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Redfin Reports Fourth Quarter and Full Year 2021 Financial Results

Redfin Corporation (NASDAQ: RDFN) today announced results for its fourth quarter and full year ended December 31, 2021.

Fourth Quarter 2021

Fourth quarter revenue was $643.1 million, an increase of 163% compared to the fourth quarter of 2020. Gross profit was $108.0 million, an increase of 35% year-over-year. Real estate services gross profit was $75.2 million, a decrease of 7% year-over-year, and real estate services gross margin was 33%, compared to 41% in the fourth quarter of 2020.

Net loss was $27.0 million, compared to a net income of $14.0 million in the fourth quarter of 2020. Net loss attributable to common stock was $28.4 million. Net loss per share attributable to common stock, diluted, was $0.27, compared to net income per share, diluted, of $0.11 in the fourth quarter of 2020.

Full Year 2021

Full year revenue was $1,922.8 million, an increase of 117% year-over-year. Gross profit was $403.8 million, an increase of 74% year-over-year. Real estate services gross profit was $300.0 million, an increase of 28% year-over-year, and real estate services gross margin was 33%, compared to 36% in 2020.

Net loss was $109.6 million, compared to a net loss of $18.5 million in 2020. Net loss attributable to common stock was $116.9 million. Net loss per share attributable to common stock, diluted, was $1.12, compared to a net loss per share, diluted, of $0.23 in 2020.

“Fourth-quarter revenues and net income exceeded our expectations,” said Redfin CEO Glenn Kelman. “More importantly, Redfin is broadening its sources of customer value and corporate income, with title, mortgage, and iBuying now on track to generate gross profits, after years of being subsidized by our brokerage. Entering an uncertain market, Redfin’s pricing power and on-demand service will let us take share and improve operating margins.”

Fourth Quarter Highlights

  • Reached market share of 1.15% of U.S. existing home sales by value in the fourth quarter of 2021, an increase of 11 basis points from the fourth quarter of 2020.(1)
  • Saved homebuyers and sellers over $77 million in the fourth quarter and over $288 million in 2021. 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 apps and website reached nearly 45 million average monthly users in the fourth quarter. For the year, Redfin reached a record of more than 47 million average monthly users, an increase of 10% compared to 2020.
  • Expanded brokerage services into Big Bear, California; Ocean City, Maryland; and Ulster County, New York, furthering Redfin’s presence in popular vacation home destinations.
  • Launched RedfinNow in the Minneapolis metro area, reaching a total of 30 markets.
  • Confirmed Redfin sells homes faster and for more money than other brokerages for the 6th year in a row. Nationwide Redfin listings sold about 5 days faster and for $1,600 more than comparable listings from other brokerages according to a third-party study that we commissioned.
  • Welcomed the inaugural class of 32 Redfin agents to our Career Accelerator pilot program, bringing professionals with a diversity of backgrounds to our Seattle and Washington, D.C. teams.
  • Since December 2020, raised more than $1 million to build paths to homeownership for working families through Redfin Rise, an employee funded non-profit partnership.
  • Delivered improved software for customers, agents, partners and renovations staff including:
  • New search filters for customers to tailor the home search including pet friendliness and Walk Score.
    • On-the-go tour scheduling for Redfin agents via Mobile Agent Tools.
    • Speed improvements that help customers move quickly in a competitive market, including faster listing notifications and identifying Hot Homes that are likely to sell quickly within 5 minutes of being listed.
    • SharePlay feature that lets buyers house-hunt together via FaceTime.
    • Automated resale forecasting and renovation timeline model for RedfinNow’s investment and renovation teams.
  • Subsequent to the fourth quarter, launched our annual media campaign on February 5: Welcome to the Housing Market and Redfin Knows What You Like.

(1) 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. 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®.

Business Outlook

The following forward-looking statements reflect Redfin's expectations as of February 17, 2022, and are subject to substantial uncertainty.

For the first quarter of 2022 we expect:

  • Total revenue between $535 million and $560 million, representing a year-over-year growth between 99% and 109% compared to the first quarter of 2021. Included within total revenue are real estate services segment revenue between $165 million and $171 million, properties segment revenue between $330 million to $350 million, rentals revenue between $37 million and $38 million, and mortgage revenue of $3 million.
  • Total net loss is expected to be between $122 million and $115 million, compared to net loss of $36 million in the first quarter of 2021. RentPath’s contribution to the net loss is expected to be approximately $19 million. This guidance includes approximately $45 million in total marketing expenses, $19 million of stock-based compensation, $15 million of depreciation and amortization, and $5 million of net interest expense. In addition, 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, which is 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.

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), 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 take an instant cash offer from Redfin or 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 6,000 people.

Redfin-F

Redfin Corporation and Subsidiaries

Consolidated Balance Sheets

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

 
 

 

December 31,

 

 

2021

 

 

 

2020

 

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

591,003

 

 

$

925,276

 

Restricted cash

 

127,278

 

 

 

20,544

 

Short-term investments

 

33,737

 

 

 

131,561

 

Accounts receivable, net of allowances for credit losses of $1,298 and $160

 

69,594

 

 

 

54,719

 

Inventory

 

358,221

 

 

 

49,158

 

Loans held for sale

 

35,759

 

 

 

42,539

 

Prepaid expenses

 

22,948

 

 

 

12,131

 

Other current assets

 

7,524

 

 

 

4,898

 

Total current assets

 

1,246,064

 

 

 

1,240,826

 

Property and equipment, net

 

58,671

 

 

 

43,988

 

Right-of-use assets, net

 

54,200

 

 

 

44,149

 

Long-term investments

 

54,828

 

 

 

11,922

 

Goodwill

 

409,382

 

 

 

9,186

 

Intangible assets, net

 

185,929

 

 

 

1,830

 

Other assets, noncurrent

 

12,898

 

 

 

8,619

 

Total assets

$

2,021,972

 

 

$

1,360,520

 

Liabilities, mezzanine equity, and stockholders' equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

12,546

 

 

$

5,644

 

Accrued and other liabilities

 

118,122

 

 

 

82,644

 

Warehouse credit facilities

 

33,043

 

 

 

39,029

 

Secured revolving credit facility

 

199,781

 

 

 

23,949

 

Convertible senior notes, net

 

23,280

 

 

 

22,482

 

Lease liabilities

 

15,040

 

 

 

11,973

 

Total current liabilities

 

401,812

 

 

 

185,721

 

Lease liabilities, noncurrent

 

55,222

 

 

 

49,339

 

Convertible senior notes, net, noncurrent

 

1,214,017

 

 

 

488,268

 

Payroll tax liabilities, noncurrent

 

 

 

 

6,812

 

Deferred tax liabilities

 

1,201

 

 

 

0

 

Total liabilities

 

1,672,252

 

 

 

730,140

 

Series A convertible preferred stock—par value $0.001 per share; 10,000,000 shares authorized; 40,000 and 40,000 shares issued and outstanding at December 31, 2021 and 2020, respectively

 

39,868

 

 

 

39,823

 

Stockholders’ equity

 

 

 

Common stock—par value $0.001 per share; 500,000,000 shares authorized; 106,308,767 and 103,000,594 shares issued and outstanding at December 31, 2021 and 2020, respectively

 

106

 

 

 

103

 

Additional paid-in capital

 

682,084

 

 

 

860,556

 

Accumulated other comprehensive (loss) income

 

(174

)

 

 

211

 

Accumulated deficit

 

(372,164

)

 

 

(270,313

)

Total stockholders’ equity

 

309,852

 

 

 

590,557

 

Total liabilities, mezzanine equity, and stockholders’ equity

$

2,021,972

 

 

$

1,360,520

Redfin Corporation and Subsidiaries

Consolidated Statements of Comprehensive Loss

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

 
 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Revenue

 

 

 

 

 

 

 

Service

$

265,992

 

 

$

204,452

 

 

$

1,042,112

 

 

$

674,345

 

Product

 

377,065

 

 

 

40,065

 

 

 

880,653

 

 

 

211,748

 

Total revenue

 

643,057

 

 

 

244,517

 

 

 

1,922,765

 

 

 

886,093

 

Cost of revenue(1)

 

 

 

 

 

 

 

Service

 

161,780

 

 

 

122,642

 

 

 

648,660

 

 

 

437,484

 

Product

 

373,253

 

 

 

41,755

 

 

 

870,285

 

 

 

216,499

 

Total cost of revenue

 

535,033

 

 

 

164,397

 

 

 

1,518,945

 

 

 

653,983

 

Gross profit

 

108,024

 

 

 

80,120

 

 

 

403,820

 

 

 

232,110

 

Operating expenses

 

 

 

 

 

 

 

Technology and development(1)

 

43,894

 

 

 

23,610

 

 

 

156,718

 

 

 

84,297

 

Marketing(1)

 

22,397

 

 

 

7,270

 

 

 

138,740

 

 

 

54,881

 

General and administrative(1)

 

66,962

 

 

 

23,601

 

 

 

218,315

 

 

 

92,140

 

Total operating expenses

 

133,253

 

 

 

54,481

 

 

 

513,773

 

 

 

231,318

 

(Loss) income from operations

 

(25,229

)

 

 

25,639

 

 

 

(109,953

)

 

 

792

 

Interest income

 

163

 

 

 

215

 

 

 

635

 

 

 

2,074

 

Interest expense

 

(3,939

)

 

 

(11,864

)

 

 

(11,762

)

 

 

(19,495

)

Income tax benefit

 

744

 

 

 

 

 

 

6,107

 

 

 

 

Other income (expense), net

 

1,259

 

 

 

45

 

 

 

5,360

 

 

 

(1,898

)

Net (loss) income

$

(27,002

)

 

$

14,035

 

 

$

(109,613

)

 

$

(18,527

)

Dividend on convertible preferred stock

 

(1,394

)

 

 

(1,640

)

 

 

(7,269

)

 

 

(4,454

)

Undistributed earnings attributable to participating

 

 

 

 

(242

)

 

 

 

 

 

 

Net (loss) income attributable to common stock—basic and diluted

$

(28,396

)

 

$

12,153

 

 

$

(116,882

)

 

$

(22,981

)

Net (loss) income per share attributable to common stock—basic

$

(0.27

)

 

$

0.12

 

 

$

(1.12

)

 

$

(0.23

)

Weighted average shares of common stock—basic

 

105,739,395

 

 

 

102,176,459

 

 

 

104,683,460

 

 

 

98,574,529

 

Net (loss) income per share attributable to common stock—diluted

$

(0.27

)

 

$

0.11

 

 

$

(1.12

)

 

$

(0.23

)

Weighted average shares of common stock—diluted

 

105,739,395

 

 

 

109,461,342

 

 

 

104,683,460

 

 

 

98,574,529

 

 

 

 

 

 

 

 

 

Net (loss) income

$

(27,002

)

 

$

14,035

 

 

$

(109,613

)

 

$

(18,527

)

Other comprehensive (loss) income

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

4

 

 

 

13

 

 

 

6

 

 

 

(3

)

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

 

217

 

 

 

(110

)

 

 

379

 

 

 

172

 

Total comprehensive (loss) income

 

(26,781

)

 

 

13,938

 

 

 

(109,228

)

 

 

(18,358

)

 

(1) Includes stock-based compensation as follows:

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Cost of revenue

$

3,595

 

 

$

2,863

 

 

$

13,614

 

 

$

8,844

 

Technology and development

 

6,288

 

 

 

4,828

 

 

 

23,275

 

 

 

16,564

 

Marketing

 

736

 

 

 

439

 

 

 

2,350

 

 

 

1,569

 

General and administrative

 

4,667

 

 

 

3,079

 

 

 

15,483

 

 

 

9,996

 

Total

$

15,286

 

 

$

11,209

 

 

$

54,722

 

 

$

36,973

 

Redfin Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands, unaudited)

 
 

 

Year Ended December 31,

 

 

2021

 

 

 

2020

 

Operating Activities

 

 

 

Net loss

$

(109,613

)

 

$

(18,527

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

Depreciation and amortization

 

46,906

 

 

 

14,564

 

Stock-based compensation

 

54,722

 

 

 

36,973

 

Amortization of debt discount and issuance costs

 

4,989

 

 

 

12,038

 

Non-cash lease expense

 

11,630

 

 

 

9,204

 

Impairment costs

 

 

 

 

2,063

 

Loss on repurchases and conversions of convertible senior notes

 

 

 

 

4,634

 

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

 

815

 

 

 

(1,921

)

Other

 

(4,227

)

 

 

(349

)

Change in assets and liabilities:

 

 

 

Accounts receivable, net

 

(7,149

)

 

 

(35,496

)

Inventory

 

(309,063

)

 

 

25,432

 

Prepaid expenses and other assets

 

(12,248

)

 

 

2,333

 

Accounts payable

 

3,059

 

 

 

2,086

 

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

 

25,791

 

 

 

39,092

 

Lease liabilities

 

(13,268

)

 

 

(11,312

)

Origination of loans held for sale

 

(986,982

)

 

 

(677,310

)

Proceeds from sale of loans originated as held for sale

 

993,070

 

 

 

657,763

 

Net cash (used in) provided by operating activities

 

(301,568

)

 

 

61,267

 

Investing activities

 

 

 

Purchases of property and equipment

 

(27,492

)

 

 

(14,686

)

Purchases of investments

 

(146,274

)

 

 

(198,172

)

Sales of investments

 

98,687

 

 

 

7,887

 

Maturities of investments

 

106,773

 

 

 

147,852

 

Cash paid for acquisition

 

(608,000

)

 

 

 

Net cash used in investing activities

 

(576,306

)

 

 

(57,119

)

Financing activities

 

 

 

Proceeds from the issuance of convertible preferred stock, net of issuance costs

 

 

 

 

39,801

 

Proceeds from the issuance of common stock, net of issuance costs

 

 

 

 

69,701

 

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

 

22,772

 

 

 

21,072

 

Tax payments related to net share settlements on restricted stock units

 

(27,066

)

 

 

(16,852

)

Borrowings from warehouse credit facilities

 

942,993

 

 

 

662,278

 

Repayments to warehouse credit facilities

 

(948,979

)

 

 

(644,551

)

Borrowings from secured revolving credit facility

 

624,828

 

 

 

89,619

 

Repayments to secured revolving credit facility

 

(448,996

)

 

 

(70,115

)

Cash paid for secured revolving credit facility issuance costs

 

(527

)

 

 

(4

)

Proceeds from issuance of convertible senior notes, net of issuance costs

 

561,529

 

 

 

647,486

 

Purchases of capped calls related to convertible senior notes

 

(62,647

)

 

 

 

Payments for repurchases and conversions of convertible senior notes

 

(2,159

)

 

 

(108,061

)

Principal payments under finance lease obligations

 

(796

)

 

 

(221

)

Other financing payables

 

(10,611

)

 

 

4,074

 

Net cash provided by financing activities

 

650,341

 

 

 

694,227

 

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

 

(6

)

 

 

(3

)

Net change in cash, cash equivalents, and restricted cash

 

(227,539

)

 

 

698,372

 

Cash, cash equivalents, and restricted cash:

 

 

 

Beginning of period

 

945,820

 

 

 

247,448

 

End of period

$

718,281

 

 

$

945,820

 

Redfin Corporation and Subsidiaries

Supplemental Financial Information and Business Metrics

(unaudited)

 

 

Three Months Ended

 

Dec. 31,

2021

 

Sep. 30,

2021

 

Jun. 30,

2021

 

Mar. 31,

2021

 

Dec. 31,

2020

 

Sep. 30,

2020

 

Jun. 30,

2020

 

Mar. 31,

2020

Monthly average visitors (in thousands)

44,665

 

49,147

 

48,437

 

46,202

 

44,135

 

49,258

 

42,537

 

35,519

Real estate services transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage

19,428

 

21,929

 

21,006

 

14,317

 

16,951

 

18,980

 

13,828

 

10,751

Partner

4,603

 

4,755

 

4,597

 

3,944

 

4,940

 

5,180

 

2,691

 

2,479

Total

24,031

 

26,684

 

25,603

 

18,261

 

21,891

 

24,160

 

16,519

 

13,230

Real estate services revenue per transaction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage

$ 10,900

 

$ 11,107

 

$ 11,307

 

$ 10,927

 

$ 10,751

 

$ 10,241

 

$ 9,296

 

$ 9,520

Partner

2,819

 

2,990

 

3,195

 

3,084

 

3,123

 

2,988

 

2,417

 

2,535

Aggregate

9,352

 

9,661

 

9,850

 

9,233

 

9,030

 

8,686

 

8,175

 

8,211

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregate home value of real estate services transactions (in millions)

$ 13,255

 

$ 14,926

 

$ 14,612

 

$ 9,710

 

$ 11,478

 

$ 12,207

 

$ 7,576

 

$ 6,098

U.S. market share by value

1.15 %

 

1.16 %

 

1.18 %

 

1.16 %

 

1.04 %

 

1.04 %

 

0.94 %

 

0.92 %

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

61 %

 

62 %

 

64 %

 

62 %

 

63 %

 

63 %

 

63 %

 

61 %

Average number of lead agents

2,485

 

2,370

 

2,456

 

2,277

 

1,981

 

1,820

 

1,399

 

1,826

RedfinNow Homes Sold

600

 

388

 

292

 

171

 

83

 

37

 

162

 

171

Revenue per RedfinNow Home Sold

622,251

 

599,010

 

570,930

 

525,173

 

471,551

 

504,583

 

444,690

 

461,916

Redfin Corporation and Subsidiaries

Supplemental Financial Information

(unaudited, in thousands)

 
 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Revenue

 

 

 

 

 

 

 

Real estate services (brokerage)

$

211,756

 

 

$

182,244

 

 

$

849,288

 

 

 

607,513

 

Real estate services (partner)

 

12,976

 

 

 

15,426

 

 

 

54,046

 

 

 

43,695

 

Properties

 

377,065

 

 

 

39,399

 

 

 

880,653

 

 

 

209,686

 

Rentals

 

38,923

 

 

 

 

 

 

121,877

 

 

 

 

Mortgage

 

3,996

 

 

 

5,140

 

 

 

19,818

 

 

 

15,834.547

 

Other

 

3,347

 

 

 

3,073

 

 

 

13,609

 

 

 

12,377.25

 

Intercompany eliminations

 

(5,006

)

 

 

(765

)

 

 

(16,526

)

 

 

(3,013

)

Total

$

643,057

 

 

$

244,517

 

 

$

1,922,765

 

 

$

886,093

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

 

 

 

 

 

Real estate services

$

149,529

 

 

$

116,835

 

 

$

603,320

 

 

$

417,140

 

Properties

 

373,105

 

 

 

41,275

 

 

 

870,052

 

 

 

214,382

 

Rentals

 

6,774

 

 

 

 

 

 

21,739

 

 

 

 

Mortgage

 

6,690

 

 

 

4,585

 

 

 

26,096

 

 

 

15,627

 

Other

 

3,941

 

 

 

2,467

 

 

 

14,264

 

 

 

9,847

 

Intercompany eliminations

 

(5,006

)

 

 

(765

)

 

 

(16,526

)

 

 

(3,013

)

Total

$

535,033

 

 

$

164,397

 

 

$

1,518,945

 

 

$

653,983

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

 

 

Real estate services

 

75,203

 

 

 

80,835

 

 

 

300,014

 

 

 

234,068

 

Properties

 

3,960

 

 

 

(1,876

)

 

 

10,601

 

 

 

(4,696

)

Rentals

 

32,149

 

 

 

 

 

 

100,138

 

 

 

 

Mortgage

 

(2,694

)

 

 

555

 

 

 

(6,278

)

 

 

208

 

Other

 

(594

)

 

 

606

 

 

 

(655

)

 

 

2,530

 

Total

$

108,024

 

 

$

80,120

 

 

$

403,820

 

 

$

232,110

 

 

 

 

 

 

 

 

 

Real estate services, properties, mortgage, and other operating expenses

 

85,699

 

 

 

54,481

 

 

 

367,269

 

 

 

231,318

 

Rentals operating expenses

 

47,554

 

 

 

 

 

 

146,504

 

 

 

 

Interest income

 

163

 

 

 

215

 

 

 

635

 

 

 

2,074

 

Interest expense

 

(3,939

)

 

 

(11,864

)

 

 

(11,762

)

 

 

(19,495

)

Income tax benefit

 

744

 

 

 

 

 

 

6,107

 

 

 

 

Other income (expense), net

 

1,259

 

 

 

45

 

 

 

5,360

 

 

 

(1,898

)

Net (loss) income

$

(27,002

)

 

$

14,035

 

 

$

(109,613

)

 

$

(18,527

)

 

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