Redfin Racks Up More Losses in Q2 and Treads Water on Traffic

The U.S. brokerage and portal operator Redfin has reported on its performance for the second quarter of 2024. Notable points from the company's report for the three months ended June 30th include:

• Revenue was up 7% year-on-year to $295 million.
• Market share was 0.77% of U.S. existing home sales, compared to 0.75% in the second quarter of 2023.
• The gross profit margin for Real Estate Services was 29%, compared to 31% in the second quarter of 2023.

The Seattle-based brokerage has now racked up 14 straight quarters posting a net loss. The latest bottom-line figure was a loss of $27.9 million bringing total net losses since the beginning of 2021 to over $665 million.

Although in comments accompanying a press release Redfin CEO, Glenn Kelman said that the company's Adjusted EBITDA "should be about breakeven this year", Redfin's losses stand out like a sore thumb when compared to its brokerage competitors Compass and eXp which both made healthy profits in the same period.

Redfin has traditionally been able to point to its popularity as a discovery portal but in an increasingly competitive environment, the company's traffic numbers for the second quarter also seem to have stagnated.

Redfin reported 52 million average monthly users for its mobile app and website, the same as in the corresponding period in 2023. Meanwhile, CoStar-backed Homes.com reported 148 million to its network in the period and Realtor.com’s latest figure (via News Corp’s Q4 in May) stood at 72 million.

Redfin pulled out of iBuying in 2022 but has maintained its mortgages division which has been inching its way towards profitability since the $135 million acquisition of Bay Equity Home Loans at the start of 2022. The second quarter saw Redfin achieve a 28% attach rate (up 4 percentage points year-on-year) while originating well over 3,000 mortgages.

The company is increasingly moving away from paying agents a fixed salary and towards the pay-for-performance commission split model employed by its competitors with Kelman telling analysts that it plans to scale up hiring across the country throughout the rest of the year.