Redfin Reports Fourth Quarter and Full Year 2023 Financial Results

Rhea-AI Summary

Redfin Corporation (NASDAQ: RDFN) reported mixed financial results for the fourth quarter and full year of 2023. While revenue saw a decrease, gross profit and operating margins improved. The company's CEO, Glenn Kelman, highlighted efficiency gains and growth initiatives for the future.

Positive

• Gross profit increased by 32% year-over-year in the fourth quarter of 2023.
• Net loss decreased significantly from the previous year in both the fourth quarter and full year of 2023.
• Adjusted EBITDA loss improved in the fourth quarter and full year of 2023 compared to 2022.
• Redfin maintained its position as the #1 brokerage website in 2023.
• New sales initiatives and efficiency improvements are expected to drive growth in 2024 and 2025.

Negative

• Revenue from continuing operations decreased by 11% year-over-year in 2023.
• Total net loss increased in 2023 compared to 2022.
• Real estate services gross profit saw a decrease in 2023.
• Redfin's market share decreased slightly compared to the previous year.
• The company reported a decrease in the mortgage attach rate in the fourth quarter of 2023.

Insights

Financial Analyst

The disclosed financial results from Redfin Corporation highlight a mixed performance with both positive and negative indicators. The reported decrease in fourth quarter revenue by 2% year-over-year suggests a contraction in business activities or market challenges. However, the increase in gross profit by 32% in the same period indicates an improvement in cost management or a shift towards higher-margin services. A notable point is the expansion of the gross margin in real estate services from 18.0% to 22.5%. This could imply that Redfin has successfully optimized its service delivery, possibly through technology leverage or operational efficiencies.

Furthermore, the reduction in net loss from $61.9 million to $22.9 million year-over-year for the fourth quarter and the decrease in adjusted EBITDA loss suggest that the company is moving towards a more sustainable financial structure. The improvement in net loss per share is a positive signal for investors, reflecting better earnings quality. The company's focus on efficiency in a 'dreadful housing market' could be seen as a strategic move to weather economic downturns and position itself for future growth. The increased mortgage attach rate and the higher mix of sales to loyalty customers are indicative of successful customer retention strategies and could lead to more stable revenue streams.

However, the full year revenue decline of 11% year-over-year and the decrease in real estate services gross profit by 13% raise concerns about the company's ability to grow its top line. Investors should consider the long-term implications of these trends, particularly in the context of the overall real estate market conditions and competitive landscape.

Market Research Analyst

Redfin's position as the #1 brokerage website with five times the traffic of its closest competitor and maintaining approximately 49 million average monthly users in 2023 is a testament to its strong brand presence and digital engagement. The company's market share, however, experienced a slight decline, indicating potential challenges in converting user engagement into market share gains. This could be due to intense competition or changing consumer behaviors within the real estate sector.

The expansion of the Redfin Next agent pay plan and the launch of the 'Sign & Save' program demonstrate Redfin's commitment to innovation in its service offerings. These initiatives are designed to attract top-producing agents and incentivize customer loyalty, which could enhance the company's competitive edge. The expansion of listing coverage to 99% of the U.S. population and the introduction of Redfin Redesign are strategic moves that could enhance user experience and potentially increase transaction volumes.

Investors should monitor the effectiveness of these new sales initiatives and their impact on the company's financial performance. The expectation that these projects will 'pay off throughout 2024 and 2025' suggests a long-term growth strategy that may not yield immediate financial benefits but could strengthen Redfin's market position over time.

Real Estate Industry Expert

Redfin's financial results must be evaluated in the context of the current real estate market conditions. The CEO's reference to a 'dreadful housing market' is indicative of the broader challenges faced by the industry, such as rising interest rates and affordability issues that have likely impacted home buying activity. Redfin's ability to improve gross margins amidst these conditions suggests a strategic focus on profitability over volume.

The company's technological innovations like Redfin Redesign, which allows users to visualize potential in for-sale homes, reflect an understanding of consumer needs and a push towards enhancing the home buying experience. The increased mortgage attach rate and loyalty customer sales indicate that Redfin is not only attracting customers but also successfully cross-selling its mortgage products, which is crucial for revenue diversification.

Redfin's market share change of -4 basis points, while seemingly small, is significant in the high-volume real estate industry and warrants attention. The company's response to market dynamics through pay plan adjustments and customer incentives highlights its adaptability, but it remains to be seen how these changes will affect its market share and overall financial health in the long term.

SEATTLE--(BUSINESS WIRE)-- Redfin Corporation (NASDAQ: RDFN) today announced results for its fourth quarter and full year ended December 31, 2023.

Fourth Quarter 2023

Fourth quarter revenue was $218.1 million, a decrease of 2% compared to the fourth quarter of 2022. Gross profit was $73.2 million, an increase of 32% year-over-year. Real estate services gross profit was $29.9 million, an increase of 14% year-over-year, and real estate services gross margin was 22.5%, compared to 18.0% in the fourth quarter of 2022.

Net loss was $22.9 million, compared to a net loss of $61.9 million in the fourth quarter of 2022. Net loss attributable to common stock was $23.1 million. Net loss per share attributable to common stock, diluted, was $0.20, compared to net loss per share, diluted, of $0.57 in the fourth quarter of 2022.

Adjusted EBITDA loss was $13.5 million, compared to adjusted EBITDA loss of $40.2 million in the fourth quarter of 2022.

Full Year 2023

Full year revenue from continuing operations was $976.7 million, a decrease of 11% year-over-year. Gross profit from continuing operations was $329.8 million, an increase of 7% year-over-year. Real estate services gross profit was $156.0 million, a decrease of 13% year-over-year, and real estate services gross margin was 25.2%, compared to 22.7% in 2022.

Total net loss was $130.0 million, compared to a net loss of $321.1 million in 2022. Total net loss attributable to common stock was $131.1 million. Net loss per share attributable to common stock, diluted, was $1.16, compared to a net loss per share, diluted, of $2.99 in 2022.

Adjusted EBITDA loss was $76.4 million, compared to adjusted EBITDA loss of $145.1 million in 2022.

“In a dreadful housing market, Redfin got more efficient in the fourth quarter, again improving gross margins and operating margins, even as we laid the foundation for meaningful long-term growth,” said Redfin CEO Glenn Kelman. “Our site continued to draw visitors from rivals. And new sales initiatives are driving breakthroughs on fronts where Redfin has been stymied for years. First, our all-variable pay plan is delivering significant revenue growth in major California cities. Second, a commission refund to customers who hire a Redfin agent after the first tour seems likely to increase home-buyer close-rates in its first four pilot markets. We expect these projects to pay off throughout 2024 and 2025.”

Fourth Quarter and Full Year Highlights

• #1 brokerage website for 2023, with 5x the traffic of our next closest brokerage competitor. Redfin’s mobile apps and website reached approximately 49 million average monthly users in 2023, which was roughly flat compared to 2022.
• Our agents and partners helped approximately 62,000 customers buy or sell a home in 2023 and Redfin’s market share was 0.76% of U.S. existing home sales, a change of -4 bps compared to 2022.
• Achieved mortgage attach rate (excluding cash transactions) of 25% in the fourth quarter, compared to 21% in the fourth quarter of 2022.¹
• Increased the mix of sales to loyalty customers to 36% in the fourth quarter of 2023, compared to 32% in the fourth quarter of 2022. For the year, a record 36% of sales came from loyalty customers.
• Expanded Redfin Next agent pay plan to San Diego and Orange County following strong recruiting interest in Los Angeles and San Francisco. To date, Redfin has signed more than 60 top producing agents to join the brokerage under the Redfin Next program.
• Launched “Sign & Save” program for buyers who hire Redfin after their first tour, saving them thousands of dollars at closing. The program, which expanded to qualifying markets nationwide on February 1st, is expected to help Redfin agents win more business and close more sales.
• Expanded listing coverage to a total of 99% of the U.S. population by adding 138 new MLSs and thousands of new construction listings.
• Launched Redfin Redesign, which allows home searchers to change the appearance of Redfin and Bright MLS listing photos and envision the potential in for-sale homes.

(1) Attach rate reflects total closed loans for Redfin buy-side customers divided by Redfin buy-side transactions with a mortgage (excluding cash transactions) for the period. We previously reported only the inclusive attach rate (includes cash transactions in the denominator), which was 19% in the fourth quarter, compared to 17% in Q4 2022.

Business Outlook

The following forward-looking statements reflect Redfin's expectations as of February 27, 2024, and are subject to substantial uncertainty.

For the first quarter of 2024 we expect:

• Total revenue between $214 million and $223 million, representing a year-over-year change between 0% and 4% compared to the first quarter of 2023. Included within total revenue are real estate services revenue between $126 million and $131 million, rentals revenue between $49 million and $50 million, mortgage revenue between $29 million and $32 million, and other revenue between $9 million and $10 million.
• Total net loss is expected to be between $72 million and $65 million. This guidance includes approximately $25 million in total marketing expenses, $18 million in stock-based compensation, $14 million in depreciation and amortization, and $3 million in net interest expense. Adjusted EBITDA loss is expected to be between $36 million and $29 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, 2023, 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 run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. 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 it up 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 $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com.

Redfin-F

Redfin Corporation and Subsidiaries Consolidated Balance Sheets (in thousands, except share and per share amounts, unaudited)
	December 31,
	2023				2022
Assets
Current assets
Cash and cash equivalents	$	149,759			$	232,200
Restricted cash		1,241				2,406
Short-term investments		41,952				122,259
Accounts receivable, net of allowances for credit losses of $3,234 and $2,223		51,738				46,375
Loans held for sale		159,587				199,604
Prepaid expenses		33,296				34,006
Other current assets		7,472				7,449
Current assets of discontinued operations		—				132,159
Total current assets		445,045				776,458
Property and equipment, net		46,431				54,939
Right-of-use assets, net		31,763				40,889
Mortgage servicing rights, at fair value		32,171				36,261
Long-term investments		3,149				29,480
Goodwill		461,349				461,349
Intangible assets, net		123,284				162,272
Other assets, noncurrent		10,456				11,247
Noncurrent assets of discontinued operations		—				1,309
Total assets	$	1,153,648			$	1,574,204
Liabilities, mezzanine equity, and stockholders' equity
Current liabilities
Accounts payable	$	10,507			$	11,065
Accrued and other liabilities		90,360				106,763
Warehouse credit facilities		151,964				190,509
Convertible senior notes, net		—				23,431
Lease liabilities		15,609				18,560
Current liabilities of discontinued operations		—				4,311
Total current liabilities		268,440				354,639
Lease liabilities, noncurrent		29,084				36,906
Convertible senior notes, net, noncurrent		688,737				1,078,157
Term loan		124,416				—
Deferred tax liabilities		264				243
Noncurrent liabilities of discontinued operations		—				392
Total liabilities		1,110,941				1,470,337
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, 2023 and 2022, respectively		39,959				39,914
Stockholders’ equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 117,372,171 and 109,696,178 shares issued and outstanding at December 31, 2023 and 2022, respectively		117				110
Additional paid-in capital		826,146				757,951
Accumulated other comprehensive loss		(182	)			(801	)
Accumulated deficit		(823,333	)			(693,307	)
Total stockholders’ equity		2,748				63,953
Total liabilities, mezzanine equity, and stockholders’ equity	$	1,153,648			$	1,574,204

Redfin Corporation and Subsidiaries Consolidated Statements of Comprehensive Loss (in thousands, except share and per share amounts, unaudited)
	Three Months Ended December 31,								Year Ended December 31,
	2023				2022				2023				2022
Revenue		218,077				221,935				976,672				1,099,574
Cost of revenue(1)		144,926				166,368				646,853				790,455
Gross profit		73,151				55,567				329,819				309,119
Operating expenses
Technology and development(1)		44,098				43,247				183,294				178,924
Marketing(1)		20,332				23,956				117,863				155,309
General and administrative(1)		52,206				60,751				238,790				243,390
Restructuring and reorganization		768				13,954				7,927				32,353
Total operating expenses		117,404				141,908				547,874				609,976
Loss from continuing operations		(44,253	)			(86,341	)			(218,055	)			(300,857	)
Interest income		2,362				4,691				10,532				6,639
Interest expense		(4,233	)			(2,238	)			(9,524	)			(8,886	)
Income tax (expense) benefit		(97	)			309				(979	)			(116	)
Gain on extinguishment of convertible senior notes		25,171				57,193				94,019				57,193
Other expense, net		(1,848	)			(693	)			(2,385	)			(3,770	)
Net loss from continuing operations		(22,898	)			(27,079	)			(126,392	)			(249,797	)
Net loss from discontinued operations		—				(34,867	)			(3,634	)			(71,346	)
Net loss	$	(22,898	)		$	(61,946	)		$	(130,026	)		$	(321,143	)
Dividends on convertible preferred stock		(216	)			(144	)			(1,074	)			(1,560	)
Net loss from continuing operations attributable to common stock—basic and diluted	$	(23,114	)		$	(27,223	)		$	(127,466	)		$	(251,357	)
Net loss attributable to common stock—basic and diluted	$	(23,114	)		$	(62,090	)		$	(131,100	)		$	(322,703	)
Net loss from continuing operations per share attributable to common stock—basic and diluted	$	(0.20	)		$	(0.25	)		$	(1.13	)		$	(2.33	)
Net loss per share attributable to common stock—basic and diluted	$	(0.20	)		$	(0.57	)		$	(1.16	)		$	(2.99	)
Weighted average shares of common stock—basic and diluted		116,154,001				108,997,415				113,152,752				107,927,464
Net loss	$	(22,898	)		$	(61,946	)		$	(130,026	)		$	(321,143	)
Other comprehensive income
Foreign currency translation adjustments		2				29				(71	)			94
Unrealized gain (loss) on available-for-sale securities		73				(279	)			690				533
Comprehensive loss	$	(22,823	)		$	(62,196	)		$	(129,407	)		$	(320,516	)

(1) Includes stock-based compensation as follows:
	Three Months Ended December 31,								Year Ended December 31,
	2023				2022				2023				2022
Cost of revenue	$	2,741			$	4,367			$	12,914			$	15,137
Technology and development		8,352				6,135				33,111				26,365
Marketing		1,312				1,052				5,148				3,991
General and administrative		3,148				4,504				19,528				17,526
Total	$	15,553			$	16,058			$	70,701			$	63,019

Redfin Corporation and Subsidiaries Consolidated Statements of Cash Flows (in thousands, unaudited)
	Year Ended December 31,
	2023				2022
Operating Activities
Net loss	$	(130,026	)		$	(321,143	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		62,851				64,907
Stock-based compensation		70,935				68,257
Amortization of debt discount and issuance costs		3,620				6,137
Non-cash lease expense		16,269				16,234
Impairment costs		1,948				1,136
Net (gain) loss on IRLCs, forward sales commitments, and loans held for sale		(1,992	)			14,427
Change in fair value of mortgage servicing rights, net		3,198				(801	)
Gain on extinguishment of convertible senior notes		(94,019	)			(57,193	)
Other		(2,113	)			3,791
Change in assets and liabilities:
Accounts receivable, net		3,286				24,411
Inventory		114,232				243,948
Prepaid expenses and other assets		6,004				(5,904	)
Accounts payable		(1,323	)			(2,472	)
Accrued and other liabilities, deferred tax liabilities, and payroll tax liabilities, noncurrent		(19,085	)			(46,454	)
Lease liabilities		(18,998	)			(18,452	)
Origination of mortgage servicing rights		(565	)			(3,140	)
Proceeds from sale of mortgage servicing rights		1,457				1,662
Origination of loans held for sale		(3,525,987	)			(3,949,442	)
Proceeds from sale of loans originated as held for sale		3,567,066				4,000,582
Net cash provided by operating activities		56,758				40,491
Investing activities
Purchases of property and equipment		(12,056	)			(21,531	)
Purchases of investments		(76,866	)			(182,466	)
Sales of investments		124,681				17,545
Maturities of investments		61,723				99,455
Cash paid for acquisition, net of cash, cash equivalents, and restricted cash acquired		—				(97,341	)
Net cash provided by (used in) investing activities		97,482				(184,338	)
Financing activities
Proceeds from the issuance of common stock pursuant to employee equity plans		9,613				11,528
Tax payments related to net share settlements on restricted stock units		(16,348	)			(7,498	)
Borrowings from warehouse credit facilities		3,532,119				3,938,265
Repayments to warehouse credit facilities		(3,570,664	)			(3,989,407	)
Borrowings from secured revolving credit facility		—				565,334
Repayments to secured revolving credit facility		—				(765,114	)
Cash paid for secured revolving credit facility issuance costs		—				(733	)
Principal payments under finance lease obligations		(89	)			(855	)
Repurchases of convertible senior notes		(241,808	)			(83,614	)
Repayments of convertible senior notes		(23,512	)			—
Repayment of term loan principal		(313	)			—
Extinguishment of convertible senior notes associated with closing of term loan		(57,075	)			—
Payments of debt issuance costs		(2,338	)			—
Proceeds from term loan		125,000				—
Net cash used in financing activities		(245,415	)			(332,094	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(71	)			(94	)
Net change in cash, cash equivalents, and restricted cash		(91,246	)			(476,035	)
Cash, cash equivalents, and restricted cash:
Beginning of period		242,246				718,281
End of period	$	151,000			$	242,246

Redfin Corporation and Subsidiaries Supplemental Financial Information and Business Metrics (unaudited)
	Three Months Ended
	Dec. 31, 2023				Sep. 30, 2023				Jun. 30, 2023				Mar. 31, 2023				Dec. 31, 2022				Sep. 30, 2022				Jun. 30, 2022				Mar. 31, 2022
Monthly average visitors (in thousands)		43,861				51,309				52,308				50,440				43,847				50,785				52,698				51,287
Real estate services transactions
Brokerage		10,152				13,075				13,716				10,301				12,743				18,245				20,565				15,001
Partner		3,186				4,351				3,952				3,187				2,742				3,507				3,983				3,417
Total		13,338				17,426				17,668				13,488				15,485				21,752				24,548				18,418
Real estate services revenue per transaction
Brokerage	$	12,248			$	12,704			$	12,376			$	11,556			$	10,914			$	11,103			$	11,692			$	11,191
Partner		2,684				2,677				2,756				2,592				2,611				2,556				2,851				2,814
Aggregate		9,963				10,200				10,224				9,438				9,444				9,725				10,258				9,637
U.S. market share by units(1)		0.72	%			0.78	%			0.75	%			0.79	%			0.76	%			0.80	%			0.83	%			0.79	%
Revenue from top-10 Redfin markets as a percentage of real estate services revenue		55	%			56	%			55	%			53	%			57	%			58	%			59	%			57	%
Average number of lead agents		1,692				1,744				1,792				1,876				2,022				2,293				2,640				2,750
Mortgage originations by dollars (in millions)	$	885			$	1,110			$	1,282			$	991			$	1,036			$	1,557			$	1,565			$	159
Mortgage originations by units (in ones)		2,293				2,786				3,131				2,444				2,631				3,720				3,860				414

	Year Ended December 31,
	2023				2022
Monthly average visitors (in thousands)		49,479				49,654
Real estate services transactions
Brokerage		47,244				66,554
Partner		14,676				13,649
Total		61,920				80,203
Real estate services revenue per transaction
Brokerage	$	12,260			$	11,269
Partner		2,681				2,718
Aggregate		9,990				9,814
U.S. market share by units(1)		0.76	%			0.80	%
Revenue from top-10 markets as a percentage of real estate services revenue		55	%			58	%
Average number of lead agents		1,776				2,426
Mortgage originations by dollars (in millions)	$	4,268			$	4,317
Mortgage originations by units (in ones)		10,654				10,625

(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, 2023
	Real estate services				Rentals				Mortgage				Other			Corporate Overhead				Total
Revenue	$	132,890			$	49,176			$	26,270			$	9,741		$	—			$	218,077
Cost of revenue		103,000				11,070				25,070				5,786			—				144,926
Gross profit		29,890				38,106				1,200				3,955			—				73,151
Operating expenses
Technology and development		25,551				15,853				694				1,029			971				44,098
Marketing		7,897				11,443				942				14			36				20,332
General and administrative		17,854				20,807				4,689				968			7,888				52,206
Restructuring and reorganization		—				503				—				—			265				768
Total operating expenses		51,302				48,606				6,325				2,011			9,160				117,404
(Loss) income from continuing operations		(21,412	)			(10,500	)			(5,125	)			1,944			(9,160	)			(44,253	)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net		18				100				(168	)			237			21,168				21,355
Net (loss) income from continuing operations	$	(21,394	)		$	(10,400	)		$	(5,293	)		$	2,181		$	12,008			$	(22,898	)

	Three Months Ended December 31, 2023
	Real estate services				Rentals				Mortgage				Other				Corporate Overhead				Total
Net (loss) income from continuing operations	$	(21,394	)		$	(10,400	)		$	(5,293	)		$	2,181			$	12,008			$	(22,898	)
Interest income(1)		(18	)			(100	)			(2,176	)			(237	)			(2,007	)			(4,538	)
Interest expense(2)		—				—				2,318				—				4,132				6,450
Income tax expense		—				—				68				—				29				97
Depreciation and amortization		3,201				9,808				935				246				255				14,445
Stock-based compensation(3)		10,961				3,073				(1,088	)			550				2,057				15,553
Restructuring and reorganization(4)		—				503				—				—				265				768
Impairment(5)		—				—				—				—				1,835				1,835
Gain on extinguishment of convertible senior notes		—				—				—				—				(25,171	)			(25,171	)
Adjusted EBITDA	$	(7,250	)		$	2,884			$	(5,236	)		$	2,740			$	(6,597	)		$	(13,459	)

(1) Interest income includes $2.2 million of interest income related to originated mortgage loans for the three months ended December 31, 2023.

(2) Interest expense includes $2.2 million of interest expense related to our warehouse credit facilities for the three months ended December 31, 2023.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program.

(4) 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.

(5) Impairment consists of an impairment loss due to subleasing one of our operating leases.

	Three Months Ended December 31, 2022
	Real estate services				Rentals				Mortgage				Other				Corporate Overhead				Total
Revenue(1)	$	146,242			$	40,931			$	28,420			$	6,342			$	—			$	221,935
Cost of revenue		119,913				9,647				30,936				5,872				—				166,368
Gross profit		26,329				31,284				(2,516	)			470				—				55,567
Operating expenses
Technology and development		25,052				15,360				798				616				1,421				43,247
Marketing		8,293				14,258				1,364				26				15				23,956
General and administrative		20,594				23,990				7,633				960				7,574				60,751
Restructuring and reorganization		—				—				—				—				13,954				13,954
Total operating expenses		53,939				53,608				9,795				1,602				22,964				141,908
(Loss) income from continuing operations		(27,610	)			(22,324	)			(12,311	)			(1,132	)			(22,964	)			(86,341	)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net		—				291				50				88				58,833				59,262
Net (loss) income from continuing operations	$	(27,610	)		$	(22,033	)		$	(12,261	)		$	(1,044	)		$	35,869			$	(27,079	)

(1) Included in revenue is $2.9 million from providing services to our discontinued properties segment.

	Three Months Ended December 31, 2022
	Real estate services				Rentals				Mortgage				Other				Corporate Overhead				Total
Net (loss) income from continuing operations	$	(27,610	)		$	(22,033	)		$	(12,261	)		$	(1,044	)		$	35,869			$	(27,079	)
Interest income(1)		—				(23	)			(3,203	)			(88	)			(4,571	)			(7,885	)
Interest expense(2)		—				—				2,981				—				2,136				5,117
Income tax expense		—				(288	)			(174	)			—				153				(309	)
Depreciation and amortization		4,569				10,133				1,013				274				953				16,942
Stock-based compensation(3)		7,008				2,709				1,542				345				4,454				16,058
Restructuring and reorganization(4)		—				—				—				—				13,954				13,954
Impairment(5)		—				—				—				—				224				224
Gain on extinguishment of convertible senior notes		—				—				—				—				(57,193	)			(57,193	)
Adjusted EBITDA	$	(16,033	)		$	(9,502	)		$	(10,102	)		$	(513	)		$	(4,021	)		$	(40,171	)

(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) 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.

(5) Impairment consists of an impairment loss due to subleasing one of our operating leases.

	Year ended December 31, 2023
	Real estate services				Rentals				Mortgage				Other			Corporate overhead				Total
Revenue(1)	$	618,577			$	184,812			$	134,108			$	39,175		$	—			$	976,672
Cost of revenue		462,625				42,086				118,178				23,964			—				646,853
Gross profit		155,952				142,726				15,930				15,211			—				329,819
Operating expenses
Technology and development		108,201				63,934				2,871				4,504			3,784				183,294
Marketing		59,746				53,952				4,064				60			41				117,863
General and administrative		76,851				94,252				25,012				4,017			38,658				238,790
Restructuring and reorganization		—				503				—				—			7,424				7,927
Total operating expenses		244,798				212,641				31,947				8,581			49,907				547,874
(Loss) income from continuing operations		(88,846	)			(69,915	)			(16,017	)			6,630			(49,907	)			(218,055	)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net		59				215				(392	)			712			91,069				91,663
Net (loss) income from continuing operations	$	(88,787	)		$	(69,700	)		$	(16,409	)		$	7,342		$	41,162			$	(126,392	)

(1) Included in revenue is $1.2 million from providing services to our discontinued properties segment.

	Year ended December 31, 2023
	Real estate services				Rentals				Mortgage				Other				Corporate overhead				Total
Net (loss) income from continuing operations	$	(88,787	)		$	(69,700	)		$	(16,409	)		$	7,342			$	41,162			$	(126,392	)
Interest income(1)		(59	)			(338	)			(11,238	)			(712	)			(9,407	)			(21,754	)
Interest expense(2)		—				—				12,055				—				9,417				21,472
Income tax expense		—				123				289				—				567				979
Depreciation and amortization		16,020				39,876				3,864				1,002				2,000				62,762
Stock-based compensation(3)		44,002				14,653				1,466				2,246				8,334				70,701
Acquisition-related costs(4)		—				—				—				—				8				8
Restructuring and reorganization(5)		—				503				—				—				7,424				7,927
Impairment(6)		—				—				—				—				1,948				1,948
Gain on extinguishment of convertible senior notes		—				—				—				—				(94,019	)			(94,019	)
Adjusted EBITDA	$	(28,824	)		$	(14,883	)		$	(9,973	)		$	9,878			$	(32,566	)		$	(76,368	)

(1) Interest income includes $11.2 million of interest income related to originated mortgage loans for the year ended December 31, 2023.

(2) Interest expense includes $11.9 million of interest expense related to our warehouse credit facilities for the year ended December 31, 2023.

(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.

(6) Impairment consists of impairment losses due to subleasing two of our operating leases.

	Year ended December 31, 2022
	Real estate services				Rentals				Mortgage				Other				Corporate overhead				Total
Revenue(1)	$	787,076			$	155,910			$	132,904			$	23,684			$	—			$	1,099,574
Cost of revenue		608,027				33,416				126,552				22,460				—				790,455
Gross profit		179,049				122,494				6,352				1,224				—				309,119
Operating expenses
Technology and development		105,196				59,899				6,034				3,591				4,204				178,924
Marketing		98,673				51,064				4,889				199				484				155,309
General and administrative		88,171				92,728				25,680				3,307				33,504				243,390
Restructuring and reorganization		—				—				—				—				32,353				32,353
Total operating expenses		292,040				203,691				36,603				7,097				70,545				609,976
Loss from continuing operations		(112,991	)			(81,197	)			(30,251	)			(5,873	)			(70,545	)			(300,857	)
Interest income, interest expense, income tax benefit, gain on extinguishment of convertible senior notes, and other expense, net		(123	)			1,389				(114	)			140				49,768				51,060
Net loss from continuing operations	$	(113,114	)		$	(79,808	)		$	(30,365	)		$	(5,733	)		$	(20,777	)		$	(249,797	)

(1) Included in revenue is $17.8 million from providing services to our discontinued properties segment.

	Year ended December 31, 2022
	Real estate services				Rentals				Mortgage				Other				Corporate overhead				Total
Net loss from continuing operations	$	(113,114	)		$	(79,808	)		$	(30,365	)		$	(5,733	)		$	(20,777	)		$	(249,797	)
Interest income(1)		—				(24	)			(10,499	)			(143	)			(6,447	)			(17,113	)
Interest expense(2)		—				—				8,580				—				8,778				17,358
Income tax expense		—				(1,077	)			—				—				1,193				116
Depreciation and amortization		17,526				38,683				3,438				1,089				1,836				62,572
Stock-based compensation(3)		36,652				11,319				4,132				1,496				9,420				63,019
Acquisition-related costs(4)		—				—				—				—				2,437				2,437
Restructuring and reorganization(5)		—				—				—				—				32,353				32,353
Impairment(6)		—				—				—				—				1,136				1,136
Gain on extinguishment of convertible senior notes		—				—				—				—				(57,193	)			(57,193	)
Adjusted EBITDA	$	(58,936	)		$	(30,907	)		$	(24,714	)		$	(3,291	)		$	(27,264	)		$	(145,112	)

(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.

Redfin Corporation and Subsidiaries Reconciliation of Adjusted EBITDA Guidance to Net Loss Guidance (unaudited, in millions)
	Three Months Ended March 31, 2024
	Low				High
Net loss	$	(72	)		$	(65	)
Net interest expense		3				3
Depreciation and amortization		14				14
Stock-based compensation		18				18
Adjusted EBITDA	$	(36	)		$	(29	)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240227444269/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 was Redfin's revenue in the fourth quarter of 2023?

Redfin's revenue in the fourth quarter of 2023 was $218.1 million.

What was Redfin's net loss in the fourth quarter of 2023?

Redfin's net loss in the fourth quarter of 2023 was $22.9 million.

What was Redfin's gross profit from continuing operations in 2023?

Redfin's gross profit from continuing operations in 2023 was $329.8 million.

Who is the CEO of Redfin Corporation?

The CEO of Redfin Corporation is Glenn Kelman.

What was Redfin's market share in 2023?

Redfin's market share in 2023 was 0.76% of U.S. existing home sales.

What new sales initiatives did Redfin launch in 2023?

Redfin launched an all-variable pay plan in major California cities and a commission refund program for customers hiring a Redfin agent after the first tour.

How did Redfin's mobile apps and website performance compare in 2023 to 2022?

Redfin's mobile apps and website reached approximately 49 million average monthly users in 2023, roughly flat compared to 2022.

What was Redfin's adjusted EBITDA loss in the fourth quarter of 2023?

Redfin's adjusted EBITDA loss in the fourth quarter of 2023 was $13.5 million.

What percentage of Redfin's sales came from loyalty customers in the fourth quarter of 2023?

A record 36% of Redfin's sales came from loyalty customers in the fourth quarter of 2023.

What new program did Redfin launch for buyers in 2023?

Redfin launched the 'Sign & Save' program for buyers who hire Redfin after their first tour, saving them thousands of dollars at closing.