Redfin (RDFN) Q3 2024 earnings summary

Executive summary

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

• Net loss widened to $33.8 million from $19 million a year ago, impacted by higher interest expense, legal settlements, and one-time costs.

• The Redfin Next program, shifting agent compensation to bonuses, was fully rolled out nationwide, increasing agent close rates and census.

• Rentals and mortgage segments posted their eighth straight quarter of growth, with rentals revenue up 9% and mortgage revenue up 8% year-over-year.

• Redfin settled major antitrust litigation for $9.25 million, with final court approval in November 2024.

Financial highlights

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

• Adjusted EBITDA was $3.9 million, down from $7.7 million a year ago, due to one-time costs.

• Net loss for Q3 2024 was $33.8 million; diluted loss per share was $0.28 versus $0.17 a year ago.

• Real estate services revenue was $175 million (down 1%), rentals $51.7 million (up 9%), mortgage $35.6 million (up 8%), and other segment $15.6 million (up 43%).

• Operating expenses were $129 million, up 4% year-over-year, representing 46.3% of revenue.

Outlook and guidance

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

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

• Real estate services gross margin for Q4 2024 anticipated at approximately 29%, up over 600 basis points year-over-year.

• Full-year 2024 adjusted EBITDA loss expected between $15 million and $22 million.

• Management expects continued macroeconomic headwinds, including high mortgage rates and inflation, to impact demand.