Redfin Experiences Third Quarter 2020 Financial Results

November 05, 2020

SEATTLE, Nov. 5, 2020 /PRNewswire/ — Redfin Corporation (NASDAQ: RDFN) on the present time launched financial results for the third quarter ended September 30, 2020. All financial measures, except otherwise well-known, are supplied on a GAAP basis and encompass stock-basically based totally compensation, depreciation and amortization, and prices linked to actions taken basically based totally on COVID-19.

Revenue lowered 1% one year-over-one year to $237 million within the midst of the third quarter. Contaminated earnings became $93 million, an develop of 74% from $53 million within the third quarter of 2019. True property services and products defective earnings became $92 million, an develop of 70% from $54 million within the third quarter of 2019. True property services and products defective margin became 44%, compared with 35% within the third quarter of 2019. Working prices like been $56 million, an develop of 22% from $46 million within the third quarter of 2019. Working prices like been 24% of earnings, up from 19% within the third quarter of 2019.

Net earnings became $34.2 million, compared with fetch earnings of $6.8 million within the third quarter of 2019. Dividend on our convertible most popular stock became $1.5 million within the third quarter. Net earnings attributable to overall stock became $32.0 million. Inventory-basically based totally compensation became $11.3 million, up from $7.5 million within the third quarter of 2019. Depreciation and amortization became $3.7 million, up from $2.6 million within the third quarter of 2019. Passion earnings became $0.3 million and ardour expense became $2.5 million, compared with $1.6 million and $2.3 million, respectively, within the third quarter of 2019. Reveal and incremental prices linked to COVID-19 like been $0.3 million and are integrated in most cases and administrative prices.

Net earnings per allotment attributable to overall stock, diluted, became $0.30, compared with fetch earnings per allotment, diluted, of $0.07 within the third quarter of 2019.

“Redfin’s rising allotment of North The usa’s online precise property viewers, coupled with a solid housing market, has generated seek data from quicker than we are going to recruit agents, lenders and partners,” said Redfin CEO Glenn Kelman. “Our market allotment good points like resumed, and appear to be accelerating. Our mortgage trade generated its first quarterly defective earnings. It has taken us more than a decade to originate the expertise and the extraordinary community of local agents to let folk tour practically any home within the marketplace in practically any city in The usa, almost or in person. This functionality became a consolation for folk nonetheless at concern of use a ragged agent for a inappropriate-city transfer. Nevertheless for the hundreds and hundreds of American citizens now free to transfer any place within the nation, that diminutive Redfin touring button on their cell-phone camouflage has change into the passport to a brand unusual lifestyles.”

Third Quarter Highlights

Reached market allotment of 1.04% of U.S. existing home sales by establish within the third quarter of 2020, an develop of .08 proportion ingredients from the third quarter of 2019.⁽¹⁾
Saved homebuyers and sellers over $61 million within the third quarter of 2020. This contains the savings Redfin gives investors thru the Redfin Refund and sellers thru Redfin’s decrease list rate when compared with a 2.5% list rate.
Grew guests to our web location and cell utility by 38% compared with the third quarter of 2019.
Kicked off a huge hiring effort to meet surging person seek data from and welcomed over 400 unusual workers to Redfin within the third quarter.
Conducted practically 21,000 video excursions. At the same time as the majority of Redfin consumers like resumed in-person touring, roughly 9% of third quarter tour requests like been for video excursions, a signal Redfin’s virtual brokerage capabilities will almost definitely be a lengthy-term aggressive advantage even after the pandemic subsides.
Launched RedfinNow in Palm Springs. The company has now resumed RedfinNow gives in 11 of 13 markets and has persisted to extend to additional markets within the fourth quarter.
Created a brand unusual Home Sale Consultant characteristic to better wait on prospects navigate their home promoting alternatives at Redfin, whether or no longer they clutch to list within the marketplace with a local Redfin agent or sell at once to RedfinNow.
Elevated the proportion of Redfin workers who are folk of colour from 31% in June to 32% in September.
Appointed Kerry D. Chandler, an experienced HR govt, to the Redfin Board of Directors.

⁽¹⁾ We calculate the aggregate establish of U.S. home sales by multiplying the complete series of U.S. existing home sales by the imply sale establish of these properties, each and each as reported by the National Affiliation of REALTORS^®. We calculate our market allotment by aggregating the home establish of brokerage and accomplice precise property services and products transactions. Then, in disclose to legend for both the sell- and buy-aspect ingredients of each and each transaction, we divide that establish by two-cases the estimated aggregate establish of U.S. home sales.

Commerce Outlook

The following forward-having a take into legend statements replicate Redfin’s expectations as of November 5, 2020, and are subject to monumental uncertainty.

For the fourth quarter of 2020 we demand:

Total earnings between $226 million and $233 million, representing a one year-over-one year decrease between 3% and zero% compared with the fourth quarter of 2019. Properties section earnings between $31 million and $34 million is integrated within the guidance offered.
Net earnings between $2 million and $5 million, compared with fetch loss of $7.8 million within the fourth quarter of 2019. This guidance contains roughly $10.5 million of anticipated stock-basically based totally compensation, $4.2 million of anticipated depreciation and amortization, and $7.5 million of anticipated ardour expense linked with our convertible senior notes and totally different credit rating tasks. This guidance also contains roughly $8.1 million of an anticipated one-time, non-money expense linked with the repurchase of a fraction of our convertible senior notes due 2023. Net earnings attributable to overall stock will encompass the price of dividend on our convertible most popular stock, which we demand to pay in shares of our overall stock.

Conference Call

Redfin will webcast a convention call to focus on about the implications at 1: 30 p.m. Pacific Time on the present time. The webcast will almost definitely be birth to the general public at http://traders.redfin.com. The webcast will remain on hand on the investor relatives web location for on the very least three months following the convention call.

Forward-Having a take into legend Statements

This press birth contains forward-having a take into legend statements within the that strategy of federal securities laws, including our future working results, as described below Commerce Outlook. We assume our expectations linked to these forward-having a take into legend statements are life like, but staunch results might presumably flip out to be materially totally different. For factors that might presumably cause staunch results to fluctuate materially from the forward-having a take into legend statements on this press birth, please discover relating to the hazards and uncertainties recognized below the heading “Possibility Components” in our annual document for the one year ended December 31, 2019, as supplemented by our quarterly document for the quarter ended September 30, 2020, both of that are on hand on our Investor Family members web location at http://traders.redfin.com and on the SEC web location at www.sec.gov. All forward-having a take into legend statements replicate our beliefs and assumptions only as of the date of this press birth. We undertake no responsibility to change forward-having a take into legend statements to repeat future events or conditions.

About Redfin

Redfin is a expertise-powered residential precise property company, redefining precise property within the person’s resolve on in a rate-pushed trade. We non-public this by integrating each and each step of the home attempting to search out and promoting process and pairing our like agents with our like expertise, developing a service that is quicker, better and prices much less. We provide brokerage, iBuying, mortgage, and title services and products, and we also bustle the nation’s #1 precise property brokerage search location, providing a huge selection of online instruments to consumers, including the Redfin Estimate. We signify folk attempting to search out and promoting properties in over 90 markets in the United States and Canada. Since our birth in 2006, now we like got saved our prospects over $800 million and now we like helped them buy or sell more than 235,000 properties price more than $115 billion.

Redfin might presumably post updates about COVID-19’s influence on the U.S. residential precise property trade or its trade on its company weblog at www.redfin.com/weblog/precise-property-data/. We lend a hand traders and others making an allowance for our company to verify and subscribe to the suggestions we post on our company weblog, as one of the important suggestions might presumably be subject matter.

Redfin-F

Redfin Corporation and Subsidiaries Consolidated Statements of Comprehensive Loss (in hundreds, excluding allotment and per allotment portions, unaudited)

	Three Months Ended September 30,					9 Months Ended September 30, 2020
	2020		2019			2020		2019
Revenue
Carrier	$	217,280	$	158,519		$	469,893	$	405,160
Product	19,636		80,164			171,683		141,445
Total earnings	236,916		238,683			641,576		546,605
Save of earnings⁽¹⁾
Carrier	122,583		104,397			314,842		297,320
Product	21,261		80,909			174,744		144,807
Total establish of earnings	143,844		185,306			489,586		442,127
Contaminated earnings	93,072		53,377			151,990		104,478
Working prices
Technology and development⁽¹⁾	22,452		18,801			60,687		50,421
Advertising⁽¹⁾	12,421		8,361			47,611		68,611
Fashioned and administrative⁽¹⁾⁽²⁾	21,190		18,779			68,539		57,881
Total working prices	56,063		45,941			176,837		176,913
Earnings (loss) from operations	37,009		7,436			(24,847)		(72,435)
Passion earnings	319		1,576			1,859		5,804
Passion expense	(2,522)		(2,274)			(7,631)		(6,564)
Varied earnings (expense), fetch	(640)		44			(1,943)		172
Net earnings (loss)	$	34,166	$	6,782		$	(32,562)	$	(73,023)
Dividend on convertible most popular stock	(1,530)		—			(2,814)		—
Undistributed earnings attributable to taking part securities	(653)		—			—		—
Net earnings (loss) attributable to overall stock—overall and diluted	$	31,983	$	6,782		$	(35,376)	$	(73,023)
Net earnings (loss) per allotment attributable to overall stock—overall	$	0.32	$	0.07		$	(0.36)	$	(0.80)
Weighted common shares of overall stock—overall	99,840,144		91,994,731			97,365,122		91,279,086
Net earnings (loss) per allotment attributable to overall stock—diluted	0.30		0.07			(0.36)		(0.80)
Weighted common shares of overall stock—diluted	107,607,711		97,171,270			97,365,122		91,279,086
…………………………………………………………………..					.
Varied complete earnings (loss)
Net earnings (loss)	$	34,166	$	6,782		$	(32,562)	$	(73,023)
International currencies translation adjustments	6		(10)			(16)		28
Unrealized succeed in (loss) on on hand-for-sale securities	(139)		(8)			282		(2)
Total complete earnings (loss)	$	34,033	$	6,764		$	(32,296)	$	(72,997)

(1) Comprises stock-basically based totally compensation as follows:

	Three Months Ended September 30,				9 Months Ended September 30,
	2020		2019		2020		2019
Save of earnings	$	2,574	$	1,605	$	5,981	$	4,398
Technology and development	4,964		3,320		11,736		8,661
Advertising	403		390		1,130		1,025
Fashioned and administrative	3,407		2,195		6,917		5,708
Total	$	11,348	$	7,510	$	25,764	$	19,792

(2) Comprises whine and incremental prices linked to COVID-19 of $321 and $7,846, that are in part offset by $56 and $1,348 in employee retention credits allowed below the CARES Act, for the three and 9 months ended September 30, 2020, respectively.

Redfin Corporation and Subsidiaries Consolidated Steadiness Sheets (in hundreds, excluding allotment and per allotment portions, unaudited)

	September 30, 2020		December 31, 2019
Sources
Fresh sources
Money and money equivalents	$	371,573	$	234,679
Restricted money	16,393		12,769
Rapid-term investments	129,809		70,029
Accounts receivable, fetch	41,085		19,223
Inventory	24,993		74,590
Loans held within the marketplace	41,921		21,985
Pay as you trot prices	7,698		14,822
Varied most standard sources	5,189		3,496
Total most standard sources	638,661		451,593
Property and equipment, fetch	42,210		39,577
Staunch-of-use sources, fetch	45,392		52,004
Long-term investments	17,072		30,978
Goodwill and intangibles, fetch	11,138		11,504
Varied non-most standard sources	8,776		10,557
Total sources	$	763,249	$	596,213
Liabilities, mezzanine equity and stockholders’ equity
Fresh liabilities
Accounts payable	$	3,375	$	2,122
Accrued liabilities	57,517		38,022
Varied payables	10,550		7,884
Warehouse credit rating facilities	40,308		21,302
Secured revolving credit rating facility	14,923		4,444
Convertible senior notes, fetch	124,495		—
Fresh rent liabilities	11,682		11,408
Total most standard liabilities	262,850		85,182
Non-most standard rent liabilities and deposits	51,597		59,869
Convertible senior notes, fetch	—		119,716
Non-most standard payroll tax liabilities	8,711		—
Total liabilities	323,158		264,767
Commitments and contingencies
Sequence A convertible most popular stock—par establish $0.001 per allotment; 10,000,000 shares authorized; 40,000 and no shares issued and prominent, respectively	39,812		—
Stockholders’ equity
Fashioned stock—par establish $0.001 per allotment; 500,000,000 shares authorized; 100,241,416 and 93,001,597 shares issued and prominent, respectively	100		93
Extra paid-in capital	684,219		583,097
Accrued totally different complete earnings	308		42
Accrued deficit	(284,348)		(251,786)
Total stockholders’ equity	400,279		331,446
Total liabilities, mezzanine equity and stockholders’ equity	$	763,249	$	596,213

Redfin Corporation and Subsidiaries Consolidated Statements of Money Flows (in hundreds, unaudited)

	9 Months Ended September 30,
	2020		2019
Working Actions
Net loss	$	(32,562)	$	(73,023)
Adjustments to reconcile fetch loss to fetch money offered by (outmoded in) working activities:
Depreciation and amortization	10,581		6,366
Inventory-basically based totally compensation	25,764		19,792
Amortization of debt carve establish and issuance prices	5,254		4,674
Non-money rent expense	6,821		4,727
Impairment prices	2,063		—
Varied	(693)		(401)
Replace in sources and liabilities:
Accounts receivable, fetch	(21,862)		(9,071)
Inventory	49,597		(82,766)
Pay as you trot prices and totally different sources	5,168		(82)
Accounts payable	851		579
Accrued liabilities, totally different payables, and non-most standard payroll tax liabilities	28,469		18,994
Rent liabilities	(8,368)		(5,095)
Origination of loans held within the marketplace	(479,153)		(285,182)
Proceeds from sale of loans originated as held within the marketplace	459,605		267,850
Net money offered by (outmoded in) working activities	51,535		(132,638)
Investing activities
Purchases of property and equipment	(10,391)		(12,821)
Purchases of investments	(135,118)		(106,063)
Sales of investments	6,583		1,005
Maturities of investments	82,772		4,900
Net money outmoded in investing activities	(56,154)		(112,979)
Financing activities
Proceeds from the issuance of convertible most popular stock, fetch of issuance prices	39,801		—
Proceeds from the issuance of overall stock, fetch of issuance prices	69,701		—
Proceeds from the issuance of shares due to employee equity plans	15,119		10,869
Tax funds linked to fetch allotment settlements on restricted stock objects	(10,987)		(2,856)
Borrowings from warehouse credit rating facilities	473,283		280,129
Repayments to warehouse credit rating facilities	(454,277)		(262,875)
Borrowings from secured revolving credit rating facility	57,378		—
Repayments to secured revolving credit rating facility	(46,899)		—
Varied payables—deposits held in escrow	2,097		637
Significant funds for finance rent tasks	(59)		—
Money paid for debt issuance prices	(4)		(152)
Net money offered by financing activities	145,153		25,752
Plan of exchange rate adjustments on money and money equivalents	(16)		28
Net exchange in money, money equivalents, and restricted money	140,518		(219,837)
Money, money equivalents, and restricted money:
Beginning of length	247,448		439,055
Pause of length	$	387,966	$	219,218

Redfin Corporation and Subsidiaries Supplemental Financial Knowledge and Commerce Metrics (unaudited)

	Three Months Ended
	Sep. 30, 2020			Jun. 30, 2020			Mar. 31, 2020			Dec. 31, 2019			Sep. 30, 2019			Jun. 30, 2019			Mar. 31, 2019			Dec. 31, 2018			Sep. 30, 2018
Month-to-month common guests (in hundreds)	49,258			42,537			35,519			30,595			35,633			36,557			31,107			25,212			29,236
True property services and products transactions
Brokerage	18,980			13,828			10,751			13,122			16,098			15,580			8,435			9,822			12,876
Accomplice	5,180			2,691			2,479			2,958			3,499			3,357			2,125			2,749			3,333
Total	24,160			16,519			13,230			16,080			19,597			18,937			10,560			12,571			16,209
True property services and products earnings per transaction
Brokerage	$	10,241		$	9,296		$	9,520		$	9,425		$	9,075		$	9,332		$	9,640		$	9,569		$	9,227
Accomplice	2,988			2,417			2,535			2,369			2,295			2,218			2,153			2,232			2,237
Aggregate	8,686			8,175			8,211			8,127			7,865			8,071			8,134			7,964			7,790

Aggregate home establish of precise property services and products transactions (in hundreds and hundreds)	$	12,207		$	7,576		$	6,098		$	7,588		$	9,157		$	8,986		$	4,800		$	5,825		$	7,653
U.S. market allotment by establish	1.04		%	0.93		%	0.93		%	0.94		%	0.96		%	0.94		%	0.83		%	0.81		%	0.85		%
Revenue from top-10 Redfin markets as a proportion of precise property services and products earnings	63		%	63		%	61		%	62		%	63		%	64		%	64		%	66		%	66		%
Life like series of lead agents	1,820			1,399			1,826			1,526			1,579			1,603			1,503			1,419			1,397

Redfin Corporation and Subsidiaries Supplemental Financial Knowledge (unaudited, in hundreds)

	Three Months Ended September 30,						9 Months Ended September 30,
	2020			2019			2020			2019
True property services and products earnings
Brokerage earnings	$	194,375		$	146,096		$	425,269		$	372,809
Accomplice earnings	15,478			8,030			28,269			20,053
Total precise property services and products earnings	209,853			154,126			453,538			392,862
Properties earnings	19,005			80,164			170,287			141,445
Varied earnings	8,503			5,161			19,999			13,490
Intercompany eliminations	(445)			(768)			(2,248)			(1,192)
Total earnings	$	236,916		$	238,683		$	641,576		$	546,605

Save of earnings
True property services and products	$	117,944		$	100,048		$	300,305		$	284,447
Properties	20,460			80,909			173,107			144,807
Varied	5,885			5,117			18,422			14,065
Intercompany eliminations	(445)			(768)			(2,248)			(1,192)
Total establish of earnings	$	143,844		$	185,306		$	489,586		$	442,127

Contaminated earnings by section
True property services and products	$	91,909		$	54,078		$	153,233		$	108,415
Properties	(1,455)			(745)			(2,820)			(3,362)
Varied	2,618			44			1,577			(575)
Total defective earnings	$	93,072		$	53,377		$	151,990		$	104,478

Contaminated margin (proportion of earnings)
True property services and products	43.8		%	35.1		%	33.8		%	27.6		%
Properties	(7.7)			(0.9)			(1.7)			(2.4)
Varied	30.8			0.9			7.9			(4.3)
Total defective margin	39.3			22.4			23.7			19.1