Redfin Q1 2024: Revenues up 5%, But Net Losses Widen by 9%

Redfin, the NASDAQ-listed technology-enabled brokerage in the United States, has released its Q1 FY2024 financial statements, with market conditions being blamed for a stuttering first three months of the year.

Highlights include:

• First quarter revenue was up 5% year-on-year, to $225.5 million*
• Net loss was $66.8 million, widening 9% YoY
• Quarter-on-quarter losses more than doubled (from $22.9 million in Q4 2023 to $66.8 million in Q1 2024)
• Adjusted EBITDA loss was $27.6 million, compared to $63.6 million in 2023.

Glenn Kelman, CEO at Redfin, said:

"Market conditions recently got worse, but Redfin got better in the first quarter of 2024.

"Each of our business segments performed at the top of the range we set last quarter, or above that range. Our plan to build a larger marketplace, based on rental and for-sale listings, is paying off. Despite spending less than our major rivals on advertising, we continue to compete well for traffic.

"Our brokerage initiatives are working. Market-share, loyalty sales and luxury sales increased, with the strongest increases in the four California markets that eliminated agent salaries in lieu of higher bonuses. Revenue improved year-over-year, gross profit improved even more, and adjusted EBITDA improved the most, which tells us that we can spend less and still make more.”

Real estate services made a net loss of $39.2 million for the quarter at an Adjusted EBITDA loss of $24.7 million. Meanwhile, segments including Rentals and Mortgages made losses for the quarter, $12.7M and $0.3M respectively.

Brokerage revenue rose to $125M for the quarter, up 5% YoY, while brokerage transactions dipped slightly. In other words, Redfin has increased its revenue per transaction YoY.

Despite the aforementioned losses, Rentals revenue rose 16% YoY—but Mortgage revenue dropped 7% YoY.

Redfin's outlook for Q2 forecasts a net loss of $28M at best or a $34M loss at worst.

Redfin is one of the biggest names to be affected by the recent litigation cycles in the States and announced this week that it will pay $9.25M in a settlement deal, with the funds to be redistributed to home sellers who paid what has now been ruled as unfair buyer commission fees as part of the transaction.

Redfin highlighted a number of tech and product launches for the quarter. The first, Ask Redfin, is an AI-powered virtual assistant launched nationwide, contributed to increased user engagement. Meanwhile, Redfin added new information to its listings pages, including air quality data, a rent calculator, and affordability information for renters to parse over before signing a new lease.

*Author's note: Redfin's claim that Q1 2024 revenues were 5% higher than Q1 2023 may appear confusing. Q1 2023 revenues were $325.6 million, which means revenues dropped by 31%.

We reached out to Redfin to clarify how this number was calculated. Redfin said this:

"The $325.6 million you quote includes revenue from our discontinued operations (our RedfinNow home buying business)."

In this case, revenues in Q1 2023 were $214 million.