Redfin’s losses in the first quarter grew faster than revenue, but the tech-powered real estate brokerage met or beat Wall Street expectations on key metrics.
Revenue: The company reported $110.1 million in revenue in the first quarter, a 38 percent rise over the previous year and well ahead of analyst expectations of $103 million.
Profit/Loss: Redfin posted a loss of $67.1 million in the quarter, up a whopping 84 percent over a year ago. However, losses of $0.74 per share were right on par with what analysts expected.
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Redfin’s losses typically accelerate in the first quarter as the company is hiring agents, doing tours and setting up sales that take place in the second quarter. Redfin CEO Glenn Kelman said on a call with analysts that losses rose this quarter because of spending on advertising and investments in new businesses.
RedfinNow: The company breaks out its direct homebuying and selling operation RedfinNow under a reporting group called “Properties.” That segment was responsible for $21.4 million in revenue in the first quarter. That’s a 7X increase over a year ago, when the company brought in $3.1 million from Properties.
Kelman said Redfin is growing the business slowly, with only about 50 sales in the quarter. In the quarter, RedfinNow expanded to Los Angeles and Dallas. Earlier this week, Redfin said the program is also expanding to Denver.
Looking ahead: Redfin’s second quarter revenue guidance of $183.7 million to $193.1 million is well ahead of what analysts expected. Net loss is expected to be between $11.3 million to $14.7 million. The Properties segment is projected to bring in $30 million to $35 million.
“Redfin’s traffic and revenue growth accelerated in the first quarter, and agent productivity increased for the first time since the second quarter of 2017, all while our earnings were better than our projections,” Redfin CEO Glenn Kelman said in a statement. “Demand has been especially strong for mortgage, title, RedfinNow and our concierge service for painting and staging listings, increasing our conviction that these new services can combine with our brokerage capabilities to let us solve customer problems no other real estate company can.”
Analysts weren’t sure how to feel initially, as the company’s stock shot up about 5 percent immediately after the company’s earnings release. A few minutes later it was down close to 3 percent. Redfin stock is down 11.5 percent over this time last year.
In the quarter, Redfin embarked on its first international expansion, launching a national search site in Canada and a brokerage in Toronto. Redfin.ca now displays over 170,000 homes for sale across most provinces.