August 05, 2021

SEATTLE, Aug. 5, 2021 /PRNewswire/ — Redfin Corporation (NASDAQ: RDFN) today announced financial results for the second quarter ended June 30, 2021. All financial measures, unless otherwise noted, are presented on a GAAP basis and include stock-based compensation, and depreciation and amortization.

Revenue increased 121% year-over-year to $471 million during the second quarter. Gross profit was $126 million, a increase of 174% from $46 million in the second quarter of 2020. Real estate services gross profit was $88 million, an increase of 90% from $46 million in the second quarter of 2020. Real estate services gross margin was 35%, compared to 34% in the second quarter of 2020. Operating expenses were $156 million, an increase of 210% from $50 million in the second quarter of 2020. Operating expenses were 33% of revenue, up from 24% in the second quarter of 2020.

Net loss was $27.9 million, compared to net loss of $6.6 million in the second quarter of 2020. The dividend on our convertible preferred stock was $1.9 million in the second quarter. Net loss attributable to common stock was $29.8 million. Stock-based compensation was $13.7 million, up from $7.2 million in the second quarter of 2020. Depreciation and amortization was $13.8 million, up from $3.6 million in the second quarter of 2020. Interest income was $0.1 million and interest expense was $2.8 million, compared to $0.4 million and $2.7 million, respectively, in the second quarter of 2020.

Net loss per share attributable to common stock, diluted, was $0.29, compared to net loss per share attributable to common stock, diluted, of $0.08 in the second quarter of 2020.

“Even in a rapidly expanding market, Redfin gained more market-share in the second quarter than at any point since our 2017 initial public offering,” said Redfin CEO Glenn Kelman. “And we took share where it mattered most: in markets where we offer Redfin Premier services, Redfin listings above a million dollars grew three times faster than listings below a million dollars. Despite increased pricing discipline and record gross margins, RedfinNow bought 40% more homes in the second quarter than we did in all of 2020; our properties revenue grew 139%. And even though this was our first quarter owning RentPath, we already hired a world-class RentPath CEO.”

Second Quarter Highlights

  • Reached market share of 1.18% of U.S. existing home sales by value in the second quarter of 2021, an increase of 24 basis points from the second quarter of 2020.
  • Saved homebuyers and sellers over $82 million in the second quarter. This includes the savings Redfin offers buyers through the Redfin Refund and sellers through Redfin’s lower listing fee when compared to a 2.5% listing commission typically charged by traditional agents.
  • Redfin’s mobile application and website reached 48.4 million average monthly visitors in the second quarter, an increase of 14% compared to the second quarter of 2020.
  • Continued RedfinNow expansion by launching in Tucson, Boston and Portland, Oregon.
  • Closed the acquisition of RentPath on April 2; announced the appointment of Jon Ziglar as RentPath’s Chief Executive Officer, effective August 16.
  • Improved software for customers, agents, partners, home services and mortgage teams, including:
    • New data architecture in the cloud that will let Redfin’s software engineers move faster;
    • New Loan Queue software for Redfin mortgage processors to improve workflow by providing a clear list of tasks, deadlines and documents in one place; and
    • Expanding Fast Offers software to Redfin agents in Seattle, making it easy to create offer paperwork on the go with a few clicks.

(1) We calculate the aggregate value of U.S. home sales by multiplying the total number of U.S. existing home sales by the mean sale price of these homes, each as reported by the National Association of REALTORS® (“NAR”). NAR data for the most recent period is preliminary and may subsequently be updated by NAR. We calculate our market share by aggregating the home value of brokerage and partner real estate services transactions. Then, in order to account for both the sell- and buy-side components of each transaction, we divide that value by two-times the estimated aggregate value of U.S. home sales.

Business Outlook

The following forward-looking statements reflect Redfin’s expectations as of August 5, 2021, and are subject to substantial uncertainty.

For the third quarter of 2021 we expect:

  • Total revenue between $530 million and $541 million, representing a year-over-year increase between 124% and 128% compared to the third quarter of 2020. Included within total revenue are properties segment revenue between $231 million and $236 million, and RentPath revenue between $40 million and $41 million.
  • Total net loss between $24 million and $20 million, compared to total net income of $34 million in the third quarter of 2020. RentPath’s contribution to the net loss is expected to be approximately $17 million. This guidance includes approximately $14 million of expected stock-based compensation, $14 million of expected depreciation and amortization, and $4 million of expected net interest expense. Net income attributable to common stockholders will include the value of dividends on our convertible preferred stock, which we expect to pay in shares of our common stock.

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, and the anticipated benefits from our improved software. 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, 2020, as supplemented by our quarterly report for the quarter ended June 30, 2021, 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.

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), 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 take an instant cash offer from Redfin or 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 6,000 people.

Redfin-F


 Redfin Corporation and Subsidiaries
 


 Consolidated Balance Sheets
 


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






 June 30, 2021
 




 December 31, 2020
 










 Assets
 







Current assets







Cash and cash equivalents

$

735,387





$

925,276



Restricted cash

52,295





20,544



Short-term investments

29,605





131,561



Accounts receivable, net of allowances for credit losses of $204 and $160

84,757





54,719



Inventory

249,003





49,158



Loans held for sale

51,643





42,539



Prepaid expenses

18,028





12,131



Other current assets

7,152





4,898



Total current assets

1,227,870





1,240,826



Property and equipment, net

53,907





43,988



Right-of-use assets, net

58,144





44,149



Long-term investments

36,085





11,922



Goodwill

407,228





9,186



Intangibles, net

203,782





1,830



Other assets, noncurrent

14,059





8,619



Total assets

$

2,001,075





$

1,360,520




 Liabilities, mezzanine equity, and stockholders’ equity
 







Current liabilities







Accounts payable

$

26,095





$

5,644



Accrued liabilities

102,345





69,460



Other payables

17,367





13,184



Warehouse credit facilities

46,425





39,029



Secured revolving credit facility

123,770





23,949



Convertible senior notes, net

23,428





22,482



Lease liabilities

14,633





11,973



Total current liabilities

354,063





185,721



Lease liabilities and deposits, noncurrent

60,958





49,339



Convertible senior notes, net, noncurrent

1,211,517





488,268



Payroll tax liabilities, noncurrent

7,841





6,812



Deferred tax liabilities

1,254







Total liabilities

1,635,633





730,140



Series A convertible preferred stock—par value $0.001 per share; 10,000,000 shares

authorized; 40,000 shares issued and outstanding

39,846





39,823




 Stockholders’ equity
 







Common stock—par value $0.001 per share; 500,000,000 shares authorized;

104,838,095 and 103,000,594 shares issued and outstanding at June 30, 2021 and

December 31, 2020, respectively

105





103



Additional paid-in capital

651,627





860,556



Accumulated other comprehensive income

77





211



Accumulated deficit

(326,213)





(270,313)



Total stockholders’ equity

325,596





590,557



Total liabilities, mezzanine equity, and stockholders’ equity

$

2,001,075





$

1,360,520




 Redfin Corporation and Subsidiaries
 


 Consolidated Statements of Comprehensive Loss
 


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






 Three Months Ended June 30,
 




 Six Months Ended June 30,
 




 2021
 




 2020
 




 2021
 




 2020
 

Revenue















Service

$

298,870





$

141,135





$

474,463





$

252,613



Product

172,445





72,530





265,171





152,047



Total revenue

471,315





213,665





739,634





404,660



Cost of revenue(1)















Service

177,762





93,891





312,613





192,259



Product

167,417





73,735





258,527





153,483



Total cost of revenue

345,179





167,626





571,140





345,742



Gross profit

126,136





46,039





168,494





58,918



Operating expenses















Technology and development(1)

41,488





17,961





69,166





38,235



Marketing(1)

55,398





9,482





67,200





35,190



General and administrative(1)

59,567





23,022





96,957





47,349



Total operating expenses

156,453





50,465





233,323





120,774



Loss from operations

(30,317)





(4,426)





(64,829)





(61,856)



Interest income

135





437





293





1,540



Interest expense

(2,813)





(2,665)





(4,151)





(5,109)



Income tax benefit

5,052









5,052







Other income (expense), net

65





43





(27)





(1,303)



Net loss

$

(27,878)





$

(6,611)





$

(63,662)





$

(66,728)



Dividends on convertible preferred stock

(1,877.865)





(1,284)





(4,213.733)





(1,284)



Net loss attributable to common stock—basic and

diluted

$

(29,756)





$

(7,895)





$

(67,876)





$

(68,012)



Net loss per share attributable to common stock—basic

and diluted

$

(0.29)





$

(0.08)





$

(0.65)





$

(0.71)



Weighted average shares to compute net loss per share

attributable to common stock—basic and diluted

104,391,337





98,785,318





103,912,212





96,114,012



















Net Loss

$

(27,878)





$

(6,611)





$

(63,662)





$

(66,728)



Other comprehensive income (loss)















Foreign currency translation adjustments

$

0.246





$

3





$

(0.414)





$

(22)



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

securities

84





(137)





134





421



Comprehensive loss

$

(27,794)





$

(6,745)





$

(63,528)





$

(66,329)



(1) Includes stock-based compensation as follows:






 Three Months Ended June 30,
 




 Six Months Ended June 30,
 




 2021
 




 2020
 




 2021
 




 2020
 

Cost of revenue

$

3,758





$

1,769





$

6,736





$

3,407



Technology and development

5,771





3,124





11,532





6,772



Marketing

535





352





1,078





727



General and administrative

3,679





1,960





6,981





3,510



Total

$

13,743





$

7,205





$

26,327





$

14,416




 Redfin Corporation and Subsidiaries
 


 Consolidated Statements of Cash Flows
 


 (in thousands, unaudited)
 






 Six Months Ended June 30,
 




 2021
 




 2020
 


 Operating Activities
 







Net loss

$

(63,662)





$

(66,728)



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







Depreciation and amortization

18,018





6,865



Stock-based compensation

26,327





14,416



Amortization of debt discount and issuance costs

2,203





3,477



Non-cash lease expense

5,448





4,522



Impairment costs





1,420



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

238





(1,928)



Other

169





(218)



Change in assets and liabilities:







Accounts receivable, net

(22,312)





(14,959)



Inventory

(199,845)





65,153



Prepaid expenses and other assets

(7,137)





6,827



Accounts payable

15,766





1,040



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

liabilities, noncurrent

26,915





13,819



Lease liabilities

(6,144)





(5,481)



Origination of loans held for sale

(488,274)





(294,076)



Proceeds from sale of loans originated as held for sale

478,652





274,595



Net cash (used in) provided by operating activities

(213,638)





8,744




 Investing activities
 







Purchases of property and equipment

(13,580)





(6,072)



Purchases of investments

(104,877)





(88,724)



Sales of investments

89,536





3,183



Maturities of investments

92,843





40,351



Cash paid for acquisition

(608,000)







Net cash used in investing activities

(544,078)





(51,262)




 Financing activities
 







Proceeds from the issuance of convertible preferred stock, net of issuance costs





39,801



Proceeds from the issuance of common stock, net of issuance costs





69,701



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

12,496





11,052



Tax payments related to net share settlements on restricted stock units

(16,530)





(6,065)



Borrowings from warehouse credit facilities

464,250





290,891



Repayments to warehouse credit facilities

(456,854)





(271,627)



Borrowings from secured revolving credit facility

230,608





39,587



Repayments to secured revolving credit facility

(130,788)





(36,816)



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

(1,925)







Other payables—deposits held in escrow

97





19,056



Principal payments under finance lease obligations

(353)





(30)



Cash paid for secured revolving credit facility issuance costs

(305)





(4)



Net cash provided by financing activities

599,578





155,546



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





(22)



Net change in cash, cash equivalents, and restricted cash

(158,138)





113,006



Cash, cash equivalents, and restricted cash:







Beginning of period

945,820





247,448



End of period

787,682





360,454




 Redfin Corporation and Subsidiaries
 


 Supplemental Financial Information and Business Metrics
 


 (unaudited)
 






 Three Months Ended
 




 Jun. 30,

2021

 




 Mar. 31,

2021

 




 Dec. 31,

2020

 




 Sep. 30

2020

 




 Jun. 30,

2020

 




 Mar. 31,

2020

 




 Dec. 31,

2019

 




 Sep. 30,

2019

 




 Jun. 30,

2019

 

Monthly average visitors (in thousands)

48,437





46,202





44,135





49,258





42,537





35,519





30,595





35,633





36,557



Real estate services transactions



































Brokerage

21,006





14,317





16,951





18,980





13,828





10,751





13,122





16,098





15,580



Partner

4,597





3,944





4,940





5,180





2,691





2,479





2,958





3,499





3,357



Total

25,603





18,261





21,891





24,160





16,519





13,230





16,080





19,597





18,937



Real estate services revenue per

transaction



































Brokerage

$

11,307





$

10,927





$

10,751





$

10,241





$

9,296





$

9,520





$

9,425





$

9,075





$

9,332



Partner

3,195





3,084





3,123





2,988





2,417





2,535





2,369





2,295





2,218



Aggregate

9,850





9,233





9,030





8,686





8,175





8,211





8,127





7,865





8,071



Aggregate home value of real estate

services transactions (in millions)

$

14,612





$

9,621





$

11,478





$

12,207





$

7,576





$

6,098





$

7,588





$

9,157





$

8,986



U.S. market share by value

1.18

%



1.16

%



1.04

%



1.04

%



0.94

%



0.92

%



0.95

%



0.96

%



0.94

%

Revenue from top-10 Redfin markets as

a percentage of real estate services

revenue

64

%



62

%



63

%



63

%



63

%



61

%



62

%



63

%



64

%

Average number of lead agents

2,456





2,277





1,981





1,820





1,399





1,826





1,526





1,579





1,603



RedfinNow homes sold

292





171





83





37





162





171





212





168





80



Revenue per RedfinNow home sold

$

570,930





$

525,173





$

471,551





$

504,583





$

444,690





$

461,916





$

466,939





$

476,770





$

498,083




 Redfin Corporation and Subsidiaries
 


 Supplemental Financial Information
 


 (unaudited, in thousands)
 






 Three Months Ended June 30,
 




 Six Months Ended June 30,
 




 2021
 




 2020
 




 2021
 




 2020
 

Real estate services (brokerage)

$

237,511





$

128,543





$

393,957





$

230,894



Real estate services (partner)

14,688





6,506





26,851





12,791



Properties revenue

172,445





72,184





265,171





151,282



Rentals revenue

42,548









42,548







Other revenue

8,521





7,246





17,878





11,496



Intercompany elimination

(4,398)





(814)





(6,771)





(1,803)



Total revenue

$

471,315





$

213,665





$

739,634





$

404,660



















Cost of revenue















Real estate services

$

164,125





$

88,799





$

292,342





$

182,361



Properties

167,420





73,348





258,551





152,647



Rentals

7,570









7,570







Other

10,462





6,293





19,448





12,537



Intercompany elimination

(4,398)





(814)





(6,771)





(1,803)



Total cost of revenue

$

345,179





$

167,626





$

571,140





$

345,742



















Gross profit















Real estate services

$

88,074





$

46,250





$

128,466





$

61,324



Properties

5,025





(1,164)





6,620





(1,365)



Rentals

34,978









34,978







Other

(1,941)





953





(1,570)





(1,041)



Total gross profit

$

126,136





$

46,039





$

168,494





$

58,918



















Gross margin (percentage of revenue)















Real estate services

34.9

%



34.2

%



30.5

%



25.2

%

Properties

2.9





(1.6)





2.5





(0.9)



Rentals

82.2









82.2







Other

(22.8)





13.2





(8.8)





(9.1)



Total gross margin

26.8





21.5





22.8





14.6



Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/redfin-reports-second-quarter-2021-financial-results-301349743.html

SOURCE Redfin

Investor Relations, Meg Nunnally, 206-576-8610, ir@redfin.com; Public Relations, Mariam Sughayer, 206-876-1322, press@redfin.com