Redfin Reports Fourth Quarter and Full Year 2021 Financial Results

SEATTLE--(BUSINESS WIRE)-- Redfin Corporation (NASDAQ: RDFN) today announced results for its fourth quarter and full year ended December 31, 2021.

Fourth Quarter 2021

Fourth quarter revenue was $643.1 million, an increase of 163% compared to the fourth quarter of 2020. Gross profit was $108.0 million, an increase of 35% year-over-year. Real estate services gross profit was $75.2 million, a decrease of 7% year-over-year, and real estate services gross margin was 33%, compared to 41% in the fourth quarter of 2020.

Net loss was $27.0 million, compared to a net income of $14.0 million in the fourth quarter of 2020. Net loss attributable to common stock was $28.4 million. Net loss per share attributable to common stock, diluted, was $0.27, compared to net income per share, diluted, of $0.11 in the fourth quarter of 2020.

Full Year 2021

Full year revenue was $1,922.8 million, an increase of 117% year-over-year. Gross profit was $403.8 million, an increase of 74% year-over-year. Real estate services gross profit was $300.0 million, an increase of 28% year-over-year, and real estate services gross margin was 33%, compared to 36% in 2020.

Net loss was $109.6 million, compared to a net loss of $18.5 million in 2020. Net loss attributable to common stock was $116.9 million. Net loss per share attributable to common stock, diluted, was $1.12, compared to a net loss per share, diluted, of $0.23 in 2020.

“Fourth-quarter revenues and net income exceeded our expectations,” said Redfin CEO Glenn Kelman. “More importantly, Redfin is broadening its sources of customer value and corporate income, with title, mortgage, and iBuying now on track to generate gross profits, after years of being subsidized by our brokerage. Entering an uncertain market, Redfin’s pricing power and on-demand service will let us take share and improve operating margins.”

Fourth Quarter Highlights

Reached market share of 1.15% of U.S. existing home sales by value in the fourth quarter of 2021, an increase of 11 basis points from the fourth quarter of 2020.⁽¹⁾
Saved homebuyers and sellers over $77 million in the fourth quarter and over $288 million in 2021. This includes the savings Redfin offers buyers through the Redfin Refund and sellers through Redfin’s lower listing fee when compared to a 2.5% listing commission typically charged by traditional agents.
Redfin’s mobile apps and website reached nearly 45 million average monthly users in the fourth quarter. For the year, Redfin reached a record of more than 47 million average monthly users, an increase of 10% compared to 2020.
Expanded brokerage services into Big Bear, California; Ocean City, Maryland; and Ulster County, New York, furthering Redfin’s presence in popular vacation home destinations.
Launched RedfinNow in the Minneapolis metro area, reaching a total of 30 markets.
Confirmed Redfin sells homes faster and for more money than other brokerages for the 6th year in a row. Nationwide Redfin listings sold about 5 days faster and for $1,600 more than comparable listings from other brokerages according to a third-party study that we commissioned.
Welcomed the inaugural class of 32 Redfin agents to our Career Accelerator pilot program, bringing professionals with a diversity of backgrounds to our Seattle and Washington, D.C. teams.
Since December 2020, raised more than $1 million to build paths to homeownership for working families through Redfin Rise, an employee funded non-profit partnership.
Delivered improved software for customers, agents, partners and renovations staff including:
New search filters for customers to tailor the home search including pet friendliness and Walk Score.
- On-the-go tour scheduling for Redfin agents via Mobile Agent Tools.
- Speed improvements that help customers move quickly in a competitive market, including faster listing notifications and identifying Hot Homes that are likely to sell quickly within 5 minutes of being listed.
- SharePlay feature that lets buyers house-hunt together via FaceTime.
- Automated resale forecasting and renovation timeline model for RedfinNow’s investment and renovation teams.
Subsequent to the fourth quarter, launched our annual media campaign on February 5: Welcome to the Housing Market and Redfin Knows What You Like.

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

Business Outlook

The following forward-looking statements reflect Redfin's expectations as of February 17, 2022, and are subject to substantial uncertainty.

For the first quarter of 2022 we expect:

Total revenue between $535 million and $560 million, representing a year-over-year growth between 99% and 109% compared to the first quarter of 2021. Included within total revenue are real estate services segment revenue between $165 million and $171 million, properties segment revenue between $330 million to $350 million, rentals revenue between $37 million and $38 million, and mortgage revenue of $3 million.
Total net loss is expected to be between $122 million and $115 million, compared to net loss of $36 million in the first quarter of 2021. RentPath’s contribution to the net loss is expected to be approximately $19 million. This guidance includes approximately $45 million in total marketing expenses, $19 million of stock-based compensation, $15 million of depreciation and amortization, and $5 million of net interest expense. In addition, we expect to pay a quarterly dividend of 30,640 shares of common stock to our preferred stockholder.

Conference Call

Redfin will webcast a conference call to discuss the results at 1:30 p.m. Pacific Time today. The webcast will be open to the public at http://investors.redfin.com. The webcast will remain available on the investor relations website for at least three months following the conference call.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws, including our future operating results, as described under Business Outlook. We believe our expectations related to these forward-looking statements are reasonable, but actual results may turn out to be materially different. For factors that could cause actual results to differ materially from the forward-looking statements in this press release, please see the risks and uncertainties identified under the heading "Risk Factors" in our annual report for the year ended December 31, 2021, 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.

About Redfin

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

Redfin-F

Redfin Corporation and Subsidiaries Consolidated Balance Sheets (in thousands, except share and per share amounts, unaudited)


	December 31,
		2021			2020
Assets
Current assets
Cash and cash equivalents	$	591,003		$	925,276
Restricted cash		127,278			20,544
Short-term investments		33,737			131,561
Accounts receivable, net of allowances for credit losses of $1,298 and $160		69,594			54,719
Inventory		358,221			49,158
Loans held for sale		35,759			42,539
Prepaid expenses		22,948			12,131
Other current assets		7,524			4,898
Total current assets		1,246,064			1,240,826
Property and equipment, net		58,671			43,988
Right-of-use assets, net		54,200			44,149
Long-term investments		54,828			11,922
Goodwill		409,382			9,186
Intangible assets, net		185,929			1,830
Other assets, noncurrent		12,898			8,619
Total assets	$	2,021,972		$	1,360,520
Liabilities, mezzanine equity, and stockholders' equity
Current liabilities
Accounts payable	$	12,546		$	5,644
Accrued and other liabilities		118,122			82,644
Warehouse credit facilities		33,043			39,029
Secured revolving credit facility		199,781			23,949
Convertible senior notes, net		23,280			22,482
Lease liabilities		15,040			11,973
Total current liabilities		401,812			185,721
Lease liabilities, noncurrent		55,222			49,339
Convertible senior notes, net, noncurrent		1,214,017			488,268
Payroll tax liabilities, noncurrent		—			6,812
Deferred tax liabilities		1,201			0
Total liabilities		1,672,252			730,140
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, 2021 and 2020, respectively		39,868			39,823
Stockholders’ equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 106,308,767 and 103,000,594 shares issued and outstanding at December 31, 2021 and 2020, respectively		106			103
Additional paid-in capital		682,084			860,556
Accumulated other comprehensive (loss) income		(174	)		211
Accumulated deficit		(372,164	)		(270,313	)
Total stockholders’ equity		309,852			590,557
Total liabilities, mezzanine equity, and stockholders’ equity	$	2,021,972		$	1,360,520

Redfin Corporation and Subsidiaries Consolidated Statements of Comprehensive Loss (in thousands, except share and per share amounts, unaudited)


	Three Months Ended December 31,						Twelve Months Ended December 31,
		2021			2020			2021			2020
Revenue
Service	$	265,992		$	204,452		$	1,042,112		$	674,345
Product		377,065			40,065			880,653			211,748
Total revenue		643,057			244,517			1,922,765			886,093
Cost of revenue⁽¹⁾
Service		161,780			122,642			648,660			437,484
Product		373,253			41,755			870,285			216,499
Total cost of revenue		535,033			164,397			1,518,945			653,983
Gross profit		108,024			80,120			403,820			232,110
Operating expenses
Technology and development⁽¹⁾		43,894			23,610			156,718			84,297
Marketing⁽¹⁾		22,397			7,270			138,740			54,881
General and administrative⁽¹⁾		66,962			23,601			218,315			92,140
Total operating expenses		133,253			54,481			513,773			231,318
(Loss) income from operations		(25,229	)		25,639			(109,953	)		792
Interest income		163			215			635			2,074
Interest expense		(3,939	)		(11,864	)		(11,762	)		(19,495	)
Income tax benefit		744			—			6,107			—
Other income (expense), net		1,259			45			5,360			(1,898	)
Net (loss) income	$	(27,002	)	$	14,035		$	(109,613	)	$	(18,527	)
Dividend on convertible preferred stock		(1,394	)		(1,640	)		(7,269	)		(4,454	)
Undistributed earnings attributable to participating		—			(242	)		—			—
Net (loss) income attributable to common stock—basic and diluted	$	(28,396	)	$	12,153		$	(116,882	)	$	(22,981	)
Net (loss) income per share attributable to common stock—basic	$	(0.27	)	$	0.12		$	(1.12	)	$	(0.23	)
Weighted average shares of common stock—basic		105,739,395			102,176,459			104,683,460			98,574,529
Net (loss) income per share attributable to common stock—diluted	$	(0.27	)	$	0.11		$	(1.12	)	$	(0.23	)
Weighted average shares of common stock—diluted		105,739,395			109,461,342			104,683,460			98,574,529

Net (loss) income	$	(27,002	)	$	14,035		$	(109,613	)	$	(18,527	)
Other comprehensive (loss) income
Foreign currency translation adjustments		4			13			6			(3	)
Unrealized gain (loss) on available-for-sale securities		217			(110	)		379			172
Total comprehensive (loss) income		(26,781	)		13,938			(109,228	)		(18,358	)

(1) Includes stock-based compensation as follows:

	Three Months Ended December 31,						Twelve Months Ended December 31,
		2021			2020			2021			2020
Cost of revenue	$	3,595		$	2,863		$	13,614		$	8,844
Technology and development		6,288			4,828			23,275			16,564
Marketing		736			439			2,350			1,569
General and administrative		4,667			3,079			15,483			9,996
Total	$	15,286		$	11,209		$	54,722		$	36,973

Redfin Corporation and Subsidiaries Consolidated Statements of Cash Flows (in thousands, unaudited)


	Year Ended December 31,
		2021			2020
Operating Activities
Net loss	$	(109,613	)	$	(18,527	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		46,906			14,564
Stock-based compensation		54,722			36,973
Amortization of debt discount and issuance costs		4,989			12,038
Non-cash lease expense		11,630			9,204
Impairment costs		—			2,063
Loss on repurchases and conversions of convertible senior notes		—			4,634
Net loss (gain) on IRLCs, forward sales commitments, and loans held for sale		815			(1,921	)
Other		(4,227	)		(349	)
Change in assets and liabilities:
Accounts receivable, net		(7,149	)		(35,496	)
Inventory		(309,063	)		25,432
Prepaid expenses and other assets		(12,248	)		2,333
Accounts payable		3,059			2,086
Accrued and other liabilities, deferred tax liabilities, and payroll tax liabilities, noncurrent		25,791			39,092
Lease liabilities		(13,268	)		(11,312	)
Origination of loans held for sale		(986,982	)		(677,310	)
Proceeds from sale of loans originated as held for sale		993,070			657,763
Net cash (used in) provided by operating activities		(301,568	)		61,267
Investing activities
Purchases of property and equipment		(27,492	)		(14,686	)
Purchases of investments		(146,274	)		(198,172	)
Sales of investments		98,687			7,887
Maturities of investments		106,773			147,852
Cash paid for acquisition		(608,000	)		—
Net cash used in investing activities		(576,306	)		(57,119	)
Financing activities
Proceeds from the issuance of convertible preferred stock, net of issuance costs		—			39,801
Proceeds from the issuance of common stock, net of issuance costs		—			69,701
Proceeds from the issuance of common stock pursuant to employee equity plans		22,772			21,072
Tax payments related to net share settlements on restricted stock units		(27,066	)		(16,852	)
Borrowings from warehouse credit facilities		942,993			662,278
Repayments to warehouse credit facilities		(948,979	)		(644,551	)
Borrowings from secured revolving credit facility		624,828			89,619
Repayments to secured revolving credit facility		(448,996	)		(70,115	)
Cash paid for secured revolving credit facility issuance costs		(527	)		(4	)
Proceeds from issuance of convertible senior notes, net of issuance costs		561,529			647,486
Purchases of capped calls related to convertible senior notes		(62,647	)		—
Payments for repurchases and conversions of convertible senior notes		(2,159	)		(108,061	)
Principal payments under finance lease obligations		(796	)		(221	)
Other financing payables		(10,611	)		4,074
Net cash provided by financing activities		650,341			694,227
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(6	)		(3	)
Net change in cash, cash equivalents, and restricted cash		(227,539	)		698,372
Cash, cash equivalents, and restricted cash:
Beginning of period		945,820			247,448
End of period	$	718,281		$	945,820

Redfin Corporation and Subsidiaries Supplemental Financial Information and Business Metrics (unaudited)


	Three Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020
Monthly average visitors (in thousands)	44,665	49,147	48,437	46,202	44,135	49,258	42,537	35,519
Real estate services transactions
Brokerage	19,428	21,929	21,006	14,317	16,951	18,980	13,828	10,751
Partner	4,603	4,755	4,597	3,944	4,940	5,180	2,691	2,479
Total	24,031	26,684	25,603	18,261	21,891	24,160	16,519	13,230
Real estate services revenue per transaction
Brokerage	$ 10,900	$ 11,107	$ 11,307	$ 10,927	$ 10,751	$ 10,241	$ 9,296	$ 9,520
Partner	2,819	2,990	3,195	3,084	3,123	2,988	2,417	2,535
Aggregate	9,352	9,661	9,850	9,233	9,030	8,686	8,175	8,211

Aggregate home value of real estate services transactions (in millions)	$ 13,255	$ 14,926	$ 14,612	$ 9,710	$ 11,478	$ 12,207	$ 7,576	$ 6,098
U.S. market share by value	1.15 %	1.16 %	1.18 %	1.16 %	1.04 %	1.04 %	0.94 %	0.92 %
Revenue from top-10 Redfin markets as a percentage of real estate services revenue	61 %	62 %	64 %	62 %	63 %	63 %	63 %	61 %
Average number of lead agents	2,485	2,370	2,456	2,277	1,981	1,820	1,399	1,826
RedfinNow Homes Sold	600	388	292	171	83	37	162	171
Revenue per RedfinNow Home Sold	622,251	599,010	570,930	525,173	471,551	504,583	444,690	461,916

Redfin Corporation and Subsidiaries Supplemental Financial Information (unaudited, in thousands)


	Three Months Ended December 31,						Twelve Months Ended December 31,
		2021			2020			2021			2020
Revenue
Real estate services (brokerage)	$	211,756		$	182,244		$	849,288			607,513
Real estate services (partner)		12,976			15,426			54,046			43,695
Properties		377,065			39,399			880,653			209,686
Rentals		38,923			—			121,877			—
Mortgage		3,996			5,140			19,818			15,834.547
Other		3,347			3,073			13,609			12,377.25
Intercompany eliminations		(5,006	)		(765	)		(16,526	)		(3,013	)
Total	$	643,057		$	244,517		$	1,922,765		$	886,093

Cost of revenue
Real estate services	$	149,529		$	116,835		$	603,320		$	417,140
Properties		373,105			41,275			870,052			214,382
Rentals		6,774			—			21,739			—
Mortgage		6,690			4,585			26,096			15,627
Other		3,941			2,467			14,264			9,847
Intercompany eliminations		(5,006	)		(765	)		(16,526	)		(3,013	)
Total	$	535,033		$	164,397		$	1,518,945		$	653,983

Gross Profit
Real estate services		75,203			80,835			300,014			234,068
Properties		3,960			(1,876	)		10,601			(4,696	)
Rentals		32,149			—			100,138			—
Mortgage		(2,694	)		555			(6,278	)		208
Other		(594	)		606			(655	)		2,530
Total	$	108,024		$	80,120		$	403,820		$	232,110

Real estate services, properties, mortgage, and other operating expenses		85,699			54,481			367,269			231,318
Rentals operating expenses		47,554			—			146,504			—
Interest income		163			215			635			2,074
Interest expense		(3,939	)		(11,864	)		(11,762	)		(19,495	)
Income tax benefit		744			—			6,107			—
Other income (expense), net		1,259			45			5,360			(1,898	)
Net (loss) income	$	(27,002	)	$	14,035		$	(109,613	)	$	(18,527	)