SEATTLE, May 9, 2021 /PRNewswire/ — Redfin Corporation (NASDAQ: RDFN) today announced financial results for the first quarter ended March 31, 2021. All financial measures, unless otherwise noted, are presented on a GAAP basis and include stock-based compensation, and depreciation and amortization.
Revenue increased 40% year-over-year to $268 million during the first quarter. Gross profit was $42 million, an increase of 229% from $13 million in the first quarter of 2020. Real estate services gross profit was $40 million, an increase of 168% from $15 million in the first quarter of 2020. Real estate services gross margin was 24%, compared to 14% in the first quarter of 2020. Operating expenses were $77 million, an increase of 9% from $70 million in the first quarter of 2020. Operating expenses were 29% of revenue, down from 37% in the first quarter of 2020.
Net loss was $36 million, compared to net loss of $60 million in the first quarter of 2020. The dividend on our convertible preferred stock was $2.3 million in the first quarter. Net loss attributable to common stock was $38 million. Stock-based compensation was $12.6 million, up from $7.2 million in the first quarter of 2020. Depreciation and amortization was $4.4 million, up from $3.3 million in the first quarter of 2020. Interest income was $0.2 million and interest expense was $1.3 million, compared to $1.1 million and $2.4 million, respectively, in the first quarter of 2020.
Net loss per share attributable to common stock, diluted, was $0.37, compared to net loss per share, diluted, of $0.64 in the first quarter of 2020.
“After scrambling in the second half of 2020 to hire enough agents and lenders to handle a pandemic-driven surge in demand, Redfin is just about hitting on all cylinders,” said Redfin CEO Glenn Kelman. “From the fourth quarter of 2020 to the first quarter of 2021, our year-over-year market-share gains more than doubled, and our year-over-year gross-margin gains also accelerated. We tripled the rate at which we’re scheduling home tours instantly and automatically, giving our customers a competitive advantage when homes are selling faster than ever. Our RedfinNow business of buying and selling homes returned to growth and earned its first significant gross profits, and our mortgage business continued to grow at a year-over-year rate of about 200%.”
First Quarter Highlights
- Reached market share of 1.14% of U.S. existing home sales by value in the first quarter of 2021, an increase of 21 basis points from the first quarter of 2020.(1)
- Saved homebuyers and sellers over $42 million in the first 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 46 million average monthly users in the first quarter, an increase of 30% compared to the first quarter of 2020.
- Completed the acquisition of RentPath on April 2. RentPath is a leading rental listings company, with sites including ApartmentGuide.com, Rent.com, and Rentals.com. Combined with RentPath, Redfin can now be a nationwide destination for all consumers looking for a home.
- Continued expansion of RedfinNow by launching in Phoenix, Maryland, Northern Virginia and Washington D.C. in the first quarter of 2021.
- Launched Redfin Premier service for luxury homes in Lake Tahoe, Los Angeles, Santa Barbara, San Francisco, Seattle and Washington, D.C., expanding from 14 to 20 markets. Redfin Premier offers high-end photography and premium marketing to showcase million dollar homes and reach luxury buyers around the globe.
- Upgraded our software for customers, agents, partners, home services and mortgage teams, including:
- Shipped new software for home sale advisors to stay in touch with prospective home sellers and guide them toward the Redfin selling solution that meets their needs whether that is listing with a Redfin agent or getting a cash offer from RedfinNow.
- Began publishing the commission offered to the buyer agent on homes for sale to give consumers more transparent information about real estate agent fees.
- Published our 2020 Diversity at Redfin report to track our progress and the next steps in our efforts to make Redfin a better place to work for all people. The share of women and people of color at the company and within leadership roles increased from 2019 to 2020. While there is continued opportunity for improvement, the percentage of Black employees rose from 7.5% to 8.5% and the number of Latinx employees rose from 8.4% to 10.0%.
- Subsequent to the first quarter, launched our annual media campaign on April 19 featuring on-demand tours.
(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®. 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.
The following forward-looking statements reflect Redfin’s expectations as of May 5, 2021, and are subject to substantial uncertainty.
For the second quarter of 2021 we expect:
- Total revenue between $446 million and $457 million, representing a year-over-year increase between 109% and 114% compared to the second quarter of 2020. Included within total revenue are properties segment revenue between $151 million and $156 million, and RentPath revenue between $41 million and $42 million.
- Total net loss between $38 million and $32 million, compared to total net loss of $7 million in the second quarter of 2020. RentPath’s contribution to the net loss is expected to be between $10 million and $9 million. This guidance includes approximately $13 million of expected stock-based compensation, $10 million of expected depreciation and amortization, $6 million of expected transaction fees associated with the RentPath acquisition, and $3 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.
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.
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, 2020, as supplemented by our quarterly report for the quarter ended March 31, 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.
Redfin (www.redfin.com) is a technology-powered real estate broker, instant home-buyer (iBuyer), lender, title insurer, and renovations company. 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. Since launching in 2006, we’ve saved customers more than $1 billion in commissions. We serve more than 95 markets across the U.S. and Canada and employ over 4,100 people.