Redfin Reports Third Quarter 2023 Financial Results

Rhea-AI Summary

Redfin Corporation (NASDAQ: RDFN) reported its third-quarter results for 2023. The company's revenue for the quarter was $269.0 million, a decrease of 12% compared to the same period last year. Gross profit increased by 8% year-over-year to $98.3 million. Net loss for the quarter was $19.0 million, an improvement from a net loss of $90.2 million in the third quarter of 2022.

SEATTLE--(BUSINESS WIRE)-- Redfin Corporation (NASDAQ: RDFN) today announced results for its third quarter ended September 30, 2023.

Third Quarter 2023

Third quarter revenue was $269.0 million, a decrease of 12% compared to the third quarter of 2022. Gross profit was $98.3 million, an increase of 8% year-over-year. Real estate services gross profit was $54.1 million, a decrease of 2% year-over-year, and real estate services gross margin was 30%, compared to 26% in the third quarter of 2022.

Net loss was $19.0 million, compared to a net loss of $90.2 million in the third quarter of 2022. Net loss attributable to common stock was $19.3 million. Net loss per share attributable to common stock, diluted, was $0.17, compared to net loss per share, diluted, of $0.83 in the third quarter of 2022.

“In a worsening housing market, Redfin earned an adjusted EBITDA profit, a $59 million improvement over the third quarter of 2022, all while growing traffic and gaining share,” said Redfin CEO Glenn Kelman. “In October, we raised capital, began generating revenues from a new digital business, and launched all-variable agent pay in California. This downturn has only made us stronger.”

Third Quarter Highlights

• Third quarter market share was 0.78% of U.S. existing home sales by units, compared to 0.75% in the second quarter of 2023.
• Redfin’s mobile apps and website reached more than 51 million average monthly users, up 1% compared to the third quarter of 2022.
• Achieved mortgage cross-selling attach rate of 18% in the third quarter, despite strong headwinds.
• Sustained momentum in loyalty sales, with 36% of sales coming from loyalty customers in Q3 2023 compared to 33% in Q3 2022.
• Announced a new construction partnership that will add thousands of new listings to Redfin and provide customers with richer information about newly built homes and communities.
• Delivered software to improve customer and agent experience while driving customer contacts and boosting traffic to Redfin:
  • Added wind risk data to home description pages, making Redfin the first brokerage to publish wind risk information for nearly every for-sale home in the U.S.
  • Launched a new design system for rental detail pages, improving the visual appearance and driving significant increases in user engagement. We applied the same design system to the tour checkout process for customers touring with a Redfin partner agent, leading to an increase in contacts.
  • Improved call filters on our customer service line, allowing Redfin sales advisors to spend more time helping high-intent customers.
  • Simplified Redfin Estimate section for off-market home detail pages, making it easier for consumers to find the information they need and generating a 5% increase in listing contacts.

Business Outlook

The following forward-looking statements reflect Redfin's expectations as of November 2, 2023, and are subject to substantial uncertainty.

For the fourth quarter of 2023 we expect:

• Total revenue between $211 million and $226 million, representing a year-over-year change between (5)% and 2% compared to the fourth quarter of 2022. Included within total revenue are real estate services revenue between $127 million and $137 million, rentals revenue between $49 million and $50 million, mortgage revenue between $26 million and $29 million and other revenue of $9 million to $10 million.
• Total net loss is expected to be between $27 million and $18 million, compared to net loss of $62 million in the fourth quarter of 2022. This guidance includes approximately $20 million in total marketing expenses, $18 million of stock-based compensation, $15 million in depreciation and amortization, $27 million in gains on extinguishment of convertible senior notes and $2 million to $3 million in net interest expense. Adjusted EBITDA loss is expected to be between $19 million and $9 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, as supplemented by our quarterly report for the quarter ended September 30, 2023, 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 for the three months ended September 30, 2023 and 2022 is presented below, along with a reconciliation of adjusted EBITDA to net loss.

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 also run the country's #1 real estate brokerage site. Our home-buying customers see homes first with same day tours, and our lending and title services help them close quickly. Customers selling a home in certain markets 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. Customers who buy and sell with Redfin pay a 1% listing fee, subject to minimums, less than half of what brokerages commonly charge. 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 4,000 people.

Redfin-F

Redfin Corporation and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share amounts, unaudited)
	September 30, 2023				December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	125,803			$	232,200
Restricted cash		1,414				2,406
Short-term investments		41,752				122,259
Accounts receivable, net of allowances for credit losses of $2,529 and $2,223		55,118				46,375
Loans held for sale		137,680				199,604
Prepaid expenses		26,248				34,006
Other current assets		8,811				7,449
Current assets of discontinued operations		—				132,159
Total current assets		396,826				776,458
Property and equipment, net		48,405				54,939
Right-of-use assets, net		35,150				40,889
Mortgage servicing rights, at fair value		34,773				36,261
Long-term investments		5,474				29,480
Goodwill		461,349				461,349
Intangible assets, net		133,031				162,272
Other assets, noncurrent		10,857				11,247
Noncurrent assets of discontinued operations		—				1,309
Total assets	$	1,125,865			$	1,574,204
Liabilities, mezzanine equity, and stockholders' equity
Current liabilities
Accounts payable	$	11,996			$	11,065
Accrued and other liabilities		88,191				106,763
Warehouse credit facilities		132,320				190,509
Convertible senior notes, net		—				23,431
Lease liabilities		16,317				18,560
Current liabilities of discontinued operations		—				4,311
Total current liabilities		248,824				354,639
Lease liabilities, noncurrent		31,416				36,906
Convertible senior notes, net, noncurrent		799,665				1,078,157
Deferred tax liabilities		260				243
Noncurrent liabilities of discontinued operations		—				392
Total liabilities		1,080,165				1,470,337
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, 2023 and December 31, 2022, respectively		39,947				39,914
Stockholders’ equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 115,210,998 and 109,696,178 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		115				110
Additional paid-in capital		806,330				757,951
Accumulated other comprehensive loss		(257	)			(801	)
Accumulated deficit		(800,435	)			(693,307	)
Total stockholders’ equity		5,753				63,953
Total liabilities, mezzanine equity, and stockholders’ equity	$	1,125,865			$	1,574,204

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,
		2023				2022				2023				2022
Revenue	$	268,956			$	305,774			$	758,595			$	877,639
Cost of revenue		170,616				215,109				501,927				624,089
Gross profit		98,340				90,665				256,668				253,550
Operating expenses
Technology and development		44,392				43,335				139,196				135,678
Marketing		24,095				33,242				97,531				131,352
General and administrative		55,380				57,976				186,584				182,640
Restructuring and reorganization		—				284				7,159				18,399
Total operating expenses		123,867				134,837				430,470				468,069
Loss from continuing operations		(25,527	)			(44,172	)			(173,802	)			(214,519	)
Interest income		2,060				1,174				8,170				1,948
Interest expense		(1,603	)			(2,219	)			(5,291	)			(6,648	)
Income tax expense		(239	)			(132	)			(882	)			(425	)
Gain on extinguishment of convertible senior notes		6,495				—				68,848				—
Other expense, net		(158	)			(902	)			(537	)			(3,077	)
Net loss from continuing operations		(18,972	)			(46,251	)			(103,494	)			(222,721	)
Net loss from discontinued operations		—				(43,994	)			(3,634	)			(36,476	)
Net loss	$	(18,972	)		$	(90,245	)		$	(107,128	)		$	(259,197	)
Dividends on convertible preferred stock		(335	)			(272	)			(858	)			(1,416	)
Net loss from continuing operations attributable to common stock—basic and diluted	$	(19,307	)		$	(46,523	)		$	(104,352	)		$	(224,137	)
Net loss attributable to common stock—basic and diluted	$	(19,307	)		$	(90,517	)		$	(107,986	)		$	(260,613	)
Net loss from continuing operations per share attributable to common stock—basic and diluted	$	(0.17	)		$	(0.43	)		$	(0.93	)		$	(2.08	)
Net loss attributable to common stock per share—basic and diluted	$	(0.17	)		$	(0.83	)		$	(0.96	)		$	(2.42	)
Weighted-average shares to compute net loss per share attributable to common stock—basic and diluted		114,592,679				108,618,491				112,141,342				107,566,894
Net loss	$	(18,972	)		$	(90,245	)		$	(107,128	)		$	(259,197	)
Other comprehensive income
Foreign currency translation adjustments		(15	)			27				(73	)			65
Unrealized gain on available-for-sale debt securities		210				34				617				812
Comprehensive loss	$	(18,777	)		$	(90,184	)		$	(106,584	)		$	(258,320	)
(1) Includes stock-based compensation as follows:
	Three Months Ended September 30,								Nine Months Ended September 30,
		2023				2022				2023				2022
Cost of revenue	$	3,037			$	4,165			$	10,173			$	10,771
Technology and development		8,391				6,353				24,759				20,230
Marketing		1,337				1,002				3,836				2,939
General and administrative		6,035				4,904				16,380				13,022
Total	$	18,800			$	16,424			$	55,148			$	46,962

Redfin Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands, unaudited)
	Nine Months Ended September 30,
		2023				2022
Operating Activities
Net loss	$	(107,128	)		$	(259,197	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		48,443				47,438
Stock-based compensation		55,382				51,672
Amortization of debt discount and issuance costs		2,873				4,358
Non-cash lease expense		12,909				11,313
Impairment costs		113				913
Net (gain) loss on IRLCs, forward sales commitments, and loans held for sale		(1,767	)			4,228
Change in fair value of mortgage servicing rights, net		1,065				(1,472	)
Gain on extinguishment of convertible senior notes		(68,848	)			—
Other		(2,013	)			3,254
Change in assets and liabilities:
Accounts receivable, net		(238	)			(17,052	)
Inventory		114,232				56,990
Prepaid expenses and other assets		9,696				(2,721	)
Accounts payable		177				(1,875	)
Accrued and other liabilities, deferred tax liabilities, and payroll tax liabilities, noncurrent		(19,346	)			(24,202	)
Lease liabilities		(14,864	)			(12,435	)
Origination of mortgage servicing rights		(699	)			(2,774	)
Proceeds from sale of mortgage servicing rights		1,122				1,314
Origination of loans held for sale		(2,798,337	)			(3,091,099	)
Proceeds from sale of loans originated as held for sale		2,858,656				3,082,858
Net cash provided by (used in) operating activities		91,428				(148,489	)
Investing activities
Purchases of property and equipment		(9,235	)			(17,496	)
Purchases of investments		(76,866	)			(145,273	)
Sales of investments		124,681				12,946
Maturities of investments		59,383				66,055
Cash paid for acquisition, net of cash, cash equivalents, and restricted cash acquired		—				(97,341	)
Net cash provided by (used in) investing activities		97,963				(181,109	)
Financing activities
Proceeds from the issuance of common stock pursuant to employee equity plans		5,790				9,679
Tax payments related to net share settlements on restricted stock units		(15,961	)			(6,650	)
Borrowings from warehouse credit facilities		2,803,589				3,080,606
Repayments to warehouse credit facilities		(2,861,779	)			(3,069,728	)
Borrowings from secured revolving credit facility		—				552,051
Repayments to secured revolving credit facility		—				(549,416	)
Cash paid for secured revolving credit facility issuance costs		—				(764	)
Principal payments under finance lease obligations		(73	)			(680	)
Repurchases of convertible senior notes		(212,401	)			—
Repayments of convertible senior notes		(23,512	)			—
Net cash (used in) provided by financing activities		(304,347	)			15,098
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(73	)			(65	)
Net change in cash, cash equivalents, and restricted cash		(115,029	)			(314,565	)
Cash, cash equivalents, and restricted cash:
Beginning of period		242,246				718,281
End of period	$	127,217			$	403,716

Redfin Corporation and Subsidiaries
Supplemental Financial Information and Business Metrics
(unaudited)
	Three Months Ended
	Sep. 30, 2023				Jun. 30, 2023				Mar. 31, 2023				Dec. 31, 2022				Sep. 30, 2022				Jun. 30, 2022				Mar. 31, 2022				Dec. 31, 2021
Monthly average visitors (in thousands)		51,309				52,308				50,440				43,847				50,785				52,698				51,287				44,665
Real estate services transactions
Brokerage		13,075				13,716				10,301				12,743				18,245				20,565				15,001				19,428
Partner		4,351				3,952				3,187				2,742				3,507				3,983				3,417				4,603
Total		17,426				17,668				13,488				15,485				21,752				24,548				18,418				24,031
Real estate services revenue per transaction
Brokerage	$	12,704			$	12,376			$	11,556			$	10,914			$	11,103			$	11,692			$	11,191			$	10,900
Partner		2,677				2,756				2,592				2,611				2,556				2,851				2,814				2,819
Aggregate		10,200				10,224				9,438				9,444				9,725				10,258				9,637				9,352
U.S. market share by units(1)		0.78	%			0.75	%			0.79	%			0.76	%			0.80	%			0.83	%			0.79	%			0.78	%
Revenue from top-10 Redfin markets as a percentage of real estate services revenue		56	%			55	%			53	%			57	%			58	%			59	%			57	%			61	%
Average number of lead agents		1,744				1,792				1,876				2,022				2,293				2,640				2,750				2,485
Mortgage originations by dollars (in millions)	$	1,110			$	1,282			$	991			$	1,036			$	1,557			$	1,565			$	159			$	242
Mortgage originations by units (in ones)		2,786				3,131				2,444				2,631				3,720				3,860				414				591

(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
Supplemental Financial Information
(unaudited, in thousands)
	Three Months Ended September 30, 2023
	Real estate services				Rentals				Mortgage				Other				Corporate overhead				Total
Revenue	$	177,750			$	47,410			$	32,923			$	10,873			$	—			$	268,956
Cost of revenue		123,684				10,824				29,629				6,479				—				170,616
Gross profit		54,066				36,586				3,294				4,394				—				98,340
Operating expenses
Technology and development		25,711				15,813				800				1,133				935				44,392
Marketing		10,785				12,245				1,088				20				(43	)			24,095
General and administrative		18,418				21,838				6,670				952				7,502				55,380
Total operating expenses		54,914				49,896				8,558				2,105				8,394				123,867
(Loss) income from continuing operations		(848	)			(13,310	)			(5,264	)			2,289				(8,394	)			(25,527	)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net		41				42				(73	)			207				6,338				6,555
Net (loss) income from continuing operations	$	(807	)		$	(13,268	)		$	(5,337	)		$	2,496			$	(2,056	)		$	(18,972	)

	Three Months Ended September 30, 2023
	Real estate services				Rentals				Mortgage				Other				Corporate overhead				Total
Net (loss) income from continuing operations	$	(807	)		$	(13,268	)		$	(5,337	)		$	2,496			$	(2,056	)		$	(18,972	)
Interest income(1)		(41	)			(81	)			(2,886	)			(207	)			(1,732	)			(4,947	)
Interest expense(2)		—				—				3,132				—				1,598				4,730
Income tax expense		—				37				70				—				132				239
Depreciation and amortization		3,123				9,681				947				233				312				14,296
Stock-based compensation(3)		11,151				4,255				473				574				2,347				18,800
Gain on extinguishment of convertible senior notes		—				—				—				—				(6,495	)			(6,495	)
Adjusted EBITDA	$	13,426			$	624			$	(3,601	)		$	3,096			$	(5,894	)		$	7,651

(1) Interest income includes $2.9 million of interest income related to originated mortgage loans for the three months ended September 30, 2023.

(2) Interest expense includes $3.1 million of interest expense related to our warehouse credit facilities for the three months ended September 30, 2023.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 11 to our consolidated financial statements for more information.

	Three Months Ended September 30, 2022
	Real estate services				Rentals				Mortgage				Other				Corporate overhead				Total
Revenue(1)	$	211,540			$	38,686			$	48,469			$	7,079			$	—			$	305,774
Cost of revenue		156,632				8,676				43,783				6,018				—				215,109
Gross profit		54,908				30,010				4,686				1,061				—				90,665
Operating expenses
Technology and development		25,709				15,385				985				751				505				43,335
Marketing		18,772				12,678				1,653				48				91				33,242
General and administrative		20,244				22,722				7,073				784				7,153				57,976
Restructuring and reorganization		—				—				—				—				284				284
Total operating expenses		64,725				50,785				9,711				1,583				8,033				134,837
Loss from continuing operations		(9,817	)			(20,775	)			(5,025	)			(522	)			(8,033	)			(44,172	)
Interest income, interest expense, income tax expense, and other expense, net		—				397				(129	)			40				(2,387	)			(2,079	)
Net loss from continuing operations	$	(9,817	)		$	(20,378	)		$	(5,154	)		$	(482	)		$	(10,420	)		$	(46,251	)

(1) Included in revenue is $4.9 million from providing services to our discontinued properties segment.

	Three Months Ended September 30, 2022
	Real estate services				Rentals				Mortgage				Other				Corporate overhead				Total
Net loss from continuing operations	$	(9,817	)		$	(20,378	)		$	(5,154	)		$	(482	)		$	(10,420	)		$	(46,251	)
Interest income(1)		—				—				(4,049	)			(42	)			(1,115	)			(5,206	)
Interest expense(2)		—				—				3,364				—				2,215				5,579
Income tax expense		—				(355	)			141				—				346				132
Depreciation and amortization		4,388				9,683				1,053				241				291				15,656
Stock-based compensation(3)		9,834				3,632				1,209				341				1,408				16,424
Acquisition-related costs(4)		—				—				—				—				13				13
Restructuring and reorganization(5)		—				—				—				—				284				284
Impairment(6)		—				—				—				—				913				913
Adjusted EBITDA	$	4,405			$	(7,418	)		$	(3,436	)		$	58			$	(6,065	)		$	(12,456	)

(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 11 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 for our rentals segment due to the restructuring and reorganization activities from our acquisition of Rent.

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

	Nine Months Ended September 30, 2023
	Real estate services				Rentals				Mortgage				Other				Corporate overhead				Total
Revenue(1)	$	485,687			$	135,636			$	107,838			$	29,434			$	—			$	758,595
Cost of revenue		359,625				31,016				93,108				18,178				—				501,927
Gross profit		126,062				104,620				14,730				11,256				—				256,668
Operating expenses
Technology and development		82,650				48,081				2,177				3,475				2,813				139,196
Marketing		51,849				42,509				3,122				46				5				97,531
General and administrative		58,997				73,445				20,323				3,049				30,770				186,584
Restructuring and reorganization		—				—				—				—				7,159				7,159
Total operating expenses		193,496				164,035				25,622				6,570				40,747				430,470
(Loss) income from continuing operations		(67,434	)			(59,415	)			(10,892	)			4,686				(40,747	)			(173,802	)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net		41				115				(224	)			475				69,901				70,308
Net (loss) income from continuing operations	$	(67,393	)		$	(59,300	)		$	(11,116	)		$	5,161			$	29,154			$	(103,494	)

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

	Nine Months Ended September 30, 2023
	Real estate services				Rentals				Mortgage				Other				Corporate overhead				Total
Net (loss) income from continuing operations	$	(67,393	)		$	(59,300	)		$	(11,116	)		$	5,161			$	29,154			$	(103,494	)
Interest income(1)		(41	)			(238	)			(9,062	)			(475	)			(7,400	)			(17,216	)
Interest expense(2)		—				—				9,737				—				5,285				15,022
Income tax expense		—				123				222				—				537				882
Depreciation and amortization		12,819				30,068				2,929				756				1,745				48,317
Stock-based compensation(3)		33,041				11,580				2,554				1,696				6,277				55,148
Acquisition-related costs(4)		—				—				—				—				8				8
Restructuring and reorganization(5)		—				—				—				—				7,159				7,159
Impairment(6)		—				—				—				—				113				113
Gain on extinguishment of convertible senior notes		—				—				—				—				(68,848	)			(68,848	)
Adjusted EBITDA	$	(21,574	)		$	(17,767	)		$	(4,736	)		$	7,138			$	(25,970	)		$	(62,909	)

(1) Interest income includes $9.0 million of interest income related to originated mortgage loans for the nine months ended September 30, 2023.

(2) Interest expense includes $9.7 million of interest expense related to our warehouse credit facilities for the nine months ended September 30, 2023.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 11 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, October 2022, and March 2023 workforce reductions.

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

	Nine Months Ended September 30, 2022
	Real estate services				Rentals				Mortgage				Other				Corporate overhead				Total
Revenue(1)	$	640,835			$	114,979			$	104,484			$	17,341			$	—			$	877,639
Cost of revenue		488,114				23,769				95,616				16,590				—				624,089
Gross profit		152,721				91,210				8,868				751				—				253,550
Operating expenses
Technology and development		80,144				44,539				5,236				2,975				2,784				135,678
Marketing		90,380				36,806				3,525				173				468				131,352
General and administrative		67,578				68,738				18,047				2,346				25,931				182,640
Restructuring and reorganization		—				—				—				—				18,399				18,399
Total operating expenses		238,102				150,083				26,808				5,494				47,582				468,069
Loss from operations		(85,381	)			(58,873	)			(17,940	)			(4,743	)			(47,582	)			(214,519	)
Interest income, interest expense, income tax expense, and other expense, net		(123	)			1,098				(164	)			51				(9,064	)			(8,202	)
Net loss from continuing operations	$	(85,504	)		$	(57,775	)		$	(18,104	)		$	(4,692	)		$	(56,646	)		$	(222,721	)

(1) Included in revenue is $14.9 million from providing services to our discontinued properties segment.

	Nine Months Ended September 30, 2022
	Real estate services				Rentals				Mortgage				Other				Corporate overhead				Total
Net loss from continuing operations	$	(85,504	)		$	(57,775	)		$	(18,104	)		$	(4,692	)		$	(56,646	)		$	(222,721	)
Interest income(1)		—				(1	)			(7,296	)			(55	)			(1,876	)			(9,228	)
Interest expense(2)		—				—				5,599				—				6,642				12,241
Income tax expense		—				(789	)			174				—				1,040				425
Depreciation and amortization		12,957				28,550				2,425				814				909				45,655
Stock-based compensation(3)		29,644				8,611				2,590				1,151				4,966				46,962
Acquisition-related costs(4)		—				—				—				—				2,437				2,437
Restructuring and reorganization(5)		—				—				—				—				18,399				18,399
Impairment(6)		—				—				—				—				913				913
Adjusted EBITDA	$	(42,903	)		$	(21,404	)		$	(14,612	)		$	(2,782	)		$	(23,216	)		$	(104,917	)

(1) Interest income includes $7.3 million of interest income related to originated mortgage loans for the nine months ended September 30, 2023.

(2) Interest expense includes $5.6 million of interest expense related to our warehouse credit facilities for the nine months ended September 30, 2023.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 11 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, October 2022, and March 2023 workforce reductions.

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

Reconciliation of Adjusted EBITDA Guidance to Net Loss Guidance
(unaudited, in millions)
	Q4 2023
	Low			High
Net loss	(27	)		(18	)
Net interest expense	3			2
Depreciation and amortization	15			15
Stock-based compensation	18			18
Gain on extinguishment of notes	(27	)		(27	)
Adjusted EBITDA	(19	)		(9	)
Note: Figures may not sum due to rounding.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20231102909304/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 is the revenue for Redfin in the third quarter of 2023?

Redfin's revenue for the third quarter of 2023 was $269.0 million.

What was the gross profit for Redfin in the third quarter of 2023?

Redfin's gross profit for the third quarter of 2023 was $98.3 million.

What was the net loss for Redfin in the third quarter of 2023?

Redfin's net loss for the third quarter of 2023 was $19.0 million.

How does the third quarter revenue compare to the same period last year?

The third quarter revenue for Redfin decreased by 12% compared to the third quarter of 2022.

What is Redfin's market share in U.S. existing home sales by units?

Redfin's market share in U.S. existing home sales by units was 0.78% in the third quarter of 2023.

How many average monthly users did Redfin's mobile apps and website reach in the third quarter of 2023?

Redfin's mobile apps and website reached more than 51 million average monthly users in the third quarter of 2023.