 
Loss from continuing operations(18,691)(19,434)(6,415)(2,114)(25,783)(72,437)
Interest income, interest expense, income tax expense, and other expense, net(123)232 (35)11 (2,171)(2,086)
Net loss from continuing operations$(18,814)$(19,202)$(6,450)$(2,103)$(27,954)$(74,523)
(1) Included in revenue is $4,740 from providing services to our discontinued properties segment.
10

Index to Notes to Financial Statements
Six Months Ended June 30, 2023
Real estate servicesRentalsMortgageOtherCorporate overheadTotal
Revenue(1)
$307,937 $88,226 $74,915 $18,561 $ $489,639 
Cost of revenue235,941 20,192 63,479 11,699  331,311 
Gross profit71,996 68,034 11,436 6,862  158,328 
Operating expenses
Technology and development56,939 32,268 1,377 2,342 1,878 94,804 
Marketing41,064 30,264 2,034 26 48 73,436 
General and administrative40,579 51,607 13,653 2,097 23,268 131,204 
Restructuring and reorganization    7,159 7,159 
Total operating expenses138,582 114,139 17,064 4,465 32,353 306,603 
(Loss) income from continuing operations(66,586)(46,105)(5,628)2,397 (32,353)(148,275)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net 73 (151)268 63,563 63,753 
Net (loss) income from continuing operations$(66,586)$(46,032)$(5,779)$2,665 $31,210 $(84,522)
(1) Included in revenue is $1,244 from providing services to our discontinued properties segment.
Six Months Ended June 30, 2022
Real estate servicesRentalsMortgageOtherCorporate overheadTotal
Revenue(1)
$429,295 $76,292 $56,015 $10,263 $ $571,865 
Cost of revenue331,482 15,094 51,834 10,570  408,980 
Gross profit97,813 61,198 4,181 (307) 162,885 
Operating expenses
Technology and development54,435 29,154 4,251 2,225 2,278 92,343 
Marketing71,608 24,128 1,871 125 379 98,111 
General and administrative47,333 46,015 10,974 1,562 18,780 124,664 
Restructuring and reorganization    18,115