Redfin Reports Fourth Quarter and Full Year 2022 Financial Results

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

Fourth Quarter 2022

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

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

Full Year 2022

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

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

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

Fourth Quarter and Full Year Highlights

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

Business Outlook

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

For the first quarter of 2023 we expect:

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

Conference Call

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

Forward-Looking Statements

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

About Redfin

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

Redfin-F

Redfin Corporation and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share and per share amounts, unaudited)

 

 

December 31,

 

2022

 

2021

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

239,840

 

 

$

591,003

 

Restricted cash

 

2,406

 

 

 

127,278

 

Short-term investments

 

122,259

 

 

 

33,737

 

Accounts receivable, net of allowances for credit losses of $2,019 and $1,298

 

54,880

 

 

 

69,594

 

Inventory

 

114,273

 

 

 

358,221

 

Loans held for sale

 

199,604

 

 

 

35,759

 

Prepaid expenses

 

34,506

 

 

 

22,948

 

Other current assets

 

8,690

 

 

 

7,524

 

Total current assets

 

776,458

 

 

 

1,246,064

 

Property and equipment, net

 

55,105

 

 

 

58,671

 

Right-of-use assets, net

 

42,032

 

 

 

54,200

 

Mortgage servicing rights, at fair value

 

36,261

 

 

 

 

Long-term investments

 

29,480

 

 

 

54,828

 

Goodwill

 

461,349

 

 

 

409,382

 

Intangible assets, net

 

162,272

 

 

 

185,929

 

Other assets, noncurrent

 

11,247

 

 

 

12,898

 

Total assets

$

1,574,204

 

 

$

2,021,972

 

Liabilities, mezzanine equity, and stockholders' equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

11,819

 

 

$

12,546

 

Accrued and other liabilities

 

109,743

 

 

 

118,122

 

Warehouse credit facilities

 

190,509

 

 

 

33,043

 

Secured revolving credit facility

 

 

 

 

199,781

 

Convertible senior notes, net

 

23,431

 

 

 

23,280

 

Lease liabilities

 

19,137

 

 

 

15,040

 

Total current liabilities

 

354,639

 

 

 

401,812

 

Lease liabilities, noncurrent

 

37,298

 

 

 

55,222

 

Convertible senior notes, net, noncurrent

 

1,078,157

 

 

 

1,214,017

 

Deferred tax liabilities

 

243

 

 

 

1,201

 

Total liabilities

 

1,470,337

 

 

 

1,672,252

 

Series A convertible preferred stock—par value $0.001 per share; 10,000,000 shares authorized; 40,000 and 40,000 shares issued and outstanding at December 31, 2022 and 2021, respectively

 

39,914

 

 

 

39,868

 

Stockholders’ equity

 

 

 

Common stock—par value $0.001 per share; 500,000,000 shares authorized; 109,696,178 and 106,308,767 shares issued and outstanding at December 31, 2022 and 2021, respectively

 

110

 

 

 

106

 

Additional paid-in capital

 

757,951

 

 

 

682,084

 

Accumulated other comprehensive loss

 

(801

)

 

 

(174

)

Accumulated deficit

 

(693,307

)

 

 

(372,164

)

Total stockholders’ equity

 

63,953

 

 

 

309,852

 

Total liabilities, mezzanine equity, and stockholders’ equity

$

1,574,204

 

 

$

2,021,972

 

Redfin Corporation and Subsidiaries

Consolidated Statements of Comprehensive Loss

(in thousands, except share and per share amounts, unaudited)

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

2022

 

2021

 

2022

 

2021

Revenue

 

 

 

 

 

 

 

Service

$

219,121

 

 

$

265,992

 

 

$

1,081,877

 

 

$

1,042,112

 

Product

 

260,543

 

 

 

377,065

 

 

 

1,202,565

 

 

 

880,653

 

Total revenue

 

479,664

 

 

 

643,057

 

 

 

2,284,442

 

 

 

1,922,765

 

Cost of revenue(1)

 

 

 

 

 

 

 

Service

 

163,467

 

 

 

161,780

 

 

 

772,351

 

 

 

648,660

 

Product

 

278,762

 

 

 

373,253

 

 

 

1,226,038

 

 

 

870,285

 

Total cost of revenue

 

442,229

 

 

 

535,033

 

 

 

1,998,389

 

 

 

1,518,945

 

Gross profit

 

37,435

 

 

 

108,024

 

 

 

286,053

 

 

 

403,820

 

Operating expenses

 

 

 

 

 

 

 

Technology and development(1)

 

47,041

 

 

 

43,894

 

 

 

196,250

 

 

 

156,718

 

Marketing(1)

 

24,238

 

 

 

22,397

 

 

 

158,071

 

 

 

138,740

 

General and administrative(1)

 

62,889

 

 

 

66,962

 

 

 

254,593

 

 

 

218,315

 

Restructuring and reorganization

 

21,798

 

 

 

 

 

 

40,469

 

 

 

 

Total operating expenses

 

155,966

 

 

 

133,253

 

 

 

649,383

 

 

 

513,773

 

Loss from operations

 

(118,531

)

 

 

(25,229

)

 

 

(363,330

)

 

 

(109,953

)

Interest income

 

4,691

 

 

 

163

 

 

 

6,639

 

 

 

635

 

Interest expense

 

(4,905

)

 

 

(3,939

)

 

 

(17,745

)

 

 

(11,762

)

Income tax benefit (expense)

 

299

 

 

 

744

 

 

 

(126

)

 

 

6,107

 

Gain on extinguishment of convertible senior notes

 

57,193

 

 

 

 

 

 

57,193

 

 

 

 

Other (expense) income, net

 

(693

)

 

 

1,259

 

 

 

(3,774

)

 

 

5,360

 

Net loss

$

(61,946

)

 

$

(27,002

)

 

$

(321,143

)

 

$

(109,613

)

Dividends on convertible preferred stock

 

(144

)

 

 

(1,394

)

 

 

(1,560

)

 

 

(7,269

)

Net loss attributable to common stock—basic and diluted

$

(62,090

)

 

$

(28,396

)

 

$

(322,703

)

 

$

(116,882

)

Net loss per share attributable to common stock—basic and diluted

$

(0.57

)

 

$

(0.27

)

 

$

(2.99

)

 

$

(1.12

)

Weighted average shares of common stock—basic and diluted

 

108,997,415

 

 

 

105,739,395

 

 

 

107,927,464

 

 

 

104,683,460

 

 

 

 

 

 

 

 

 

Net loss

$

(61,946

)

 

$

(27,002

)

 

$

(321,143

)

 

$

(109,613

)

Other comprehensive income

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

29

 

 

 

4

 

 

 

94

 

 

 

6

 

Unrealized (loss) gain on available-for-sale securities

 

(279

)

 

 

217

 

 

 

533

 

 

 

379

 

Comprehensive loss

 

(62,196

)

 

 

(26,781

)

 

 

(320,516

)

 

 

(109,228

)

 

(1) Includes stock-based compensation as follows:

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

2022

 

2021

 

2022

 

2021

Cost of revenue

$

4,307

 

 

$

3,595

 

 

$

15,950

 

 

$

13,614

 

Technology and development

 

6,572

 

 

 

6,288

 

 

 

29,608

 

 

 

23,275

 

Marketing

 

1,069

 

 

 

736

 

 

 

4,093

 

 

 

2,350

 

General and administrative

 

4,638

 

 

 

4,667

 

 

 

18,606

 

 

 

15,483

 

Total

$

16,586

 

 

$

15,286

 

 

$

68,257

 

 

$

54,722

 

Redfin Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands, unaudited)

 

 

Year Ended December 31,

 

2022

 

2021

Operating Activities

 

 

 

Net loss

$

(321,143

)

 

$

(109,613

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

Depreciation and amortization

 

64,907

 

 

 

46,906

 

Stock-based compensation

 

68,257

 

 

 

54,722

 

Amortization of debt discount and issuance costs

 

6,137

 

 

 

4,989

 

Non-cash lease expense

 

16,234

 

 

 

11,630

 

Impairment costs

 

1,136

 

 

 

 

Net loss on IRLCs, forward sales commitments, and loans held for sale

 

14,427

 

 

 

815

 

Change in fair value of mortgage servicing rights, net

 

(801

)

 

 

 

Gain on extinguishment of convertible senior notes

 

(57,193

)

 

 

 

Other

 

3,791

 

 

 

(4,227

)

Change in assets and liabilities:

 

 

 

Accounts receivable, net

 

24,411

 

 

 

(7,149

)

Inventory

 

243,948

 

 

 

(309,063

)

Prepaid expenses and other assets

 

(5,904

)

 

 

(12,248

)

Accounts payable

 

(2,472

)

 

 

3,059

 

Accrued and other liabilities, deferred tax liabilities, and payroll tax liabilities, noncurrent

 

(46,454

)

 

 

25,791

 

Lease liabilities

 

(18,452

)

 

 

(13,268

)

Origination of mortgage servicing rights

 

(3,140

)

 

 

 

Proceeds from sale of mortgage servicing rights

 

1,662

 

 

 

 

Origination of loans held for sale

 

(3,949,442

)

 

 

(986,982

)

Proceeds from sale of loans originated as held for sale

 

4,000,582

 

 

 

993,070

 

Net cash provided by (used in) operating activities

 

40,491

 

 

 

(301,568

)

Investing activities

 

 

 

Purchases of property and equipment

 

(21,531

)

 

 

(27,492

)

Purchases of investments

 

(182,466

)

 

 

(146,274

)

Sales of investments

 

17,545

 

 

 

98,687

 

Maturities of investments

 

99,455

 

 

 

106,773

 

Cash paid for acquisition, net of cash, cash equivalents, and restricted cash acquired

 

(97,341

)

 

 

(608,000

)

Net cash used in investing activities

 

(184,338

)

 

 

(576,306

)

Financing activities

 

 

 

Proceeds from the issuance of common stock pursuant to employee equity plans

 

11,528

 

 

 

22,772

 

Tax payments related to net share settlements on restricted stock units

 

(7,498

)

 

 

(27,066

)

Borrowings from warehouse credit facilities

 

3,938,265

 

 

 

942,993

 

Repayments to warehouse credit facilities

 

(3,989,407

)

 

 

(948,979

)

Borrowings from secured revolving credit facility

 

565,334

 

 

 

624,828

 

Repayments to secured revolving credit facility

 

(765,114

)

 

 

(448,996

)

Cash paid for secured revolving credit facility issuance costs

 

(733

)

 

 

(527

)

Proceeds from issuance of convertible senior notes, net of issuance costs

 

 

 

 

561,529

 

Purchases of capped calls related to convertible senior notes

 

 

 

 

(62,647

)

Conversions of convertible senior notes

 

 

 

 

(2,159

)

Principal payments under finance lease obligations

 

(855

)

 

 

(796

)

Repurchases of convertible senior notes

 

(83,614

)

 

 

 

Other financing payables

 

 

 

 

(10,611

)

Net cash (used in) provided by financing activities

 

(332,094

)

 

 

650,341

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

(94

)

 

 

(6

)

Net change in cash, cash equivalents, and restricted cash

 

(476,035

)

 

 

(227,539

)

Cash, cash equivalents, and restricted cash:

 

 

 

Beginning of period

 

718,281

 

 

 

945,820

 

End of period

$

242,246

 

 

$

718,281

 

Redfin Corporation and Subsidiaries

Supplemental Financial Information and Business Metrics

(unaudited)

 

 

Three Months Ended

 

Dec. 31,

2022

 

Sep. 30,

2022

 

Jun. 30,

2022

 

Mar. 31,

2022

 

Dec. 31,

2021

 

Sep. 30,

2021

 

Jun. 30,

2021

 

Mar. 31,

2021

Monthly average visitors (in thousands)

 

43,847

 

 

 

50,785

 

 

 

52,698

 

 

 

51,287

 

 

 

44,665

 

 

 

49,147

 

 

 

48,437

 

 

 

46,202

 

Real estate services transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage

 

12,743

 

 

 

18,245

 

 

 

20,565

 

 

 

15,001

 

 

 

19,428

 

 

 

21,929

 

 

 

21,006

 

 

 

14,317

 

Partner

 

2,742

 

 

 

3,507

 

 

 

3,983

 

 

 

3,417

 

 

 

4,603

 

 

 

4,755

 

 

 

4,597

 

 

 

3,944

 

Total

 

15,485

 

 

 

21,752

 

 

 

24,548

 

 

 

18,418

 

 

 

24,031

 

 

 

26,684

 

 

 

25,603

 

 

 

18,261

 

Real estate services revenue per transaction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage

$

10,914

 

 

$

11,103

 

 

$

11,692

 

 

$

11,191

 

 

$

10,900

 

 

$

11,107

 

 

$

11,307

 

 

$

10,927

 

Partner

 

2,611

 

 

 

2,556

 

 

 

2,851

 

 

 

2,814

 

 

 

2,819

 

 

 

2,990

 

 

 

3,195

 

 

 

3,084

 

Aggregate

 

9,444

 

 

 

9,725

 

 

 

10,258

 

 

 

9,637

 

 

 

9,352

 

 

 

9,661

 

 

 

9,850

 

 

 

9,233

 

U.S. market share by units(1)

 

0.76

%

 

 

0.80

%

 

 

0.82

%

 

 

0.79

%

 

 

0.78

%

 

 

0.78

%

 

 

0.77

%

 

 

0.75

%

Revenue from top-10 Redfin markets as a percentage of real estate services revenue

 

57

%

 

 

58

%

 

 

59

%

 

 

57

%

 

 

61

%

 

 

62

%

 

 

64

%

 

 

62

%

Average number of lead agents

 

2,022

 

 

 

2,293

 

 

 

2,640

 

 

 

2,750

 

 

 

2,485

 

 

 

2,370

 

 

 

2,456

 

 

 

2,277

 

RedfinNow homes sold

 

474

 

 

 

530

 

 

 

423

 

 

 

617

 

 

 

600

 

 

 

388

 

 

 

292

 

 

 

171

 

Revenue per RedfinNow home sold

 

538,788

 

 

 

550,903

 

 

 

604,120

 

 

 

608,851

 

 

 

622,519

 

 

 

599,963

 

 

 

571,670

 

 

 

525,765

 

Mortgage originations by dollars (in millions)

$

1,036

 

 

$

1,557

 

 

$

1,565

 

 

$

159

 

 

$

242

 

 

$

258

 

 

$

261

 

 

$

227

 

Mortgage originations by units (in ones)

 

2,631

 

 

 

3,720

 

 

 

3,860

 

 

 

414

 

 

 

591

 

 

 

671

 

 

 

749

 

 

 

632

 

 

Year Ended December 31,

 

2022

 

2021

Monthly average visitors (in thousands)

 

49,654

 

 

 

47,113

 

Real estate services transactions

 

 

 

Brokerage

 

66,554

 

 

 

76,680

 

Partner

 

13,649

 

 

 

17,899

 

Total

 

80,203

 

 

 

94,579

 

Real estate services revenue per transaction

 

 

 

Brokerage

$

11,269

 

 

$

11,076

 

Partner

 

2,718

 

 

 

3,020

 

Aggregate

 

9,814

 

 

 

9,551

 

U.S. market share by units(1)

 

0.80

%

 

 

0.77

%

Revenue from top-10 markets as a percentage of real estate services revenue

 

58

%

 

 

62

%

Average number of lead agents

 

2,426

 

 

 

2,396

 

RedfinNow homes sold

 

2,044

 

 

 

1,451

 

Revenue per RedfinNow home sold

$

576,599

 

 

$

594,268

 

Mortgage originations by dollars (in millions)

$

4,317

 

 

$

988

 

Mortgage originations by units (in ones)

 

10,625

 

 

 

2,643

 

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

Redfin Corporation and Subsidiaries

Segment Reporting and Reconciliation of Adjusted EBITDA to Net Income (Loss)

(unaudited, in thousands)

 

 

Three Months Ended December 31, 2022

 

Real estate

services

 

Properties

 

Rentals

 

Mortgage

 

Other

 

Corporate

Overhead and

Intercompany

Eliminations

 

Total

Revenue

$

146,242

 

 

$

260,629

 

 

$

40,931

 

 

$

28,420

 

 

$

6,342

 

 

$

(2,900

)

 

$

479,664

 

Cost of revenue

 

119,913

 

 

 

278,761

 

 

 

9,647

 

 

 

30,936

 

 

 

5,872

 

 

 

(2,900

)

 

 

442,229

 

Gross profit

 

26,329

 

 

 

(18,132

)

 

 

31,284

 

 

 

(2,516

)

 

 

470

 

 

 

 

 

 

37,435

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and development

 

25,052

 

 

 

3,794

 

 

 

15,360

 

 

 

798

 

 

 

616

 

 

 

1,421

 

 

 

47,041

 

Marketing

 

8,293

 

 

 

282

 

 

 

14,258

 

 

 

1,364

 

 

 

26

 

 

 

15

 

 

 

24,238

 

General and administrative

 

20,594

 

 

 

2,138

 

 

 

23,990

 

 

 

7,633

 

 

 

960

 

 

 

7,574

 

 

 

62,889

 

Restructuring and reorganization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21,798

 

 

 

21,798

 

Total operating expenses

 

53,939

 

 

 

6,214

 

 

 

53,608

 

 

 

9,795

 

 

 

1,602

 

 

 

30,808

 

 

 

155,966

 

Loss from operations

 

(27,610

)

 

 

(24,346

)

 

 

(22,324

)

 

 

(12,311

)

 

 

(1,132

)

 

 

(30,808

)

 

 

(118,531

)

Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net

 

 

 

 

(1,924

)

 

 

291

 

 

 

50

 

 

 

88

 

 

 

58,080

 

 

 

56,585

 

Net loss

$

(27,610

)

 

$

(26,270

)

 

$

(22,033

)

 

$

(12,261

)

 

$

(1,044

)

 

$

27,272

 

 

$

(61,946

)

 

Three Months Ended December 31, 2022

 

Real estate

services

 

Properties

 

Rentals

 

Mortgage

 

Other

 

Corporate

Overhead and

Intercompany

Eliminations

 

Total

Net loss

$

(27,610

)

 

$

(26,270

)

 

$

(22,033

)

 

$

(12,261

)

 

$

(1,044

)

 

$

27,272

 

 

$

(61,946

)

Interest income(1)

 

 

 

 

(752

)

 

 

(23

)

 

 

(3,203

)

 

 

(88

)

 

 

(3,819

)

 

 

(7,885

)

Interest expense(2)

 

 

 

 

2,666

 

 

 

 

 

 

2,981

 

 

 

 

 

 

2,136

 

 

 

7,783

 

Income tax expense

 

 

 

 

10

 

 

 

(288

)

 

 

(174

)

 

 

 

 

 

153

 

 

 

(299

)

Depreciation and amortization

 

4,569

 

 

 

552

 

 

 

10,133

 

 

 

1,013

 

 

 

274

 

 

 

927

 

 

 

17,468

 

Stock-based compensation(3)

 

7,008

 

 

 

528

 

 

 

2,709

 

 

 

1,542

 

 

 

345

 

 

 

4,454

 

 

 

16,586

 

Acquisition-related costs(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring and reorganization(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21,798

 

 

 

21,798

 

Impairment(6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

224

 

 

 

224

 

Gain on extinguishment of convertible senior notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(57,193

)

 

 

(57,193

)

Adjusted EBITDA

$

(16,033

)

 

$

(23,266

)

 

$

(9,502

)

 

$

(10,102

)

 

$

(513

)

 

$

(4,048

)

 

$

(63,464

)

(1) Interest income includes $3.2 million of interest income related to originated mortgage loans for the three months ended December 31, 2022.

(2) Interest expense includes $2.9 million of interest expense related to our warehouse credit facilities for the three months ended December 31, 2022.

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

(4) Acquisition-related costs consist of fees for external advisory, legal, and other professional services incurred in connection with our acquisition of other companies.

(5) Restructuring and reorganization expenses primarily consist of personnel-related costs associated with employee terminations, furloughs, or retention due to the restructuring and reorganization activities from our acquisitions of Bay Equity and Rent., and from our June and October 2022 workforce reductions.

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

 

Three Months Ended December 31, 2021

 

Real estate

services

 

Properties

 

Rentals

 

Mortgage

 

Other

 

Corporate

Overhead and

Intercompany

Eliminations

 

Total

Revenue

$

224,732

 

$

377,065

 

 

$

38,923

 

 

$

3,996

 

 

$

3,347

 

 

$

(5,006

)

 

$

643,057

 

Cost of revenue

 

149,529

 

 

 

373,105

 

 

 

6,774

 

 

 

6,690

 

 

 

3,941

 

 

 

(5,006

)

 

 

535,033

 

Gross profit

 

75,203

 

 

 

3,960

 

 

 

32,149

 

 

 

(2,694

)

 

 

(594

)

 

 

 

 

 

108,024

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and development

 

20,727

 

 

 

3,724

 

 

 

13,876

 

 

 

2,582

 

 

 

990

 

 

 

1,995

 

 

 

43,894

 

Marketing

 

11,923

 

 

 

466

 

 

 

9,450

 

 

 

149

 

 

 

104

 

 

 

305

 

 

 

22,397

 

General and administrative

 

23,842

 

 

 

2,828

 

 

 

25,530

 

 

 

2,620

 

 

 

823

 

 

 

11,319

 

 

 

66,962

 

Restructuring and reorganization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

56,492

 

 

 

7,018

 

 

 

48,856

 

 

 

5,351

 

 

 

1,917

 

 

 

13,619

 

 

 

133,253

 

Loss from operations

 

18,711

 

 

 

(3,058

)

 

 

(16,707

)

 

 

(8,045

)

 

 

(2,511

)

 

 

(13,619

)

 

 

(25,229

)

Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net

 

 

 

 

(1,723

)

 

 

2,777

 

 

 

1

 

 

 

1

 

 

 

(2,829

)

 

 

(1,773

)

Net loss

$

18,711

 

 

$

(4,781

)

 

$

(13,930

)

 

$

(8,044

)

 

$

(2,510

)

 

$

(16,448

)

 

$

(27,002

)

 

Three Months Ended December 31, 2021

 

Real estate

services

 

Properties

 

Rentals

 

Mortgage

 

Other

 

Corporate

Overhead and

Intercompany

Eliminations

 

Total

Net loss

$

18,711

 

$

(4,781

)

 

$

(13,930

)

 

$

(8,044

)

 

$

(2,510

)

 

$

(16,448

)

 

$

(27,002

)

Interest income(1)

 

 

 

 

(2

)

 

 

 

 

 

(424

)

 

 

(1

)

 

 

(159

)

 

 

(586

)

Interest expense(2)

 

 

 

 

1,725

 

 

 

 

 

 

431

 

 

 

 

 

 

2,214

 

 

 

4,370

 

Income tax expense

 

 

 

 

 

 

 

(2,177

)

 

 

 

 

 

 

 

 

1,433

 

 

 

(744

)

Depreciation and amortization

 

3,583

 

 

 

554

 

 

 

9,307

 

 

 

387

 

 

 

247

 

 

 

525

 

 

 

14,603

 

Stock-based compensation(3)

 

8,963

 

 

 

1,492

 

 

 

994

 

 

 

820

 

 

 

348

 

 

 

2,669

 

 

 

15,286

 

Adjusted EBITDA

$

31,257

 

 

$

(1,012

)

 

$

(5,806

)

 

$

(6,830

)

 

$

(1,916

)

 

$

(9,766

)

 

$

5,927

 

(1) Interest income includes $0.4 million of interest income related to originated mortgage loans for the three months ended December 31, 2021.

(2) Interest expense includes $0.4 million of interest expense related to our warehouse credit facilities for the three months ended December 31, 2021.

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

 

Year ended December 31, 2022

 

Real estate

services

 

Properties

 

Rentals

 

Mortgage

 

Other

 

Corporate

Overhead and

Intercompany

Eliminations

 

Total

Revenue

$

787,076

 

 

$

1,202,651

 

 

$

155,910

 

 

$

132,904

 

 

$

23,684

 

 

$

(17,783

)

 

$

2,284,442

 

Cost of revenue

 

608,027

 

 

 

1,225,717

 

 

 

33,416

 

 

 

126,552

 

 

 

22,460

 

 

 

(17,783

)

 

 

1,998,389

 

Gross profit

 

179,049

 

 

 

(23,066

)

 

 

122,494

 

 

 

6,352

 

 

 

1,224

 

 

 

 

 

 

286,053

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and development

 

105,196

 

 

 

17,326

 

 

 

59,899

 

 

 

6,034

 

 

 

3,591

 

 

 

4,204

 

 

 

196,250

 

Marketing

 

98,673

 

 

 

2,762

 

 

 

51,064

 

 

 

4,889

 

 

 

199

 

 

 

484

 

 

 

158,071

 

General and administrative

 

88,171

 

 

 

11,203

 

 

 

92,728

 

 

 

25,680

 

 

 

3,307

 

 

 

33,504

 

 

 

254,593

 

Restructuring and reorganization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40,469

 

 

 

40,469

 

Total operating expenses

 

292,040

 

 

 

31,291

 

 

 

203,691

 

 

 

36,603

 

 

 

7,097

 

 

 

78,661

 

 

 

649,383

 

Loss from operations

 

(112,991

)

 

 

(54,357

)

 

 

(81,197

)

 

 

(30,251

)

 

 

(5,873

)

 

 

(78,661

)

 

 

(363,330

)

Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net

 

(123

)

 

 

(7,607

)

 

 

1,389

 

 

 

(114

)

 

 

140

 

 

 

48,502

 

 

 

42,187

 

Net loss

$

(113,114

)

 

$

(61,964

)

 

$

(79,808

)

 

$

(30,365

)

 

$

(5,733

)

 

$

(30,159

)

 

$

(321,143

)

 

Year ended December 31, 2022

 

Real estate

services

 

Properties

 

Rentals

 

Mortgage

 

Other

 

Corporate

Overhead and

Intercompany

Eliminations

 

Total

Net loss

$

(113,114

)

 

$

(61,964

)

 

$

(79,808

)

 

$

(30,365

)

 

$

(5,733

)

 

$

(30,159

)

 

$

(321,143

)

Interest income(1)

 

 

 

 

(1,266

)

 

 

(24

)

 

 

(10,499

)

 

 

(143

)

 

 

(5,181

)

 

 

(17,113

)

Interest expense(2)

 

 

 

 

8,859

 

 

 

 

 

 

8,580

 

 

 

 

 

 

8,778

 

 

 

26,217

 

Income tax expense

 

 

 

 

10

 

 

 

(1,077

)

 

 

 

 

 

 

 

 

1,193

 

 

 

126

 

Depreciation and amortization

 

17,526

 

 

 

2,335

 

 

 

38,683

 

 

 

3,438

 

 

 

1,089

 

 

 

1,836

 

 

 

64,907

 

Stock-based compensation(3)

 

36,652

 

 

 

5,238

 

 

 

11,319

 

 

 

4,132

 

 

 

1,496

 

 

 

9,420

 

 

 

68,257

 

Acquisition-related costs(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,437

 

 

 

2,437

 

Restructuring and reorganization(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40,469

 

 

 

40,469

 

Impairment(6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,136

 

 

 

1,136

 

Gain on extinguishment of convertible senior notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(57,193

)

 

 

(57,193

)

Adjusted EBITDA

$

(58,936

)

 

$

(46,788

)

 

$

(30,907

)

 

$

(24,714

)

 

$

(3,291

)

 

$

(27,264

)

 

$

(191,900

)

(1) Interest income includes $10.5 million of interest income related to originated mortgage loans for the year ended December 31, 2022.

(2) Interest expense includes $8.5 million of interest expense related to our warehouse credit facilities for the year ended December 31, 2022.

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

(4) Acquisition-related costs consist of fees for external advisory, legal, and other professional services incurred in connection with our acquisition of other companies.

(5) Restructuring and reorganization expenses primarily consist of personnel-related costs associated with employee terminations, furloughs, or retention due to the restructuring and reorganization activities from our acquisitions of Bay Equity and Rent., and from our June and October 2022 workforce reductions.

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

 

Year ended December 31, 2021

 

Real estate

services

 

Properties

 

Rentals

 

Mortgage

 

Other

 

Corporate

Overhead and

Intercompany

Eliminations

 

Total

Revenue

$

903,334

 

 

$

880,653

 

 

$

121,877

 

 

$

19,818

 

 

$

13,609

 

 

$

(16,526

)

 

$

1,922,765

 

Cost of revenue

 

603,320

 

 

 

870,052

 

 

 

21,739

 

 

 

26,096

 

 

 

14,264

 

 

 

(16,526

)

 

 

1,518,945

 

Gross profit

 

300,014

 

 

 

10,601

 

 

 

100,138

 

 

 

(6,278

)

 

 

(655

)

 

 

 

 

 

403,820

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and development

 

81,588

 

 

 

13,237

 

 

 

41,492

 

 

 

10,396

 

 

 

2,528

 

 

 

7,477

 

 

 

156,718

 

Marketing

 

98,746

 

 

 

1,889

 

 

 

36,174

 

 

 

561

 

 

 

209

 

 

 

1,161

 

 

 

138,740

 

General and administrative

 

84,655

 

 

 

9,593

 

 

 

71,943

 

 

 

8,306

 

 

 

2,288

 

 

 

41,530

 

 

 

218,315

 

Restructuring and reorganization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

264,989

 

 

 

24,719

 

 

 

149,609

 

 

 

19,263

 

 

 

5,025

 

 

 

50,168

 

 

 

513,773

 

Loss from operations

 

35,025

 

 

 

(14,118

)

 

 

(49,471

)

 

 

(25,541

)

 

 

(5,680

)

 

 

(50,168

)

 

 

(109,953

)

Interest income, interest expense, income tax benefit, and other expense, net

 

(87

)

 

 

(4,261

)

 

 

3,301

 

 

 

3

 

 

 

2

 

 

 

1,382

 

 

 

340

 

Net income (loss)

$

34,938

 

 

$

(18,379

)

 

$

(46,170

)

 

$

(25,538

)

 

$

(5,678

)

 

$

(48,786

)

 

$

(109,613

)

 

Year ended December 31, 2021

 

Real estate

services

 

Properties

 

Rentals

 

Mortgage

 

Other

 

Corporate

Overhead and

Intercompany

Eliminations

 

Total

Net loss

$

34,938

 

$

(18,379

)

 

$

(46,170

)

 

$

(25,538

)

 

$

(5,678

)

 

$

(48,786

)

 

$

(109,613

)

Interest income(1)

 

 

 

 

(9

)

 

 

 

 

 

(1,598

)

 

 

(2

)

 

 

(619

)

 

 

(2,228

)

Interest expense(2)

 

 

 

 

4,271

 

 

 

 

 

 

1,666

 

 

 

 

 

 

7,490

 

 

 

13,427

 

Income tax expense

 

 

 

 

 

 

 

(2,699

)

 

 

 

 

 

 

 

 

(3,408

)

 

 

(6,107

)

Depreciation and amortization

 

13,282

 

 

 

1,888

 

 

 

27,607

 

 

 

1,406

 

 

 

761

 

 

 

1,962

 

 

 

46,906

 

Stock-based compensation(3)

 

34,662

 

 

 

5,177

 

 

 

1,311

 

 

 

2,985

 

 

 

856

 

 

 

9,731

 

 

 

54,722

 

Acquisition-related costs(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,925

 

 

 

7,925

 

Restructuring and reorganization(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

82,882

 

 

$

(7,052

)

 

$

(19,951

)

 

$

(21,079

)

 

$

(4,063

)

 

$

(25,705

)

 

$

5,032

 

(1) Interest income includes $1.6 million of interest income related to originated mortgage loans for the year ended December 31, 2021.

(2) Interest expense includes $1.7 million of interest expense related to our warehouse credit facilities for the year ended December 31, 2021.

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

(4) Acquisition-related costs consist of fees for external advisory, legal, and other professional services incurred in connection with our acquisition of other companies.

(5) Restructuring and reorganization expenses primarily consist of personnel-related costs associated with employee terminations, furloughs, or retention due to the restructuring and reorganization activities from our acquisition of Rent.

Redfin Corporation and Subsidiaries

Reconciliation of Adjusted EBITDA Guidance to Net Loss Guidance

(unaudited, in millions)

 

 

Three Months Ended March 31, 2023

 

Low

 

High

Net loss

$

(116

)

 

$

(105

)

Depreciation and amortization

 

17

 

 

 

17

 

Stock-based compensation

 

20

 

 

 

20

 

Restructuring and reorganization

 

1

 

 

 

1

 

Gain on extinguishment of convertible senior notes

 

(7

)

 

 

(7

)

Adjusted EBITDA

$

(84

)

 

$

(73

)

 

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