Redfin (RDFN) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 2025 was $221.0 million, down 2% year-over-year, with a net loss of $92.5 million compared to a $66.8 million net loss in Q1 2024.

• Entered into a merger agreement with Rocket Companies, announced March 10, 2025, expected to close in Q2 or Q3 2025, subject to regulatory and shareholder approval.

• Formed a five-year partnership with Zillow, including a $100 million upfront payment and a minimum $75 million lead generation guarantee for the first year.

• Restructured rentals segment, incurring $18.9 million in Q1 2025 restructuring costs, with further costs expected in Q2 2025.

• Adjusted EBITDA loss was $32.0 million, up from $27.6 million in Q1 2024.

Financial highlights

• Gross profit was $70.6 million, nearly flat year-over-year; gross margin improved 60 basis points to 32.0%.

• Operating expenses rose 11% to $156.1 million, driven by restructuring and higher marketing spend, partially offset by lower technology and G&A costs.

• Cash and cash equivalents were $183.5 million as of March 31, 2025, up from $124.7 million at year-end 2024.

• No repurchases of convertible senior notes in Q1 2025; $576.9 million in notes outstanding.

• Net cash provided by operating activities was $37.9 million in Q1 2025, compared to net use of $46.0 million in Q1 2024.

Outlook and guidance

• Management expects the Rocket merger to close in Q2 or Q3 2025, but notes risks if closing conditions are not met.

• Rentals revenue will transition to being primarily Zillow-sourced by end of July 2025.

• Liquidity is expected to be sufficient for at least the next 12 months, but future capital needs may require additional financing.

• No financial guidance for Q2 2025 due to the pending Rocket acquisition.