News Releases

August 5, 2021 at 4:01 PM EDT
Redfin Reports Second Quarter 2021 Financial Results

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


 

 

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SOURCE Redfin

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