Document

EX-99.1 2 q42022earningsreleaseex.htm EX-99.1 Document

Redfin Reports Fourth Quarter and Full Year 2022 Financial Results

SEATTLE - February 16, 2023 - Redfin Corporation (NASDAQ: RDFN) today announced results for its fourth quarter and full year ended December 31, 2022.

Fourth Quarter 2022

Fourth quarter revenue was $479.7 million, a decrease of 25% compared to the fourth quarter of 2021. Gross profit was $37.4 million, a decrease of 65% year-over-year. Real estate services gross profit was $26.3 million, a decrease of 65% year-over-year, and real estate services gross margin was 18%, compared to 33% in the fourth quarter of 2021.

Net loss was $61.9 million, compared to a net loss of $27.0 million in the fourth quarter of 2021. Net loss attributable to common stock was $62.1 million. Net loss per share attributable to common stock, diluted, was $0.57, compared to net loss per share, diluted, of $0.27 in the fourth quarter of 2021.

Full Year 2022

Full year revenue was $2,284.4 million, an increase of 19% year-over-year. Gross profit was $286.1 million, a decrease of 29% year-over-year. Real estate services gross profit was $179.0 million, a decrease of 40% year-over-year, and real estate services gross margin was 23%, compared to 33% in 2021.

Net loss was $321.1 million, compared to a net loss of $109.6 million in 2021. Net loss attributable to common stock was $322.7 million. Net loss per share attributable to common stock, diluted, was $2.99, compared to a net loss per share, diluted, of $1.12 in 2021.

“Redfin in the fourth quarter of 2022 set ourselves up to earn adjusted EBITDA in 2023, which would be an improvement in profits of nearly $200 million, even in a major housing downturn,” said Redfin CEO Glenn Kelman. “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. The discipline to make adjusted EBITDA this year can make us very profitable when the housing market recovers. We also bought $143 million of debt for $84 million in cash. We have either sold or accepted an offer to sell all but 19 of our RedfinNow homes. Our revenues and net income exceeded the guidance we gave investors in our November earnings report.”

Fourth Quarter and Full Year Highlights

•Reached market share of 0.76% of U.S. existing home sales by units in the fourth quarter. For the year, Redfin reached a market share of 0.80%, an increase of 3 bps compared to 2021.

•Redfin’s mobile apps and website reached nearly 44 million average monthly users in the fourth quarter. For the year, Redfin reached a record of nearly 50 million average monthly users, an increase of 5% compared to 2021.

•Brought Redfin agent service to Wilmington, North Carolina and Green Bay, Wisconsin and expanded listing coverage to a total of 98% of the U.S. population.

•Maintained momentum in mortgage cross-selling, with 17% attach rates for the fourth quarter which was flat compared to the third quarter of 2022.

•Confirmed Redfin sells homes faster and for more money than other brokerages for the 7th year in a row. Nationwide Redfin listings sold about 3 days faster and for $1,800 more than comparable listings from other brokerages according to a third-party study that we commissioned.

•Delivered software to improve the customers experience and employee productivity:

◦Added energy cost estimates to U.S. home listings, helping consumers understand the full cost of living in a home and allowing homeowners to discover how much they could save by installing solar panels.

◦Added zoning and land-use data to U.S. home listings, making it easier for consumers to understand how properties may or may not be used.

◦Implemented a new design system for iOS home detail pages that increased homebuyer contact and tour completion rates.

◦Improved landlord referral process from Redfin.com to rentals.com, helping retain high-intent prospective landlords.

Business Outlook

The following forward-looking statements reflect Redfin's expectations as of February 16, 2023, and are subject to substantial uncertainty.

For the first quarter of 2023 we expect:

•Total revenue between $307 million and $324 million, representing a year-over-year decline between (49)% and (46)% compared to the first quarter of 2022. Included within total revenue are real estate services segment revenue between $122 million and $130 million, properties segment revenue between $108 million to $113 million, rentals revenue between $41 million and $42 million, and mortgage revenue between $29 million and $32 million.

•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. This guidance includes approximately $45 million in total marketing expenses, $20 million of stock-based compensation, $17 million of depreciation and amortization, $7 million in gains on extinguishment of convertible senior notes and $1 million in restructuring expenses. Adjusted EBITDA loss is expected to be between $84 million and $73 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, 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, 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 $1.5 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 5,000 people.

Redfin-F

Contacts

Investor Relations

Meg Nunnally, 206-576-8610

ir@redfin.com

Public Relations

Mariam Sughayer, 206-876-1322

press@redfin.com

Redfin Corporation and Subsidiaries

Consolidated Balance Sheets

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


	December 31,
	2022		2021
Assets
Current assets
Cash and cash equivalents	$	239,840	$	591,003
Restricted cash	2,406		127,278
Short-term investments	122,259		33,737
Accounts receivable, net of allowances for credit losses of $2,019 and $1,298	54,880		69,594
Inventory	114,273		358,221
Loans held for sale	199,604		35,759
Prepaid expenses	34,506		22,948
Other current assets	8,690		7,524
Total current assets	776,458		1,246,064
Property and equipment, net	55,105		58,671
Right-of-use assets, net	42,032		54,200
Mortgage servicing rights, at fair value	36,261		—
Long-term investments	29,480		54,828
Goodwill	461,349		409,382
Intangible assets, net	162,272		185,929
Other assets, noncurrent	11,247		12,898
Total assets	$	1,574,204	$	2,021,972
Liabilities, mezzanine equity, and stockholders' equity
Current liabilities
Accounts payable	$	11,819	$	12,546
Accrued and other liabilities	109,743		118,122
Warehouse credit facilities	190,509		33,043
Secured revolving credit facility	—		199,781
Convertible senior notes, net	23,431		23,280
Lease liabilities	19,137		15,040
Total current liabilities	354,639		401,812
Lease liabilities, noncurrent	37,298		55,222
Convertible senior notes, net, noncurrent	1,078,157		1,214,017

Deferred tax liabilities	243		1,201
Total liabilities	1,470,337		1,672,252
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, 2022 and 2021, respectively	39,914		39,868
Stockholders’ equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 109,696,178 and 106,308,767 shares issued and outstanding at December 31, 2022 and 2021, respectively	110		106
Additional paid-in capital	757,951		682,084
Accumulated other comprehensive loss	(801)		(174)
Accumulated deficit	(693,307)		(372,164)
Total stockholders’ equity	63,953		309,852
Total liabilities, mezzanine equity, and stockholders’ equity	$	1,574,204	$	2,021,972

Redfin Corporation and Subsidiaries

Consolidated Statements of Comprehensive Loss

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


	Three Months Ended December 31,				Year Ended December 31,
	2022		2021		2022		2021
Revenue
Service	$	219,121	$	265,992	$	1,081,877	$	1,042,112
Product	260,543		377,065		1,202,565		880,653
Total revenue	479,664		643,057		2,284,442		1,922,765
Cost of revenue(1)
Service	163,467		161,780		772,351		648,660
Product	278,762		373,253		1,226,038		870,285
Total cost of revenue	442,229		535,033		1,998,389		1,518,945
Gross profit	37,435		108,024		286,053		403,820
Operating expenses
Technology and development(1)	47,041		43,894		196,250		156,718
Marketing(1)	24,238		22,397		158,071		138,740
General and administrative(1)	62,889		66,962		254,593		218,315
Restructuring and reorganization	21,798		—		40,469		—
Total operating expenses	155,966		133,253		649,383		513,773
Loss from operations	(118,531)		(25,229)		(363,330)		(109,953)
Interest income	4,691		163		6,639		635
Interest expense	(4,905)		(3,939)		(17,745)		(11,762)
Income tax benefit (expense)	299		744		(126)		6,107
Gain on extinguishment of convertible senior notes	57,193		—		57,193		—
Other (expense) income, net	(693)		1,259		(3,774)		5,360
Net loss	$	(61,946)	$	(27,002)	$	(321,143)	$	(109,613)
Dividends on convertible preferred stock	(144)		(1,394)		(1,560)		(7,269)

Net loss attributable to common stock—basic and diluted	$	(62,090)	$	(28,396)	$	(322,703)	$	(116,882)
Net loss per share attributable to common stock—basic and diluted	$	(0.57)	$	(0.27)	$	(2.99)	$	(1.12)
Weighted average shares of common stock—basic and diluted	108,997,415		105,739,395		107,927,464		104,683,460



Net loss	$	(61,946)	$	(27,002)	$	(321,143)	$	(109,613)
Other comprehensive income
Foreign currency translation adjustments	29		4		94		6
Unrealized (loss) gain on available-for-sale securities	(279)		217		533		379
Comprehensive loss	(62,196)		(26,781)		(320,516)		(109,228)

(1) Includes stock-based compensation as follows:


	Three Months Ended December 31,				Year Ended December 31,
	2022		2021		2022		2021
Cost of revenue	$	4,307	$	3,595	$	15,950	$	13,614
Technology and development	6,572		6,288		29,608		23,275
Marketing	1,069		736		4,093		2,350
General and administrative	4,638		4,667		18,606		15,483
Total	$	16,586	$	15,286	$	68,257	$	54,722

Redfin Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands, unaudited)


	Year Ended December 31,
	2022		2021
Operating Activities
Net loss	$	(321,143)	$	(109,613)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	64,907		46,906
Stock-based compensation	68,257		54,722
Amortization of debt discount and issuance costs	6,137		4,989
Non-cash lease expense	16,234		11,630
Impairment costs	1,136		—

Net loss on IRLCs, forward sales commitments, and loans held for sale	14,427		815
Change in fair value of mortgage servicing rights, net	(801)		—
Gain on extinguishment of convertible senior notes	(57,193)		—
Other	3,791		(4,227)
Change in assets and liabilities:
Accounts receivable, net	24,411		(7,149)
Inventory	243,948		(309,063)
Prepaid expenses and other assets	(5,904)		(12,248)
Accounts payable	(2,472)		3,059
Accrued and other liabilities, deferred tax liabilities, and payroll tax liabilities, noncurrent	(46,454)		25,791
Lease liabilities	(18,452)		(13,268)
Origination of mortgage servicing rights	(3,140)		—
Proceeds from sale of mortgage servicing rights	1,662		—
Origination of loans held for sale	(3,949,442)		(986,982)
Proceeds from sale of loans originated as held for sale	4,000,582		993,070
Net cash provided by (used in) operating activities	40,491		(301,568)
Investing activities
Purchases of property and equipment	(21,531)		(27,492)
Purchases of investments	(182,466)		(146,274)
Sales of investments	17,545		98,687
Maturities of investments	99,455		106,773
Cash paid for acquisition, net of cash, cash equivalents, and restricted cash acquired	(97,341)		(608,000)
Net cash used in investing activities	(184,338)		(576,306)
Financing activities


Proceeds from the issuance of common stock pursuant to employee equity plans	11,528		22,772
Tax payments related to net share settlements on restricted stock units	(7,498)		(27,066)
Borrowings from warehouse credit facilities	3,938,265		942,993
Repayments to warehouse credit facilities	(3,989,407)		(948,979)
Borrowings from secured revolving credit facility	565,334		624,828
Repayments to secured revolving credit facility	(765,114)		(448,996)
Cash paid for secured revolving credit facility issuance costs	(733)		(527)
Proceeds from issuance of convertible senior notes, net of issuance costs	—		561,529
Purchases of capped calls related to convertible senior notes	—		(62,647)
Conversions of convertible senior notes	—		(2,159)
Principal payments under finance lease obligations	(855)		(796)
Repurchases of convertible senior notes	(83,614)		—
Other financing payables	—		(10,611)
Net cash (used in) provided by financing activities	(332,094)		650,341
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(94)		(6)
Net change in cash, cash equivalents, and restricted cash	(476,035)		(227,539)
Cash, cash equivalents, and restricted cash:
Beginning of period	718,281		945,820
End of period	$	242,246	$	718,281

Redfin Corporation and Subsidiaries

Supplemental Financial Information and Business Metrics

(unaudited)


	Three Months Ended
	Dec. 31, 2022			Sep. 30, 2022			Jun. 30, 2022			Mar. 31, 2022			Dec. 31, 2021			Sep. 30, 2021			Jun. 30, 2021			Mar. 31, 2021
Monthly average visitors (in thousands)	43,847			50,785			52,698			51,287			44,665			49,147			48,437			46,202
Real estate services transactions
Brokerage	12,743			18,245			20,565			15,001			19,428			21,929			21,006			14,317
Partner	2,742			3,507			3,983			3,417			4,603			4,755			4,597			3,944
Total	15,485			21,752			24,548			18,418			24,031			26,684			25,603			18,261
Real estate services revenue per transaction
Brokerage	$	10,914		$	11,103		$	11,692		$	11,191		$	10,900		$	11,107		$	11,307		$	10,927
Partner	2,611			2,556			2,851			2,814			2,819			2,990			3,195			3,084
Aggregate	9,444			9,725			10,258			9,637			9,352			9,661			9,850			9,233
U.S. market share by units(1)	0.76		%	0.80		%	0.82		%	0.79		%	0.78		%	0.78		%	0.77		%	0.75		%
Revenue from top-10 Redfin markets as a percentage of real estate services revenue	57		%	58		%	59		%	57		%	61		%	62		%	64		%	62		%
Average number of lead agents	2,022			2,293			2,640			2,750			2,485			2,370			2,456			2,277
RedfinNow homes sold	474			530			423			617			600			388			292			171
Revenue per RedfinNow home sold	538,788			550,903			604,120			608,851			622,519			599,963			571,670			525,765
Mortgage originations by dollars (in millions)	$	1,036		$	1,557		$	1,565		$	159		$	242		$	258		$	261		$	227
Mortgage originations by units (in ones)	2,631			3,720			3,860			414			591			671			749			632


	Year Ended December 31,
	2022			2021
Monthly average visitors (in thousands)	49,654			47,113
Real estate services transactions
Brokerage	66,554			76,680
Partner	13,649			17,899
Total	80,203			94,579
Real estate services revenue per transaction
Brokerage	$	11,269		$	11,076
Partner	2,718			3,020
Aggregate	9,814			9,551
U.S. market share by units(1)	0.80		%	0.77		%
Revenue from top-10 markets as a percentage of real estate services revenue	58		%	62		%
Average number of lead agents	2,426			2,396
RedfinNow homes sold	2,044			1,451
Revenue per RedfinNow home sold	$	576,599		$	594,268
Mortgage originations by dollars (in millions)	$	4,317		$	988
Mortgage originations by units (in ones)	10,625			2,643

(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

Segment Reporting and Reconciliation of Adjusted EBITDA to Net Income (Loss)

(unaudited, in thousands)


	Three Months Ended December 31, 2022
	Real estate services		Properties		Rentals		Mortgage		Other		Corporate Overhead and Intercompany Eliminations		Total
Revenue	$	146,242	$	260,629	$	40,931	$	28,420	$	6,342	$	(2,900)	$	479,664
Cost of revenue	119,913		278,761		9,647		30,936		5,872		(2,900)		442,229
Gross profit	26,329		(18,132)		31,284		(2,516)		470		—		37,435
Operating expenses
Technology and development	25,052		3,794		15,360		798		616		1,421		47,041
Marketing	8,293		282		14,258		1,364		26		15		24,238
General and administrative	20,594		2,138		23,990		7,633		960		7,574		62,889
Restructuring and reorganization	—		—		—		—		—		21,798		21,798
Total operating expenses	53,939		6,214		53,608		9,795		1,602		30,808		155,966
Loss from operations	(27,610)		(24,346)		(22,324)		(12,311)		(1,132)		(30,808)		(118,531)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net	—		(1,924)		291		50		88		58,080		56,585
Net loss	$	(27,610)	$	(26,270)	$	(22,033)	$	(12,261)	$	(1,044)	$	27,272	$	(61,946)


	Three Months Ended December 31, 2022
	Real estate services		Properties		Rentals		Mortgage		Other		Corporate Overhead and Intercompany Eliminations		Total
Net loss	$	(27,610)	$	(26,270)	$	(22,033)	$	(12,261)	$	(1,044)	$	27,272	$	(61,946)
Interest income(1)	—		(752)		(23)		(3,203)		(88)		(3,819)		(7,885)
Interest expense(2)	—		2,666		—		2,981		—		2,136		7,783
Income tax expense	—		10		(288)		(174)		—		153		(299)
Depreciation and amortization	4,569		552		10,133		1,013		274		927		17,468
Stock-based compensation(3)	7,008		528		2,709		1,542		345		4,454		16,586
Acquisition-related costs(4)	—		—		—		—		—		—		—
Restructuring and reorganization(5)	—		—		—		—		—		21,798		21,798
Impairment(6)	—		—		—		—		—		224		224
Gain on extinguishment of convertible senior notes	—		—		—		—		—		(57,193)		(57,193)
Adjusted EBITDA	$	(16,033)	$	(23,266)	$	(9,502)	$	(10,102)	$	(513)	$	(4,048)	$	(63,464)

(1) Interest income includes $3.2 million of interest income related to originated mortgage loans for the three months ended December 31, 2022.

(2) Interest expense includes $2.9 million of interest expense related to our warehouse credit facilities for the three months ended December 31, 2022.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program.

(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 and October 2022 workforce reductions.

(6) Impairment consists of an impairment loss due to subleasing one of our operating leases.


	Three Months Ended December 31, 2021
	Real estate services		Properties		Rentals		Mortgage		Other		Corporate Overhead and Intercompany Eliminations		Total
Revenue	$	224,732	$	377,065	$	38,923	$	3,996	$	3,347	$	(5,006)	$	643,057
Cost of revenue	149,529		373,105		6,774		6,690		3,941		(5,006)		535,033
Gross profit	75,203		3,960		32,149		(2,694)		(594)		—		108,024
Operating expenses
Technology and development	20,727		3,724		13,876		2,582		990		1,995		43,894
Marketing	11,923		466		9,450		149		104		305		22,397
General and administrative	23,842		2,828		25,530		2,620		823		11,319		66,962
Restructuring and reorganization	—		—		—		—		—		—		—
Total operating expenses	56,492		7,018		48,856		5,351		1,917		13,619		133,253
Loss from operations	18,711		(3,058)		(16,707)		(8,045)		(2,511)		(13,619)		(25,229)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net	—		(1,723)		2,777		1		1		(2,829)		(1,773)
Net loss	$	18,711	$	(4,781)	$	(13,930)	$	(8,044)	$	(2,510)	$	(16,448)	$	(27,002)


	Three Months Ended December 31, 2021
	Real estate services		Properties		Rentals		Mortgage		Other		Corporate Overhead and Intercompany Eliminations		Total
Net loss	$	18,711	$	(4,781)	$	(13,930)	$	(8,044)	$	(2,510)	$	(16,448)	$	(27,002)
Interest income(1)	—		(2)		—		(424)		(1)		(159)		(586)
Interest expense(2)	—		1,725		—		431		—		2,214		4,370
Income tax expense	—		—		(2,177)		—		—		1,433		(744)
Depreciation and amortization	3,583		554		9,307		387		247		525		14,603
Stock-based compensation(3)	8,963		1,492		994		820		348		2,669		15,286




Adjusted EBITDA	$	31,257	$	(1,012)	$	(5,806)	$	(6,830)	$	(1,916)	$	(9,766)	$	5,927

(1) Interest income includes $0.4 million of interest income related to originated mortgage loans for the three months ended December 31, 2021.

(2) Interest expense includes $0.4 million of interest expense related to our warehouse credit facilities for the three months ended December 31, 2021.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program.


	Year ended December 31, 2022
	Real estate services		Properties		Rentals		Mortgage		Other		Corporate Overhead and Intercompany Eliminations		Total
Revenue	$	787,076	$	1,202,651	$	155,910	$	132,904	$	23,684	$	(17,783)	$	2,284,442
Cost of revenue	608,027		1,225,717		33,416		126,552		22,460		(17,783)		1,998,389
Gross profit	179,049		(23,066)		122,494		6,352		1,224		—		286,053
Operating expenses
Technology and development	105,196		17,326		59,899		6,034		3,591		4,204		196,250
Marketing	98,673		2,762		51,064		4,889		199		484		158,071
General and administrative	88,171		11,203		92,728		25,680		3,307		33,504		254,593
Restructuring and reorganization	—		—		—		—		—		40,469		40,469
Total operating expenses	292,040		31,291		203,691		36,603		7,097		78,661		649,383
Loss from operations	(112,991)		(54,357)		(81,197)		(30,251)		(5,873)		(78,661)		(363,330)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net	(123)		(7,607)		1,389		(114)		140		48,502		42,187
Net loss	$	(113,114)	$	(61,964)	$	(79,808)	$	(30,365)	$	(5,733)	$	(30,159)	$	(321,143)


	Year ended December 31, 2022
	Real estate services		Properties		Rentals		Mortgage		Other		Corporate Overhead and Intercompany Eliminations		Total
Net loss	$	(113,114)	$	(61,964)	$	(79,808)	$	(30,365)	$	(5,733)	$	(30,159)	$	(321,143)
Interest income(1)	—		(1,266)		(24)		(10,499)		(143)		(5,181)		(17,113)
Interest expense(2)	—		8,859		—		8,580		—		8,778		26,217
Income tax expense	—		10		(1,077)		—		—		1,193		126
Depreciation and amortization	17,526		2,335		38,683		3,438		1,089		1,836		64,907
Stock-based compensation(3)	36,652		5,238		11,319		4,132		1,496		9,420		68,257
Acquisition-related costs(4)	—		—		—		—		—		2,437		2,437
Restructuring and reorganization(5)	—		—		—		—		—		40,469		40,469
Impairment(6)	—		—		—		—		—		1,136		1,136
Gain on extinguishment of convertible senior notes	—		—		—		—		—		(57,193)		(57,193)
Adjusted EBITDA	$	(58,936)	$	(46,788)	$	(30,907)	$	(24,714)	$	(3,291)	$	(27,264)	$	(191,900)

(1) Interest income includes $10.5 million of interest income related to originated mortgage loans for the year ended December 31, 2022.

(2) Interest expense includes $8.5 million of interest expense related to our warehouse credit facilities for the year ended December 31, 2022.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program.

(4) Acquisition-related costs consist of fees for external advisory, legal, and other professional services incurred in connection with our acquisition of other companies.

(6) Impairment consists of an impairment loss due to subleasing one of our operating leases.


	Year ended December 31, 2021
	Real estate services		Properties		Rentals		Mortgage		Other		Corporate Overhead and Intercompany Eliminations		Total
Revenue	$	903,334	$	880,653	$	121,877	$	19,818	$	13,609	$	(16,526)	$	1,922,765
Cost of revenue	603,320		870,052		21,739		26,096		14,264		(16,526)		1,518,945
Gross profit	300,014		10,601		100,138		(6,278)		(655)		—		403,820
Operating expenses
Technology and development	81,588		13,237		41,492		10,396		2,528		7,477		156,718
Marketing	98,746		1,889		36,174		561		209		1,161		138,740
General and administrative	84,655		9,593		71,943		8,306		2,288		41,530		218,315
Restructuring and reorganization	—		—		—		—		—		—		—
Total operating expenses	264,989		24,719		149,609		19,263		5,025		50,168		513,773
Loss from operations	35,025		(14,118)		(49,471)		(25,541)		(5,680)		(50,168)		(109,953)
Interest income, interest expense, income tax benefit, and other expense, net	(87)		(4,261)		3,301		3		2		1,382		340
Net income (loss)	$	34,938	$	(18,379)	$	(46,170)	$	(25,538)	$	(5,678)	$	(48,786)	$	(109,613)


	Year ended December 31, 2021
	Real estate services		Properties		Rentals		Mortgage		Other		Corporate Overhead and Intercompany Eliminations		Total
Net loss	$	34,938	$	(18,379)	$	(46,170)	$	(25,538)	$	(5,678)	$	(48,786)	$	(109,613)
Interest income(1)	—		(9)		—		(1,598)		(2)		(619)		(2,228)
Interest expense(2)	—		4,271		—		1,666		—		7,490		13,427
Income tax expense	—		—		(2,699)		—		—		(3,408)		(6,107)
Depreciation and amortization	13,282		1,888		27,607		1,406		761		1,962		46,906
Stock-based compensation(3)	34,662		5,177		1,311		2,985		856		9,731		54,722
Acquisition-related costs(4)	—		—		—		—		—		7,925		7,925
Restructuring and reorganization(5)	—		—		—		—		—		—		—

Adjusted EBITDA	$	82,882	$	(7,052)	$	(19,951)	$	(21,079)	$	(4,063)	$	(25,705)	$	5,032

(1) Interest income includes $1.6 million of interest income related to originated mortgage loans for the year ended December 31, 2021.

(2) Interest expense includes $1.7 million of interest expense related to our warehouse credit facilities for the year ended December 31, 2021.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program.

(4) Acquisition-related costs consist of fees for external advisory, legal, and other professional services incurred in connection with our acquisition of other companies.

Redfin Corporation and Subsidiaries

Reconciliation of Adjusted EBITDA Guidance to Net Loss Guidance

(unaudited, in millions)


	Three Months Ended March 31, 2023
	Low		High
Net loss	$	(116)	$	(105)


Depreciation and amortization	17		17
Stock-based compensation	20		20

Restructuring and reorganization	1		1

Gain on extinguishment of convertible senior notes	(7)		(7)
Adjusted EBITDA	$	(84)	$	(73)