Real estate brokerage and listings platform Redfin posted a financial loss and a big decline in revenue in the first quarter, but executives say the company has turned a corner.
First quarter revenue came in at $325.7 million, a decrease of 45% compared to the first quarter of 2022. Redfin also recorded a $60.8 million net loss in the first quarter, which was an improvement on the $90.8 million the company lost in the first quarter a year ago.
“Redfin’s first-quarter revenues and earnings exceeded our expectations, keeping us on track for full-year adjusted EBITDA in 2023,” Redfin CEO Glenn Kelman said in a statement Thursday. “We’re drawing online visitors away from our main rivals, and our brokerage has gotten more efficient. For the second quarter, we expect gross-margins gains in our core business for the first time since 2021.”
Kelman added that the two companies Redfin acquired over the past two years — mortgage lender Bay Equity and rental platform RentPath — are starting to deliver results.
“Rent’s revenue growth is accelerating, and Bay Equity’s net income improved, with more than one in five Redfin homebuyers getting a mortgage from Bay Equity in the first quarter. And finally, our competitive position has materially improved, as we’ve reduced our debt by more than $300 million, and sold all but five of our RedfinNow homes,” Kelman said. “We wouldn’t wish a housing downturn on anyone, but it has made Redfin leaner, hungrier and better.”
Redfin’s market share declined slightly to 0.78% in the first quarter, with a 31% decline in transaction volume from a year ago — but revenue per transaction grew 3.26% to $11,556.
Kelman noted that traffic to mobile apps and the website totaled about 50 million monthly users, down slightly from 51 million in the first quarter of 2022, when the market was significantly hotter.
The company has begun expanding its Redfin Premier service, which targets luxury markets. The company has invested in branding, marketing and website improvements to connect customers with agents.
It also brought Redfin agent service to the Colorado Rockies and launched its Title Forward business in Northern California, expanding Title Forward coverage of Redfin’s sales from 48% to 55%.
Though Redfin says it’s heading in the right direction, it is unlikely to get in the black in the second quarter. Redfin is projected to be between $268 million and $281 million, a year-over-year decline of between 20 and 24%. The total net loss is projected to be between $35 million and $44 million in the second quarter.
In April, Redfin laid off 201 employees, or about 4% of its staff.