Redfin Reports Fourth Quarter and Full Year 2022 Financial Results

Rhea-AI Summary

Redfin Corporation (NASDAQ: RDFN) reported its fourth quarter and full year results for 2022. Fourth quarter revenue was $479.7 million, down 25% year-over-year, with a gross profit of $37.4 million, a 65% decline. The net loss reached $61.9 million, worsening from a $27.0 million loss in the same quarter of 2021. For the full year, revenue increased 19% to $2,284.4 million, but gross profit fell 29% to $286.1 million. The annual net loss was $321.1 million, compared to $109.6 million in 2021. Redfin aims for $200 million in adjusted EBITDA improvement in 2023, driven by digital revenue growth and reduced costs.

Positive

• Full year revenue increased 19% year-over-year to $2,284.4 million.
• Market share reached 0.80% of U.S. existing home sales for the full year, a 3 basis points increase from 2021.
• Redfin's mobile platform attracted nearly 50 million average monthly users in 2022, a 5% increase.

Negative

• Fourth quarter revenue decreased 25% year-over-year.
• Fourth quarter gross profit dropped 65% year-over-year to $37.4 million.
• Full year net loss increased to $321.1 million, compared to $109.6 million in 2021.

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

Fourth Quarter 2022

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

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

Full Year 2022

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

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

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

Fourth Quarter and Full Year Highlights

• Reached market share of 0.76% of U.S. existing home sales by units in the fourth quarter. For the year, Redfin reached a market share of 0.80%, an increase of 3 bps compared to 2021.
• Redfin’s mobile apps and website reached nearly 44 million average monthly users in the fourth quarter. For the year, Redfin reached a record of nearly 50 million average monthly users, an increase of 5% compared to 2021.
• Brought Redfin agent service to Wilmington, North Carolina and Green Bay, Wisconsin and expanded listing coverage to a total of 98% of the U.S. population.
• Maintained momentum in mortgage cross-selling, with 17% attach rates for the fourth quarter which was flat compared to the third quarter of 2022.
• Confirmed Redfin sells homes faster and for more money than other brokerages for the 7th year in a row. Nationwide Redfin listings sold about 3 days faster and for $1,800 more than comparable listings from other brokerages according to a third-party study that we commissioned.
• Delivered software to improve the customers experience and employee productivity:
  • Added energy cost estimates to U.S. home listings, helping consumers understand the full cost of living in a home and allowing homeowners to discover how much they could save by installing solar panels.
  • Added zoning and land-use data to U.S. home listings, making it easier for consumers to understand how properties may or may not be used.
  • Implemented a new design system for iOS home detail pages that increased homebuyer contact and tour completion rates.
  • Improved landlord referral process from Redfin.com to rentals.com, helping retain high-intent prospective landlords.

Business Outlook

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

For the first quarter of 2023 we expect:

• Total revenue between $307 million and $324 million, representing a year-over-year decline between (49)% and (46)% compared to the first quarter of 2022. Included within total revenue are real estate services segment revenue between $122 million and $130 million, properties segment revenue between $108 million to $113 million, rentals revenue between $41 million and $42 million, and mortgage revenue between $29 million and $32 million.
• Total net loss is expected to be between $116 million and $105 million, compared to net loss of $91 million in the first quarter of 2022. This guidance includes approximately $45 million in total marketing expenses, $20 million of stock-based compensation, $17 million of depreciation and amortization, $7 million in gains on extinguishment of convertible senior notes and $1 million in restructuring expenses. Adjusted EBITDA loss is expected to be between $84 million and $73 million. Furthermore, we expect to pay a quarterly dividend of 30,640 shares of common stock to our preferred stockholder.

Conference Call

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

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws, including our future operating results, as described under Business Outlook. We believe our expectations related to these forward-looking statements are reasonable, but actual results may turn out to be materially different. For factors that could cause actual results to differ materially from the forward-looking statements in this press release, please see the risks and uncertainties identified under the heading "Risk Factors" in our annual report for the year ended December 31, 2022, which is available on our Investor Relations website at http://investors.redfin.com and on the SEC website at www.sec.gov. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances.

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country's #1 real estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.5 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 5,000 people.

Redfin-F

Redfin Corporation and Subsidiaries Consolidated Balance Sheets (in thousands, except share and per share amounts, unaudited)
	December 31,
	2022				2021
Assets
Current assets
Cash and cash equivalents	$	239,840			$	591,003
Restricted cash		2,406				127,278
Short-term investments		122,259				33,737
Accounts receivable, net of allowances for credit losses of $2,019 and $1,298		54,880				69,594
Inventory		114,273				358,221
Loans held for sale		199,604				35,759
Prepaid expenses		34,506				22,948
Other current assets		8,690				7,524
Total current assets		776,458				1,246,064
Property and equipment, net		55,105				58,671
Right-of-use assets, net		42,032				54,200
Mortgage servicing rights, at fair value		36,261				—
Long-term investments		29,480				54,828
Goodwill		461,349				409,382
Intangible assets, net		162,272				185,929
Other assets, noncurrent		11,247				12,898
Total assets	$	1,574,204			$	2,021,972
Liabilities, mezzanine equity, and stockholders' equity
Current liabilities
Accounts payable	$	11,819			$	12,546
Accrued and other liabilities		109,743				118,122
Warehouse credit facilities		190,509				33,043
Secured revolving credit facility		—				199,781
Convertible senior notes, net		23,431				23,280
Lease liabilities		19,137				15,040
Total current liabilities		354,639				401,812
Lease liabilities, noncurrent		37,298				55,222
Convertible senior notes, net, noncurrent		1,078,157				1,214,017
Deferred tax liabilities		243				1,201
Total liabilities		1,470,337				1,672,252
Series A convertible preferred stock—par value $0.001 per share; 10,000,000 shares authorized; 40,000 and 40,000 shares issued and outstanding at December 31, 2022 and 2021, respectively		39,914				39,868
Stockholders’ equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 109,696,178 and 106,308,767 shares issued and outstanding at December 31, 2022 and 2021, respectively		110				106
Additional paid-in capital		757,951				682,084
Accumulated other comprehensive loss		(801	)			(174	)
Accumulated deficit		(693,307	)			(372,164	)
Total stockholders’ equity		63,953				309,852
Total liabilities, mezzanine equity, and stockholders’ equity	$	1,574,204			$	2,021,972

Redfin Corporation and Subsidiaries Consolidated Statements of Comprehensive Loss (in thousands, except share and per share amounts, unaudited)
	Three Months Ended December 31,								Twelve Months Ended December 31,
	2022				2021				2022				2021
Revenue
Service	$	219,121			$	265,992			$	1,081,877			$	1,042,112
Product		260,543				377,065				1,202,565				880,653
Total revenue		479,664				643,057				2,284,442				1,922,765
Cost of revenue(1)
Service		163,467				161,780				772,351				648,660
Product		278,762				373,253				1,226,038				870,285
Total cost of revenue		442,229				535,033				1,998,389				1,518,945
Gross profit		37,435				108,024				286,053				403,820
Operating expenses
Technology and development(1)		47,041				43,894				196,250				156,718
Marketing(1)		24,238				22,397				158,071				138,740
General and administrative(1)		62,889				66,962				254,593				218,315
Restructuring and reorganization		21,798				—				40,469				—
Total operating expenses		155,966				133,253				649,383				513,773
Loss from operations		(118,531	)			(25,229	)			(363,330	)			(109,953	)
Interest income		4,691				163				6,639				635
Interest expense		(4,905	)			(3,939	)			(17,745	)			(11,762	)
Income tax benefit (expense)		299				744				(126	)			6,107
Gain on extinguishment of convertible senior notes		57,193				—				57,193				—
Other (expense) income, net		(693	)			1,259				(3,774	)			5,360
Net loss	$	(61,946	)		$	(27,002	)		$	(321,143	)		$	(109,613	)
Dividends on convertible preferred stock		(144	)			(1,394	)			(1,560	)			(7,269	)
Net loss attributable to common stock—basic and diluted	$	(62,090	)		$	(28,396	)		$	(322,703	)		$	(116,882	)
Net loss per share attributable to common stock—basic and diluted	$	(0.57	)		$	(0.27	)		$	(2.99	)		$	(1.12	)
Weighted average shares of common stock—basic and diluted		108,997,415				105,739,395				107,927,464				104,683,460
Net loss	$	(61,946	)		$	(27,002	)		$	(321,143	)		$	(109,613	)
Other comprehensive income
Foreign currency translation adjustments		29				4				94				6
Unrealized (loss) gain on available-for-sale securities		(279	)			217				533				379
Comprehensive loss		(62,196	)			(26,781	)			(320,516	)			(109,228	)
(1) Includes stock-based compensation as follows:
	Three Months Ended December 31,								Twelve Months Ended December 31,
	2022				2021				2022				2021
Cost of revenue	$	4,307			$	3,595			$	15,950			$	13,614
Technology and development		6,572				6,288				29,608				23,275
Marketing		1,069				736				4,093				2,350
General and administrative		4,638				4,667				18,606				15,483
Total	$	16,586			$	15,286			$	68,257			$	54,722

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

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

	Year Ended December 31,
	2022				2021
Monthly average visitors (in thousands)		49,654				47,113
Real estate services transactions
Brokerage		66,554				76,680
Partner		13,649				17,899
Total		80,203				94,579
Real estate services revenue per transaction
Brokerage	$	11,269			$	11,076
Partner		2,718				3,020
Aggregate		9,814				9,551
U.S. market share by units(1)		0.80	%			0.77	%
Revenue from top-10 markets as a percentage of real estate services revenue		58	%			62	%
Average number of lead agents		2,426				2,396
RedfinNow homes sold		2,044				1,451
Revenue per RedfinNow home sold	$	576,599			$	594,268
Mortgage originations by dollars (in millions)	$	4,317			$	988
Mortgage originations by units (in ones)		10,625				2,643
(1) Prior to the second quarter of 2022, we reported our U.S. market share based on the aggregate home value of our real estate services transactions, relative to the aggregate value of all U.S. home sales, which we computed based on the mean sale price of U.S. homes provided by the National Association of REALTORS® (“NAR”). Beginning in the second quarter of 2022, NAR (1) revised its methodology of computing the mean sale price, (2) restated its previously reported mean sale price beginning from January 2020 (and indicated that previously reported mean sale price prior to January 2020 is not comparable), and (3) discontinued publication of the mean sale price as part of its primary data set. Due to these changes, as of the second quarter of 2022, we report our U.S. market share based on the number of homes sold, rather than the dollar value of homes sold. Our market share by number of homes sold has historically been lower than our market share by dollar value of homes sold. We also stopped reporting the aggregate home value of our real estate services transactions.

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

	Three Months Ended December 31, 2022
	Real estate services				Properties				Rentals				Mortgage				Other				Corporate Overhead and Intercompany Eliminations				Total
Net loss	$	(27,610	)		$	(26,270	)		$	(22,033	)		$	(12,261	)		$	(1,044	)		$	27,272			$	(61,946	)
Interest income(1)		—				(752	)			(23	)			(3,203	)			(88	)			(3,819	)			(7,885	)
Interest expense(2)		—				2,666				—				2,981				—				2,136				7,783
Income tax expense		—				10				(288	)			(174	)			—				153				(299	)
Depreciation and amortization		4,569				552				10,133				1,013				274				927				17,468
Stock-based compensation(3)		7,008				528				2,709				1,542				345				4,454				16,586
Acquisition-related costs(4)		—				—				—				—				—				—				—
Restructuring and reorganization(5)		—				—				—				—				—				21,798				21,798
Impairment(6)		—				—				—				—				—				224				224
Gain on extinguishment of convertible senior notes		—				—				—				—				—				(57,193	)			(57,193	)
Adjusted EBITDA	$	(16,033	)		$	(23,266	)		$	(9,502	)		$	(10,102	)		$	(513	)		$	(4,048	)		$	(63,464	)
(1) Interest income includes $3.2 million of interest income related to originated mortgage loans for the three months ended December 31, 2022.
(2) Interest expense includes $2.9 million of interest expense related to our warehouse credit facilities for the three months ended December 31, 2022.
(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program.
(4) Acquisition-related costs consist of fees for external advisory, legal, and other professional services incurred in connection with our acquisition of other companies.
(5) Restructuring and reorganization expenses primarily consist of personnel-related costs associated with employee terminations, furloughs, or retention due to the restructuring and reorganization activities from our acquisitions of Bay Equity and Rent., and from our June and October 2022 workforce reductions.
(6) Impairment consists of an impairment loss due to subleasing one of our operating leases.

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

	Three Months Ended December 31, 2021
	Real estate services				Properties				Rentals				Mortgage				Other				Corporate Overhead and Intercompany Eliminations				Total
Net loss	$	18,711			$	(4,781	)		$	(13,930	)		$	(8,044	)		$	(2,510	)		$	(16,448	)		$	(27,002	)
Interest income(1)		—				(2	)			—				(424	)			(1	)			(159	)			(586	)
Interest expense(2)		—				1,725				—				431				—				2,214				4,370
Income tax expense		—				—				(2,177	)			—				—				1,433				(744	)
Depreciation and amortization		3,583				554				9,307				387				247				525				14,603
Stock-based compensation(3)		8,963				1,492				994				820				348				2,669				15,286
Adjusted EBITDA	$	31,257			$	(1,012	)		$	(5,806	)		$	(6,830	)		$	(1,916	)		$	(9,766	)		$	5,927
(1) Interest income includes $0.4 million of interest income related to originated mortgage loans for the three months ended December 31, 2021.
(2) Interest expense includes $0.4 million of interest expense related to our warehouse credit facilities for the three months ended December 31, 2021.
(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program.

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

	Year ended December 31, 2022
	Real estate services				Properties				Rentals				Mortgage				Other				Corporate Overhead and Intercompany Eliminations				Total
Net loss	$	(113,114	)		$	(61,964	)		$	(79,808	)		$	(30,365	)		$	(5,733	)		$	(30,159	)		$	(321,143	)
Interest income(1)		—				(1,266	)			(24	)			(10,499	)			(143	)			(5,181	)			(17,113	)
Interest expense(2)		—				8,859				—				8,580				—				8,778				26,217
Income tax expense		—				10				(1,077	)			—				—				1,193				126
Depreciation and amortization		17,526				2,335				38,683				3,438				1,089				1,836				64,907
Stock-based compensation(3)		36,652				5,238				11,319				4,132				1,496				9,420				68,257
Acquisition-related costs(4)		—				—				—				—				—				2,437				2,437
Restructuring and reorganization(5)		—				—				—				—				—				40,469				40,469
Impairment(6)		—				—				—				—				—				1,136				1,136
Gain on extinguishment of convertible senior notes		—				—				—				—				—				(57,193	)			(57,193	)
Adjusted EBITDA	$	(58,936	)		$	(46,788	)		$	(30,907	)		$	(24,714	)		$	(3,291	)		$	(27,264	)		$	(191,900	)
(1) Interest income includes $10.5 million of interest income related to originated mortgage loans for the year ended December 31, 2022.
(2) Interest expense includes $8.5 million of interest expense related to our warehouse credit facilities for the year ended December 31, 2022.
(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program.
(4) Acquisition-related costs consist of fees for external advisory, legal, and other professional services incurred in connection with our acquisition of other companies.
(5) Restructuring and reorganization expenses primarily consist of personnel-related costs associated with employee terminations, furloughs, or retention due to the restructuring and reorganization activities from our acquisitions of Bay Equity and Rent., and from our June and October 2022 workforce reductions.
(6) Impairment consists of an impairment loss due to subleasing one of our operating leases.

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

	Year ended December 31, 2021
	Real estate services				Properties				Rentals				Mortgage				Other				Corporate Overhead and Intercompany Eliminations				Total
Net loss	$	34,938			$	(18,379	)		$	(46,170	)		$	(25,538	)		$	(5,678	)		$	(48,786	)		$	(109,613	)
Interest income(1)		—				(9	)			—				(1,598	)			(2	)			(619	)			(2,228	)
Interest expense(2)		—				4,271				—				1,666				—				7,490				13,427
Income tax expense		—				—				(2,699	)			—				—				(3,408	)			(6,107	)
Depreciation and amortization		13,282				1,888				27,607				1,406				761				1,962				46,906
Stock-based compensation(3)		34,662				5,177				1,311				2,985				856				9,731				54,722
Acquisition-related costs(4)		—				—				—				—				—				7,925				7,925
Restructuring and reorganization(5)		—				—				—				—				—				—				—
Adjusted EBITDA	$	82,882			$	(7,052	)		$	(19,951	)		$	(21,079	)		$	(4,063	)		$	(25,705	)		$	5,032
(1) Interest income includes $1.6 million of interest income related to originated mortgage loans for the year ended December 31, 2021.
(2) Interest expense includes $1.7 million of interest expense related to our warehouse credit facilities for the year ended December 31, 2021.
(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program.
(4) Acquisition-related costs consist of fees for external advisory, legal, and other professional services incurred in connection with our acquisition of other companies.
(5) Restructuring and reorganization expenses primarily consist of personnel-related costs associated with employee terminations, furloughs, or retention due to the restructuring and reorganization activities from our acquisition of Rent.

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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230216005731/en/

Investor Relations

Meg Nunnally, 206-576-8610

ir@redfin.com

Public Relations

Mariam Sughayer, 206-876-1322

press@redfin.com

Source: Redfin Corporation

FAQ

What were Redfin's fourth quarter results for 2022?

Redfin reported fourth quarter revenue of $479.7 million, a 25% decrease from the previous year, and a net loss of $61.9 million.

How did Redfin perform in 2022 compared to 2021?

In full year 2022, Redfin's revenue rose 19% to $2,284.4 million, but they reported a net loss of $321.1 million, up from $109.6 million in 2021.

What is Redfin's market share in the real estate industry?

Redfin reached a market share of 0.80% of U.S. existing home sales in 2022, a slight increase from the previous year.

What is Redfin's outlook for 2023?

Redfin aims to achieve an adjusted EBITDA of nearly $200 million in 2023, focusing on digital revenue and reducing expenses.

How many users did Redfin's platform attract in 2022?

Redfin's mobile apps and website reached nearly 50 million average monthly users in 2022, a 5% increase from 2021.