Redfin Reports Fourth Quarter and Full Year 2020 Financial Results
02/24/2021 - 04:01 PM
SEATTLE , Feb. 24, 2021 /PRNewswire/ -- Redfin Corporation (NASDAQ: RDFN) today announced financial results for the fourth quarter and full year ended December 31, 2020. All financial measures, unless otherwise noted, are presented on a GAAP basis and include stock-based compensation, depreciation and amortization, and expenses related to actions taken in response to COVID-19.
Fourth Quarter 2020 Revenue increased 5% year-over-year to $244 .5 million during the fourth quarter. Gross profit was $80 .1 million, an increase of 102% from $39 .6 million in the fourth quarter of 2019. Real estate services gross profit was $80 .8 million, an increase of 93% from $42 .0 million in the fourth quarter of 2019. Real estate services gross margin was 41% , compared to 32% in the fourth quarter of 2019. Operating expenses were $54.5 million 17% from $46.4 million 22% of revenue, up from 20% in the fourth quarter of 2019.
Net income was $14.0 million $7.8 million $1.6 million $12 .2 million. Stock-based compensation was $11.2 million $8.0 million $4 .0 million, up from $2 .9 million in the fourth quarter of 2019. Total interest and other expenses was $11 .6 million, which included a $4 .6 million loss on the extinguishment of debt and $6 .8 million in non-cash interest expense which was primarily related to our convertible senior notes, compared to $1 .0 million in the fourth quarter of 2019.
Net income per share attributable to common stock, diluted, was $0.11 , compared to a net loss per share, diluted, of $0.08 in the fourth quarter of 2019.
Full Year 2020 Revenue increased 14% year-over-year to $886 .1 million in 2020. Gross profit was $232.1 million 61% from $144.1 million $234.1 million 56% from $150.4 million 36% , compared to 29% in 2019. Operating expenses were $231.3 million 4% from $223.3 million 26% of revenue, down from 29% in 2019.
Net loss was $18 .5 million, compared to a net loss of $80 .8 million in 2019. The dividend on our convertible preferred stock was $4 .5 million. Net loss attributable to common stock was $23 .0 million. Stock-based compensation was $37 .0 million, up from $27 .8 million in 2019. Depreciation and amortization was $14.6 million $9.2 million $19 .3 million, which included a $4 .6 million loss on the extinguishment of our 2023 convertible senior notes and $12 .0 million in non-cash interest expense which was primarily related to our convertible senior notes, compared to $1 .6 million in 2019.
Net loss per share attributable to common stock, diluted, was $0.23 , compared to a net loss per share, diluted, of $0.88 in 2019.
"Revenues in our core business of brokering home sales increased 51% in the fourth quarter, with gross margins again exceeding 40% ," said Redfin CEO Glenn Kelman . "Our mortgage business had even stronger results, with 210% revenue growth. We were the fastest-growing major real estate website, as home-buyers moving to a new part of the country have increasingly turned to the Internet to find a real estate agent. Since more than half of all homes now sell in a bidding war, our on-demand home-touring has become a crucial competitive advantage for our customers, who want to see a listing either in-person or virtually before other buyers even know it's for sale."
Fourth Quarter Highlights
Reached market share of 1.04% of U.S. existing home sales by value in the fourth quarter of 2020, an increase of .10 percentage points from the fourth quarter of 2019.(1) Saved homebuyers and sellers over $54 million $185 million 2.5% listing commission typically charged by traditional agents. Redfin's mobile apps and website reached a record of 44 million average monthly users in the fourth quarter. For the year, Redfin reached a record of more than 42 million average monthly users, an increase of 28% compared to 2019. Continued expansion of RedfinNow by launching in Sacramento , San Francisco and Seattle in the fourth quarter of 2020. Conducted over 21,000 video tours in the fourth quarter. Since the start of the pandemic in March, Redfin has seen a 137-fold increase in monthly requests for video tours and a nearly 7-fold increase in monthly views of 3D walkthroughs on Redfin.com. Upgraded its software for customers, agents, partners, home services and mortgage teams, including: Adding flood risk data to home listing pages to give customers more information about individual properties and their risk factors. Adding Direct Access touring information to the Owner Dashboard, giving sellers and agents the ability to track self-tours and see buyers' feedback about the home. Improving the functionality, speed and stability of Redfin Builder Tools and Redfin Lender Tools, software used by Redfin's home services and mortgage organizations. Rolling out a new communication platform for Redfin partner agents to help them easily connect with customers, driving faster response times and better customer experiences. Launched Redfin Rise (1) 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® . 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.
Business Outlook The following forward-looking statements reflect Redfin's expectations as of February 24, 2021, and are subject to substantial uncertainty.
For the first quarter of 2021 we expect:
Total revenue between $249 million $255 million 30% and 34% compared to the first quarter of 2020. Properties segment revenue between $77 million $80 million Net loss is expected to be between $39 million $36 million $60 million $13.0 million $4.5 million $1.2 million 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, 2020 , 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 is a technology-powered residential real estate company, redefining real estate in the consumer's favor in a commission-driven industry. We do this by integrating every step of the home buying and selling process and pairing our own agents with our own technology, creating a service that is faster, better and costs less. We offer brokerage, iBuying, mortgage, and title services, and we also run the country's #1 real estate brokerage search site, offering a host of online tools to consumers, including the Redfin Estimate. We represent people buying and selling homes in over 95 markets in the United States and Canada . Since our launch in 2006, we have saved our customers nearly $1 billion $152 billion
Redfin may post updates about COVID-19's impact on the U.S. residential real estate industry or its business on its company blog at www.redfin.com/blog/real-estate-news/ . We encourage investors and others interested in our company to review and subscribe to the information we post on our company blog, as some of the information may be material.
Redfin-F
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,
2020
2019
2020
2019
Revenue
Service
$
204,452
$
134,128
$
674,345
$
539,288
Product
40,065
99,063
211,748
240,508
Total revenue
244,517
233,191
886,093
779,796
Cost of revenue(1)
Service
122,642
93,183
437,484
390,504
Product
41,755
100,382
216,499
245,189
Total cost of revenue
164,397
193,565
653,983
635,693
Gross profit
80,120
39,626
232,110
144,103
Operating expenses
Technology and development(1)
23,610
19,345
84,297
69,765
Marketing(1)
7,270
8,099
54,881
76,710
General and administrative(1)(2)
23,601
18,992
92,140
76,874
Total operating expenses
54,481
46,436
231,318
223,349
Income (loss) from operations
25,639
(6,810)
792
(79,246)
Interest income
215
1,341
2,074
7,146
Interest expense
(11,864)
(2,365)
(19,495)
(8,928)
Other income (expense), net
45
51
(1,898)
223
Net income (loss)
$
14,035
$
(7,783)
$
(18,527)
$
(80,805)
Dividend on convertible preferred stock
(1,640)
—
(4,454)
—
Undistributed earnings attributable to
(242)
—
—
—
Net income (loss) attributable to common
$
12,153
$
(7,783)
$
(22,981)
$
(80,805)
Net income (loss) per share attributable to
$
0.12
$
(0.08)
$
(0.23)
$
(0.88)
Weighted average shares of common stock—
102,176,459
92,486,944
98,574,529
91,583,533
Net income (loss) per share attributable to
0.11
(0.08)
(0.23)
(0.88)
Weighted average shares of common stock—
109,461,342
92,486,944
98,574,529
91,583,533
Other comprehensive income (loss)
Net income (loss)
$
14,035
$
(7,783)
$
(18,527)
$
(80,805)
Foreign currency translation adjustments
13
5
(3)
33
Unrealized gain (loss) on available-for-sale
(110)
11
172
9
Total comprehensive income (loss)
$
13,938
$
(7,767)
$
(18,358)
$
(80,763)
(1) Includes stock-based compensation as follows:
Three Months Ended December 31,
Twelve Months Ended December 31,
2020
2019
2020
2019
Cost of revenue
$
2,863
$
1,689
$
8,844
$
6,087
Technology and development
4,828
3,701
16,564
12,362
Marketing
439
393
1,569
1,418
General and administrative
3,079
2,239
9,996
7,947
Total
$
11,209
$
8,022
$
36,973
$
27,814
(2) Includes direct and incremental costs related to COVID-19 of $18 and $7,864, which are partially offset by $0 and $1,348 in employee retention credits allowed under the CARES Act, for the three and twelve months ended December 31, 2020, respectively.
Redfin Corporation and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share amounts, unaudited)
December 31, 2020
December 31, 2019
Assets
Current assets
Cash and cash equivalents
$
925,276
$
234,679
Restricted cash
20,544
12,769
Short-term investments
131,561
70,029
Accounts receivable, net of allowances for credit losses of $160 and $165
54,719
19,223
Inventory
49,158
74,590
Loans held for sale
42,539
21,985
Prepaid expenses
12,131
14,822
Other current assets
4,898
3,496
Total current assets
1,240,826
451,593
Property and equipment, net
43,988
39,577
Right-of-use assets, net
44,149
52,004
Long-term investments
11,922
30,978
Goodwill and intangibles, net
11,016
11,504
Other assets, noncurrent
8,619
10,557
Total assets
$
1,360,520
$
596,213
Liabilities, mezzanine equity and stockholders' equity
Current liabilities
Accounts payable
$
5,644
$
2,122
Accrued liabilities
69,460
38,022
Other payables
13,184
7,884
Warehouse credit facilities
39,029
21,302
Secured revolving credit facility
23,949
4,444
Convertible senior notes, net
22,482
—
Lease liabilities
11,973
11,408
Total current liabilities
185,721
85,182
Lease liabilities and deposits, noncurrent
49,339
59,869
Convertible senior notes, net, noncurrent
488,268
119,716
Payroll tax liabilities, noncurrent
6,812
—
Total liabilities
730,140
264,767
Commitments and contingencies (Note 7)
Series A convertible preferred stock—par value $0.001 per share; 10,000,000 shares authorized;
39,823
—
Stockholders' equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 103,000,594 and
103
93
Additional paid-in capital
860,556
583,097
Accumulated other comprehensive income
211
42
Accumulated deficit
(270,313)
(251,786)
Total stockholders' equity
590,557
331,446
Total liabilities, mezzanine equity and stockholders' equity
$
1,360,520
$
596,213
Redfin Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands, unaudited)
Year Ended December 31,
2020
2019
Operating Activities
Net loss
$
(18,527)
$
(80,805)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization
14,564
9,230
Stock-based compensation
36,973
27,814
Amortization of debt discount and issuance costs
12,038
6,385
Non-cash lease expense
9,204
6,940
Impairment costs
2,063
—
Loss on repurchases and conversions of convertible senior notes
4,634
—
Net gain on IRLCs, forward sales commitments and loans held for sale
(1,921)
(493)
Other
(349)
(663)
Change in assets and liabilities:
Accounts receivable, net
(35,496)
(3,861)
Inventory
25,432
(51,896)
Prepaid expenses and other assets
2,333
(3,293)
Accounts payable
2,086
(394)
Accrued liabilities, other payables, and payroll tax liabilities, noncurrent
39,092
7,422
Lease liabilities
(11,312)
(7,209)
Deferred rent
—
1
Origination of loans held for sale
(677,310)
(395,354)
Proceeds from sale of loans originated as held for sale
657,763
378,566
Net cash provided by (used in) operating activities
61,267
(107,610)
Investing activities
Purchases of property and equipment
(14,686)
(15,533)
Purchases of investments
(198,172)
(136,265)
Sales of investments
7,887
11,486
Maturities of investments
147,852
24,400
Net cash used in investing activities
(57,119)
(115,912)
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
21,072
16,107
Tax payments related to net share settlements on restricted stock units
(16,852)
(5,126)
Borrowings from warehouse credit facilities
662,278
388,586
Repayments to warehouse credit facilities
(644,551)
(372,017)
Borrowings from secured revolving credit facility
89,619
4,444
Repayments to secured revolving credit facility
(70,115)
—
Cash paid for secured revolving credit facility issuance costs
(4)
(922)
Proceeds from issuance of convertible senior notes, net of issuance costs
647,486
—
Payments for repurchases and conversions of convertible senior notes
(108,061)
—
Principal payments under finance lease obligations
(221)
(72)
Proceeds from follow on offering
—
—
Other payables - deposits held in escrow
4,074
883
Net cash provided by financing activities
$
694,227
$
31,883
Effect of exchange rate changes on cash and cash equivalents
(3)
32
Net change in cash, cash equivalents, and restricted cash
698,372
(191,607)
Cash, cash equivalents, and restricted cash:
Beginning of period
247,448
439,055
End of period
$
945,820
$
247,448
Redfin Corporation and Subsidiaries
Supplemental Financial Information and Business Metrics
(unaudited)
Three Months Ended
Dec. 31
Sep. 30
Jun. 30,
Mar. 31,
Dec. 31,
Sep. 30,
Jun. 30,
Mar. 31,
Dec. 31,
Monthly average visitors (in thousands)
44,135
49,258
42,537
35,519
30,595
35,633
36,557
31,107
25,212
Real estate services transactions
Brokerage
16,951
18,980
13,828
10,751
13,122
16,098
15,580
8,435
9,822
Partner
4,940
5,180
2,691
2,479
2,958
3,499
3,357
2,125
2,749
Total
21,891
24,160
16,519
13,230
16,080
19,597
18,937
10,560
12,571
Real estate services revenue per transaction
Brokerage
$
10,751
$
10,241
$
9,296
$
9,520
$
9,425
$
9,075
$
9,332
$
9,640
$
9,569
Partner
3,123
2,988
2,417
2,535
2,369
2,295
2,218
2,153
2,232
Aggregate
9,030
8,686
8,175
8,211
8,127
7,865
8,071
8,134
7,964
Aggregate home value of real estate
$
11,478
$
12,207
$
7,576
$
6,098
$
7,588
$
9,157
$
8,986
$
4,800
$
5,825
U.S. market share by value
1.04
%
1.04
%
0.93
%
0.93
%
0.94
%
0.96
%
0.94
%
0.83
%
0.81
%
Revenue from top-10 Redfin markets as a
63
%
63
%
63
%
61
%
62
%
63
%
64
%
64
%
66
%
Average number of lead agents
1,981
1,820
1,399
1,826
1,526
1,579
1,603
1,503
1,419
Properties transactions
83
37
162
171
212
168
80
43
47
Properties revenue per transaction
474,690
513,648
445,578
462,563
467,276
477,167
498,847
497,044
459,663
Redfin Corporation and Subsidiaries
Supplemental Financial Information
(unaudited, in thousands)
Three Months Ended December 31,
Year Ended December 31,
2020
2019
2020
2019
Real estate services revenue
Brokerage revenue
$
182,244
$
123,671
$
607,513
496,480
Partner revenue
15,426
7,008
43,695
27,060
Total real estate services revenue
197,670
130,679
651,208
523,540
Properties revenue
39,399
99,063
209,686
240,507
Other revenue
8,213
4,143
28,212
17,634
Intercompany eliminations
(765)
(693)
(3,013)
(1,885)
Total revenue
$
244,517
$
233,192
$
886,093
$
779,796
Cost of revenue
Real estate services
$
116,835
$
88,703
$
417,140
$
373,150
Properties
41,275
100,382
214,382
245,189
Other
7,052
5,174
25,474
19,239
Intercompany eliminations
(765)
(693)
(3,013)
(1,885)
Total cost of revenue
$
164,397
$
193,566
$
653,983
$
635,693
Gross profit by segment
Real estate services
$
80,835
$
41,976
$
234,068
$
150,390
Properties
(1,876)
(1,319)
(4,696)
(4,682)
Other
1,161
(1,031)
2,738
(1,605)
Total gross profit
$
80,120
$
39,626
$
232,110
$
144,103
Gross margin (percentage of revenue)
Real estate services
40.9
%
32.1
%
35.9
%
28.7
%
Properties
(4.8)
(1.3)
(2.2)
(1.9)
Other
14.1
(24.9)
9.7
(9.1)
Total gross margin
32.8
17.0
26.2
18.5
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SOURCE Redfin
