Redfin continued its recovery in the fourth quarter, with revenue falling 2% annually to $218.1 million, a nearly 180% decline compared to annual revenue declines of more than 20% in the first and second quarters.
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Redfin continued its recovery in the fourth quarter, with revenue falling 2% annually to $218.1 million, a nearly 180° turn from the more than 20% annual revenue declines in the first and second quarters.
The Seattle-based company earnings report It showed that the gross profit margin has improved, increasing by 32% year-on-year to US$73.2 million, of which real estate services gross profit increased by 14% year-on-year to US$29.9 million. The gross profit margin of real estate services was 22.5%, an increase of 20% from the fourth quarter of 2022.
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Much like previous quarters, the company’s cost-saving measures and focus on growing digital margin revenue resulted in a narrower net loss. The net loss in the fourth quarter of 2023 was US$22.9 million, which surged to US$78.1 million from the loss in the fourth quarter of 2022, a 170% annual decrease.
Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) losses also improved, falling from $40.2 million in the fourth quarter of 2022 to $13.5 million in the fourth quarter of 2023.
Glenn Kelman
“In a poor housing market, Redfin improved efficiency in the fourth quarter and gross and operating margins improved again, even as we positioned ourselves for meaningful long-term growth,” Redfin CEO Glenn Kelman said in a written statement ahead of the company’s call. foundation.” Tuesday afternoon’s earnings call.
The company’s fourth-quarter efforts had a mixed impact on Redfin’s full-year results, with revenue falling 11% to $796.7 million. Gross profit increased by 7% year-on-year to US$329.8 million, but gross profit from real estate services decreased by 13% year-on-year to US$156.0 million. Real estate services gross profit margin will increase from 22.7% in 2022 to 25.2% in 2023.
Total net loss for the year fell 59% from $321.1 million to $130.0 million, and adjusted EBITDA loss fell from $145.1 million to $76.4 million.
Although its market share fell four basis points to 0.76%, Kelman said the company was able to increase sales from loyal customers from 32% in the fourth quarter of 2022 to 36% in the fourth quarter of 2023. He also said the company is “the number one customer.” By 2023, Redfin.com will become the “No. 1 brokerage website”, and by 2023, the average monthly number of Redfin.com users will reach 49 million.
“Our website continues to attract visitors from our competitors. New sales initiatives are driving breakthroughs in areas where Redfin has been stymied for years.”
Kelman sees the company’s variable pay scale and new “Sign & Save” commission refund program as two of the company’s biggest strengths in the coming year.
“Our fully variable compensation plan is driving significant revenue growth in major California cities,” he said. “Second, returning commissions to customers who hire a Redfin agent after the first tour appears likely to increase homebuyer closing rates in its first four pilot markets. We expect these programs to pay off in 2024 and 2025.”
The CEO made no mention of a potential class-action lawsuit filed Monday involving home sellers who paid their buyer’s agents in the four years before Redfin announced it was withdrawing from the National Association of Realtors.
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