Seattle real estate brokerage Redfin on Thursday posted second quarter revenue of $471 million, a jump of 121 percent over the same period last year. The surge in revenues also came as net losses grew — coming in at $27.9 million for the quarter versus $6.6 million for the same period last year.
The losses were tied to Redfin’s recent acquisition of bankrupt RentPath, which accounted for $13 million in losses. Redfin also ramped up marketing spending compared to the second quarter of last year, which Redfin CEO Glenn Kelman noted was a “near death experience” for the real estate industry which was shaken by the outbreak of COVID-19. The company also is spending heavily to attract and retain real estate agents.
Shares of Redfin closed Thursday at $60.76, with a market value of $6.3 billion. The stock inched up slightly in after hours trading.
“Even in a rapidly expanding market, Redfin gained more market-share in the second quarter than at any point since our 2017 initial public offering,” said Kelman in a press release. The company said its market share now stands at 1.18% of U.S. existing home sales, when measured by value.
Kelman said the housing market is starting to return to more normal levels, noting that online interest in homes started to wane in April as families started celebrating graduations and taking vacations. But he also said it was a “revolt against runaway prices” when bidding wars forced some home buyers out of the market.
“The market is still hot, just not as hot as before,” said Kelman, adding that the number of homes for sale is rising and red hot markets like Bend, Oregon and Phoenix are starting to see price drops. Because of increased inventory, Kelman said “buyers and sellers are now mating in the wild.”
The company continues to expand its RedfinNow home buying service, recently expanding to Tucson, Boston and Portland. It bought 40% more homes in the second quarter compared to all of last year, and the company believes that its use of machine learning to identify homes to buy and its expertise in home renovation will help grow its direct buying service as it competes with companies like OpenDoor and Zillow Group.
Redfin expects revenue of $530 million to $541 million in the third quarter, and a net loss of $20 million to $24 million. RentPath, which is expected to account for $40 million to $41 million in revenue, will account for about $17 million of those losses in the third quarter. Redfin recently tapped Jon Ziglar, formerly CEO of ParkMobile, as CEO of RentPath.
Redfin’s cross-town rival Zillow Group also posted quarterly results Thursday, reporting revenue of $1.3 billion on consolidated net income of $10 million.
