rdfn-20210331
0001382821--12-312021Q1falserdfn:AccountingStandardsUpdate202006MemberP1YP2Y00013828212021-01-012021-03-31xbrli:shares00013828212021-04-28iso4217:USD00013828212021-03-3100013828212020-12-310001382821us-gaap:FairValueMeasurementsRecurringMember2021-03-31iso4217:USDxbrli:shares0001382821us-gaap:ServiceMember2021-01-012021-03-310001382821us-gaap:ServiceMember2020-01-012020-03-310001382821us-gaap:ProductMember2021-01-012021-03-310001382821us-gaap:ProductMember2020-01-012020-03-3100013828212020-01-012020-03-3100013828212019-12-3100013828212020-03-310001382821us-gaap:CommonStockMember2019-12-310001382821us-gaap:AdditionalPaidInCapitalMember2019-12-310001382821us-gaap:RetainedEarningsMember2019-12-310001382821us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001382821us-gaap:CommonStockMember2020-01-012020-03-310001382821us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310001382821us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001382821us-gaap:RetainedEarningsMember2020-01-012020-03-310001382821us-gaap:CommonStockMember2020-03-310001382821us-gaap:AdditionalPaidInCapitalMember2020-03-310001382821us-gaap:RetainedEarningsMember2020-03-310001382821us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-310001382821us-gaap:PreferredStockMember2020-12-310001382821us-gaap:CommonStockMember2020-12-310001382821us-gaap:AdditionalPaidInCapitalMember2020-12-310001382821us-gaap:RetainedEarningsMember2020-12-310001382821us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001382821us-gaap:AdditionalPaidInCapitalMembersrt:RevisionOfPriorPeriodAccountingStandardsUpdateAdjustmentMember2020-12-310001382821us-gaap:RetainedEarningsMembersrt:RevisionOfPriorPeriodAccountingStandardsUpdateAdjustmentMember2020-12-310001382821srt:RevisionOfPriorPeriodAccountingStandardsUpdateAdjustmentMember2020-12-310001382821us-gaap:PreferredStockMember2021-01-012021-03-310001382821us-gaap:CommonStockMember2021-01-012021-03-310001382821us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001382821us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001382821us-gaap:RetainedEarningsMember2021-01-012021-03-310001382821us-gaap:PreferredStockMember2021-03-310001382821us-gaap:CommonStockMember2021-03-310001382821us-gaap:AdditionalPaidInCapitalMember2021-03-310001382821us-gaap:RetainedEarningsMember2021-03-310001382821us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100013828212020-01-012020-12-310001382821rdfn:RentPathHoldingsAcquisitionMemberus-gaap:SubsequentEventMember2021-04-022021-04-020001382821rdfn:A1.75ConvertibleSeniorNotesdue2023Member2021-01-012021-03-310001382821srt:RestatementAdjustmentMember2021-01-0100013828212021-01-01rdfn:complaint0001382821us-gaap:OperatingSegmentsMemberrdfn:BrokerageRevenueMemberrdfn:RealEstateSegmentMember2021-01-012021-03-310001382821us-gaap:OperatingSegmentsMemberrdfn:BrokerageRevenueMemberrdfn:RealEstateSegmentMember2020-01-012020-03-310001382821us-gaap:OperatingSegmentsMemberrdfn:PartnerRevenueMemberrdfn:RealEstateSegmentMember2021-01-012021-03-310001382821us-gaap:OperatingSegmentsMemberrdfn:PartnerRevenueMemberrdfn:RealEstateSegmentMember2020-01-012020-03-310001382821us-gaap:OperatingSegmentsMemberrdfn:RealEstateSegmentMember2021-01-012021-03-310001382821us-gaap:OperatingSegmentsMemberrdfn:RealEstateSegmentMember2020-01-012020-03-310001382821us-gaap:OperatingSegmentsMemberrdfn:PropertiesSegmentMember2021-01-012021-03-310001382821us-gaap:OperatingSegmentsMemberrdfn:PropertiesSegmentMember2020-01-012020-03-310001382821us-gaap:CorporateNonSegmentMember2021-01-012021-03-310001382821us-gaap:CorporateNonSegmentMember2020-01-012020-03-310001382821us-gaap:IntersegmentEliminationMember2021-01-012021-03-310001382821us-gaap:IntersegmentEliminationMember2020-01-012020-03-310001382821srt:MinimumMemberus-gaap:InterestRateLockCommitmentsMember2021-01-012021-03-310001382821us-gaap:InterestRateLockCommitmentsMembersrt:MaximumMember2021-01-012021-03-310001382821us-gaap:ForwardContractsMember2021-03-310001382821us-gaap:ForwardContractsMember2020-12-310001382821us-gaap:InterestRateLockCommitmentsMember2021-03-310001382821us-gaap:InterestRateLockCommitmentsMember2020-12-310001382821us-gaap:ForwardContractsMemberrdfn:ServiceRevenueMember2021-01-012021-03-310001382821us-gaap:ForwardContractsMemberrdfn:ServiceRevenueMember2020-01-012020-03-310001382821us-gaap:InterestRateLockCommitmentsMemberrdfn:ServiceRevenueMember2021-01-012021-03-310001382821us-gaap:InterestRateLockCommitmentsMemberrdfn:ServiceRevenueMember2020-01-012020-03-310001382821us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-03-310001382821us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-03-310001382821us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-03-310001382821us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-03-310001382821us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:ForwardContractsMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:ForwardContractsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:ForwardContractsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:ForwardContractsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821rdfn:AgencyBondsMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821rdfn:AgencyBondsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821rdfn:AgencyBondsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821rdfn:AgencyBondsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-12-310001382821us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-12-310001382821us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-12-310001382821us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-12-310001382821us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:ForwardContractsMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:ForwardContractsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:ForwardContractsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:ForwardContractsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821rdfn:AgencyBondsMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821rdfn:AgencyBondsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821rdfn:AgencyBondsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821rdfn:AgencyBondsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-31xbrli:pure0001382821us-gaap:InterestRateLockCommitmentsMemberrdfn:MeasurementInputWeightedAveragePullThroughRatMemberrdfn:MarketingpricingMember2021-03-310001382821us-gaap:InterestRateLockCommitmentsMemberrdfn:MeasurementInputWeightedAveragePullThroughRatMemberrdfn:MarketingpricingMember2020-12-310001382821rdfn:A1.75ConvertibleSeniorNotesdue2023Member2021-03-310001382821rdfn:A1.75ConvertibleSeniorNotesdue2023Member2020-12-310001382821rdfn:A0ConvertibleSeniorNotesDue2025Member2021-03-310001382821rdfn:A0ConvertibleSeniorNotesDue2025Member2020-12-310001382821rdfn:A05ConvertibleSeniorNotesDue2027Member2021-03-310001382821rdfn:A05ConvertibleSeniorNotesDue2027Member2020-12-310001382821us-gaap:CashMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001382821us-gaap:CashMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001382821us-gaap:LeaseholdImprovementsMember2021-03-310001382821us-gaap:LeaseholdImprovementsMember2020-12-310001382821us-gaap:SoftwareDevelopmentMembersrt:MinimumMember2021-01-012021-03-310001382821us-gaap:SoftwareDevelopmentMembersrt:MaximumMember2021-01-012021-03-310001382821us-gaap:SoftwareDevelopmentMember2021-03-310001382821us-gaap:SoftwareDevelopmentMember2020-12-310001382821us-gaap:OfficeEquipmentMember2021-01-012021-03-310001382821us-gaap:OfficeEquipmentMember2021-03-310001382821us-gaap:OfficeEquipmentMember2020-12-310001382821rdfn:SoftwareMember2021-01-012021-03-310001382821rdfn:SoftwareMember2021-03-310001382821rdfn:SoftwareMember2020-12-310001382821us-gaap:FurnitureAndFixturesMember2021-01-012021-03-310001382821us-gaap:FurnitureAndFixturesMember2021-03-310001382821us-gaap:FurnitureAndFixturesMember2020-12-310001382821rdfn:PropertyPlantAndEquipmentGrossExcludingConstructionInProgressMember2021-03-310001382821rdfn:PropertyPlantAndEquipmentGrossExcludingConstructionInProgressMember2020-12-310001382821us-gaap:ConstructionInProgressMember2021-03-310001382821us-gaap:ConstructionInProgressMember2020-12-310001382821srt:MinimumMember2021-03-310001382821srt:MaximumMember2021-03-310001382821us-gaap:VehiclesMember2021-03-310001382821us-gaap:CostOfSalesMember2021-01-012021-03-310001382821us-gaap:CostOfSalesMember2020-01-012020-03-310001382821us-gaap:OperatingExpenseMember2021-01-012021-03-310001382821us-gaap:OperatingExpenseMember2020-01-012020-03-31rdfn:employee0001382821us-gaap:SubsequentEventMemberrdfn:EmploymentClaimMember2021-04-060001382821us-gaap:TradeNamesMember2021-01-012021-03-310001382821us-gaap:TradeNamesMember2021-03-310001382821us-gaap:TradeNamesMember2020-12-310001382821us-gaap:DevelopedTechnologyRightsMember2021-01-012021-03-310001382821us-gaap:DevelopedTechnologyRightsMember2021-03-310001382821us-gaap:DevelopedTechnologyRightsMember2020-12-310001382821us-gaap:CustomerRelationshipsMember2021-01-012021-03-310001382821us-gaap:CustomerRelationshipsMember2021-03-310001382821us-gaap:CustomerRelationshipsMember2020-12-310001382821us-gaap:CommonStockMember2020-04-012020-04-010001382821us-gaap:CommonStockMember2020-04-010001382821us-gaap:PreferredStockMember2020-04-012020-04-010001382821us-gaap:PreferredStockMember2020-04-0100013828212020-04-012020-04-0100013828212020-04-01rdfn:tradingDay0001382821rdfn:A2004EquityIncentivePlanMemberus-gaap:EmployeeStockMember2021-03-310001382821rdfn:A2004EquityIncentivePlanMember2021-01-012021-03-310001382821rdfn:A2017EquityIncentivePlanMember2017-07-260001382821rdfn:A2017EquityIncentivePlanMember2021-01-012021-03-310001382821srt:MinimumMemberrdfn:A2017EquityIncentivePlanMember2021-01-012021-03-310001382821rdfn:A2017EquityIncentivePlanMembersrt:MaximumMember2021-01-012021-03-310001382821rdfn:A2017EquityIncentivePlanMember2021-03-310001382821rdfn:A2017EquityIncentivePlanMember2020-12-310001382821rdfn:A2017EmployeeStockPurchasePlanMemberus-gaap:EmployeeStockMember2017-07-270001382821rdfn:A2017EmployeeStockPurchasePlanMemberus-gaap:EmployeeStockMember2017-07-272017-07-270001382821rdfn:A2017EmployeeStockPurchasePlanMemberus-gaap:EmployeeStockMember2021-01-012021-03-310001382821rdfn:A2017EmployeeStockPurchasePlanMember2021-03-310001382821rdfn:A2017EmployeeStockPurchasePlanMember2020-12-310001382821us-gaap:EmployeeStockOptionMember2021-01-012021-03-310001382821srt:ChiefExecutiveOfficerMemberus-gaap:PerformanceSharesMember2019-06-012019-06-010001382821srt:ChiefExecutiveOfficerMemberus-gaap:PerformanceSharesMembersrt:MaximumMember2019-06-012019-06-010001382821srt:ChiefExecutiveOfficerMemberus-gaap:PerformanceSharesMembersrt:MaximumMember2021-01-012021-03-310001382821us-gaap:RestrictedStockUnitsRSUMember2020-12-310001382821us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310001382821us-gaap:RestrictedStockUnitsRSUMember2021-03-310001382821us-gaap:PerformanceSharesMember2021-03-310001382821us-gaap:PerformanceSharesMember2021-01-012021-03-310001382821srt:MinimumMemberus-gaap:PerformanceSharesMember2021-01-012021-03-310001382821us-gaap:PerformanceSharesMembersrt:MaximumMember2021-01-012021-03-310001382821rdfn:CurrentPeriodMemberus-gaap:PerformanceSharesMember2021-01-012021-03-310001382821rdfn:CurrentPeriodMemberus-gaap:PerformanceSharesMember2020-01-012020-03-310001382821us-gaap:PerformanceSharesMemberrdfn:PriorPeriodsMember2021-01-012021-03-310001382821us-gaap:PerformanceSharesMemberrdfn:PriorPeriodsMember2020-01-012020-03-310001382821us-gaap:PerformanceSharesMember2020-01-012020-03-310001382821us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-03-310001382821us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-03-310001382821us-gaap:SellingAndMarketingExpenseMember2021-01-012021-03-310001382821us-gaap:SellingAndMarketingExpenseMember2020-01-012020-03-310001382821us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-03-310001382821us-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-03-310001382821rdfn:A1.75ConvertibleSeniorNotesdue2023Member2020-01-012020-03-310001382821rdfn:A0ConvertibleSeniorNotesDue2025Member2021-01-012021-03-310001382821rdfn:A0ConvertibleSeniorNotesDue2025Member2020-01-012020-03-310001382821rdfn:A05ConvertibleSeniorNotesDue2027Member2021-01-012021-03-310001382821rdfn:A05ConvertibleSeniorNotesDue2027Member2020-01-012020-03-310001382821us-gaap:ConvertiblePreferredStockMember2021-01-012021-03-310001382821us-gaap:ConvertiblePreferredStockMember2020-01-012020-03-310001382821us-gaap:EmployeeStockOptionMember2021-01-012021-03-310001382821us-gaap:EmployeeStockOptionMember2020-01-012020-03-310001382821us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310001382821us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-03-310001382821us-gaap:EmployeeStockMember2021-01-012021-03-310001382821us-gaap:EmployeeStockMember2020-01-012020-03-310001382821us-gaap:RestrictedStockUnitsRSUMemberrdfn:NonEmployeeDirectorsMember2021-01-012021-03-3100013828212018-03-310001382821us-gaap:DomesticCountryMember2020-12-310001382821us-gaap:StateAndLocalJurisdictionMember2020-12-310001382821us-gaap:ForeignCountryMember2020-12-310001382821rdfn:WesternAllianceBankMemberus-gaap:WarehouseAgreementBorrowingsMember2021-03-310001382821rdfn:WesternAllianceBankMemberus-gaap:WarehouseAgreementBorrowingsMember2020-12-310001382821rdfn:TexasCapitalBankNationalAssociationMemberus-gaap:WarehouseAgreementBorrowingsMember2021-03-310001382821rdfn:TexasCapitalBankNationalAssociationMemberus-gaap:WarehouseAgreementBorrowingsMember2020-12-310001382821us-gaap:WarehouseAgreementBorrowingsMemberrdfn:FlagstarBankMember2021-03-310001382821us-gaap:WarehouseAgreementBorrowingsMemberrdfn:FlagstarBankMember2020-12-310001382821us-gaap:WarehouseAgreementBorrowingsMember2021-03-310001382821us-gaap:WarehouseAgreementBorrowingsMember2020-12-310001382821rdfn:WesternAllianceBankMemberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:WarehouseAgreementBorrowingsMember2021-01-012021-03-310001382821rdfn:TexasCapitalBankNationalAssociationMemberus-gaap:WarehouseAgreementBorrowingsMember2021-01-012021-03-310001382821us-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:WarehouseAgreementBorrowingsMemberrdfn:FlagstarBankMember2021-01-012021-03-310001382821us-gaap:WarehouseAgreementBorrowingsMemberrdfn:FlagstarBankMember2021-01-012021-03-310001382821us-gaap:RevolvingCreditFacilityMemberrdfn:GoldmanSachsBankUSAMember2021-03-310001382821us-gaap:RevolvingCreditFacilityMemberrdfn:GoldmanSachsBankUSAMember2020-12-310001382821us-gaap:RevolvingCreditFacilityMemberrdfn:GoldmanSachsBankUSAMember2021-01-012021-03-310001382821us-gaap:RevolvingCreditFacilityMembersrt:MinimumMemberrdfn:GoldmanSachsBankUSAMember2021-01-132021-03-310001382821us-gaap:RevolvingCreditFacilityMemberrdfn:GoldmanSachsBankUSAMembersrt:MaximumMember2021-01-132021-03-310001382821us-gaap:RevolvingCreditFacilityMembersrt:MinimumMemberrdfn:GoldmanSachsBankUSAMember2021-01-012021-01-120001382821us-gaap:RevolvingCreditFacilityMember2021-03-310001382821us-gaap:RevolvingCreditFacilityMember2020-12-310001382821us-gaap:RevolvingCreditFacilityMember2021-01-012021-03-310001382821us-gaap:RevolvingCreditFacilityMember2020-01-012020-03-310001382821rdfn:A1.75ConvertibleSeniorNotesdue2023Memberus-gaap:SeniorNotesMember2021-03-310001382821rdfn:A1.75ConvertibleSeniorNotesdue2023Memberus-gaap:SeniorNotesMember2021-01-012021-03-310001382821rdfn:A0ConvertibleSeniorNotesDue2025Memberus-gaap:SeniorNotesMember2021-03-310001382821rdfn:A0ConvertibleSeniorNotesDue2025Memberus-gaap:SeniorNotesMember2021-01-012021-03-310001382821rdfn:A05ConvertibleSeniorNotesDue2027Memberus-gaap:SeniorNotesMember2021-03-310001382821rdfn:A05ConvertibleSeniorNotesDue2027Memberus-gaap:SeniorNotesMember2021-01-012021-03-310001382821rdfn:A1.75ConvertibleSeniorNotesdue2023Memberus-gaap:SeniorNotesMember2018-07-230001382821rdfn:A0ConvertibleSeniorNotesDue2025Memberus-gaap:SeniorNotesMember2020-10-200001382821rdfn:A05ConvertibleSeniorNotesDue2027Memberus-gaap:SeniorNotesMember2021-03-252021-03-250001382821rdfn:A1.75ConvertibleSeniorNotesdue2023Memberus-gaap:SeniorNotesMember2020-12-310001382821rdfn:A0ConvertibleSeniorNotesDue2025Memberus-gaap:SeniorNotesMember2020-12-310001382821rdfn:A1.75ConvertibleSeniorNotesdue2023Memberus-gaap:SeniorNotesMember2020-01-012020-03-310001382821rdfn:A0ConvertibleSeniorNotesDue2025Memberus-gaap:SeniorNotesMember2020-01-012020-03-310001382821rdfn:A05ConvertibleSeniorNotesDue2027Memberus-gaap:SeniorNotesMember2020-01-012020-03-310001382821us-gaap:SeniorNotesMember2021-01-012021-03-310001382821us-gaap:SeniorNotesMember2020-01-012020-03-310001382821us-gaap:DebtInstrumentRedemptionPeriodOneMemberrdfn:ConvertibleSeniorNotesMemberus-gaap:SeniorNotesMember2021-01-012021-03-31rdfn:businessDay0001382821us-gaap:DebtInstrumentRedemptionPeriodTwoMemberrdfn:ConvertibleSeniorNotesMemberus-gaap:SeniorNotesMember2021-01-012021-03-310001382821us-gaap:DebtInstrumentRedemptionPeriodTwoMember2021-01-012021-03-310001382821srt:MinimumMemberrdfn:A05ConvertibleSeniorNotesDue2027Memberus-gaap:CallOptionMemberrdfn:CappedCallTransactionMemberus-gaap:SeniorNotesMember2021-03-252021-03-250001382821rdfn:A05ConvertibleSeniorNotesDue2027Memberus-gaap:CallOptionMemberrdfn:CappedCallTransactionMemberus-gaap:SeniorNotesMembersrt:MaximumMember2021-03-252021-03-250001382821rdfn:A05ConvertibleSeniorNotesDue2027Memberus-gaap:SubsequentEventMemberus-gaap:SeniorNotesMember2021-04-050001382821rdfn:A05ConvertibleSeniorNotesDue2027Memberus-gaap:SubsequentEventMemberus-gaap:SeniorNotesMember2021-04-052021-04-05

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 March 31, 2021
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 104,041,511 shares of common stock outstanding as of April 28, 2021.



Redfin Corporation

Quarterly Report on Form 10-Q
For the Quarter Ended March 31, 2021

Table of Contents
PART I
Page
Item 1.
Item 2.
Item 3.
Item 4.
PART II
Item 1.
Item 1A.
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, (ii) the secured revolving credit facility with Goldman Sachs, the terms "we," "us," and "our" refer only to RedfinNow Borrower LLC, and (iii) each warehouse credit facility, the terms "we," "us"," and "our" refer only to Redfin Mortgage, LLC.

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, 2020, 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)
March 31, 2021December 31, 2020
Assets
Current assets
Cash and cash equivalents$1,241,255 $925,276 
Restricted cash101,790 20,544 
Short-term investments140,843 131,561 
Accounts receivable, net of allowances for credit losses of $182 and $160
47,416 54,719 
Inventory97,371 49,158 
Loans held for sale43,447 42,539 
Prepaid expenses15,224 12,131 
Other current assets7,014 4,898 
Total current assets1,694,360 1,240,826 
Property and equipment, net47,649 43,988 
Right-of-use assets, net47,932 44,149 
Long-term investments6,906 11,922 
Goodwill and intangibles, net10,894 11,016 
Other assets, noncurrent8,836 8,619 
Total assets$1,816,577 $1,360,520 
Liabilities, mezzanine equity and stockholders' equity
Current liabilities
Accounts payable$15,568 $5,644 
Accrued liabilities75,75469,460 
Other payables19,11713,184 
Warehouse credit facilities40,66339,029 
Secured revolving credit facility48,85123,949 
Convertible senior notes, net23,428 22,482 
Lease liabilities12,611 11,973 
Total current liabilities235,992 185,721 
Lease liabilities and deposits, noncurrent53,333 49,339 
Convertible senior notes, net, noncurrent1,136,974 488,268 
Payroll tax liabilities, noncurrent6,812 6,812 
Total liabilities1,433,111 730,140 
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
39,834 39,823 
Stockholders’ equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 103,983,585 and 103,000,594 shares issued and outstanding, respectively
104 103 
Additional paid-in capital641,702 860,556 
Accumulated other comprehensive income161 211 
Accumulated deficit(298,335)(270,313)
Total stockholders’ equity343,632 590,557 
Total liabilities, mezzanine equity and stockholders’ equity$1,816,577 $1,360,520 

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 March 31,
20212020
Revenue
Service$175,593 $111,478 
Product92,726 79,517 
Total revenue268,319 190,995 
Cost of revenue
Service134,851 98,368 
Product91,110 79,748 
Total cost of revenue225,961 178,116 
Gross profit42,358 12,879 
Operating expenses
Technology and development27,678 20,274 
Marketing11,802 25,708 
General and administrative37,391 24,327 
Total operating expenses76,871 70,309 
Loss from operations(34,513)(57,430)
Interest income159 1,103 
Interest expense(1,338)(2,444)
Other income (expense), net(92)(1,346)
Net loss$(35,784)$(60,117)
Dividends on convertible preferred stock(2,336) 
Net loss attributable to common stock—basic and diluted$(38,120)$(60,117)
Net loss per share attributable to common stock—basic and diluted$(0.37)$(0.64)
Weighted average shares to compute net loss per share attributable to common stock—basic and diluted103,427,764 93,442,706 
Net loss$(35,784)$(60,117)
Other comprehensive income (loss)
Foreign currency translation adjustments (25)
Unrealized gain (loss) on available-for-sale securities(50)559 
Comprehensive loss$(35,834)$(59,583)

See Notes to the consolidated financial statements.

2

Table of Contents
Redfin Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands, unaudited)
Three Months Ended March 31,
20212020
Operating Activities
Net loss
$(35,784)$(60,117)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization4,341 3,307 
Stock-based compensation12,583 7,211 
Amortization of debt discount and issuance costs855 1,730 
Non-cash lease expense2,533 2,254 
Impairment costs 1,420 
Net gain on IRLCs, forward sales commitments and loans held for sale(1,052)(494)
Other109 (119)
Change in assets and liabilities:
Accounts receivable, net7,303 (2,598)
Inventory(48,213)3,941 
Prepaid expenses and other assets(3,359)4,934 
Accounts payable5,947 514 
Accrued liabilities, other payables, and payroll tax liabilities, noncurrent8,873 18,725 
Lease liabilities (2,951)(2,693)
Origination of loans held for sale(227,090)(132,697)
Proceeds from sale of loans originated as held for sale225,140 111,233 
Net cash used in operating activities(50,765)(43,449)
Investing activities
Purchases of property and equipment(5,285)(3,406)
Purchases of investments(67,877)(33,267)
Sales of investments 31,608 
Maturities of investments63,589 1,597 
Net cash used in investing activities(9,573)(3,468)
Financing activities
Proceeds from the issuance of common stock pursuant to employee equity plans3,411 4,103 
Tax payments related to net share settlements on restricted stock units(10,860)(3,307)
Borrowings from warehouse credit facilities216,382 131,310 
Repayments to warehouse credit facilities(214,747)(110,025)
Borrowings from secured revolving credit facility71,177 11,854 
Repayments to secured revolving credit facility(46,275)(7,398)
Proceeds from issuance of convertible senior notes, net of issuance costs488,691  
Purchases of capped calls related to convertible senior notes(54,480) 
Payments for repurchases and conversions of convertible senior notes(1,886) 
Other payables—deposits held in escrow6,521 3,684 
Principal payments under finance lease obligations(67)(15)
Cash paid for secured revolving credit facility issuance costs(305) 
Net cash provided by financing activities457,562 30,206 
Effect of exchange rate changes on cash and cash equivalents1 (25)
Net change in cash, cash equivalents, and restricted cash397,225 (16,736)
Cash, cash equivalents, and restricted cash:
Beginning of period945,820 247,448 
End of period
$1,343,045 $230,712 
Supplemental disclosure of cash flow information
Cash paid for interest
973 1,582 
Non-cash transactions
Stock-based compensation capitalized in property and equipment732 504 
Property and equipment additions in accounts payable and accrued liabilities2,348 451 
Leasehold improvements paid directly by lessor1,334  

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 Income/(Loss)Total Stockholders' Equity
SharesAmountSharesAmount
Balance, December 31, 2019— $— 93,001,597 $93 $583,097 $(251,786)$42 $331,446 
Issuance of common stock pursuant to exercise of stock options— — 738,398 1 3,915 — — 3,916 
Issuance of common stock pursuant to settlement of restricted stock units— — 320,440 — — — —  
Common stock surrendered for employees' tax liability upon settlement of restricted stock units— — (102,661)— (3,307)— — (3,307)
Stock-based compensation— — — — 7,715 — — 7,715 
Other comprehensive income— — — — — — 533 533 
Net loss— — — — — (60,117)— (60,117)
Balance, March 31, 2020— $— 93,957,774 $94 $591,420 $(311,903)$575 $280,186 
Balance, December 31, 202040,000 $39,823 103,000,594 $103 $860,556 $(270,313)$211 $590,557 
Adjustment related to adoption of ASU 2020-06— — — — (170,240)7,762 — (162,478)
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 exercise of stock options— — 670,050 1 3,462 — — 3,463 
Issuance of common stock pursuant to settlement of restricted stock units— — 360,351 — — — —  
Common stock surrendered for employees' tax liability upon settlement of restricted stock units— — (115,030)— (10,860)— — (10,860)
Purchases of capped calls related to convertible senior notes— — — — (54,480)— — (54,480)
Issuance of common stock in connection with conversion of convertible senior notes— — 36,980 — (52)— — (52)
Stock-based compensation— — — — 13,316 — — 13,316 
Other comprehensive loss— — — — — — (50)(50)
Net loss— — — — — (35,784)— (35,784)
Balance, March 31, 202140,000 $39,834 103,983,585 $104 $641,702 $(298,335)$161 $343,632 

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:
Note 15:
Note 16:
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, 2020 that is included in this quarterly report is derived from the audited consolidated financial statements and notes for the year ended December 31, 2020 included in Item 8 in our annual report for the year ended December 31, 2020. 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 March 31, 2021, the statements of comprehensive loss, statements of cash flows, and statements of changes in mezzanine equity and stockholders’ equity for the three months ended March 31, 2021 and 2020. The results for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any interim period or for any other future year.

Certain amounts presented in the prior period consolidated statements of cash flows have been reclassified to conform to the current period financial statement presentation. The change in classification does not affect previously reported cash flows from operating activities, investing activities or financing activities in the consolidated statements of cash flows.

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, net realizable value of inventory, 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, fair value of interest rate lock commitments ("IRLCs") and forward sales commitments, fair value of reporting units for purposes of evaluating goodwill for impairment, current expected credit losses on certain financial assets, and the fair value of the convertible feature related to our convertible senior notes. 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.

Agreement to Acquire RentPath Holdings, Inc.—On February 19, 2021, we entered into an Asset Purchase Agreement (the "Purchase Agreement") with RentPath Holdings, Inc. ("RentPath") and certain of its wholly owned subsidiaries (together with RentPath Holdings, Inc., the "Sellers"). RentPath is a provider of digital marketing solutions for rental properties through a network of internet listing websites. Pursuant to the Purchase Agreement, we will acquire, for $608,000 in cash, all of the equity interests of RentPath, as reorganized following an internal restructuring of the Sellers (“Reorganized RentPath”) pursuant to the joint chapter 11 plan of reorganization of the Sellers in the chapter 11 cases of the Sellers (the "Plan") and certain of their affiliates filed on February 12, 2020 in the U.S. Bankruptcy Court for the District of Delaware (the "Acquisition"). In connection with the internal restructuring, certain assets and liabilities related to the Sellers' business of providing digital media services to clients in the residential real estate business will be transferred to Reorganized RentPath, and the remaining assets and liabilities will be transferred to a wind-down company.

6

Index to Notes to Financial Statements
In connection with our entry into the Purchase Agreement, we deposited $60,800 into an escrow account, and this amount will be applied towards the purchase price at the closing of the Acquisition. If the Purchase Agreement is terminated, other than in a situation involving our breach of the Purchase Agreement, then the deposit will be returned to us. We have recorded the deposit in escrow account as part of restricted cash on the consolidated balance sheet. See Note 16 for details on the closing of our acquisition of RentPath that occurred on April 2, 2021.

Convertible Senior Notes—In accounting for the issuance of our convertible senior notes, we treat the instrument wholly as a liability, in accordance with the adoption of ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06").

Issuance costs are being amortized to expense over the respective term of the convertible senior notes.

For conversions prior to the maturity of the notes, we will settle using cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election. The carrying amount of the instrument (including unamortized debt issuance costs) is reduced by cash and other assets transferred, with the difference reflected as a reduction to additional paid-in capital. The indentures governing our convertible senior notes allow us, under certain circumstances, to irrevocably fix our method for settling conversions of the applicable notes by giving notice to the noteholders. Our election to irrevocably fix the settlement method could affect the calculation of diluted earnings per share when applicable. We have no plans to exercise our rights to fix the settlement method.

Unsettled Conversion Requests of Convertible Senior Notes—Our 2023 notes were convertible during the quarter ended March 31, 2021. We received conversion requests for $39 aggregate principal amount of the notes prior to the end of the quarter that we will settle using a combination of cash and shares of our common stock during the quarter ending June 30, 2021. All references to the outstanding aggregate principal amount of our 2023 notes as of March 31, 2021 includes the $39 principal amount with respect to which we received conversion requests on or prior to such date.

Recently Adopted Accounting Pronouncements—In August 2020, the Financial Accounting Standards Board (the "FASB") issued authoritative guidance under ASU 2020-06.

This guidance removes the liability and equity separation models for convertible instruments with a cash conversion feature or beneficial conversion feature. As a result, companies will more likely account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account). In addition, the guidance simplifies the settlement assessment that issuers perform to determine whether a contract in their own equity qualifies for equity classification. Finally, the guidance requires entities to use the if-converted method to calculate earnings per share for all convertible instruments.

We early adopted ASU 2020-06 as of January 1, 2021 using the modified retrospective approach. The cumulative effect of initially applying the new standard was recognized as an adjustment to accumulated deficit. Upon the adoption of the new standard we recognized the following adjustments:

Ending Balance as of December 31, 2020ASU 2020-06 AdjustmentsBeginning Balance as of January 1, 2021
Convertible senior notes, net$22,482 $2,723 $25,205 
Convertible senior notes, net, noncurrent488,268159,755648,023
Additional paid-in capital860,556(170,240)690,316
Accumulated deficit(270,313)7,762(262,551)

The $7,762 adjustment to accumulated deficit represents a reduction to non-cash interest expense related to the accretion of the debt discount under the historical separation model.

7

Index to Notes to Financial Statements
Note 2: Segment Reporting and Revenue

In operation of the business, our management, including our chief operating decision maker, 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. All other financial information is presented on a consolidated basis. We have five operating segments and two reportable segments, real estate services and properties.

We generate revenue primarily from commissions and fees charged on each real estate services transaction closed by our lead agents or partner agents, and from the sale of homes. Our key revenue components are brokerage revenue, partner revenue, properties revenue, and other revenue.

Information on each of the reportable and other segments and reconciliation to consolidated net loss is as follows:
Three Months Ended March 31,
20212020
Real estate services
Brokerage revenue$156,447 $102,351 
Partner revenue12,162 6,285 
Total real estate services revenue168,609 108,636 
Cost of revenue128,216 93,562 
Gross profit40,393 15,074 
Properties
Revenue92,726 79,098 
Cost of revenue91,130 79,299 
Gross profit1,596 (201)
Other
Revenue9,357 4,250 
Cost of revenue8,988 6,244 
Gross profit369 (1,994)
Intercompany eliminations
Revenue(2,373)(989)
Cost of revenue(2,373)(989)
Gross profit  
Consolidated
Revenue268,319 190,995 
Cost of revenue225,961 178,116 
Gross profit42,358 12,879 
Operating expenses76,871 70,309 
Interest income159 1,103 
Interest expense(1,338)(2,444)
Other income (expense), net(92)(1,346)
Net loss$(35,784)$(60,117)

Note 3: Financial Instruments

Derivatives

Our primary market exposure is to interest rate risk, specifically U.S. treasury and mortgage interest rates, due to their impact on mortgage-related assets and commitments. We use forward sales commitments on whole loans and mortgage-backed securities to manage and reduce this risk. We do not have any derivative instruments designated as hedging instruments.

Forward Sales Commitments—We are exposed to interest rate and price risk on loans held for sale from the funding date until the date the loan is sold. Forward sales commitments on whole loans and mortgage-backed securities are used to fix the forward sales price that will be realized at the sale of each loan.
8

Index to Notes to Financial Statements

Interest Rate Lock Commitments—IRLCs represent an agreement to extend credit to a mortgage loan applicant. We commit (subject to loan approval) to fund the loan at the specified rate, regardless of changes in market interest rates between the commitment date and the funding date. Outstanding IRLCs are subject to interest rate risk and related price risk during the period from the date of commitment through the loan funding date or expiration date. Loan commitments generally range between 30 and 90 days and the borrower is not obligated to obtain the loan. Therefore, IRLCs are subject to fallout risk, which occurs when approved borrowers choose not to close on the underlying loans. We review our commitment-to-closing ratio ("pull-through rate") as part of an estimate of the number of mortgage loans that will fund according to the IRLCs.

Notional AmountsMarch 31, 2021December 31, 2020
Forward sales commitments$105,107 $130,109 
IRLCs111,753 88,923 

The locations and amounts of gains (losses) recognized in income related to our derivatives are as follows:

Three Months Ended March 31,
InstrumentClassification20212020
Forward sales commitmentsService revenue$1,928 $(1,571)
IRLCsService revenue166 1,195 

Fair Value of Financial Instruments

A summary of assets and liabilities related to our financial instruments, measured at fair value on a recurring basis and as reflected in our consolidated balance sheets, is set forth below:

Balance at March 31, 2021Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Assets
Cash equivalents
Money market funds$612,590 $612,590 $ $ 
U.S. treasury securities4,912 4,912   
Total cash equivalents617,502 617,502   
Short-term investments
U.S. treasury securities140,843 140,843   
Loans held for sale43,447  43,447  
Other current assets
Forward sales commitments1,465  1,465  
IRLCs2,146   2,146 
Total other current assets3,611  1,465 2,146 
Long-term investments
Agency bonds6,906 6,906   
Total assets$812,309 $765,251 $44,912 $2,146 
Liabilities
Accrued liabilities
Forward sales commitments$10 $ $10 $ 
IRLCs209   209 
Total liabilities$219 $ $10 $209 

9

Index to Notes to Financial Statements
Balance at December 31, 2020Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant
Other Observable Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3)
Assets
Cash equivalents
        Money market funds$886,261 $886,261 $ $ 
U.S. treasury securities6,100 6,100   
Total cash equivalents892,361 892,361   
Short-term investments
   U.S. treasury securities131,561 131,561   
Loans held for sale42,539  42,539  
Other current assets
Forward sales commitments34  34  
IRLCs1,781   1,781 
Total other current assets1,815  34 1,781 
Long-term investments
Agency bonds11,922 11,922   
Total assets$1,080,198 $1,035,844 $42,573 $1,781 
Liabilities
Accrued liabilities
Forward sales commitments$507 $ $507 $ 
IRLCs10   10 
Total liabilities$517 $ $507 $10 

There were no transfers into or out of Level 3 financial instruments during the periods presented.

The significant unobservable input used in the fair value measurement of IRLCs is the pull-through rate. Significant changes in the input could result in a significant change in fair value measurement. The pull-through rate used to determine the fair value of IRLCs was as follows:

Key InputsValuation TechniqueMarch 31, 2021December 31, 2020
Weighted-average pull-through rate
Market pricing
72.8%72.3%

The following is a summary of changes in the fair value of IRLCs for the three months ended March 31, 2021:

Balance, net—January 1, 2021$1,771 
Issuances of IRLCs5,504 
Settlements of IRLCs(5,139)
Net loss recognized in earnings(199)
Balance, net—March 31, 2021$1,937 
Changes in fair value recognized during the period relating to assets still held at March 31, 2021$166 

The following table presents the carrying amounts and estimated fair values of our 2023 notes, 2025 notes, and our 2027 notes that are not recorded at fair value on our consolidated balance sheets:

March 31, 2021December 31, 2020
IssuanceNet Carrying AmountEstimated Fair ValueNet Carrying AmountEstimated Fair Value
2023 notes$23,428 $53,683 $22,482 $59,894 
2025 notes648,713 772,651 488,268 802,083 
2027 notes488,261 510,340   

10

Index to Notes to Financial Statements
The difference between the principal amounts and unsettled conversions of our 2023 notes, our 2025 notes, and our 2027 notes, which were $23,777, $661,250, and $500,000, respectively, and the net carrying amounts of the notes represents the unamortized debt issuance costs (see Note 15 for additional details). The estimated fair value of each tranche of convertible senior notes is based on the closing trading price of the notes on the last day of trading for the period, and is classified as Level 2 within the fair value hierarchy, due to the limited trading activity of the notes. As of March 31, 2021, the difference between the net carrying amount of the notes and their estimated fair values represented the equity conversion value premium the market assigned to the notes. Based on the closing price of our common stock of $66.59 on March 31, 2021, the if-converted value of the 2023 notes exceeded the principal amount of $23,777, while the if-converted values of the 2025 notes and 2027 notes were less than the principal amounts of $661,250 and $500,000, respectively. See Note 15 for additional details on the convertible senior notes.

See Note 11 for the carrying amount of our convertible preferred stock.

Assets and liabilities recognized or disclosed at fair value on a nonrecurring basis include items such as property and equipment, goodwill and other intangible assets, cost method investments, and other assets. These assets are measured at fair value if determined to be impaired.

The cost or amortized cost, gross unrealized gains and losses, and estimated fair market value of our cash, money market funds, restricted cash, and available-for-sale investments were as follows:

March 31, 2021
Cost or Amortized CostUnrealized GainsUnrealized LossesEstimated Fair ValueCash, Cash Equivalents, Restricted CashShort-term InvestmentsLong-term Investments
Cash$623,753 $— $— $623,753 $623,753 $— $— 
Money markets funds612,590 — — 612,590 612,590 — — 
Restricted cash101,790 — — 101,790 101,790 — — 
U.S. treasury securities145,630 125  145,755 4,912 140,843  
Agency bonds6,900 7 (1)6,906 —  6,906 
Total$1,490,663 $132 $(1)$1,490,794 $1,343,045 $140,843 $6,906 


December 31, 2020
Cost or Amortized CostUnrealized GainsUnrealized LossesEstimated Fair ValueCash, Cash Equivalents, Restricted CashShort-term InvestmentsLong-term Investments
Cash$32,915 $— $— $32,915 $32,915 $— $— 
Money markets funds886,261 — — 886,261 886,261 — — 
Restricted cash20,544 — — 20,544 20,544 — — 
U.S. treasury securities137,502 159  137,661 6,100 131,561  
Agency bonds11,900 22  11,922 —  11,922 
Total$1,089,122 $181 $ $1,089,303 $945,820 $131,561 $11,922 

We have evaluated our portfolio of available-for-sale debt securities based on credit quality indicators for expected credit losses and do not believe there are any expected credit losses. Our portfolio consists of U.S. government securities, all with a high quality credit rating issued by various credit agencies.

As of March 31, 2021 and December 31, 2020, we had accrued interest of $44 and $108, respectively, on our available-for-sale investments, of which we have recorded no expected credit losses. Accrued interest receivable is presented within other current assets in our consolidated balance sheets.

11

Index to Notes to Financial Statements
Note 4: Inventory

The components of inventory were as follows:

March 31, 2021December 31, 2020
Properties for sale$43,428 $17,153 
Properties not available for sale14,515 7,225 
Properties under improvement39,428 24,780 
Inventory$97,371 $49,158 

Inventory costs include direct home purchase costs and any capitalized improvements, net of lower of cost or net realizable value write-downs applied on a specific home basis. As of March 31, 2021 and December 31, 2020, lower of cost or net realizable value write-downs were $112 and $29, respectively. During the three months ended March 31, 2021 and 2020, we directly purchased $120,488 and $65,167 of homes and sold $74,598 and $68,083 in cost basis of homes, respectively.

Note 5: Property and Equipment

The components of property and equipment were as follows:

Useful Lives (Years)March 31, 2021December 31, 2020
Leasehold improvementsShorter of lease term or economic life$31,132 $29,558 
Website and software development costs