Redfin Reports Third Quarter 2023 Financial Results
Redfin Corporation (NASDAQ: RDFN) today announced results for its third quarter ended September 30, 2023.
Third Quarter 2023
Third quarter revenue was $269.0 million, a decrease of 12% compared to the third quarter of 2022. Gross profit was $98.3 million, an increase of 8% year-over-year. Real estate services gross profit was $54.1 million, a decrease of 2% year-over-year, and real estate services gross margin was 30%, compared to 26% in the third quarter of 2022.
Net loss was $19.0 million, compared to a net loss of $90.2 million in the third quarter of 2022. Net loss attributable to common stock was $19.3 million. Net loss per share attributable to common stock, diluted, was $0.17, compared to net loss per share, diluted, of $0.83 in the third quarter of 2022.
“In a worsening housing market, Redfin earned an adjusted EBITDA profit, a $59 million improvement over the third quarter of 2022, all while growing traffic and gaining share,” said Redfin CEO Glenn Kelman. “In October, we raised capital, began generating revenues from a new digital business, and launched all-variable agent pay in California. This downturn has only made us stronger.”
Third Quarter Highlights
Third quarter market share was 0.78% of U.S. existing home sales by units, compared to 0.75% in the second quarter of 2023. Redfin’s mobile apps and website reached more than 51 million average monthly users, up 1% compared to the third quarter of 2022. Achieved mortgage cross-selling attach rate of 18% in the third quarter, despite strong headwinds. Sustained momentum in loyalty sales, with 36% of sales coming from loyalty customers in Q3 2023 compared to 33% in Q3 2022. Announced a new construction partnership that will add thousands of new listings to Redfin and provide customers with richer information about newly built homes and communities. Delivered software to improve customer and agent experience while driving customer contacts and boosting traffic to Redfin: Added wind risk data to home description pages, making Redfin the first brokerage to publish wind risk information for nearly every for-sale home in the U.S. Launched a new design system for rental detail pages, improving the visual appearance and driving significant increases in user engagement. We applied the same design system to the tour checkout process for customers touring with a Redfin partner agent, leading to an increase in contacts. Improved call filters on our customer service line, allowing Redfin sales advisors to spend more time helping high-intent customers. Simplified Redfin Estimate section for off-market home detail pages, making it easier for consumers to find the information they need and generating a 5% increase in listing contacts.Business Outlook
The following forward-looking statements reflect Redfin's expectations as of November 2, 2023, and are subject to substantial uncertainty.
For the fourth quarter of 2023 we expect:
Total revenue between $211 million and $226 million, representing a year-over-year change between (5)% and 2% compared to the fourth quarter of 2022. Included within total revenue are real estate services revenue between $127 million and $137 million, rentals revenue between $49 million and $50 million, mortgage revenue between $26 million and $29 million and other revenue of $9 million to $10 million. Total net loss is expected to be between $27 million and $18 million, compared to net loss of $62 million in the fourth quarter of 2022. This guidance includes approximately $20 million in total marketing expenses, $18 million of stock-based compensation, $15 million in depreciation and amortization, $27 million in gains on extinguishment of convertible senior notes and $2 million to $3 million in net interest expense. Adjusted EBITDA loss is expected to be between $19 million and $9 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 September 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 September 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 4,000 people.
Redfin-F
Redfin Corporation and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share amounts, unaudited)
September 30, 2023
December 31, 2022
Assets
Current assets
Cash and cash equivalents
$
125,803
$
232,200
Restricted cash
1,414
2,406
Short-term investments
41,752
122,259
Accounts receivable, net of allowances for credit losses of $2,529 and $2,223
55,118
46,375
Loans held for sale
137,680
199,604
Prepaid expenses
26,248
34,006
Other current assets
8,811
7,449
Current assets of discontinued operations
—
132,159
Total current assets
396,826
776,458
Property and equipment, net
48,405
54,939
Right-of-use assets, net
35,150
40,889
Mortgage servicing rights, at fair value
34,773
36,261
Long-term investments
5,474
29,480
461,349
461,349
Intangible assets, net
133,031
162,272
Other assets, noncurrent
10,857
11,247
Noncurrent assets of discontinued operations
—
1,309
Total assets
$
1,125,865
$
1,574,204
Liabilities, mezzanine equity, and stockholders' equity
Current liabilities
Accounts payable
$
11,996
$
11,065
Accrued and other liabilities
88,191
106,763
Warehouse credit facilities
132,320
190,509
Convertible senior notes, net
—
23,431
Lease liabilities
16,317
18,560
Current liabilities of discontinued operations
—
4,311
Total current liabilities
248,824
354,639
Lease liabilities, noncurrent
31,416
36,906
Convertible senior notes, net, noncurrent
799,665
1,078,157
Deferred tax liabilities
260
243
Noncurrent liabilities of discontinued operations
—
392
Total liabilities
1,080,165
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 September 30, 2023 and December 31, 2022, respectively
39,947
39,914
Stockholders’ equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 115,210,998 and 109,696,178 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively
115
110
Additional paid-in capital
806,330
757,951
Accumulated other comprehensive loss
(257
)
(801
)
Accumulated deficit
(800,435
)
(693,307
)
Total stockholders’ equity
5,753
63,953
Total liabilities, mezzanine equity, and stockholders’ equity
$
1,125,865
$
1,574,204
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,
2023
2022
2023
2022
Revenue
$
268,956
$
305,774
$
758,595
$
877,639
Cost of revenue
170,616
215,109
501,927
624,089
Gross profit
98,340
90,665
256,668
253,550
Operating expenses
Technology and development
44,392
43,335
139,196
135,678
24,095
33,242
97,531
131,352
General and administrative
55,380
57,976
186,584
182,640
Restructuring and reorganization
—
284
7,159
18,399
Total operating expenses
123,867
134,837
430,470
468,069
Loss from continuing operations
(25,527
)
(44,172
)
(173,802
)
(214,519
)
Interest income
2,060
1,174
8,170
1,948
Interest expense
(1,603
)
(2,219
)
(5,291
)
(6,648
)
Income tax expense
(239
)
(132
)
(882
)
(425
)
Gain on extinguishment of convertible senior notes
6,495
—
68,848
—
Other expense, net
(158
)
(902
)
(537
)
(3,077
)
Net loss from continuing operations
(18,972
)
(46,251
)
(103,494
)
(222,721
)
Net loss from discontinued operations
—
(43,994
)
(3,634
)
(36,476
)
Net loss
$
(18,972
)
$
(90,245
)
$
(107,128
)
$
(259,197
)
Dividends on convertible preferred stock
(335
)
(272
)
(858
)
(1,416
)
Net loss from continuing operations attributable to common stock—basic and diluted
$
(19,307
)
$
(46,523
)
$
(104,352
)
$
(224,137
)
Net loss attributable to common stock—basic and diluted
$
(19,307
)
$
(90,517
)
$
(107,986
)
$
(260,613
)
Net loss from continuing operations per share attributable to common stock—basic and diluted
$
(0.17
)
$
(0.43
)
$
(0.93
)
$
(2.08
)
Net loss attributable to common stock per share—basic and diluted
$
(0.17
)
$
(0.83
)
$
(0.96
)
$
(2.42
)
Weighted-average shares to compute net loss per share attributable to common stock—basic and diluted
114,592,679
108,618,491
112,141,342
107,566,894
Net loss
$
(18,972
)
$
(90,245
)
$
(107,128
)
$
(259,197
)
Other comprehensive income
Foreign currency translation adjustments
(15
)
27
(73
)
65
Unrealized gain on available-for-sale debt securities
210
34
617
812
Comprehensive loss
$
(18,777
)
$
(90,184
)
$
(106,584
)
$
(258,320
)
(1) Includes stock-based compensation as follows:
Three Months Ended September 30,
Nine Months Ended September 30,
2023
2022
2023
2022
Cost of revenue
$
3,037
$
4,165
$
10,173
$
10,771
Technology and development
8,391
6,353
24,759
20,230
1,337
1,002
3,836
2,939
General and administrative
6,035
4,904
16,380
13,022
Total
$
18,800
$
16,424
$
55,148
$
46,962
Redfin Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands, unaudited)
Nine Months Ended September 30,
2023
2022
Operating Activities
Net loss
$
(107,128
)
$
(259,197
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
48,443
47,438
Stock-based compensation
55,382
51,672
Amortization of debt discount and issuance costs
2,873
4,358
Non-cash lease expense
12,909
11,313
Impairment costs
113
913
Net (gain) loss on IRLCs, forward sales commitments, and loans held for sale
(1,767
)
4,228
Change in fair value of mortgage servicing rights, net
1,065
(1,472
)
Gain on extinguishment of convertible senior notes
(68,848
)
—
Other
(2,013
)
3,254
Change in assets and liabilities:
Accounts receivable, net
(238
)
(17,052
)
Inventory
114,232
56,990
Prepaid expenses and other assets
9,696
(2,721
)
Accounts payable
177
(1,875
)
Accrued and other liabilities, deferred tax liabilities, and payroll tax liabilities, noncurrent
(19,346
)
(24,202
)
Lease liabilities
(14,864
)
(12,435
)
Origination of mortgage servicing rights
(699
)
(2,774
)
Proceeds from sale of mortgage servicing rights
1,122
1,314
Origination of loans held for sale
(2,798,337
)
(3,091,099
)
Proceeds from sale of loans originated as held for sale
2,858,656
3,082,858
Net cash provided by (used in) operating activities
91,428
(148,489
)
Investing activities
Purchases of property and equipment
(9,235
)
(17,496
)
Purchases of investments
(76,866
)
(145,273
)
Sales of investments
124,681
12,946
Maturities of investments
59,383
66,055
Cash paid for acquisition, net of cash, cash equivalents, and restricted cash acquired
—
(97,341
)
Net cash provided by (used in) investing activities
97,963
(181,109
)
Financing activities
Proceeds from the issuance of common stock pursuant to employee equity plans
5,790
9,679
Tax payments related to net share settlements on restricted stock units
(15,961
)
(6,650
)
Borrowings from warehouse credit facilities
2,803,589
3,080,606
Repayments to warehouse credit facilities
(2,861,779
)
(3,069,728
)
Borrowings from secured revolving credit facility
—
552,051
Repayments to secured revolving credit facility
—
(549,416
)
Cash paid for secured revolving credit facility issuance costs
—
(764
)
Principal payments under finance lease obligations
(73
)
(680
)
Repurchases of convertible senior notes
(212,401
)
—
Repayments of convertible senior notes
(23,512
)
—
Net cash (used in) provided by financing activities
(304,347
)
15,098
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
(73
)
(65
)
Net change in cash, cash equivalents, and restricted cash
(115,029
)
(314,565
)
Cash, cash equivalents, and restricted cash:
Beginning of period
242,246
718,281
End of period
$
127,217
$
403,716
Redfin Corporation and Subsidiaries
Supplemental Financial Information and Business Metrics
(unaudited)
Three Months Ended
Sep. 30,
2023
Jun. 30,
2023
Mar. 31,
2023
Dec. 31,
2022
Sep. 30,
2022
Jun. 30,
2022
Mar. 31,
2022
Dec. 31,
2021
Monthly average visitors (in thousands)
51,309
52,308
50,440
43,847
50,785
52,698
51,287
44,665
Real estate services transactions
Brokerage
13,075
13,716
10,301
12,743
18,245
20,565
15,001
19,428
Partner
4,351
3,952
3,187
2,742
3,507
3,983
3,417
4,603
Total
17,426
17,668
13,488
15,485
21,752
24,548
18,418
24,031
Real estate services revenue per transaction
Brokerage
$
12,704
$
12,376
$
11,556
$
10,914
$
11,103
$
11,692
$
11,191
$
10,900
Partner
2,677
2,756
2,592
2,611
2,556
2,851
2,814
2,819
Aggregate
10,200
10,224
9,438
9,444
9,725
10,258
9,637
9,352
U.S. market share by units(1)
0.78
%
0.75
%
0.79
%
0.76
%
0.80
%
0.83
%
0.79
%
0.78
%
Revenue from top-10 Redfin markets as a percentage of real estate services revenue
56
%
55
%
53
%
57
%
58
%
59
%
57
%
61
%
Average number of lead agents
1,744
1,792
1,876
2,022
2,293
2,640
2,750
2,485
Mortgage originations by dollars (in millions)
$
1,110
$
1,282
$
991
$
1,036
$
1,557
$
1,565
$
159
$
242
Mortgage originations by units (in ones)
2,786
3,131
2,444
2,631
3,720
3,860
414
591
(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 September 30, 2023
Real estate
services
Rentals
Mortgage
Other
Corporate
overhead
Total
Revenue
$
177,750
$
47,410
$
32,923
$
10,873
$
—
$
268,956
Cost of revenue
123,684
10,824
29,629
6,479
—
170,616
Gross profit
54,066
36,586
3,294
4,394
—
98,340
Operating expenses
Technology and development
25,711
15,813
800
1,133
935
44,392
10,785
12,245
1,088
20
(43
)
24,095
General and administrative
18,418
21,838
6,670
952
7,502
55,380
Total operating expenses
54,914
49,896
8,558
2,105
8,394
123,867
(Loss) income from continuing operations
(848
)
(13,310
)
(5,264
)
2,289
(8,394
)
(25,527
)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net
41
42
(73
)
207
6,338
6,555
Net (loss) income from continuing operations
$
(807
)
$
(13,268
)
$
(5,337
)
$
2,496
$
(2,056
)
$
(18,972
)
Three Months Ended September 30, 2023
Real estate
services
Rentals
Mortgage
Other
Corporate
overhead
Total
Net (loss) income from continuing operations
$
(807
)
$
(13,268
)
$
(5,337
)
$
2,496
$
(2,056
)
$
(18,972
)
Interest income(1)
(41
)
(81
)
(2,886
)
(207
)
(1,732
)
(4,947
)
Interest expense(2)
—
—
3,132
—
1,598
4,730
Income tax expense
—
37
70
—
132
239
Depreciation and amortization
3,123
9,681
947
233
312
14,296
Stock-based compensation(3)
11,151
4,255
473
574
2,347
18,800
Gain on extinguishment of convertible senior notes
—
—
—
—
(6,495
)
(6,495
)
Adjusted EBITDA
$
13,426
$
624
$
(3,601
)
$
3,096
$
(5,894
)
$
7,651
(1) Interest income includes $2.9 million of interest income related to originated mortgage loans for the three months ended September 30, 2023.
(2) Interest expense includes $3.1 million of interest expense related to our warehouse credit facilities for the three months ended September 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.
Three Months Ended September 30, 2022
Real estate
services
Rentals
Mortgage
Other
Corporate
overhead
Total
Revenue(1)
$
211,540
$
38,686
$
48,469
$
7,079
$
—
$
305,774
Cost of revenue
156,632
8,676
43,783
6,018
—
215,109
Gross profit
54,908
30,010
4,686
1,061
—
90,665
Operating expenses
Technology and development
25,709
15,385
985
751
505
43,335
18,772
12,678
1,653
48
91
33,242
General and administrative
20,244
22,722
7,073
784
7,153
57,976
Restructuring and reorganization
—
—
—
—
284
284
Total operating expenses
64,725
50,785
9,711
1,583
8,033
134,837
Loss from continuing operations
(9,817
)
(20,775
)
(5,025
)
(522
)
(8,033
)
(44,172
)
Interest income, interest expense, income tax expense, and other expense, net
—
397
(129
)
40
(2,387
)
(2,079
)
Net loss from continuing operations
$
(9,817
)
$
(20,378
)
$
(5,154
)
$
(482
)
$
(10,420
)
$
(46,251
)
(1) Included in revenue is $4.9 million from providing services to our discontinued properties segment.
Three Months Ended September 30, 2022
Real estate
services
Rentals
Mortgage
Other
Corporate
overhead
Total
Net loss from continuing operations
$
(9,817
)
$
(20,378
)
$
(5,154
)
$
(482
)
$
(10,420
)
$
(46,251
)
Interest income(1)
—
—
(4,049
)
(42
)
(1,115
)
(5,206
)
Interest expense(2)
—
—
3,364
—
2,215
5,579
Income tax expense
—
(355
)
141
—
346
132
Depreciation and amortization
4,388
9,683
1,053
241
291
15,656
Stock-based compensation(3)
9,834
3,632
1,209
341
1,408
16,424
Acquisition-related costs(4)
—
—
—
—
13
13
Restructuring and reorganization(5)
—
—
—
—
284
284
Impairment(6)
—
—
—
—
913
913
Adjusted EBITDA
$
4,405
$
(7,418
)
$
(3,436
)
$
58
$
(6,065
)
$
(12,456
)
(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 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 for our rentals segment due to the restructuring and reorganization activities from our acquisition of Rent.
(6) Impairment consists of an impairment loss due to subleasing one of our operating leases.
Nine Months Ended September 30, 2023
Real estate
services
Rentals
Mortgage
Other
Corporate
overhead
Total
Revenue(1)
$
485,687
$
135,636
$
107,838
$
29,434
$
—
$
758,595
Cost of revenue
359,625
31,016
93,108
18,178
—
501,927
Gross profit
126,062
104,620
14,730
11,256
—
256,668
Operating expenses
Technology and development
82,650
48,081
2,177
3,475
2,813
139,196
51,849
42,509
3,122
46
5
97,531
General and administrative
58,997
73,445
20,323
3,049
30,770
186,584
Restructuring and reorganization
—
—
—
—
7,159
7,159
Total operating expenses
193,496
164,035
25,622
6,570
40,747
430,470
(Loss) income from continuing operations
(67,434
)
(59,415
)
(10,892
)
4,686
(40,747
)
(173,802
)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net
41
115
(224
)
475
69,901
70,308
Net (loss) income from continuing operations
$
(67,393
)
$
(59,300
)
$
(11,116
)
$
5,161
$
29,154
$
(103,494
)
(1) Included in revenue is $1.2 million from providing services to our discontinued properties segment.
Nine Months Ended September 30, 2023
Real estate
services
Rentals
Mortgage
Other
Corporate
overhead
Total
Net (loss) income from continuing operations
$
(67,393
)
$
(59,300
)
$
(11,116
)
$
5,161
$
29,154
$
(103,494
)
Interest income(1)
(41
)
(238
)
(9,062
)
(475
)
(7,400
)
(17,216
)
Interest expense(2)
—
—
9,737
—
5,285
15,022
Income tax expense
—
123
222
—
537
882
Depreciation and amortization
12,819
30,068
2,929
756
1,745
48,317
Stock-based compensation(3)
33,041
11,580
2,554
1,696
6,277
55,148
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
—
—
—
—
(68,848
)
(68,848
)
Adjusted EBITDA
$
(21,574
)
$
(17,767
)
$
(4,736
)
$
7,138
$
(25,970
)
$
(62,909
)
(1) Interest income includes $9.0 million of interest income related to originated mortgage loans for the nine months ended September 30, 2023.
(2) Interest expense includes $9.7 million of interest expense related to our warehouse credit facilities for the nine months ended September 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.
Nine Months Ended September 30, 2022
Real estate
services
Rentals
Mortgage
Other
Corporate
overhead
Total
Revenue(1)
$
640,835
$
114,979
$
104,484
$
17,341
$
—
$
877,639
Cost of revenue
488,114
23,769
95,616
16,590
—
624,089
Gross profit
152,721
91,210
8,868
751
—
253,550
Operating expenses
Technology and development
80,144
44,539
5,236
2,975
2,784
135,678
90,380
36,806
3,525
173
468
131,352
General and administrative
67,578
68,738
18,047
2,346
25,931
182,640
Restructuring and reorganization
—
—
—
—
18,399
18,399
Total operating expenses
238,102
150,083
26,808
5,494
47,582
468,069
Loss from operations
(85,381
)
(58,873
)
(17,940
)
(4,743
)
(47,582
)
(214,519
)
Interest income, interest expense, income tax expense, and other expense, net
(123
)
1,098
(164
)
51
(9,064
)
(8,202
)
Net loss from continuing operations
$
(85,504
)
$
(57,775
)
$
(18,104
)
$
(4,692
)
$
(56,646
)
$
(222,721
)
(1) Included in revenue is $14.9 million from providing services to our discontinued properties segment.
Nine Months Ended September 30, 2022
Real estate
services
Rentals
Mortgage
Other
Corporate
overhead
Total
Net loss from continuing operations
$
(85,504
)
$
(57,775
)
$
(18,104
)
$
(4,692
)
$
(56,646
)
$
(222,721
)
Interest income(1)
—
(1
)
(7,296
)
(55
)
(1,876
)
(9,228
)
Interest expense(2)
—
—
5,599
—
6,642
12,241
Income tax expense
—
(789
)
174
—
1,040
425
Depreciation and amortization
12,957
28,550
2,425
814
909
45,655
Stock-based compensation(3)
29,644
8,611
2,590
1,151
4,966
46,962
Acquisition-related costs(4)
—
—
—
—
2,437
2,437
Restructuring and reorganization(5)
—
—
—
—
18,399
18,399
Impairment(6)
—
—
—
—
913
913
Adjusted EBITDA
$
(42,903
)
$
(21,404
)
$
(14,612
)
$
(2,782
)
$
(23,216
)
$
(104,917
)
(1) Interest income includes $7.3 million of interest income related to originated mortgage loans for the nine months ended September 30, 2023.
(2) Interest expense includes $5.6 million of interest expense related to our warehouse credit facilities for the nine months ended September 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.
Reconciliation of Adjusted EBITDA Guidance to Net Loss Guidance
(unaudited, in millions)
Q4 2023
Low
High
Net loss
(27
)
(18
)
Net interest expense
3
2
Depreciation and amortization
15
15
Stock-based compensation
18
18
Gain on extinguishment of notes
(27
)
(27
)
Adjusted EBITDA
(19
)
(9
)
Note: Figures may not sum due to rounding.
View source version on businesswire.com: https://www.businesswire.com/news/home/20231102909304/en/