Redfin Reports Third Quarter 2022 Financial Results
Redfin Corporation (NASDAQ: RDFN) today announced results for its third quarter ended September 30, 2022.
Third Quarter 2022
Third quarter revenue was $600.5 million, an increase of 11% compared to the third quarter of 2021. Gross profit was $58.1 million, a decrease of 54% year-over-year. Real estate services gross profit was $54.9 million, a decrease of 43% year-over-year, and real estate services gross margin was 26%, compared to 37% in the third quarter of 2021.
Net loss was $90.2 million, compared to a net loss of $18.9 million in the third quarter of 2021. Net loss attributable to common stock was $90.5 million. Net loss per share attributable to common stock, diluted, was $0.83, compared to net loss per share, diluted, of $0.20 in the third quarter of 2021.
Adjusted EBITDA loss was $51.0 million, compared to adjusted EBITDA income of $11.8 million in the third quarter of 2021.
“Laying off 862 colleagues and friends is heartbreaking,” said Redfin CEO Glenn Kelman. “But I feel relief about closing RedfinNow with relatively low losses. We’re profoundly grateful for the dazzling entrepreneurs who built that business on a knife’s edge, but its appeal to consumers has waned as the market turned. Home prices will at some point stabilize but the cost of capital isn’t going back to 2021 levels any time soon, and this is a major why RedfinNow offers had already gotten so low. Redfin will have more cash and sell more properties by focusing on growth in our online audience, low fees, and better brokerage, mortgage and title service. Already, our share of real estate traffic and home sales is increasing. Loyalty sales and the rate at which Redfin customers stuck with us for a sale also both increased in the third quarter, as did mortgage and title attach rates. The year after we bought it in bankruptcy, our Rent business is growing instead of declining. Housing companies are in the jungle now, but Redfin has been there before and come out stronger. We’ll generate adjusted EBITDA in 2023 and net income in 2024.”
Third Quarter Highlights
Reached market share of 0.80% of U.S. existing home sales by units in the third quarter of 2022, an increase of 2 basis points from the third quarter of 2021. Redfin’s mobile apps and website reached more than 51 million average monthly users in the third quarter, an increase of 3% compared to the third quarter of 2021. Brought Redfin agent service to Hilton Head, South Carolina and expanded listing coverage to a total of 96% of the U.S. population. Streamlined Redfin Concierge service with a simpler pricing model that helps customers fix up their home to sell for top dollar. In our pilot markets, adoption in homes valued at more than $500,000 grew from 6.8% in the first quarter of 2022 to 24.0% in the third quarter. Increased representation of underrepresented racial or ethnic groups in senior leadership to 13% in the third quarter of 2022 from 10% in the prior year. Focused internal DEI resources on educating agents about the needs of Hispanic and Latinx homebuyers and better equipping them to serve customers with limited English proficiency. Significant sequential step-up in mortgage cross-selling with 17% attach rates for the third quarter compared to 8% in the second quarter of 2022. Delivered software to improve the customers experience and employee productivity: Added down payment assistance information to U.S. for-sale home listings, making it easier for consumers to discover assistance programs they may qualify for in order to make home ownership more affordable. Added transit data to listing pages, showing renters and buyers the stops that serve each home. Introduced a low-code tool that allows product teams and marketers to launch new Redfin.com resources quickly and easily. Newly designed listing pages on Android, which increased buy-side contacts by more than 9% and scheduled tours by more than 8%.Business Outlook
The following forward-looking statements reflect Redfin's expectations as of November 9, 2022, and are subject to substantial uncertainty.
For the fourth quarter of 2022 we expect:
Total revenue between $430 million and $459 million, representing a year-over-year decline between (33)% and (29)% compared to the fourth quarter of 2021. Included within total revenue are real estate services segment revenue between $136 million and $144 million, properties segment revenue between $220 million and $240 million, rentals revenue between $39 million and $40 million and mortgage revenue between $29 million and $32 million. Total net loss is expected to be between $134 million and $118 million, compared to net loss of $27 million in the fourth quarter of 2021. This guidance includes approximately $25 million in total marketing expenses, $17 million of stock-based compensation, $18 million of depreciation and amortization, $23 million to $21 million in restructuring expenses, and $5 million to $4 million of net interest expense. Adjusted EBITDA loss is expected to be between $71 million and $58 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, 2021, as supplemented by our quarterly report for the quarter ended September 30, 2022, 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, on a consolidated basis and for each reportable segment, for the three months ended September 30, 2022 and 2021 is presented below, along with a reconciliation of adjusted EBITDA to net loss. The reconciliation of adjusted EBITDA to net loss for the three months ended September 30, 2022 is also below.
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 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 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 5,000 people.
Redfin-F
Redfin Corporation and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share amounts, unaudited)
September 30, 2022
December 31, 2021
Assets
Current assets
Cash and cash equivalents
$
359,724
$
591,003
Restricted cash
43,992
127,278
Short-term investments
110,316
33,737
Accounts receivable, net of allowances for credit losses of $1,979 and $1,298
96,343
69,594
Inventory
301,231
358,221
Loans held for sale
256,339
35,759
Prepaid expenses
27,361
22,948
Other current assets
26,738
7,524
Total current assets
1,222,044
1,246,064
Property and equipment, net
59,238
58,671
Right-of-use assets, net
45,647
54,200
Mortgage servicing rights, at fair value
36,914
—
Long-term investments
41,677
54,828
Goodwill
461,349
409,382
Intangible assets, net
172,019
185,929
Other assets, noncurrent
12,054
12,898
Total assets
$
2,050,942
$
2,021,972
Liabilities, mezzanine equity, and stockholders' equity
Current liabilities
Accounts payable
$
12,422
$
12,546
Accrued and other liabilities
133,885
118,122
Warehouse credit facilities
252,529
33,043
Secured revolving credit facility
202,416
199,781
Convertible senior notes, net
23,393
23,280
Lease liabilities
21,094
15,040
Total current liabilities
645,739
401,812
Lease liabilities, noncurrent
39,803
55,222
Convertible senior notes, net, noncurrent
1,217,768
1,214,017
Deferred tax liabilities
344
1,201
Total liabilities
1,903,654
1,672,252
Series A convertible preferred stock—par value $0.001 per share; 10,000,000 shares authorized; 40,000 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively
39,902
39,868
Stockholders’ equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 108,716,990 and 106,308,767 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively
109
106
Additional paid-in capital
739,689
682,084
Accumulated other comprehensive loss
(1,051
)
(174
)
Accumulated deficit
(631,361
)
(372,164
)
Total stockholders’ equity
107,386
309,852
Total liabilities, mezzanine equity, and stockholders’ equity
$
2,050,942
$
2,021,972
Redfin Corporation and Subsidiaries
Consolidated Statements of Comprehensive Loss
(in thousands, except share and per share amounts, unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2022
2021
2022
2021
Revenue
Service
$
300,854
$
301,657
$
862,756
$
776,120
Product
299,663
238,417
942,022
503,588
Total revenue
600,517
540,074
1,804,778
1,279,708
Cost of revenue(1)
Service
210,189
174,267
608,884
486,880
Product
332,251
238,505
947,277
497,032
Total cost of revenue
542,440
412,772
1,556,161
983,912
Gross profit
58,077
127,302
248,617
295,796
Operating expenses
Technology and development(1)
48,063
43,658
149,209
112,824
Marketing(1)
33,748
49,143
133,832
116,343
General and administrative(1)
61,005
54,395
191,704
151,352
Restructuring and reorganization
284
—
18,670
—
Total operating expenses
143,100
147,196
493,415
380,519
Loss from operations
(85,023
)
(19,894
)
(244,798
)
(84,723
)
Interest income
1,174
178
1,948
472
Interest expense
(5,359
)
(3,672
)
(12,841
)
(7,822
)
Income tax (expense) benefit
(132
)
311
(425
)
5,363
Other (expense) income, net
(905
)
4,128
(3,081
)
4,099
Net loss
$
(90,245
)
$
(18,949
)
$
(259,197
)
$
(82,611
)
Dividends on convertible preferred stock
(272
)
(1,662
)
(1,416
)
(5,875
)
Net loss attributable to common stock—basic and diluted
$
(90,517
)
$
(20,611
)
$
(260,613
)
$
(88,486
)
Net loss per share attributable to common stock—basic and diluted
$
(0.83
)
$
(0.20
)
$
(2.42
)
$
(0.85
)
Weighted-average shares to compute net loss per share attributable to common stock—basic and diluted
108,618,491
105,144,872
107,566,894
104,327,614
Net loss
$
(90,245
)
$
(18,949
)
$
(259,197
)
$
(82,611
)
Other comprehensive income
Foreign currency translation adjustments
27
3
65
3
Unrealized gain on available-for-sale debt securities
34
27
812
161
Comprehensive loss
$
(90,184
)
$
(18,919
)
$
(258,320
)
$
(82,447
)
(1) Includes stock-based compensation as follows:
Three Months Ended September 30,
Nine Months Ended September 30,
2022
2021
2022
2021
Cost of revenue
$
4,387
$
3,283
$
11,644
$
10,019
Technology and development
7,371
5,455
23,036
16,987
Marketing
1,028
537
3,024
1,615
General and administrative
5,284
3,835
13,968
10,817
Total
$
18,070
$
13,110
$
51,672
$
39,438
Redfin Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands, unaudited)
Nine Months Ended September 30,
2022
2021
Operating Activities
Net loss
$
(259,197
)
$
(82,611
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
47,438
32,303
Stock-based compensation
51,672
39,438
Amortization of debt discount and issuance costs
4,358
3,583
Non-cash lease expense
11,313
8,510
Impairment costs
913
—
Net loss on IRLCs, forward sales commitments, and loans held for sale
4,228
342
Change in fair value of mortgage servicing rights, net
(1,472
)
Other
3,254
(3,847
)
Change in assets and liabilities:
Accounts receivable, net
(17,052
)
(29,487
)
Inventory
56,990
(385,986
)
Prepaid expenses and other assets
(2,721
)
(9,532
)
Accounts payable
(1,875
)
616
Accrued and other liabilities, deferred tax liabilities, and payroll tax liabilities, noncurrent
(24,202
)
23,011
Lease liabilities
(12,435
)
(9,644
)
Origination of mortgage servicing rights
(2,774
)
—
Proceeds from sale of mortgage servicing rights
1,314
—
Origination of loans held for sale
(3,091,099
)
(745,703
)
Proceeds from sale of loans originated as held for sale
3,082,858
744,886
Net cash used in operating activities
(148,489
)
(414,121
)
Investing activities
Purchases of property and equipment
(17,496
)
(20,575
)
Purchases of investments
(145,273
)
(129,277
)
Sales of investments
12,946
98,687
Maturities of investments
66,055
96,303
Cash paid for acquisition, net of cash, cash equivalents, and restricted cash acquired
(97,341
)
(608,000
)
Net cash used in investing activities
(181,109
)
(562,862
)
Financing activities
Proceeds from the issuance of common stock pursuant to employee equity plans
9,679
14,194
Tax payments related to net share settlements on restricted stock units
(6,650
)
(21,088
)
Borrowings from warehouse credit facilities
3,080,606
710,535
Repayments to warehouse credit facilities
(3,069,728
)
(709,739
)
Borrowings from secured revolving credit facility
552,051
431,717
Repayments to secured revolving credit facility
(549,416
)
(256,039
)
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
—
(2,159
)
Other financing payables
—
3,161
Principal payments under finance lease obligations
(680
)
(567
)
Cash paid for secured revolving credit facility issuance costs
(764
)
(485
)
Net cash provided by financing activities
15,098
668,412
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
(65
)
(3
)
Net change in cash, cash equivalents, and restricted cash
(314,565
)
(308,574
)
Cash, cash equivalents, and restricted cash:
Beginning of period
718,281
945,820
End of period
$
403,716
$
637,246
Redfin Corporation and Subsidiaries
Supplemental Financial Information and Business Metrics
(unaudited)
Three Months Ended
Sep. 30,
2022
Jun. 30,
2022
Mar. 31,
2022
Dec. 31,
2021
Sep. 30,
2021
Jun. 30,
2021
Mar. 31,
2021
Dec. 31,
2020
Sep. 30,
2020
Monthly average visitors (in thousands)
50,785
52,698
51,287
44,665
49,147
48,437
46,202
44,135
49,258
Real estate services transactions
Brokerage
18,245
20,565
15,001
19,428
21,929
21,006
14,317
16,951
18,980
Partner
3,507
3,983
3,417
4,603
4,755
4,597
3,944
4,940
5,180
Total
21,752
24,548
18,418
24,031
26,684
25,603
18,261
21,891
24,160
Real estate services revenue per transaction
Brokerage
$
11,103
$
11,692
$
11,191
$
10,900
$
11,107
$
11,307
$
10,927
$
10,751
$
10,241
Partner
2,556
2,851
2,814
2,819
2,990
3,195
3,084
3,123
2,988
Aggregate
9,725
10,258
9,637
9,352
9,661
9,850
9,233
9,030
8,686
U.S. market share by units(1)
0.80
%
0.82
%
0.79
%
0.78
%
0.78
%
0.77
%
0.75
%
0.68
%
0.70
%
Revenue from top-10 Redfin markets as a percentage of real estate services revenue
58
%
59
%
57
%
61
%
62
%
64
%
62
%
63
%
63
%
Average number of lead agents
2,293
2,640
2,750
2,485
2,370
2,456
2,277
1,981
1,820
RedfinNow homes sold
530
423
617
600
388
292
171
83
37
Revenue per RedfinNow home sold (in ones)
$
550,903
$
604,120
$
608,851
$
622,519
$
599,963
$
571,670
$
525,765
$
471,895
$
504,730
Mortgage originations by dollars (in millions)
$
1,557
$
1,565
$
159
$
242
$
258
$
261
$
227
$
206
$
185
Mortgage originations by units (in ones)
3,720
3,860
414
591
671
749
632
570
539
(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.
Supplemental Financial Information
Segment Reporting and Reconciliation of Adjusted EBITDA to Net Income (Loss)
(unaudited, in thousands)
Three Months Ended September 30, 2022
Real estate
services
Properties
Rentals
Mortgage
Other
Corporate Overhead
and Intercompany
Eliminations
Total
Revenue
$
211,540
$
299,663
$
38,686
$
48,469
$
7,079
$
(4,920
)
$
600,517
Cost of revenue
156,632
332,251
8,676
43,783
6,018
(4,920
)
542,440
Gross profit
54,908
(32,588
)
30,010
4,686
1,061
—
58,077
Operating expenses
Technology and development
25,709
4,728
15,385
985
751
505
48,063
Marketing
18,772
506
12,678
1,653
48
91
33,748
General and administrative
20,244
3,029
22,722
7,073
784
7,153
61,005
Restructuring and reorganization
—
—
—
—
—
284
284
Total operating expenses
64,725
8,263
50,785
9,711
1,583
8,033
143,100
Loss from operations
(9,817
)
(40,851
)
(20,775
)
(5,025
)
(522
)
(8,033
)
(85,023
)
Interest income, interest expense, income tax expense, and other expense, net
—
(2,814
)
397
(129
)
40
(2,716
)
(5,222
)
Net loss
$
(9,817
)
$
(43,665
)
$
(20,378
)
$
(5,154
)
$
(482
)
$
(10,749
)
$
(90,245
)
Three Months Ended September 30, 2022
Real estate
services
Properties
Rentals
Mortgage
Other
Corporate Overhead
and Intercompany
Eliminations
Total
Net loss
$
(9,817
)
$
(43,665
)
$
(20,378
)
$
(5,154
)
$
(482
)
$
(10,749
)
$
(90,245
)
Interest income(1)
—
(330
)
—
(4,049
)
(42
)
(786
)
(5,207
)
Interest expense(2)
—
3,140
—
3,364
—
2,215
8,719
Income tax expense
—
—
(355
)
141
—
346
132
Depreciation and amortization
4,388
642
9,683
1,053
241
291
16,298
Stock-based compensation(3)
9,834
1,646
3,632
1,209
341
1,408
18,070
Acquisition-related costs(4)
—
—
—
—
—
13
13
Restructuring and reorganization(5)
—
—
—
—
—
284
284
Impairment(6)
—
—
—
—
—
913
913
Adjusted EBITDA
$
4,405
$
(38,567
)
$
(7,418
)
$
(3,436
)
$
58
$
(6,065
)
$
(51,023
)
(1) Interest income includes $4.0 million of interest income related to originated mortgage loans for the three months ended September 30, 2022.
(2) Interest expense includes $3.4 million of interest expense related to our warehouse credit facilities for the three months ended September 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 2022 workforce reduction.
(6) Impairment consists of an impairment loss due to subleasing one of our operating leases.
Three Months Ended September 30, 2021
Real estate
services
Properties
Rentals
Mortgage
Other
Corporate Overhead
and Intercompany
Eliminations
Total
Revenue
$
257,795
$
238,417
$
40,406
$
5,013
$
3,193
$
(4,750
)
$
540,074
Cost of revenue
161,449
238,397
7,395
6,705
3,576
(4,750
)
412,772
Gross profit
96,346
20
33,011
(1,692
)
(383
)
—
127,302
Operating expenses
Technology and development
20,732
3,602
13,849
2,910
586
1,979
43,658
Marketing
33,894
645
14,113
149
42
300
49,143
General and administrative
18,383
2,258
23,264
2,334
533
7,623
54,395
Total operating expenses
73,009
6,505
51,226
5,393
1,161
9,902
147,196
Income (loss) from operations
23,337
(6,485
)
(18,215
)
(7,085
)
(1,544
)
(9,902
)
(19,894
)
Interest income, interest expense, income tax expense, and other expense, net
(56
)
(1,456
)
311
1
1
2,144
945
Net income (loss)
$
23,281
$
(7,941
)
$
(17,904
)
$
(7,084
)
$
(1,543
)
$
(7,758
)
$
(18,949
)
Three Months Ended September 30, 2021
Real estate
services
Properties
Rentals
Mortgage
Other
Corporate Overhead
and Intercompany
Eliminations
Total
Net income (loss)
$
23,281
$
(7,941
)
$
(17,904
)
$
(7,084
)
$
(1,543
)
$
(7,758
)
$
(18,949
)
Interest income(1)
—
(1
)
—
(402
)
(1
)
(176
)
(580
)
Interest expense(2)
—
1,456
—
399
—
2,216
4,071
Income tax expense
—
—
(311
)
—
—
—
(311
)
Depreciation and amortization
3,470
530
9,189
427
181
488
14,285
Stock-based compensation(3)
8,138
1,312
143
721
167
2,629
13,110
Acquisition-related costs(4)
—
—
—
—
—
202
202
Restructuring and reorganization(5)
—
—
—
—
—
—
—
Adjusted EBITDA
$
34,889
$
(4,644
)
$
(8,883
)
$
(5,939
)
$
(1,196
)
$
(2,399
)
$
11,828
(1) Interest income includes $0.4 million of interest income related to originated mortgage loans for the three months ended September 30, 2021.
(2) Interest expense includes $0.4 million of interest expense related to our warehouse credit facilities for the three months ended September 30, 2021.
(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 workforce reduction.
Nine Months Ended September 30, 2022
Real estate
services
Properties
Rentals
Mortgage
Other
Corporate Overhead
and Intercompany
Eliminations
Total
Revenue
$
640,835
$
942,022
$
114,979
$
104,484
$
17,341
$
(14,883
)
$
1,804,778
Cost of revenue
488,114
946,955
23,769
95,616
16,590
(14,883
)
1,556,161
Gross profit
152,721
(4,933
)
91,210
8,868
751
—
248,617
Operating expenses
Technology and development
80,144
13,531
44,539
5,236
2,975
2,784
149,209
Marketing
90,380
2,480
36,806
3,525
173
468
133,832
General and administrative
67,578
9,064
68,738
18,047
2,346
25,931
191,704
Restructuring and reorganization
—
—
—
—
—
18,670
18,670
Total operating expenses
238,102
25,075
150,083
26,808
5,494
47,853
493,415
Loss from operations
(85,381
)
(30,008
)
(58,873
)
(17,940
)
(4,743
)
(47,853
)
(244,798
)
Interest income, interest expense, income tax expense, and other expense, net
(123
)
(5,682
)
1,098
(164
)
51
(9,579
)
(14,399
)
Net loss
$
(85,504
)
$
(35,690
)
$
(57,775
)
$
(18,104
)
$
(4,692
)
$
(57,432
)
$
(259,197
)
Nine Months Ended September 30, 2022
Real estate
services
Properties
Rentals
Mortgage
Other
Corporate Overhead
and Intercompany
Eliminations
Total
Net loss
$
(85,504
)
$
(35,690
)
$
(57,775
)
$
(18,104
)
$
(4,692
)
$
(57,432
)
$
(259,197
)
Interest income(1)
—
(514
)
(1
)
(7,296
)
(55
)
(1,361
)
(9,227
)
Interest expense(2)
—
6,192
—
5,599
—
6,642
18,433
Income tax expense
—
—
(789
)
174
—
1,040
425
Depreciation and amortization
12,957
1,783
28,550
2,425
814
909
47,438
Stock-based compensation(3)
29,644
4,710
8,611
2,590
1,151
4,966
51,672
Acquisition-related costs(4)
—
—
—
—
—
2,437
2,437
Restructuring and reorganization(5)
—
—
—
—
—
18,670
18,670
Impairment(6)
—
—
—
—
—
913
913
Adjusted EBITDA
$
(42,903
)
$
(23,519
)
$
(21,404
)
$
(14,612
)
$
(2,782
)
$
(23,216
)
$
(128,436
)
(1) Interest income includes $7.3 million of interest income related to originated mortgage loans for the nine months ended September 30, 2022.
(2) Interest expense includes $5.6 million of interest expense related to our warehouse credit facilities for the nine months ended September 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 2022 workforce reduction.
(6) Impairment consists of an impairment loss due to subleasing one of our operating leases.
Nine Months Ended September 30, 2021
Real estate
services
Properties
Rentals
Mortgage
Other
Corporate Overhead
and Intercompany
Eliminations
Total
Revenue
$
678,602
$
503,588
$
82,954
$
15,823
$
10,261
$
(11,520
)
$
1,279,708
Cost of revenue
453,790
496,948
14,965
19,406
10,323
(11,520
)
983,912
Gross profit
224,812
6,640
67,989
(3,583
)
(62
)
—
295,796
Operating expenses
Technology and development
60,862
9,512
27,616
7,814
1,538
5,482
112,824
Marketing
86,823
1,423
26,724
413
105
855
116,343
General and administrative
60,813
6,765
46,413
5,686
1,466
30,209
151,352
Total operating expenses
208,498
17,700
100,753
13,913
3,109
36,546
380,519
Loss from operations
16,314
(11,060
)
(32,764
)
(17,496
)
(3,171
)
(36,546
)
(84,723
)
Interest income, interest expense, income tax expense, and other expense, net
(87
)
(2,538
)
523
2
2
4,210
2,112
Net loss
$
16,227
$
(13,598
)
$
(32,241
)
$
(17,494
)
$
(3,169
)
$
(32,336
)
$
(82,611
)
Nine Months Ended September 30, 2021
Real estate
services
Properties
Rentals
Mortgage
Other
Corporate Overhead
and Intercompany
Eliminations
Total
Net loss
$
16,227
$
(13,598
)
$
(32,241
)
$
(17,494
)
$
(3,169
)
$
(32,336
)
$
(82,611
)
Interest income(1)
—
(8
)
—
(1,174
)
(2
)
(459
)
(1,643
)
Interest expense(2)
—
2,546
—
1,235
—
5,277
9,058
Income tax expense
—
—
(523
)
—
—
(4,840
)
(5,363
)
Depreciation and amortization
9,700
1,333
18,299
1,019
514
1,438
32,303
Stock-based compensation(3)
25,699
3,686
317
2,165
508
7,063
39,438
Acquisition-related costs(4)
—
—
—
—
—
7,925
7,925
Restructuring and reorganization(5)
—
—
—
—
—
—
—
Adjusted EBITDA
$
51,626
$
(6,041
)
$
(14,148
)
$
(14,249
)
$
(2,149
)
$
(15,932
)
$
(893
)
(1) Interest income includes $1.2 million of interest income related to originated mortgage loans for the nine months ended September 30, 2021.
(2) Interest expense includes $1.2 million of interest expense related to our warehouse credit facilities for the nine months ended September 30, 2021.
(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 workforce reduction.
Reconciliation of Adjusted EBITDA Guidance to Net Loss Guidance
(unaudited, in millions)
Three Months Ended December 31, 2022
Low
High
Net loss
$
(134
)
$
(118
)
Net interest expense
5
4
Income tax expense
—
—
Depreciation and amortization
18
18
Stock-based compensation
17
17
Acquisition-related costs
—
—
Restructuring and reorganization
23
21
Adjusted EBITDA
$
(71
)
$
(58
)
Note: Figures may not sum due to rounding.
View source version on businesswire.com: https://www.businesswire.com/news/home/20221109005873/en/