Redfin posts $597M in revenue, tops expectations, stays optimistic in uncertain housing market

Glenn Kelman
Redfin CEO Glenn Kelman. (Redfin Photograph)

Seattle-based on-line actual property brokerage Redfin surpassed expectations within the first quarter and expressed optimism about its prospects for gaining share in an more and more tough marketplace for residence gross sales.

  • Income of $597.3 million was up 123% from the prior yr, exceeding the excessive finish of Redfin’s steering by $37 million.
  • Internet loss widened to $90.8 million, from $35.8 million a yr earlier. Internet loss per share of 86 cents was higher than the lack of $1.09 anticipated by analysts surveyed upfront of the report.
  • Redfin bought 617 houses by its RedfinNow “iBuyer” direct residence gross sales program, producing $380 million in income, with common income per residence of $608,851. That was up from from 171 houses in the identical quarter final yr, with whole income of $93 million at a mean of $525,765.
  • Web site and app site visitors rose 11% to about 51 million common month-to-month customers.
  • Redfin’s core brokerage enterprise generated $177 million in income, $6 million above the excessive finish of its steering, and up 5% from what the corporate described as a robust quarter a yr in the past.
  • Mortgage income fell to $2.9 million from $5.7 million a yr earlier. Nevertheless, the corporate says it’s on tempo to almost double the proportion of Redfin homebuyers who get a mortgage by the corporate since closing its $135 million acquisition of Bay Fairness Residence Loans on April 1, after the primary quarter was over.

Redfin CEO Glenn Kelman was so optimistic in regards to the firm’s prospects for growing its market share that one analyst, Mark Mahaney of Evercore ISI, made the tongue-in-cheek suggestion that Redfin accompany his remarks with an inspirational musical rating on its subsequent quarterly convention name.

Kelman laughed and mentioned he preferred the thought. However after one other analyst questioned his optimism extra immediately, Kelman defined his outlook in additional element, saying that Redfin does count on a major lower within the whole variety of houses bought within the U.S. this yr vs. final yr.

“We’re nonetheless very cautious in regards to the housing market total. However we expect we’re going to take important share as we progress by 2022,” Kelman mentioned, describing his feedback as “extra of a mirrored image of our enterprise and our potential to progress by headwinds than the rest.”

Rising rates of interest are inflicting some homebuyers to take a step again, he mentioned. However for others, he mentioned, the rise of distant work is altering the dynamics by making location much less essential.

“We now have people who find themselves trying in three or 4 totally different markets, every at a distinct value tier,” Kelman mentioned. This was once the hallmark of an actual property investor, he mentioned, however now it’s usually “a daily shopper who’s utterly agnostic about location.”

That gives “some buffer available in the market,” he mentioned.

“However there’s no query that there are headwinds, and there’s no query that the housing market goes by some type of correction,” Kelman mentioned. “It’s simply that we expect stock will nonetheless be the principle subject besides in a handful of markets. And simply primarily based on our personal information about excursions and provides and mortgages and all the things else, we expect we are able to beat the rap and maintain taking share.”

Shares of Redfin rose 2% to $11.56 in after-hours buying and selling, after falling 11% in common buying and selling Thursday previous to the earnings report.

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