Redfin revenues down 25% but better than expected
CEO and founder Glenn Kelman said the company is continuing to cut expenses and looking to increase the number of online visitors who hire Redfin agents.
Redfin reported a 25% drop in fourth-quarter revenues but still managed to beat expectations during a challenging time that included the winding down of its iBuyer program.
For the full year, Redfin reported revenue of $2.28 billion, a 19% increase compared to 2021, showing the strength of the market for the first half of 2022.
CEO and founder Glenn Kelman is expecting to see improved profit in 2023.
"We shifted to more digital-margin revenue, lowered expenses, increased our share of online real estate traffic, and improved the quality of our sales force," Kelman said. "The discipline to make adjusted EBITDA this year can make us very profitable when the housing market recovers."
Revenue: $479.7 million in Q4, down 25% year over year but better vs. its Q3 guidance of around $459 million and analysts' estimates. Full-year revenue up 19% to 2.28 billion.
GAAP net loss: $61.9 million in Q4 vs. $27 million in Q4 2021.
EBITDA (earnings before interest, taxes, depreciation and amortization): A Q4 loss of $63.4 million vs. a $5.9 million Q4 gain in 2021.
Earnings per share: Net loss per share attributable to common stock, diluted, was $0.57, vs. $0.27 in Q4 2021.
What Redfin had to say
During the Thursday earnings call, CEO and founder Glenn Kelman talked about growing the digital business over the next two years and getting a higher percentage of its visitors to hire Redfin agents.
Growing the company's brokerage is also a priority, not just through increased market share, Kelman said, but with repeat business. He noted the expansion of Redfin's Premier program to luxury homebuyers in more than two dozen U.S. markets.
"We've done well to put listings online but technology hasn't made the rest of the experience obviously better for consumers and that's where we want to break through," Kelman said.
Kelman recently took to social media about the market, noting that there were signs the market was turning around. "The market worsened each month through November. Now we believe the market, while still fragile, is recovering," Kelman said on Twitter.
In its business outlook for 2023, Redfin is predicting total revenue between $307 million and $324 million for the first quarter of 2023, representing a year-over-year decline between 49% and 46% compared to the first quarter of 2022. Total net loss is expected to be between $116 million and $105 million, compared to net loss of $91 million in the first quarter of 2022.
As it continued to wind down its iBuyer program RedfinNow, Redfin has just 19 homes remaining on its books.
Redfin's mobile apps and website reached nearly 44 million average monthly users in the fourth quarter. For the entire year, unique visitors increased by 5%.
The company brought agent service to Wilmington, N.C., and Green Bay, Wis., while expanding its listing coverage to a total of 98% of the U.S. population.