Press releases

Redfin Reports Third Quarter 2022 Financial Results

SEATTLE--(BUSINESS WIRE)-- 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.
  • 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.

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

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

 

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

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

 

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.

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.

 

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.

 

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.

 

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.

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.

Investor Relations
Meg Nunnally, 206-576-8610
ir@redfin.com

Public Relations
Mariam Sughayer, 206-876-1322
press@redfin.com

Source: Redfin Corporation

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