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Redfin Reports Second Quarter 2023 Financial Results

Redfin Corporation (NASDAQ: RDFN) today announced results for its second quarter ended June 30, 2023.

Second Quarter 2023

Second quarter revenue was $275.6 million, a decrease of 21% compared to the second quarter of 2022. Gross profit was $100.2 million, a decrease of 10% year-over-year. Real estate services gross profit was $56.2 million, a decrease of 24% year-over-year, and real estate services gross margin was 31%, compared to 29% in the second quarter of 2022.

Net loss was $27.4 million, compared to a net loss of $78.1 million in the second quarter of 2022. Net loss attributable to common stock was $27.7 million. Net loss per share attributable to common stock, diluted, was $0.25, compared to net loss per share, diluted, of $0.73 in the second quarter of 2022.

“In a declining market, Redfin improved our second-quarter net income by $50 million,” said Redfin CEO Glenn Kelman. “We expect to break-even on an adjusted-EBITDA basis over the next 12 months rather than in 2023, which is a setback, but still we project that our adjusted EBITDA this year will improve by more than $140 million. We lost market share due to one-time setbacks from agent layoffs and the closure of RedfinNow, but we expect to return to quarter-over-quarter gains in the second half, as Redfin.com has been competing better for traffic. The year-over-year change in visitors to Redfin.com was 17 points better in the second quarter than it was for the two largest portals to for-sale listings, an acceleration from our first-quarter advantage of 12 points. Gross margins in our core real-estate-services business improved by nearly two percentage points. We believe Redfin is set up for profitable growth.”

Second Quarter Highlights

  • Second quarter market share was 0.75% of U.S. existing home sales by units, compared to 0.83% in the second quarter of 2022.
  • Redfin’s mobile apps and website reached more than 52 million average monthly users, compared to 53 million in the second quarter of 2022.
  • Maintained momentum in mortgage cross-selling with 19% attach rates for the second quarter, up from 8% in the second quarter of 2022.
  • Brought Title Forward closing services to Florida and made significant progress in cross-selling, with 57% attach rates in the second quarter, up from 29% in the second quarter of 2022.
  • Experienced an uptick in high-end demand with over 1,300 $1M+ listings since launching the new Redfin Premier brand in the first quarter. In large coastal markets like San Francisco and Los Angeles, Redfin's year-over-year growth in $1M+ pending transactions began outpacing the broader market in June.
  • Began leveraging AI to improve both employee efficiency and the user experience on Redfin.com, including using large language models to assist with internal engineering tasks and to create content at scale for users.
  • Increased the mix of sales to loyalty customers from 35% in the second quarter of 2022 to 37% in the second quarter of 2023, driven by better agent follow-up and pipeline mining efforts.
  • Delivered software to improve customer and agent experience while driving customer contacts and boosting traffic to Redfin:
    • Launched a new design system for all property pages on Redfin.com, improving the visual appearance and making it easier for Redfin teams to create beautiful, scalable features in the future. These improvements also drove significant growth in the number of buyers and sellers contacting Redfin for service.
    • Updated SMS surveys for customers who tour with Redfin Partner Agents, making it easier for them to submit feedback about their experience and improving Redfin’s understanding of tour completion rate.
    • Improved prioritization in Redfin’s support queue, helping high-intent customers get personalized help faster and generating a 1% increase in listing customers.
    • Updated rental contact request process that makes it easier for potential renters to browse additional properties and contact multiple properties at once.

Business Outlook

The following forward-looking statements reflect Redfin's expectations as of August 3, 2023, and are subject to substantial uncertainty.

For the third quarter of 2023 we expect:

  • Total revenue between $265 million and $279 million, representing a year-over-year decline between (13)% and (9)% compared to the third quarter of 2022. Included within total revenue are real estate services revenue between $172 million and $182 million, rentals revenue between $46 million and $47 million, mortgage revenue between $35 million and $38 million and other revenue of approximately $12 million.
  • Total net loss is expected to be between $30 million and $21 million, compared to net loss of $90 million in the third quarter of 2022. This guidance includes approximately $25 million in total marketing expenses, $18 million of stock-based compensation and $17 million of depreciation and amortization. Adjusted EBITDA is expected to be between $4 million and $14 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 June 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 June 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 5,000 people.

Redfin-F

Redfin Corporation and Subsidiaries

Consolidated Balance Sheets

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

 

 

June 30, 2023

 

December 31, 2022

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

118,776

 

 

$

232,200

 

Restricted cash

 

2,377

 

 

 

2,406

 

Short-term investments

 

100,643

 

 

 

122,259

 

Accounts receivable, net of allowances for credit losses of $2,206 and $2,223

 

67,753

 

 

 

46,375

 

Loans held for sale

 

233,550

 

 

 

199,604

 

Prepaid expenses

 

26,042

 

 

 

34,006

 

Other current assets

 

9,979

 

 

 

7,449

 

Current assets of discontinued operations

 

1,378

 

 

 

132,159

 

Total current assets

 

560,498

 

 

 

776,458

 

Property and equipment, net

 

49,241

 

 

 

54,939

 

Right-of-use assets, net

 

37,270

 

 

 

40,889

 

Mortgage servicing rights, at fair value

 

35,503

 

 

 

36,261

 

Long-term investments

 

5,473

 

 

 

29,480

 

Goodwill

 

461,349

 

 

 

461,349

 

Intangible assets, net

 

142,778

 

 

 

162,272

 

Other assets, noncurrent

 

11,493

 

 

 

11,247

 

Noncurrent assets of discontinued operations

 

 

 

 

1,309

 

Total assets

$

1,303,605

 

 

$

1,574,204

 

Liabilities, mezzanine equity, and stockholders' equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

14,661

 

 

$

11,065

 

Accrued and other liabilities

 

102,568

 

 

 

106,763

 

Warehouse credit facilities

 

227,801

 

 

 

190,509

 

Convertible senior notes, net

 

23,506

 

 

 

23,431

 

Lease liabilities

 

16,234

 

 

 

18,560

 

Current liabilities of discontinued operations

 

44

 

 

 

4,311

 

Total current liabilities

 

384,814

 

 

 

354,639

 

Lease liabilities, noncurrent

 

34,383

 

 

 

36,906

 

Convertible senior notes, net, noncurrent

 

834,716

 

 

 

1,078,157

 

Deferred tax liabilities

 

255

 

 

 

243

 

Noncurrent liabilities of discontinued operations

 

 

 

 

392

 

Total liabilities

 

1,254,168

 

 

 

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 June 30, 2023 and December 31, 2022, respectively

 

39,936

 

 

 

39,914

 

Stockholders’ equity

 

 

 

Common stock—par value $0.001 per share; 500,000,000 shares authorized; 113,934,673 and 109,696,178 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

 

114

 

 

 

110

 

Additional paid-in capital

 

791,302

 

 

 

757,951

 

Accumulated other comprehensive loss

 

(452

)

 

 

(801

)

Accumulated deficit

 

(781,463

)

 

 

(693,307

)

Total stockholders’ equity

 

9,501

 

 

 

63,953

 

Total liabilities, mezzanine equity, and stockholders’ equity

$

1,303,605

 

 

$

1,574,204

 

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,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

 

275,556

 

 

 

349,049

 

 

 

489,639

 

 

 

571,865

 

Cost of revenue(1)

 

175,366

 

 

 

237,813

 

 

 

331,311

 

 

 

408,980

 

Gross profit

 

100,190

 

 

 

111,236

 

 

 

158,328

 

 

 

162,885

 

Operating expenses

 

 

 

 

 

 

 

Technology and development(1)

 

47,141

 

 

 

46,822

 

 

 

94,804

 

 

 

92,343

 

Marketing(1)

 

33,033

 

 

 

55,922

 

 

 

73,436

 

 

 

98,111

 

General and administrative(1)

 

61,765

 

 

 

68,523

 

 

 

131,204

 

 

 

124,664

 

Restructuring and reorganization

 

6,106

 

 

 

12,406

 

 

 

7,159

 

 

 

18,115

 

Total operating expenses

 

148,045

 

 

 

183,673

 

 

 

306,603

 

 

 

333,233

 

Loss from operations

 

(47,855

)

 

 

(72,437

)

 

 

(148,275

)

 

 

(170,348

)

Interest income

 

2,704

 

 

 

554

 

 

 

6,110

 

 

 

774

 

Interest expense

 

(1,766

)

 

 

(2,217

)

 

 

(3,688

)

 

 

(4,429

)

Income tax expense

 

(233

)

 

 

(159

)

 

 

(643

)

 

 

(293

)

Gain on extinguishment of convertible senior notes

 

20,083

 

 

 

 

 

 

62,353

 

 

 

 

Other expense, net

 

(145

)

 

 

(264

)

 

 

(379

)

 

 

(2,175

)

Net loss from continuing operations

$

(27,212

)

 

$

(74,523

)

 

$

(84,522

)

 

$

(176,471

)

Net (loss) income from discontinued operations

 

(146

)

 

 

(3,623

)

 

 

(3,634

)

 

7,519

 

Net loss

$

(27,358

)

 

$

(78,146

)

 

$

(88,156

)

 

$

(168,952

)

 

 

 

 

 

 

 

 

Net loss from continuing operations

 

(27,212

)

 

 

(74,523

)

 

 

(84,522

)

 

 

(176,471

)

Dividends on convertible preferred stock

 

(297

)

 

 

(350

)

 

 

(523

)

 

 

(1,144

)

Net loss from continuing operations attributable to common stock—basic and diluted

$

(27,509

)

 

$

(74,873

)

 

$

(85,045

)

 

$

(177,615

)

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

$

(0.25

)

 

$

(0.70

)

 

$

(0.77

)

 

$

(1.66

)

Weighted-average shares to compute net loss per share attributable to common stock—basic and diluted

 

111,678,417

 

 

 

107,396,575

 

 

 

110,895,358

 

 

 

107,032,381

 

Net loss attributable to common stock—basic and diluted

$

(27,655

)

 

$

(78,496

)

 

$

(88,679

)

 

$

(170,096

)

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

$

(0.25

)

 

$

(0.73

)

 

$

(0.80

)

 

$

(1.59

)

 

 

 

 

 

 

 

 

Net loss

$

(27,358

)

 

$

(78,146

)

 

$

(88,156

)

 

$

(168,952

)

Other comprehensive (loss) income

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

34

 

 

 

(58

)

 

 

38

 

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

 

(17

)

 

 

217

 

 

 

407

 

 

 

778

 

Comprehensive loss

$

(27,375

)

 

$

(77,895

)

 

 

(87,807

)

 

 

(168,136

)

(1) Includes stock-based compensation as follows:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Cost of revenue

$

3,001

 

$

3,615

 

$

7,136

 

$

6,605

Technology and development

 

8,241

 

 

6,768

 

 

16,368

 

 

13,877

Marketing

 

1,254

 

 

894

 

 

2,499

 

 

1,937

General and administrative

 

5,025

 

 

4,009

 

 

10,345

 

 

8,118

Total

$

17,521

 

$

15,286

 

$

36,348

 

$

30,537

Redfin Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands, unaudited)

 

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

Operating Activities

 

 

 

Net loss

$

(88,156

)

 

$

(168,952

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

34,146

 

 

 

31,140

 

Stock-based compensation

 

36,582

 

 

 

33,601

 

Amortization of debt discount and issuance costs

 

2,029

 

 

 

2,899

 

Non-cash lease expense

 

9,578

 

 

 

7,096

 

Impairment costs

 

113

 

 

 

 

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

 

(4,565

)

 

 

2,721

 

Change in fair value of mortgage servicing rights, net

 

599

 

 

 

(878

)

Gain on extinguishment of convertible senior notes

 

(62,353

)

 

 

 

Other

 

(1,794

)

 

 

3,170

 

Change in assets and liabilities:

 

 

 

Accounts receivable, net

 

(14,069

)

 

 

(6,791

)

Inventory

 

114,232

 

 

 

(19,297

)

Prepaid expenses and other assets

 

8,868

 

 

 

(2,852

)

Accounts payable

 

2,812

 

 

 

5,964

 

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

 

(4,522

)

 

 

5,529

 

Lease liabilities

 

(10,790

)

 

 

(8,042

)

Origination of mortgage servicing rights

 

(579

)

 

 

(964

)

Proceeds from sale of mortgage servicing rights

 

738

 

 

 

774

 

Origination of loans held for sale

 

(1,922,690

)

 

 

(1,641,377

)

Proceeds from sale of loans originated as held for sale

 

1,888,706

 

 

 

1,587,759

 

Net cash used in operating activities

 

(11,115

)

 

 

(168,500

)

Investing activities

 

 

 

Purchases of property and equipment

 

(6,213

)

 

 

(12,131

)

Purchases of investments

 

(76,866

)

 

 

(82,184

)

Sales of investments

 

65,099

 

 

 

12,946

 

Maturities of investments

 

59,383

 

 

 

19,425

 

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

 

 

 

 

(97,341

)

Net cash provided by (used in) investing activities

 

41,403

 

 

 

(159,285

)

Financing activities

 

 

 

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

 

5,665

 

 

 

9,258

 

Tax payments related to net share settlements on restricted stock units

 

(11,096

)

 

 

(3,743

)

Borrowings from warehouse credit facilities

 

1,920,487

 

 

 

1,628,684

 

Repayments to warehouse credit facilities

 

(1,883,196

)

 

 

(1,572,033

)

Borrowings from secured revolving credit facility

 

 

 

 

326,025

 

Repayments to secured revolving credit facility

 

 

 

 

(369,266

)

Cash paid for secured revolving credit facility issuance costs

 

 

 

 

(764

)

Principal payments under finance lease obligations

 

(53

)

 

 

(414

)

Repurchases of convertible senior notes

 

(183,019

)

 

 

 

Net cash (used in) provided by financing activities

 

(151,212

)

 

 

17,747

 

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

 

(58

)

 

 

(42

)

Net change in cash, cash equivalents, and restricted cash

 

(120,982

)

 

 

(310,080

)

Cash, cash equivalents, and restricted cash:

 

 

 

Beginning of period

 

242,246

 

 

 

718,281

 

End of period

$

121,264

 

 

$

408,201

 

Redfin Corporation and Subsidiaries

Supplemental Financial Information and Business Metrics

(unaudited)

 

 

Three Months Ended

 

Jun. 30, 2023

 

Mar. 31, 2023

 

Dec. 31, 2022

 

Sep. 30, 2022

 

Jun. 30, 2022

 

Mar. 31, 2022

 

Dec. 31, 2021

 

Sep. 30, 2021

Monthly average visitors (in thousands)

 

52,308

 

 

 

50,440

 

 

 

43,847

 

 

 

50,785

 

 

 

52,698

 

 

 

51,287

 

 

 

44,665

 

 

 

49,147

 

Real estate services transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage

 

13,716

 

 

 

10,301

 

 

 

12,743

 

 

 

18,245

 

 

 

20,565

 

 

 

15,001

 

 

 

19,428

 

 

 

21,929

 

Partner

 

3,952

 

 

 

3,187

 

 

 

2,742

 

 

 

3,507

 

 

 

3,983

 

 

 

3,417

 

 

 

4,603

 

 

 

4,755

 

Total

 

17,668

 

 

 

13,488

 

 

 

15,485

 

 

 

21,752

 

 

 

24,548

 

 

 

18,418

 

 

 

24,031

 

 

 

26,684

 

Real estate services revenue per transaction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage

$

12,376

 

 

$

11,556

 

 

$

10,914

 

 

$

11,103

 

 

$

11,692

 

 

$

11,191

 

 

$

10,900

 

 

$

11,107

 

Partner

 

2,756

 

 

 

2,592

 

 

 

2,611

 

 

 

2,556

 

 

 

2,851

 

 

 

2,814

 

 

 

2,819

 

 

 

2,990

 

Aggregate

 

10,224

 

 

 

9,438

 

 

 

9,444

 

 

 

9,725

 

 

 

10,258

 

 

 

9,637

 

 

 

9,352

 

 

 

9,661

 

U.S. market share by units(1)

 

0.75

%

 

 

0.79

%

 

 

0.76

%

 

 

0.80

%

 

 

0.83

%

 

 

0.79

%

 

 

0.78

%

 

 

0.78

%

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

 

55

%

 

 

53

%

 

 

57

%

 

 

58

%

 

 

59

%

 

 

57

%

 

 

61

%

 

 

62

%

Average number of lead agents

 

1,792

 

 

 

1,876

 

 

 

2,022

 

 

 

2,293

 

 

 

2,640

 

 

 

2,750

 

 

 

2,485

 

 

 

2,370

 

Mortgage originations by dollars (in millions)

$

1,282

 

 

$

991

 

 

$

1,036

 

 

$

1,557

 

 

$

1,565

 

 

$

159

 

 

$

242

 

 

$

258

 

Mortgage originations by units (in ones)

 

3,131

 

 

 

2,444

 

 

 

2,631

 

 

 

3,720

 

 

 

3,860

 

 

 

414

 

 

 

591

 

 

 

671

 

(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 June 30, 2023

 

Real estate

services

 

Rentals

 

Mortgage

 

Other

 

Corporate

overhead

 

Total

Revenue(1)

$

180,641

 

 

$

45,356

 

 

$

38,426

 

 

$

11,133

 

$

 

 

$

275,556

 

Cost of revenue

 

124,447

 

 

 

10,427

 

 

 

34,266

 

 

 

6,226

 

 

 

 

 

175,366

 

Gross profit

 

56,194

 

 

 

34,929

 

 

 

4,160

 

 

 

4,907

 

 

 

 

 

100,190

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Technology and development

 

28,044

 

 

 

16,304

 

 

 

734

 

 

 

1,118

 

 

941

 

 

 

47,141

 

Marketing

 

16,004

 

 

 

15,938

 

 

 

1,054

 

 

 

16

 

 

21

 

 

 

33,033

 

General and administrative

 

20,961

 

 

 

25,305

 

 

 

6,724

 

 

 

1,044

 

 

7,731

 

 

 

61,765

 

Restructuring and reorganization

 

 

 

 

 

 

 

 

 

 

 

 

6,106

 

 

 

6,106

 

Total operating expenses

 

65,009

 

 

 

57,547

 

 

 

8,512

 

 

 

2,178

 

 

14,799

 

 

 

148,045

 

(Loss) income from continuing operations

 

(8,815

)

 

 

(22,618

)

 

 

(4,352

)

 

 

2,729

 

 

(14,799

)

 

 

(47,855

)

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

 

 

 

 

28

 

 

 

(91

)

 

 

153

 

 

20,553

 

 

 

20,643

 

Net (loss) income from continuing operations

$

(8,815

)

 

$

(22,590

)

 

$

(4,443

)

 

$

2,882

 

$

5,754

 

 

$

(27,212

)

 

(1) Included in revenue is $0.1 million from providing services to our discontinued properties segment.

 

Three Months Ended June 30, 2023

 

Real estate

services

 

Rentals

 

Mortgage

 

Other

 

Corporate

overhead

 

Total

Net (loss) income from continuing operations

$

(8,815

)

 

$

(22,590

)

 

$

(4,443

)

 

$

2,882

 

 

$

5,754

 

 

$

(27,212

)

Interest income(1)

 

 

 

 

(77

)

 

 

(3,686

)

 

 

(153

)

 

 

(2,467

)

 

 

(6,383

)

Interest expense(2)

 

 

 

 

 

 

 

3,990

 

 

 

 

 

 

1,766

 

 

 

5,756

 

Income tax expense

 

 

 

 

43

 

 

 

83

 

 

 

 

 

 

107

 

 

 

233

 

Depreciation and amortization

 

5,264

 

 

 

10,235

 

 

 

994

 

 

 

307

 

 

 

329

 

 

 

17,129

 

Stock-based compensation(3)

 

12,297

 

 

 

3,709

 

 

 

823

 

 

 

561

 

 

 

131

 

 

 

17,521

 

Acquisition-related costs(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

 

 

8

 

Restructuring and reorganization(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

6,106

 

 

 

6,106

 

Gain on extinguishment of convertible senior notes

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,083

)

 

 

(20,083

)

Adjusted EBITDA

$

8,746

 

 

$

(8,680

)

 

$

(2,239

)

 

$

3,597

 

 

$

(8,349

)

 

$

(6,925

)

(1) Interest income includes $3.7 million of interest income related to originated mortgage loans for the three months ended June 30, 2023.

(2) Interest expense includes $4.0 million of interest expense related to our warehouse credit facilities for the three months ended June 30, 2023.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 12 to our consolidated financial statements for more information.

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

(5) Restructuring and reorganization expenses primarily consist of personnel-related costs associated with employee terminations, furloughs, or retention due to the restructuring and reorganization activities from our acquisitions of Bay Equity and Rent., and from our June 2022, October 2022, and March 2023 workforce reductions.

 

Three Months Ended June 30, 2022

 

Real estate

services

 

Rentals

 

Mortgage

 

Other

 

Corporate

overhead

 

Total

Revenue(1)

$

251,809

 

 

$

38,248

 

 

$

53,098

 

 

$

5,894

 

 

$

 

 

$

349,049

 

Cost of revenue

 

177,698

 

 

 

7,901

 

 

 

46,316

 

 

 

5,898

 

 

 

 

 

 

237,813

 

Gross profit

 

74,111

 

 

 

30,347

 

 

 

6,782

 

 

 

(4

)

 

 

 

 

 

111,236

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Technology and development

 

27,696

 

 

 

14,871

 

 

 

1,904

 

 

 

1,189

 

 

 

1,162

 

 

 

46,822

 

Marketing

 

40,765

 

 

 

13,086

 

 

 

1,843

 

 

 

71

 

 

 

157

 

 

 

55,922

 

General and administrative

 

24,341

 

 

 

21,824

 

 

 

9,450

 

 

 

850

 

 

 

12,058

 

 

 

68,523

 

Restructuring and reorganization

 

 

 

 

 

 

 

 

 

 

 

 

 

12,406

 

 

 

12,406

 

Total operating expenses

 

92,802

 

 

 

49,781

 

 

 

13,197

 

 

 

2,110

 

 

 

25,783

 

 

 

183,673

 

Loss from continuing operations

 

(18,691

)

 

 

(19,434

)

 

 

(6,415

)

 

 

(2,114

)

 

 

(25,783

)

 

 

(72,437

)

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

 

(123

)

 

 

232

 

 

 

(35

)

 

 

11

 

 

 

(2,171

)

 

 

(2,086

)

Net loss from continuing operations

$

(18,814

)

 

$

(19,202

)

 

$

(6,450

)

 

$

(2,103

)

 

$

(27,954

)

 

$

(74,523

)

 

(1) Included in revenue is $4.7 million from providing services to our discontinued properties segment.

 

Three Months Ended June 30, 2022

 

Real estate

services

 

Rentals

 

Mortgage

 

Other

 

Corporate

overhead

 

Total

Net loss from continuing operations

$

(18,814

)

 

$

(19,202

)

 

$

(6,450

)

 

$

(2,103

)

 

$

(27,954

)

 

$

(74,523

)

Interest income(1)

 

 

 

 

(1

)

 

 

(2,929

)

 

 

(12

)

 

 

(540

)

 

 

(3,482

)

Interest expense(2)

 

 

 

 

 

 

 

1,958

 

 

 

 

 

 

2,214

 

 

 

4,172

 

Income tax expense

 

 

 

 

(230

)

 

 

33

 

 

 

 

 

 

356

 

 

 

159

 

Depreciation and amortization

 

4,551

 

 

 

9,511

 

 

 

1,070

 

 

 

318

 

 

 

272

 

 

 

15,722

 

Stock-based compensation(3)

 

9,670

 

 

 

2,739

 

 

 

780

 

 

 

441

 

 

 

1,656

 

 

 

15,286

 

Acquisition-related costs(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

1,507

 

 

 

1,507

 

Restructuring and reorganization(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

12,406

 

 

 

12,406

 

Adjusted EBITDA

$

(4,593

)

 

$

(7,183

)

 

$

(5,538

)

 

$

(1,356

)

 

$

(10,083

)

 

$

(28,753

)

(1) Interest income includes $2.9 million of interest income related to originated mortgage loans for the three months ended June 30, 2022.

(2) Interest expense includes $2.0 million of interest expense related to our warehouse credit facilities for the three months ended June 30, 2022.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 12 to our consolidated financial statements for more information.

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

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

 

Six Months Ended June 30, 2023

 

Real estate

services

 

Rentals

 

Mortgage

 

Other

 

Corporate

overhead

 

Total

Revenue(1)

$

307,937

 

 

$

88,226

 

 

$

74,915

 

 

$

18,561

 

$

 

 

$

489,639

 

Cost of revenue

 

235,941

 

 

 

20,192

 

 

 

63,479

 

 

 

11,699

 

 

 

 

 

331,311

 

Gross profit

 

71,996

 

 

 

68,034

 

 

 

11,436

 

 

 

6,862

 

 

 

 

 

158,328

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Technology and development

 

56,939

 

 

 

32,268

 

 

 

1,377

 

 

 

2,342

 

 

1,878

 

 

 

94,804

 

Marketing

 

41,064

 

 

 

30,264

 

 

 

2,034

 

 

 

26

 

 

48

 

 

 

73,436

 

General and administrative

 

40,579

 

 

 

51,607

 

 

 

13,653

 

 

 

2,097

 

 

23,268

 

 

 

131,204

 

Restructuring and reorganization

 

 

 

 

 

 

 

 

 

 

 

 

7,159

 

 

 

7,159

 

Total operating expenses

 

138,582

 

 

 

114,139

 

 

 

17,064

 

 

 

4,465

 

 

32,353

 

 

 

306,603

 

(Loss) income from continuing operations

 

(66,586

)

 

 

(46,105

)

 

 

(5,628

)

 

 

2,397

 

 

(32,353

)

 

 

(148,275

)

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

 

 

 

 

73

 

 

 

(151

)

 

 

268

 

 

63,563

 

 

 

63,753

 

Net (loss) income from continuing operations

$

(66,586

)

 

$

(46,032

)

 

$

(5,779

)

 

$

2,665

 

$

31,210

 

 

$

(84,522

)

 

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

 

Six Months Ended June 30, 2023

 

Real estate

services

 

Rentals

 

Mortgage

 

Other

 

Corporate

overhead

 

Total

Net (loss) income from continuing operations

$

(66,586

)

 

$

(46,032

)

 

$

(5,779

)

 

$

2,665

 

 

$

31,210

 

 

$

(84,522

)

Interest income(1)

 

 

 

 

(157

)

 

 

(6,176

)

 

 

(268

)

 

 

(5,668

)

 

 

(12,269

)

Interest expense(2)

 

 

 

 

 

 

 

6,605

 

 

 

 

 

 

3,687

 

 

 

10,292

 

Income tax expense

 

 

 

 

86

 

 

 

151

 

 

 

 

 

 

406

 

 

 

643

 

Depreciation and amortization

 

9,696

 

 

 

20,387

 

 

 

1,982

 

 

 

523

 

 

 

1,432

 

 

 

34,020

 

Stock-based compensation(3)

 

21,890

 

 

 

7,325

 

 

 

2,081

 

 

 

1,122

 

 

 

3,930

 

 

 

36,348

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

(62,353

)

 

 

(62,353

)

Adjusted EBITDA

$

(35,000

)

 

$

(18,391

)

 

$

(1,136

)

 

$

4,042

 

 

$

(20,076

)

 

$

(70,561

)

(1) Interest income includes $6.2 million of interest income related to originated mortgage loans for the six months ended June 30, 2023.

(2) Interest expense includes $6.6 million of interest expense related to our warehouse credit facilities for the six months ended June 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.

 

Six Months Ended June 30, 2022

 

Real estate

services

 

Rentals

 

Mortgage

 

Other

 

Corporate

overhead

 

Total

Revenue(1)

$

429,295

 

 

$

76,292

 

 

$

56,015

 

 

$

10,263

 

 

$

 

 

$

571,865

 

Cost of revenue

 

331,482

 

 

 

15,094

 

 

 

51,834

 

 

 

10,570

 

 

 

 

 

 

408,980

 

Gross profit

 

97,813

 

 

 

61,198

 

 

 

4,181

 

 

 

(307

)

 

 

 

 

 

162,885

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Technology and development

 

54,435

 

 

 

29,154

 

 

 

4,251

 

 

 

2,225

 

 

 

2,278

 

 

 

92,343

 

Marketing

 

71,608

 

 

 

24,128

 

 

 

1,871

 

 

 

125

 

 

 

379

 

 

 

98,111

 

General and administrative

 

47,333

 

 

 

46,015

 

 

 

10,974

 

 

 

1,562

 

 

 

18,780

 

 

 

124,664

 

Restructuring and reorganization

 

 

 

 

 

 

 

 

 

 

 

 

 

18,115

 

 

 

18,115

 

Total operating expenses

 

173,376

 

 

 

99,297

 

 

 

17,096

 

 

 

3,912

 

 

 

39,552

 

 

 

333,233

 

Loss from operations

 

(75,563

)

 

 

(38,099

)

 

 

(12,915

)

 

 

(4,219

)

 

 

(39,552

)

 

 

(170,348

)

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

 

(123

)

 

 

701

 

 

 

(35

)

 

 

12

 

 

 

(6,678

)

 

 

(6,123

)

Net loss from continuing operations

$

(75,686

)

 

$

(37,398

)

 

$

(12,950

)

 

$

(4,207

)

 

$

(46,230

)

 

$

(176,471

)

 

(1) Included in revenue is $10.0 million from providing services to our discontinued properties segment.

 

Six Months Ended June 30, 2022

 

Real estate

services

 

Rentals

 

Mortgage

 

Other

 

Corporate

overhead

 

Total

Net loss from continuing operations

$

(75,686

)

 

$

(37,398

)

 

$

(12,950

)

 

$

(4,207

)

 

$

(46,230

)

 

$

(176,471

)

Interest income(1)

 

 

 

 

(1

)

 

 

(3,247

)

 

 

(13

)

 

 

(759

)

 

 

(4,020

)

Interest expense(2)

 

 

 

 

 

 

 

2,235

 

 

 

 

 

 

4,427

 

 

 

6,662

 

Income tax expense

 

 

 

 

(434

)

 

 

33

 

 

 

 

 

 

694

 

 

 

293

 

Depreciation and amortization

 

8,569

 

 

 

18,867

 

 

 

1,372

 

 

 

573

 

 

 

618

 

 

 

29,999

 

Stock-based compensation(3)

 

19,810

 

 

 

4,979

 

 

 

1,381

 

 

 

810

 

 

 

3,557

 

 

 

30,537

 

Acquisition-related costs(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

2,424

 

 

 

2,424

 

Restructuring and reorganization(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

18,115

 

 

 

18,115

 

Adjusted EBITDA

$

(47,307

)

 

$

(13,987

)

 

$

(11,176

)

 

$

(2,837

)

 

$

(17,154

)

 

$

(92,461

)

(1) Interest income includes $3.2 million of interest income related to originated mortgage loans for the six months ended June 30, 2023.

(2) Interest expense includes $2.2 million of interest expense related to our warehouse credit facilities for the six months ended June 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.

 

Reconciliation of Adjusted EBITDA Guidance to Net Loss Guidance

(unaudited, in millions)

 

 

Q3 2023

 

Low

 

High

Net loss

(30)

 

(21)

Depreciation and amortization

17

 

17

Stock-based compensation

18

 

18

Adjusted EBITDA

4

 

14

 

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