Redfin Reports Third Quarter 2022 Financial Results

Rhea-AI Summary

Redfin Corporation (NASDAQ: RDFN) reported third quarter 2022 results with revenue reaching $600.5 million, an 11% increase year-over-year. However, gross profit plummeted 54% to $58.1 million, alongside a net loss of $90.2 million compared to a loss of $18.9 million in Q3 2021. Adjusted EBITDA loss was $51.0 million, down from income of $11.8 million the previous year. Despite these challenges, the company noted growth in online traffic, increased loyalty sales, and a market share of 0.80% in existing home sales.

Positive

• Revenue increased by 11% year-over-year to $600.5 million.
• Achieved a market share of 0.80% of U.S. existing home sales, up 2 basis points year-over-year.
• Monthly users of Redfin's mobile apps and website surpassed 51 million, a 3% increase.
• Increased mortgage cross-selling with attach rates rising to 17% in Q3 2022 from 8% in Q2 2022.

Negative

• Gross profit decreased by 54% year-over-year to $58.1 million.
• Net loss increased significantly to $90.2 million compared to $18.9 million in Q3 2021.
• Adjusted EBITDA showed a significant loss of $51.0 million, compared to prior income.

SEATTLE--(BUSINESS WIRE)-- Redfin Corporation (NASDAQ: RDFN) today announced results for its third quarter ended September 30, 2022.

Third Quarter 2022

Third quarter revenue was $600.5 million, an increase of 11% compared to the third quarter of 2021. Gross profit was $58.1 million, a decrease of 54% year-over-year. Real estate services gross profit was $54.9 million, a decrease of 43% year-over-year, and real estate services gross margin was 26%, compared to 37% in the third quarter of 2021.

Net loss was $90.2 million, compared to a net loss of $18.9 million in the third quarter of 2021. Net loss attributable to common stock was $90.5 million. Net loss per share attributable to common stock, diluted, was $0.83, compared to net loss per share, diluted, of $0.20 in the third quarter of 2021.

Adjusted EBITDA loss was $51.0 million, compared to adjusted EBITDA income of $11.8 million in the third quarter of 2021.

“Laying off 862 colleagues and friends is heartbreaking,” said Redfin CEO Glenn Kelman. “But I feel relief about closing RedfinNow with relatively low losses. We’re profoundly grateful for the dazzling entrepreneurs who built that business on a knife’s edge, but its appeal to consumers has waned as the market turned. Home prices will at some point stabilize but the cost of capital isn’t going back to 2021 levels any time soon, and this is a major why RedfinNow offers had already gotten so low. Redfin will have more cash and sell more properties by focusing on growth in our online audience, low fees, and better brokerage, mortgage and title service. Already, our share of real estate traffic and home sales is increasing. Loyalty sales and the rate at which Redfin customers stuck with us for a sale also both increased in the third quarter, as did mortgage and title attach rates. The year after we bought it in bankruptcy, our Rent business is growing instead of declining. Housing companies are in the jungle now, but Redfin has been there before and come out stronger. We’ll generate adjusted EBITDA in 2023 and net income in 2024.”

Third Quarter Highlights

• Reached market share of 0.80% of U.S. existing home sales by units in the third quarter of 2022, an increase of 2 basis points from the third quarter of 2021.
• Redfin’s mobile apps and website reached more than 51 million average monthly users in the third quarter, an increase of 3% compared to the third quarter of 2021.
• Brought Redfin agent service to Hilton Head, South Carolina and expanded listing coverage to a total of 96% of the U.S. population.
• Streamlined Redfin Concierge service with a simpler pricing model that helps customers fix up their home to sell for top dollar. In our pilot markets, adoption in homes valued at more than $500,000 grew from 6.8% in the first quarter of 2022 to 24.0% in the third quarter.
• Increased representation of underrepresented racial or ethnic groups in senior leadership to 13% in the third quarter of 2022 from 10% in the prior year. Focused internal DEI resources on educating agents about the needs of Hispanic and Latinx homebuyers and better equipping them to serve customers with limited English proficiency.
• Significant sequential step-up in mortgage cross-selling with 17% attach rates for the third quarter compared to 8% in the second quarter of 2022.
• Delivered software to improve the customers experience and employee productivity:
  • Added down payment assistance information to U.S. for-sale home listings, making it easier for consumers to discover assistance programs they may qualify for in order to make home ownership more affordable.
  • Added transit data to listing pages, showing renters and buyers the stops that serve each home.
  • Introduced a low-code tool that allows product teams and marketers to launch new Redfin.com resources quickly and easily.
  • Newly designed listing pages on Android, which increased buy-side contacts by more than 9% and scheduled tours by more than 8%.

Business Outlook

The following forward-looking statements reflect Redfin's expectations as of November 9, 2022, and are subject to substantial uncertainty.

For the fourth quarter of 2022 we expect:

• Total revenue between $430 million and $459 million, representing a year-over-year decline between (33)% and (29)% compared to the fourth quarter of 2021. Included within total revenue are real estate services segment revenue between $136 million and $144 million, properties segment revenue between $220 million and $240 million, rentals revenue between $39 million and $40 million and mortgage revenue between $29 million and $32 million.
• Total net loss is expected to be between $134 million and $118 million, compared to net loss of $27 million in the fourth quarter of 2021. This guidance includes approximately $25 million in total marketing expenses, $17 million of stock-based compensation, $18 million of depreciation and amortization, $23 million to $21 million in restructuring expenses, and $5 million to $4 million of net interest expense. Adjusted EBITDA loss is expected to be between $71 million and $58 million. Furthermore, we expect to pay a quarterly dividend of 30,640 shares of common stock to our preferred stockholder.

Conference Call

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

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws, including our future operating results, as described under Business Outlook. We believe our expectations related to these forward-looking statements are reasonable, but actual results may turn out to be materially different. For factors that could cause actual results to differ materially from the forward-looking statements in this press release, please see the risks and uncertainties identified under the heading "Risk Factors" in our annual report for the year ended December 31, 2021, as supplemented by our quarterly report for the quarter ended September 30, 2022, both of which are available on our Investor Relations website at http://investors.redfin.com and on the SEC website at www.sec.gov. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances.

Non-GAAP Financial Measure

To supplement our consolidated financial statements that are prepared and presented in accordance with GAAP, we also compute and present adjusted EBITDA, which is a non-GAAP financial measure. We believe adjusted EBITDA is useful for investors because it enhances period-to-period comparability of our financial statements on a consistent basis and provides investors with useful insight into the underlying trends of the business. The presentation of this financial measure is not intended to be considered in isolation or as a substitute of, or superior to, our financial information prepared and presented in accordance with GAAP. Our calculation of adjusted EBITDA may be different from adjusted EBITDA or similar non-GAAP financial measures used by other companies, limiting its usefulness for comparison purposes. Our adjusted EBITDA, on a consolidated basis and for each reportable segment, for the three months ended September 30, 2022 and 2021 is presented below, along with a reconciliation of adjusted EBITDA to net loss. The reconciliation of adjusted EBITDA to net loss for the three months ended September 30, 2022 is also below.

About Redfin

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

Redfin-F

Redfin Corporation and Subsidiaries Consolidated Balance Sheets (in thousands, except share and per share amounts, unaudited)
	September 30, 2022				December 31, 2021
Assets
Current assets
Cash and cash equivalents	$	359,724			$	591,003
Restricted cash		43,992				127,278
Short-term investments		110,316				33,737
Accounts receivable, net of allowances for credit losses of $1,979 and $1,298		96,343				69,594
Inventory		301,231				358,221
Loans held for sale		256,339				35,759
Prepaid expenses		27,361				22,948
Other current assets		26,738				7,524
Total current assets		1,222,044				1,246,064
Property and equipment, net		59,238				58,671
Right-of-use assets, net		45,647				54,200
Mortgage servicing rights, at fair value		36,914				—
Long-term investments		41,677				54,828
Goodwill		461,349				409,382
Intangible assets, net		172,019				185,929
Other assets, noncurrent		12,054				12,898
Total assets	$	2,050,942			$	2,021,972
Liabilities, mezzanine equity, and stockholders' equity
Current liabilities
Accounts payable	$	12,422			$	12,546
Accrued and other liabilities		133,885				118,122
Warehouse credit facilities		252,529				33,043
Secured revolving credit facility		202,416				199,781
Convertible senior notes, net		23,393				23,280
Lease liabilities		21,094				15,040
Total current liabilities		645,739				401,812
Lease liabilities, noncurrent		39,803				55,222
Convertible senior notes, net, noncurrent		1,217,768				1,214,017
Deferred tax liabilities		344				1,201
Total liabilities		1,903,654				1,672,252
Series A convertible preferred stock—par value $0.001 per share; 10,000,000 shares authorized; 40,000 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		39,902				39,868
Stockholders’ equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 108,716,990 and 106,308,767 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		109				106
Additional paid-in capital		739,689				682,084
Accumulated other comprehensive loss		(1,051	)			(174	)
Accumulated deficit		(631,361	)			(372,164	)
Total stockholders’ equity		107,386				309,852
Total liabilities, mezzanine equity, and stockholders’ equity	$	2,050,942			$	2,021,972

Redfin Corporation and Subsidiaries Consolidated Statements of Comprehensive Loss (in thousands, except share and per share amounts, unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2022				2021				2022				2021
Revenue
Service	$	300,854			$	301,657			$	862,756			$	776,120
Product		299,663				238,417				942,022				503,588
Total revenue		600,517				540,074				1,804,778				1,279,708
Cost of revenue(1)
Service		210,189				174,267				608,884				486,880
Product		332,251				238,505				947,277				497,032
Total cost of revenue		542,440				412,772				1,556,161				983,912
Gross profit		58,077				127,302				248,617				295,796
Operating expenses
Technology and development(1)		48,063				43,658				149,209				112,824
Marketing(1)		33,748				49,143				133,832				116,343
General and administrative(1)		61,005				54,395				191,704				151,352
Restructuring and reorganization		284				—				18,670				—
Total operating expenses		143,100				147,196				493,415				380,519
Loss from operations		(85,023	)			(19,894	)			(244,798	)			(84,723	)
Interest income		1,174				178				1,948				472
Interest expense		(5,359	)			(3,672	)			(12,841	)			(7,822	)
Income tax (expense) benefit		(132	)			311				(425	)			5,363
Other (expense) income, net		(905	)			4,128				(3,081	)			4,099
Net loss	$	(90,245	)		$	(18,949	)		$	(259,197	)		$	(82,611	)
Dividends on convertible preferred stock		(272	)			(1,662	)			(1,416	)			(5,875	)
Net loss attributable to common stock—basic and diluted	$	(90,517	)		$	(20,611	)		$	(260,613	)		$	(88,486	)
Net loss per share attributable to common stock—basic and diluted	$	(0.83	)		$	(0.20	)		$	(2.42	)		$	(0.85	)
Weighted-average shares to compute net loss per share attributable to common stock—basic and diluted		108,618,491				105,144,872				107,566,894				104,327,614
Net loss	$	(90,245	)		$	(18,949	)		$	(259,197	)		$	(82,611	)
Other comprehensive income
Foreign currency translation adjustments		27				3				65				3
Unrealized gain on available-for-sale debt securities		34				27				812				161
Comprehensive loss	$	(90,184	)		$	(18,919	)		$	(258,320	)		$	(82,447	)

(1) Includes stock-based compensation as follows:
	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Cost of revenue	$	4,387		$	3,283		$	11,644		$	10,019
Technology and development		7,371			5,455			23,036			16,987
Marketing		1,028			537			3,024			1,615
General and administrative		5,284			3,835			13,968			10,817
Total	$	18,070		$	13,110		$	51,672		$	39,438

Redfin Corporation and Subsidiaries Consolidated Statements of Cash Flows (in thousands, unaudited)
	Nine Months Ended September 30,
	2022				2021
Operating Activities
Net loss	$	(259,197	)		$	(82,611	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		47,438				32,303
Stock-based compensation		51,672				39,438
Amortization of debt discount and issuance costs		4,358				3,583
Non-cash lease expense		11,313				8,510
Impairment costs		913				—
Net loss on IRLCs, forward sales commitments, and loans held for sale		4,228				342
Change in fair value of mortgage servicing rights, net		(1,472	)
Other		3,254				(3,847	)
Change in assets and liabilities:
Accounts receivable, net		(17,052	)			(29,487	)
Inventory		56,990				(385,986	)
Prepaid expenses and other assets		(2,721	)			(9,532	)
Accounts payable		(1,875	)			616
Accrued and other liabilities, deferred tax liabilities, and payroll tax liabilities, noncurrent		(24,202	)			23,011
Lease liabilities		(12,435	)			(9,644	)
Origination of mortgage servicing rights		(2,774	)			—
Proceeds from sale of mortgage servicing rights		1,314				—
Origination of loans held for sale		(3,091,099	)			(745,703	)
Proceeds from sale of loans originated as held for sale		3,082,858				744,886
Net cash used in operating activities		(148,489	)			(414,121	)
Investing activities
Purchases of property and equipment		(17,496	)			(20,575	)
Purchases of investments		(145,273	)			(129,277	)
Sales of investments		12,946				98,687
Maturities of investments		66,055				96,303
Cash paid for acquisition, net of cash, cash equivalents, and restricted cash acquired		(97,341	)			(608,000	)
Net cash used in investing activities		(181,109	)			(562,862	)
Financing activities
Proceeds from the issuance of common stock pursuant to employee equity plans		9,679				14,194
Tax payments related to net share settlements on restricted stock units		(6,650	)			(21,088	)
Borrowings from warehouse credit facilities		3,080,606				710,535
Repayments to warehouse credit facilities		(3,069,728	)			(709,739	)
Borrowings from secured revolving credit facility		552,051				431,717
Repayments to secured revolving credit facility		(549,416	)			(256,039	)
Proceeds from issuance of convertible senior notes, net of issuance costs		—				561,529
Purchases of capped calls related to convertible senior notes		—				(62,647	)
Payments for repurchases and conversions of convertible senior notes		—				(2,159	)
Other financing payables		—				3,161
Principal payments under finance lease obligations		(680	)			(567	)
Cash paid for secured revolving credit facility issuance costs		(764	)			(485	)
Net cash provided by financing activities		15,098				668,412
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(65	)			(3	)
Net change in cash, cash equivalents, and restricted cash		(314,565	)			(308,574	)
Cash, cash equivalents, and restricted cash:
Beginning of period		718,281				945,820
End of period	$	403,716			$	637,246

Redfin Corporation and Subsidiaries Supplemental Financial Information and Business Metrics (unaudited)
	Three Months Ended
	Sep. 30, 2022				Jun. 30, 2022				Mar. 31, 2022				Dec. 31, 2021				Sep. 30, 2021				Jun. 30, 2021				Mar. 31, 2021				Dec. 31, 2020				Sep. 30, 2020
Monthly average visitors (in thousands)		50,785				52,698				51,287				44,665				49,147				48,437				46,202				44,135				49,258
Real estate services transactions
Brokerage		18,245				20,565				15,001				19,428				21,929				21,006				14,317				16,951				18,980
Partner		3,507				3,983				3,417				4,603				4,755				4,597				3,944				4,940				5,180
Total		21,752				24,548				18,418				24,031				26,684				25,603				18,261				21,891				24,160
Real estate services revenue per transaction
Brokerage	$	11,103			$	11,692			$	11,191			$	10,900			$	11,107			$	11,307			$	10,927			$	10,751			$	10,241
Partner		2,556				2,851				2,814				2,819				2,990				3,195				3,084				3,123				2,988
Aggregate		9,725				10,258				9,637				9,352				9,661				9,850				9,233				9,030				8,686
U.S. market share by units(1)		0.80	%			0.82	%			0.79	%			0.78	%			0.78	%			0.77	%			0.75	%			0.68	%			0.70	%
Revenue from top-10 Redfin markets as a percentage of real estate services revenue		58	%			59	%			57	%			61	%			62	%			64	%			62	%			63	%			63	%
Average number of lead agents		2,293				2,640				2,750				2,485				2,370				2,456				2,277				1,981				1,820
RedfinNow homes sold		530				423				617				600				388				292				171				83				37
Revenue per RedfinNow home sold (in ones)	$	550,903			$	604,120			$	608,851			$	622,519			$	599,963			$	571,670			$	525,765			$	471,895			$	504,730
Mortgage originations by dollars (in millions)	$	1,557			$	1,565			$	159			$	242			$	258			$	261			$	227			$	206			$	185
Mortgage originations by units (in ones)		3,720				3,860				414				591				671				749				632				570				539

(1) Prior to the second quarter of 2022, we reported our U.S. market share based on the aggregate home value of our real estate services transactions, relative to the aggregate value of all U.S. home sales, which we computed based on the mean sale price of U.S. homes provided by the National Association of REALTORS® (“NAR”). Beginning in the second quarter of 2022, NAR (1) revised its methodology of computing the mean sale price, (2) restated its previously reported mean sale price beginning from January 2020 (and indicated that previously reported mean sale price prior to January 2020 is not comparable), and (3) discontinued publication of the mean sale price as part of its primary data set. Due to these changes, as of the second quarter of 2022, we report our U.S. market share based on the number of homes sold, rather than the dollar value of homes sold. Our market share by number of homes sold has historically been lower than our market share by dollar value of homes sold.

Supplemental Financial Information Segment Reporting and Reconciliation of Adjusted EBITDA to Net Income (Loss) (unaudited, in thousands)
	Three Months Ended September 30, 2022
	Real estate services				Properties				Rentals				Mortgage				Other				Corporate Overhead and Intercompany Eliminations				Total
Revenue	$	211,540			$	299,663			$	38,686			$	48,469			$	7,079			$	(4,920	)		$	600,517
Cost of revenue		156,632				332,251				8,676				43,783				6,018				(4,920	)			542,440
Gross profit		54,908				(32,588	)			30,010				4,686				1,061				—				58,077
Operating expenses
Technology and development		25,709				4,728				15,385				985				751				505				48,063
Marketing		18,772				506				12,678				1,653				48				91				33,748
General and administrative		20,244				3,029				22,722				7,073				784				7,153				61,005
Restructuring and reorganization		—				—				—				—				—				284				284
Total operating expenses		64,725				8,263				50,785				9,711				1,583				8,033				143,100
Loss from operations		(9,817	)			(40,851	)			(20,775	)			(5,025	)			(522	)			(8,033	)			(85,023	)
Interest income, interest expense, income tax expense, and other expense, net		—				(2,814	)			397				(129	)			40				(2,716	)			(5,222	)
Net loss	$	(9,817	)		$	(43,665	)		$	(20,378	)		$	(5,154	)		$	(482	)		$	(10,749	)		$	(90,245	)

	Three Months Ended September 30, 2022
	Real estate services				Properties				Rentals				Mortgage				Other				Corporate Overhead and Intercompany Eliminations				Total
Net loss	$	(9,817	)		$	(43,665	)		$	(20,378	)		$	(5,154	)		$	(482	)		$	(10,749	)		$	(90,245	)
Interest income(1)		—				(330	)			—				(4,049	)			(42	)			(786	)			(5,207	)
Interest expense(2)		—				3,140				—				3,364				—				2,215				8,719
Income tax expense		—				—				(355	)			141				—				346				132
Depreciation and amortization		4,388				642				9,683				1,053				241				291				16,298
Stock-based compensation(3)		9,834				1,646				3,632				1,209				341				1,408				18,070
Acquisition-related costs(4)		—				—				—				—				—				13				13
Restructuring and reorganization(5)		—				—				—				—				—				284				284
Impairment(6)		—				—				—				—				—				913				913
Adjusted EBITDA	$	4,405			$	(38,567	)		$	(7,418	)		$	(3,436	)		$	58			$	(6,065	)		$	(51,023	)

(1) Interest income includes $4.0 million of interest income related to originated mortgage loans for the three months ended September 30, 2022.
(2) Interest expense includes $3.4 million of interest expense related to our warehouse credit facilities for the three months ended September 30, 2022.
(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 12 to our consolidated financial statements for more information.
(4) Acquisition-related costs consist of fees for external advisory, legal, and other professional services incurred in connection with our acquisition of other companies.
(5) Restructuring and reorganization expenses primarily consist of personnel-related costs associated with employee terminations, furloughs, or retention due to the restructuring and reorganization activities from our acquisitions of Bay Equity and Rent., and from our June 2022 workforce reduction.
(6) Impairment consists of an impairment loss due to subleasing one of our operating leases.

	Three Months Ended September 30, 2021
	Real estate services				Properties				Rentals				Mortgage				Other				Corporate Overhead and Intercompany Eliminations				Total
Revenue	$	257,795			$	238,417			$	40,406			$	5,013			$	3,193			$	(4,750	)		$	540,074
Cost of revenue		161,449				238,397				7,395				6,705				3,576				(4,750	)			412,772
Gross profit		96,346				20				33,011				(1,692	)			(383	)			—				127,302
Operating expenses
Technology and development		20,732				3,602				13,849				2,910				586				1,979				43,658
Marketing		33,894				645				14,113				149				42				300				49,143
General and administrative		18,383				2,258				23,264				2,334				533				7,623				54,395
Total operating expenses		73,009				6,505				51,226				5,393				1,161				9,902				147,196
Income (loss) from operations		23,337				(6,485	)			(18,215	)			(7,085	)			(1,544	)			(9,902	)			(19,894	)
Interest income, interest expense, income tax expense, and other expense, net		(56	)			(1,456	)			311				1				1				2,144				945
Net income (loss)	$	23,281			$	(7,941	)		$	(17,904	)		$	(7,084	)		$	(1,543	)		$	(7,758	)		$	(18,949	)

	Three Months Ended September 30, 2021
	Real estate services			Properties				Rentals				Mortgage				Other				Corporate Overhead and Intercompany Eliminations				Total
Net income (loss)	$	23,281		$	(7,941	)		$	(17,904	)		$	(7,084	)		$	(1,543	)		$	(7,758	)		$	(18,949	)
Interest income(1)		—			(1	)			—				(402	)			(1	)			(176	)			(580	)
Interest expense(2)		—			1,456				—				399				—				2,216				4,071
Income tax expense		—			—				(311	)			—				—				—				(311	)
Depreciation and amortization		3,470			530				9,189				427				181				488				14,285
Stock-based compensation(3)		8,138			1,312				143				721				167				2,629				13,110
Acquisition-related costs(4)		—			—				—				—				—				202				202
Restructuring and reorganization(5)		—			—				—				—				—				—				—
Adjusted EBITDA	$	34,889		$	(4,644	)		$	(8,883	)		$	(5,939	)		$	(1,196	)		$	(2,399	)		$	11,828

(1) Interest income includes $0.4 million of interest income related to originated mortgage loans for the three months ended September 30, 2021.
(2) Interest expense includes $0.4 million of interest expense related to our warehouse credit facilities for the three months ended September 30, 2021.
(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 12 to our consolidated financial statements for more information.
(4) Acquisition-related costs consist of fees for external advisory, legal, and other professional services incurred in connection with our acquisition of other companies.
(5) Restructuring and reorganization expenses primarily consist of personnel-related costs associated with employee terminations, furloughs, or retention due to the restructuring and reorganization activities from our acquisitions of Bay Equity and Rent., and from our June 2022 workforce reduction.

	Nine Months Ended September 30, 2022
	Real estate services				Properties				Rentals				Mortgage				Other				Corporate Overhead and Intercompany Eliminations				Total
Revenue	$	640,835			$	942,022			$	114,979			$	104,484			$	17,341			$	(14,883	)		$	1,804,778
Cost of revenue		488,114				946,955				23,769				95,616				16,590				(14,883	)			1,556,161
Gross profit		152,721				(4,933	)			91,210				8,868				751				—				248,617
Operating expenses
Technology and development		80,144				13,531				44,539				5,236				2,975				2,784				149,209
Marketing		90,380				2,480				36,806				3,525				173				468				133,832
General and administrative		67,578				9,064				68,738				18,047				2,346				25,931				191,704
Restructuring and reorganization		—				—				—				—				—				18,670				18,670
Total operating expenses		238,102				25,075				150,083				26,808				5,494				47,853				493,415
Loss from operations		(85,381	)			(30,008	)			(58,873	)			(17,940	)			(4,743	)			(47,853	)			(244,798	)
Interest income, interest expense, income tax expense, and other expense, net		(123	)			(5,682	)			1,098				(164	)			51				(9,579	)			(14,399	)
Net loss	$	(85,504	)		$	(35,690	)		$	(57,775	)		$	(18,104	)		$	(4,692	)		$	(57,432	)		$	(259,197	)

	Nine Months Ended September 30, 2022
	Real estate services				Properties				Rentals				Mortgage				Other				Corporate Overhead and Intercompany Eliminations				Total
Net loss	$	(85,504	)		$	(35,690	)		$	(57,775	)		$	(18,104	)		$	(4,692	)		$	(57,432	)		$	(259,197	)
Interest income(1)		—				(514	)			(1	)			(7,296	)			(55	)			(1,361	)			(9,227	)
Interest expense(2)		—				6,192				—				5,599				—				6,642				18,433
Income tax expense		—				—				(789	)			174				—				1,040				425
Depreciation and amortization		12,957				1,783				28,550				2,425				814				909				47,438
Stock-based compensation(3)		29,644				4,710				8,611				2,590				1,151				4,966				51,672
Acquisition-related costs(4)		—				—				—				—				—				2,437				2,437
Restructuring and reorganization(5)		—				—				—				—				—				18,670				18,670
Impairment(6)		—				—				—				—				—				913				913
Adjusted EBITDA	$	(42,903	)		$	(23,519	)		$	(21,404	)		$	(14,612	)		$	(2,782	)		$	(23,216	)		$	(128,436	)

(1) Interest income includes $7.3 million of interest income related to originated mortgage loans for the nine months ended September 30, 2022.
(2) Interest expense includes $5.6 million of interest expense related to our warehouse credit facilities for the nine months ended September 30, 2022.
(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 12 to our consolidated financial statements for more information.
(4) Acquisition-related costs consist of fees for external advisory, legal, and other professional services incurred in connection with our acquisition of other companies.
(5) Restructuring and reorganization expenses primarily consist of personnel-related costs associated with employee terminations, furloughs, or retention due to the restructuring and reorganization activities from our acquisitions of Bay Equity and Rent., and from our June 2022 workforce reduction.
(6) Impairment consists of an impairment loss due to subleasing one of our operating leases.

	Nine Months Ended September 30, 2021
	Real estate services				Properties				Rentals				Mortgage				Other				Corporate Overhead and Intercompany Eliminations				Total
Revenue	$	678,602			$	503,588			$	82,954			$	15,823			$	10,261			$	(11,520	)		$	1,279,708
Cost of revenue		453,790				496,948				14,965				19,406				10,323				(11,520	)			983,912
Gross profit		224,812				6,640				67,989				(3,583	)			(62	)			—				295,796
Operating expenses
Technology and development		60,862				9,512				27,616				7,814				1,538				5,482				112,824
Marketing		86,823				1,423				26,724				413				105				855				116,343
General and administrative		60,813				6,765				46,413				5,686				1,466				30,209				151,352
Total operating expenses		208,498				17,700				100,753				13,913				3,109				36,546				380,519
Loss from operations		16,314				(11,060	)			(32,764	)			(17,496	)			(3,171	)			(36,546	)			(84,723	)
Interest income, interest expense, income tax expense, and other expense, net		(87	)			(2,538	)			523				2				2				4,210				2,112
Net loss	$	16,227			$	(13,598	)		$	(32,241	)		$	(17,494	)		$	(3,169	)		$	(32,336	)		$	(82,611	)

	Nine Months Ended September 30, 2021
	Real estate services			Properties				Rentals				Mortgage				Other				Corporate Overhead and Intercompany Eliminations				Total
Net loss	$	16,227		$	(13,598	)		$	(32,241	)		$	(17,494	)		$	(3,169	)		$	(32,336	)		$	(82,611	)
Interest income(1)		—			(8	)			—				(1,174	)			(2	)			(459	)			(1,643	)
Interest expense(2)		—			2,546				—				1,235				—				5,277				9,058
Income tax expense		—			—				(523	)			—				—				(4,840	)			(5,363	)
Depreciation and amortization		9,700			1,333				18,299				1,019				514				1,438				32,303
Stock-based compensation(3)		25,699			3,686				317				2,165				508				7,063				39,438
Acquisition-related costs(4)		—			—				—				—				—				7,925				7,925
Restructuring and reorganization(5)		—			—				—				—				—				—				—
Adjusted EBITDA	$	51,626		$	(6,041	)		$	(14,148	)		$	(14,249	)		$	(2,149	)		$	(15,932	)		$	(893	)

(1) Interest income includes $1.2 million of interest income related to originated mortgage loans for the nine months ended September 30, 2021.
(2) Interest expense includes $1.2 million of interest expense related to our warehouse credit facilities for the nine months ended September 30, 2021.
(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 12 to our consolidated financial statements for more information.
(4) Acquisition-related costs consist of fees for external advisory, legal, and other professional services incurred in connection with our acquisition of other companies.
(5) Restructuring and reorganization expenses primarily consist of personnel-related costs associated with employee terminations, furloughs, or retention due to the restructuring and reorganization activities from our acquisitions of Bay Equity and Rent., and from our June 2022 workforce reduction.

Reconciliation of Adjusted EBITDA Guidance to Net Loss Guidance (unaudited, in millions)
	Three Months Ended December 31, 2022
	Low				High
Net loss	$	(134	)		$	(118	)
Net interest expense		5				4
Income tax expense		—				—
Depreciation and amortization		18				18
Stock-based compensation		17				17
Acquisition-related costs		—				—
Restructuring and reorganization		23				21
Adjusted EBITDA	$	(71	)		$	(58	)

Note: Figures may not sum due to rounding.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221109005873/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 revenue figures for Q3 2022?

Redfin reported revenue of $600.5 million for the third quarter of 2022, an 11% increase compared to the same quarter in 2021.

How much did Redfin lose in Q3 2022?

Redfin reported a net loss of $90.2 million in the third quarter of 2022.

What is Redfin's market share in existing home sales?

Redfin's market share in U.S. existing home sales was 0.80% in Q3 2022.

How did Redfin's gross profit change in Q3 2022?

Gross profit for Redfin decreased by 54% year-over-year to $58.1 million.

What are Redfin's future outlook and projections?

Redfin anticipates generating adjusted EBITDA in 2023 and net income in 2024.