Redfin (RDFN) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 3% year-over-year to $278 million, driven by rentals and mortgage growth, while real estate services revenue declined slightly.

• Net loss widened to $33.8 million from $19 million in Q3 2023, impacted by higher interest, legal settlements, and one-time costs.

• Adjusted EBITDA was $3.9 million, down from $7.7 million a year ago, with trailing twelve months adjusted EBITDA at $(37) million.

• Market share was 0.76% of U.S. existing home sales by units, down from 0.78% in Q3 2023, but October and November showed share gains and improved sales execution.

• Nationwide rollout of Redfin Next agent compensation model increased agent census and close rates, especially in luxury segments.

Financial highlights

• Q3 2024 revenue was $278 million, up 3% year-over-year; gross profit was $101.9 million, up 4%; gross margin held steady at 36.6%.

• Net loss was $33.8 million; diluted loss per share was $0.28 versus $0.17 a year ago.

• Operating expenses rose 4% year-over-year to $129 million, mainly due to higher marketing, restructuring, and legal costs.

• Rentals segment revenue grew 9% to $51.7 million; mortgage revenue rose 8% to $35.6 million.

• Interest expense increased to $8.5 million in Q3 2024, primarily due to a new term loan.

Outlook and guidance

• Q4 2024 revenue expected between $237 million and $247 million, up 9–13% year-over-year.

• Q4 net loss expected between $32 million and $25 million; adjusted EBITDA between $1 million and $8 million.

• Real estate services gross margin projected at 29%, up over 600 basis points from Q4 2023.

• Plans to increase advertising spend in 2025, leveraging improved cost structure and market share gains.

• Final dividend of 20,427 shares of common stock to preferred shareholder planned for Q4 2024.