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Redfin spent the second quarter of 2024 mostly treading water, with a new report showing that the company’s revenue rose even as losses and web traffic remained nearly flat.
In total, the portal and brokerage company earned $295.2 million in revenue between April and June of this year, according to a Q2 earnings report. That’s a 7 percent increase compared to the same period in 2023. At the same time, Redfin suffered a net loss of $27.9 million, just a hair more than the $27.4 million it lost one year earlier.
The report also shows that Redfin’s apps and website attracted “nearly 52 million average monthly users.” In Q2 of 2023, the company also had 52 million average monthly users.
Glenn Kelman
In the report, Redfin CEO Glenn Kelman celebrated the results, saying that “in a still-declining market, Redfin grew revenues, profits and market share.”
The report shows that gross profit — a figure that calculates profits after production costs, but before other expenses such as interest or taxes — grew 9 percent year over year to $109.6 million. Redfin’s market share grew to 0.77 percent of U.S. existing home sales by units, the report adds, up from 0.75 percent a year earlier.
Heading into Tuesday’s earnings, Redfin shares were trading in the low $7 range. That was down slightly for the day and week, and down compared to a year ago when shares were trading in the low $10 range.
Shares fluctuated in after-hours trading following the publication of Tuesday’s earnings report but ultimately trended down.
Credit: Google
As of Tuesday afternoon, Redfin had a market cap of about $848 million.
Redfin last reported earnings in May. At the time, the company revealed that revenue jumped 5 percent year over year in the first quarter of the year to $225.5 million. The company also lost $66.8 million in the quarter, an increase compared to $60.8 million in the first quarter of 2023.
During a call with investors Tuesday afternoon, Kelman touted the growth of Redfin Next, a program that launched earlier this year and which shifts agents from a salary model to a commission model. Redfin initially rolled out the program in four California markets but has since expanded it to dozens of others.
Kelman said during the call that in 2025 the program will be rolled out in all of the company’s markets and that it has helped with recruiting. The report adds that “to date, Redfin has signed more than 200 top-producing agents to join the brokerage under Redfin Next.”
While fielding calls from Wall Street analysts during the call, Kelman added that “the next dimension for us is teams.” He explained that Redfin hopes to build teams around its top-producing agents, which will, in turn, allow the company to “develop new-to-the-industry agents” under those top producers.
“We think that’ll let us scale up hiring,” he added.
Teams have been a major real estate trend in recent years and have played a role in the rise of both established firms such as Coldwell Banker as well as upstarts such as eXp Realty. However, Redfin — perhaps thanks to its now-disappearing salaried agent model — has been largely absent from that conversation. Kelman’s comments, however, suggest the company now wants to hop more overtly onto the teams bandwagon.
Kelman also speculated during the call that Redfin may have a recruiting advantage thanks to the coming industry rules changes that resulted from antitrust litigation. The changes “may help with recruiting by encouraging more agents to consider a brokerage built to compete on price,” Kelman argued.
Later during the call, Kelman discussed the market, saying that it is “significantly shifting in buyers’ favor.” That’s thanks to growing inventory and falling rates, though he added that so far those lower rates haven’t spurred significantly higher rates of homebuying.
“It has been the first time in years that a major interest rate drop had no impact on homebuying demand,” Kelman said, adding later that “I can’t remember a time where rates came down this far this fast and the market has been so muted in its response.”
Kelman speculated that the “muted” response could be due to anxiety about the coming presidential election or about the economy. Or, he continued, it may be that recent rate drops simply came “too late” in the year when many people are on vacation or no longer paying attention to the housing market. However, he said it’s “inconceivable to me that there won’t be a reaction” and that if “rates keep falling, U.S. home sales should increase.”
“I believe the housing market is about to get better,” Kelman said, “and that Redfin is about to take share.”
Update: This story was updated after publication with additional information from Redfin’s earnings report, as well as with commentary from the company’s investor call.
