Redfin Reports Third Quarter 2023 Financial Results

SEATTLE - November 2, 2023 - Redfin Corporation (NASDAQ: RDFN) today announced results for its third quarter ended September 30, 2023.

Third Quarter 2023

Third quarter revenue was $269.0 million, a decrease of 12% compared to the third quarter of 2022. Gross profit was $98.3 million, an increase of 8% year-over-year. Real estate services gross profit was $54.1 million, a decrease of 2% year-over-year, and real estate services gross margin was 30%, compared to 26% in the third quarter of 2022.

Net loss was $19.0 million, compared to a net loss of $90.2 million in the third quarter of 2022. Net loss attributable to common stock was $19.3 million. Net loss per share attributable to common stock, diluted, was $0.17, compared to net loss per share, diluted, of $0.83 in the third quarter of 2022.

“In a worsening housing market, Redfin earned an adjusted EBITDA profit, a $59 million improvement over the third quarter of 2022, all while growing traffic and gaining share,” said Redfin CEO Glenn Kelman. “In October, we raised capital, began generating revenues from a new digital business, and launched all-variable agent pay in California. This downturn has only made us stronger.”

Third Quarter Highlights

•Third quarter market share was 0.78% of U.S. existing home sales by units, compared to 0.75% in the second quarter of 2023.

•Redfin’s mobile apps and website reached more than 51 million average monthly users, up 1% compared to the third quarter of 2022.

•Achieved mortgage cross-selling attach rate of 18% in the third quarter, despite strong headwinds.

•Sustained momentum in loyalty sales, with 36% of sales coming from loyalty customers in Q3 2023 compared to 33% in Q3 2022.

•Announced a new construction partnership that will add thousands of new listings to Redfin and provide customers with richer information about newly built homes and communities.

•Delivered software to improve customer and agent experience while driving customer contacts and boosting traffic to Redfin:

◦Added wind risk data to home description pages, making Redfin the first brokerage to publish wind risk information for nearly every for-sale home in the U.S.

◦Launched a new design system for rental detail pages, improving the visual appearance and driving significant increases in user engagement. We applied the same design system to the tour checkout process for customers touring with a Redfin partner agent, leading to an increase in contacts.

◦Improved call filters on our customer service line, allowing Redfin sales advisors to spend more time helping high-intent customers.

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◦Simplified Redfin Estimate section for off-market home detail pages, making it easier for consumers to find the information they need and generating a 5% increase in listing contacts.

Business Outlook

The following forward-looking statements reflect Redfin's expectations as of November 2, 2023, and are subject to substantial uncertainty.

For the fourth quarter of 2023 we expect:

•Total revenue between $211 million and $226 million, representing a year-over-year change between (5)% and 2% compared to the fourth quarter of 2022. Included within total revenue are real estate services revenue between $127 million and $137 million, rentals revenue between $49 million and $50 million, mortgage revenue between $26 million and $29 million and other revenue of $9 million to $10 million.

•Total net loss is expected to be between $27 million and $18 million, compared to net loss of $62 million in the fourth quarter of 2022. This guidance includes approximately $20 million in total marketing expenses, $18 million of stock-based compensation, $15 million in depreciation and amortization, $27 million in gains on extinguishment of convertible senior notes and $2 million to $3 million in net interest expense. Adjusted EBITDA loss is expected to be between $19 million and $9 million. Furthermore, we expect to pay a quarterly dividend of 30,640 shares of common stock to our preferred stockholder.

Conference Call

Redfin will webcast a conference call to discuss the results at 1:30 p.m. Pacific Time today. The webcast will be open to the public at http://investors.redfin.com. The webcast will remain available on the investor relations website for at least three months following the conference call.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws, including our future operating results, as described under Business Outlook. We believe our expectations related to these forward-looking statements are reasonable, but actual results may turn out to be materially different. For factors that could cause actual results to differ materially from the forward-looking statements in this press release, please see the risks and uncertainties identified under the heading "Risk Factors" in our annual report for the year ended December 31, 2022, as supplemented by our quarterly report for the quarter ended September 30, 2023, both of which are available on our Investor Relations website at http://investors.redfin.com and on the SEC website at www.sec.gov. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances.

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Non-GAAP Financial Measure

To supplement our consolidated financial statements that are prepared and presented in accordance with GAAP, we also compute and present adjusted EBITDA, which is a non-GAAP financial measure. We believe adjusted EBITDA is useful for investors because it enhances period-to-period comparability of our financial statements on a consistent basis and provides investors with useful insight into the underlying trends of the business. The presentation of this financial measure is not intended to be considered in isolation or as a substitute of, or superior to, our financial information prepared and presented in accordance with GAAP. Our calculation of adjusted EBITDA may be different from adjusted EBITDA or similar non-GAAP financial measures used by other companies, limiting its usefulness for comparison purposes. Our adjusted EBITDA for the three months ended September 30, 2023 and 2022 is presented below, along with a reconciliation of adjusted EBITDA to net loss.

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We also run the country's #1 real estate brokerage site. Our home-buying customers see homes first with same day tours, and our lending and title services help them close quickly. Customers selling a home in certain markets can have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Customers who buy and sell with Redfin pay a 1% listing fee, subject to minimums, less than half of what brokerages commonly charge. Since launching in 2006, we've saved customers more than $1.5 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin-F

Contacts

Investor Relations

Meg Nunnally, 206-576-8610

ir@redfin.com

Public Relations

Mariam Sughayer, 206-876-1322

press@redfin.com

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Redfin Corporation and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share and per share amounts, unaudited)

			September 30, 2023						December 31, 2022
Assets
Current assets
Cash and cash equivalents			$	125,803					$	232,200
Restricted cash			1,414						2,406
Short-term investments			41,752						122,259
Accounts receivable, net of allowances for credit losses of $2,529 and $2,223			55,118						46,375
Loans held for sale			137,680						199,604
Prepaid expenses			26,248						34,006
Other current assets			8,811						7,449
Current assets of discontinued operations			—						132,159
Total current assets			396,826						776,458
Property and equipment, net			48,405						54,939
Right-of-use assets, net			35,150						40,889
Mortgage servicing rights, at fair value			34,773						36,261
Long-term investments			5,474						29,480
Goodwill			461,349						461,349
Intangible assets, net			133,031						162,272
Other assets, noncurrent			10,857						11,247
Noncurrent assets of discontinued operations			—						1,309
Total assets			$	1,125,865					$	1,574,204
Liabilities, mezzanine equity, and stockholders' equity
Current liabilities
Accounts payable			$	11,996					$	11,065
Accrued and other liabilities			88,191						106,763
Warehouse credit facilities			132,320						190,509
Convertible senior notes, net			—						23,431
Lease liabilities			16,317						18,560
Current liabilities of discontinued operations			—						4,311
Total current liabilities			248,824						354,639
Lease liabilities, noncurrent			31,416						36,906
Convertible senior notes, net, noncurrent			799,665						1,078,157
Deferred tax liabilities			260						243
Noncurrent liabilities of discontinued operations			—						392
Total liabilities			1,080,165						1,470,337
Series A convertible preferred stock—par value $0.001 per share; 10,000,000 shares authorized; 40,000 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively			39,947						39,914
Stockholders’ equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 115,210,998 and 109,696,178 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively			115						110
Additional paid-in capital			806,330						757,951
Accumulated other comprehensive loss			(257)						(801)
Accumulated deficit			(800,435)						(693,307)
Total stockholders’ equity			5,753						63,953
Total liabilities, mezzanine equity, and stockholders’ equity			$	1,125,865					$	1,574,204

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Redfin Corporation and Subsidiaries

Consolidated Statements of Comprehensive Loss

(in thousands, except share and per share amounts, unaudited)

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
Revenue			$	268,956					$	305,774					$	758,595					$	877,639
Cost of revenue			170,616						215,109						501,927						624,089
Gross profit			98,340						90,665						256,668						253,550
Operating expenses
Technology and development			44,392						43,335						139,196						135,678
Marketing			24,095						33,242						97,531						131,352
General and administrative			55,380						57,976						186,584						182,640
Restructuring and reorganization			—						284						7,159						18,399
Total operating expenses			123,867						134,837						430,470						468,069
Loss from continuing operations			(25,527)						(44,172)						(173,802)						(214,519)
Interest income			2,060						1,174						8,170						1,948
Interest expense			(1,603)						(2,219)						(5,291)						(6,648)
Income tax expense			(239)						(132)						(882)						(425)
Gain on extinguishment of convertible senior notes			6,495						—						68,848						—
Other expense, net			(158)						(902)						(537)						(3,077)
Net loss from continuing operations			(18,972)						(46,251)						(103,494)						(222,721)
Net loss from discontinued operations			—						(43,994)						(3,634)						(36,476)
Net loss			$	(18,972)					$	(90,245)					$	(107,128)					$	(259,197)
Dividends on convertible preferred stock			(335)						(272)						(858)						(1,416)
Net loss from continuing operations attributable to common stock—basic and diluted			$	(19,307)					$	(46,523)					$	(104,352)					$	(224,137)
Net loss attributable to common stock—basic and diluted			$	(19,307)					$	(90,517)					$	(107,986)					$	(260,613)
Net loss from continuing operations per share attributable to common stock—basic and diluted			$	(0.17)					$	(0.43)					$	(0.93)					$	(2.08)
Net loss attributable to common stock per share—basic and diluted			$	(0.17)					$	(0.83)					$	(0.96)					$	(2.42)
Weighted-average shares to compute net loss per share attributable to common stock—basic and diluted			114,592,679						108,618,491						112,141,342						107,566,894
Net loss			$	(18,972)					$	(90,245)					$	(107,128)					$	(259,197)
Other comprehensive income
Foreign currency translation adjustments			(15)						27						(73)						65
Unrealized gain on available-for-sale debt securities			210						34						617						812
Comprehensive loss			$	(18,777)					$	(90,184)					$	(106,584)					$	(258,320)

(1) Includes stock-based compensation as follows:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
Cost of revenue			$	3,037					$	4,165					$	10,173					$	10,771
Technology and development			8,391						6,353						24,759						20,230
Marketing			1,337						1,002						3,836						2,939
General and administrative			6,035						4,904						16,380						13,022
Total			$	18,800					$	16,424					$	55,148					$	46,962

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Redfin Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(in thousands, unaudited)

			Nine Months Ended September 30,
			2023						2022
Operating Activities
Net loss			$	(107,128)					$	(259,197)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization			48,443						47,438
Stock-based compensation			55,382						51,672
Amortization of debt discount and issuance costs			2,873						4,358
Non-cash lease expense			12,909						11,313
Impairment costs			113						913
Net (gain) loss on IRLCs, forward sales commitments, and loans held for sale			(1,767)						4,228
Change in fair value of mortgage servicing rights, net			1,065						(1,472)
Gain on extinguishment of convertible senior notes			(68,848)						—
Other			(2,013)						3,254
Change in assets and liabilities:
Accounts receivable, net			(238)						(17,052)
Inventory			114,232						56,990
Prepaid expenses and other assets			9,696						(2,721)
Accounts payable			177						(1,875)
Accrued and other liabilities, deferred tax liabilities, and payroll tax liabilities, noncurrent			(19,346)						(24,202)
Lease liabilities			(14,864)						(12,435)
Origination of mortgage servicing rights			(699)						(2,774)
Proceeds from sale of mortgage servicing rights			1,122						1,314
Origination of loans held for sale			(2,798,337)						(3,091,099)
Proceeds from sale of loans originated as held for sale			2,858,656						3,082,858
Net cash provided by (used in) operating activities			91,428						(148,489)
Investing activities
Purchases of property and equipment			(9,235)						(17,496)
Purchases of investments			(76,866)						(145,273)
Sales of investments			124,681						12,946
Maturities of investments			59,383						66,055
Cash paid for acquisition, net of cash, cash equivalents, and restricted cash acquired			—						(97,341)
Net cash provided by (used in) investing activities			97,963						(181,109)
Financing activities
Proceeds from the issuance of common stock pursuant to employee equity plans			5,790						9,679
Tax payments related to net share settlements on restricted stock units			(15,961)						(6,650)
Borrowings from warehouse credit facilities			2,803,589						3,080,606
Repayments to warehouse credit facilities			(2,861,779)						(3,069,728)
Borrowings from secured revolving credit facility			—						552,051
Repayments to secured revolving credit facility			—						(549,416)
Cash paid for secured revolving credit facility issuance costs			—						(764)
Principal payments under finance lease obligations			(73)						(680)
Repurchases of convertible senior notes			(212,401)						—
Repayments of convertible senior notes			(23,512)						—
Net cash (used in) provided by financing activities			(304,347)						15,098
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(73)						(65)
Net change in cash, cash equivalents, and restricted cash			(115,029)						(314,565)
Cash, cash equivalents, and restricted cash:
Beginning of period			242,246						718,281
End of period			$	127,217					$	403,716

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Redfin Corporation and Subsidiaries

Supplemental Financial Information and Business Metrics

(unaudited)

			Three Months Ended
			Sep. 30, 2023						Jun. 30, 2023						Mar. 31, 2023						Dec. 31, 2022						Sep. 30, 2022						Jun. 30, 2022						Mar. 31, 2022						Dec. 31, 2021
Monthly average visitors (in thousands)			51,309						52,308						50,440						43,847						50,785						52,698						51,287						44,665
Real estate services transactions
Brokerage			13,075						13,716						10,301						12,743						18,245						20,565						15,001						19,428
Partner			4,351						3,952						3,187						2,742						3,507						3,983						3,417						4,603
Total			17,426						17,668						13,488						15,485						21,752						24,548						18,418						24,031
Real estate services revenue per transaction
Brokerage			$	12,704					$	12,376					$	11,556					$	10,914					$	11,103					$	11,692					$	11,191					$	10,900
Partner			2,677						2,756						2,592						2,611						2,556						2,851						2,814						2,819
Aggregate			10,200						10,224						9,438						9,444						9,725						10,258						9,637						9,352
U.S. market share by units(1)			0.78		%				0.75		%				0.79		%				0.76		%				0.80		%				0.83		%				0.79		%				0.78		%
Revenue from top-10 Redfin markets as a percentage of real estate services revenue			56		%				55		%				53		%				57		%				58		%				59		%				57		%				61		%
Average number of lead agents			1,744						1,792						1,876						2,022						2,293						2,640						2,750						2,485
Mortgage originations by dollars (in millions)			$	1,110					$	1,282					$	991					$	1,036					$	1,557					$	1,565					$	159					$	242
Mortgage originations by units (in ones)			2,786						3,131						2,444						2,631						3,720						3,860						414						591

(1) Prior to the second quarter of 2022, we reported our U.S. market share based on the aggregate home value of our real estate services transactions, relative to the aggregate value of all U.S. home sales, which we computed based on the mean sale price of U.S. homes provided by the National Association of REALTORS® (“NAR”). Beginning in the second quarter of 2022, NAR (1) revised its methodology of computing the mean sale price, (2) restated its previously reported mean sale price beginning from January 2020 (and indicated that previously reported mean sale price prior to January 2020 is not comparable), and (3) discontinued publication of the mean sale price as part of its primary data set. Due to these changes, as of the second quarter of 2022, we report our U.S. market share based on the number of homes sold, rather than the dollar value of homes sold. Our market share by number of homes sold has historically been lower than our market share by dollar value of homes sold. We also stopped reporting the aggregate home value of our real estate services transactions.

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Redfin Corporation and Subsidiaries

Supplemental Financial Information

(unaudited, in thousands)

			Three Months Ended September 30, 2023
			Real estate services						Rentals						Mortgage						Other						Corporate overhead						Total
Revenue			$	177,750					$	47,410					$	32,923					$	10,873					$	—					$	268,956
Cost of revenue			123,684						10,824						29,629						6,479						—						170,616
Gross profit			54,066						36,586						3,294						4,394						—						98,340
Operating expenses
Technology and development			25,711						15,813						800						1,133						935						44,392
Marketing			10,785						12,245						1,088						20						(43)						24,095
General and administrative			18,418						21,838						6,670						952						7,502						55,380
Total operating expenses			54,914						49,896						8,558						2,105						8,394						123,867
(Loss) income from continuing operations			(848)						(13,310)						(5,264)						2,289						(8,394)						(25,527)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net			41						42						(73)						207						6,338						6,555
Net (loss) income from continuing operations			$	(807)					$	(13,268)					$	(5,337)					$	2,496					$	(2,056)					$	(18,972)

			Three Months Ended September 30, 2023
			Real estate services						Rentals						Mortgage						Other						Corporate overhead						Total
Net (loss) income from continuing operations			$	(807)					$	(13,268)					$	(5,337)					$	2,496					$	(2,056)					$	(18,972)
Interest income(1)			(41)						(81)						(2,886)						(207)						(1,732)						(4,947)
Interest expense(2)			—						—						3,132						—						1,598						4,730
Income tax expense			—						37						70						—						132						239
Depreciation and amortization			3,123						9,681						947						233						312						14,296
Stock-based compensation(3)			11,151						4,255						473						574						2,347						18,800
Gain on extinguishment of convertible senior notes			—						—						—						—						(6,495)						(6,495)
Adjusted EBITDA			$	13,426					$	624					$	(3,601)					$	3,096					$	(5,894)					$	7,651

(1) Interest income includes $2.9 million of interest income related to originated mortgage loans for the three months ended September 30, 2023.

(2) Interest expense includes $3.1 million of interest expense related to our warehouse credit facilities for the three months ended September 30, 2023.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 11 to our consolidated financial statements for more information.

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			Three Months Ended September 30, 2022
			Real estate services						Rentals						Mortgage						Other						Corporate overhead						Total
Revenue(1)			$	211,540					$	38,686					$	48,469					$	7,079					$	—					$	305,774
Cost of revenue			156,632						8,676						43,783						6,018						—						215,109
Gross profit			54,908						30,010						4,686						1,061						—						90,665
Operating expenses
Technology and development			25,709						15,385						985						751						505						43,335
Marketing			18,772						12,678						1,653						48						91						33,242
General and administrative			20,244						22,722						7,073						784						7,153						57,976
Restructuring and reorganization			—						—						—						—						284						284
Total operating expenses			64,725						50,785						9,711						1,583						8,033						134,837
Loss from continuing operations			(9,817)						(20,775)						(5,025)						(522)						(8,033)						(44,172)
Interest income, interest expense, income tax expense, and other expense, net			—						397						(129)						40						(2,387)						(2,079)
Net loss from continuing operations			$	(9,817)					$	(20,378)					$	(5,154)					$	(482)					$	(10,420)					$	(46,251)

(1) Included in revenue is $4.9 million from providing services to our discontinued properties segment.

			Three Months Ended September 30, 2022
			Real estate services						Rentals						Mortgage						Other						Corporate overhead						Total
Net loss from continuing operations			$	(9,817)					$	(20,378)					$	(5,154)					$	(482)					$	(10,420)					$	(46,251)
Interest income(1)			—						—						(4,049)						(42)						(1,115)						(5,206)
Interest expense(2)			—						—						3,364						—						2,215						5,579
Income tax expense			—						(355)						141						—						346						132
Depreciation and amortization			4,388						9,683						1,053						241						291						15,656
Stock-based compensation(3)			9,834						3,632						1,209						341						1,408						16,424
Acquisition-related costs(4)			—						—						—						—						13						13
Restructuring and reorganization(5)			—						—						—						—						284						284
Impairment(6)			—						—						—						—						913						913
Adjusted EBITDA			$	4,405					$	(7,418)					$	(3,436)					$	58					$	(6,065)					$	(12,456)

(1) Interest income includes $4.0 million of interest income related to originated mortgage loans for the three months ended September 30, 2022.

(2) Interest expense includes $3.4 million of interest expense related to our warehouse credit facilities for the three months ended September 30, 2022.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 11 to our consolidated financial statements for more information.

(4) Acquisition-related costs consist of fees for external advisory, legal, and other professional services incurred in connection with our acquisition of other companies.

(5) Restructuring and reorganization expenses primarily consist of personnel-related costs associated with employee terminations, furloughs, or retention for our rentals segment due to the restructuring and reorganization activities from our acquisition of Rent.

(6) Impairment consists of an impairment loss due to subleasing one of our operating leases.

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			Nine Months Ended September 30, 2023
			Real estate services						Rentals						Mortgage						Other						Corporate overhead						Total
Revenue(1)			$	485,687					$	135,636					$	107,838					$	29,434					$	—					$	758,595
Cost of revenue			359,625						31,016						93,108						18,178						—						501,927
Gross profit			126,062						104,620						14,730						11,256						—						256,668
Operating expenses
Technology and development			82,650						48,081						2,177						3,475						2,813						139,196
Marketing			51,849						42,509						3,122						46						5						97,531
General and administrative			58,997						73,445						20,323						3,049						30,770						186,584
Restructuring and reorganization			—						—						—						—						7,159						7,159
Total operating expenses			193,496						164,035						25,622						6,570						40,747						430,470
(Loss) income from continuing operations			(67,434)						(59,415)						(10,892)						4,686						(40,747)						(173,802)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net			41						115						(224)						475						69,901						70,308
Net (loss) income from continuing operations			$	(67,393)					$	(59,300)					$	(11,116)					$	5,161					$	29,154					$	(103,494)

(1) Included in revenue is $1.2 million from providing services to our discontinued properties segment.

			Nine Months Ended September 30, 2023
			Real estate services						Rentals						Mortgage						Other						Corporate overhead						Total
Net (loss) income from continuing operations			$	(67,393)					$	(59,300)					$	(11,116)					$	5,161					$	29,154					$	(103,494)
Interest income(1)			(41)						(238)						(9,062)						(475)						(7,400)						(17,216)
Interest expense(2)			—						—						9,737						—						5,285						15,022
Income tax expense			—						123						222						—						537						882
Depreciation and amortization			12,819						30,068						2,929						756						1,745						48,317
Stock-based compensation(3)			33,041						11,580						2,554						1,696						6,277						55,148
Acquisition-related costs(4)			—						—						—						—						8						8
Restructuring and reorganization(5)			—						—						—						—						7,159						7,159
Impairment(6)			—						—						—						—						113						113
Gain on extinguishment of convertible senior notes			—						—						—						—						(68,848)						(68,848)
Adjusted EBITDA			$	(21,574)					$	(17,767)					$	(4,736)					$	7,138					$	(25,970)					$	(62,909)

(1) Interest income includes $9.0 million of interest income related to originated mortgage loans for the nine months ended September 30, 2023.

(2) Interest expense includes $9.7 million of interest expense related to our warehouse credit facilities for the nine months ended September 30, 2023.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 11 to our consolidated financial statements for more information.

(4) Acquisition-related costs consist of fees for external advisory, legal, and other professional services incurred in connection with our acquisition of other companies.

(5) Restructuring and reorganization expenses primarily consist of personnel-related costs associated with employee terminations, furloughs, or retention due to the restructuring and reorganization activities from our acquisitions of Bay Equity and Rent., and from our June 2022, October 2022, and March 2023 workforce reductions.

(6) Impairment consists of an impairment loss due to subleasing one of our operating leases.

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			Nine Months Ended September 30, 2022
			Real estate services						Rentals						Mortgage						Other						Corporate overhead						Total
Revenue(1)			$	640,835					$	114,979					$	104,484					$	17,341					$	—					$	877,639
Cost of revenue			488,114						23,769						95,616						16,590						—						624,089
Gross profit			152,721						91,210						8,868						751						—						253,550
Operating expenses
Technology and development			80,144						44,539						5,236						2,975						2,784						135,678
Marketing			90,380						36,806						3,525						173						468						131,352
General and administrative			67,578						68,738						18,047						2,346						25,931						182,640
Restructuring and reorganization			—						—						—						—						18,399						18,399
Total operating expenses			238,102						150,083						26,808						5,494						47,582						468,069
Loss from operations			(85,381)						(58,873)						(17,940)						(4,743)						(47,582)						(214,519)
Interest income, interest expense, income tax expense, and other expense, net			(123)						1,098						(164)						51						(9,064)						(8,202)
Net loss from continuing operations			$	(85,504)					$	(57,775)					$	(18,104)					$	(4,692)					$	(56,646)					$	(222,721)

(1) Included in revenue is $14.9 million from providing services to our discontinued properties segment.

			Nine Months Ended September 30, 2022
			Real estate services						Rentals						Mortgage						Other						Corporate overhead						Total
Net loss from continuing operations			$	(85,504)					$	(57,775)					$	(18,104)					$	(4,692)					$	(56,646)					$	(222,721)
Interest income(1)			—						(1)						(7,296)						(55)						(1,876)						(9,228)
Interest expense(2)			—						—						5,599						—						6,642						12,241
Income tax expense			—						(789)						174						—						1,040						425
Depreciation and amortization			12,957						28,550						2,425						814						909						45,655
Stock-based compensation(3)			29,644						8,611						2,590						1,151						4,966						46,962
Acquisition-related costs(4)			—						—						—						—						2,437						2,437
Restructuring and reorganization(5)			—						—						—						—						18,399						18,399
Impairment(6)			—						—						—						—						913						913
Adjusted EBITDA			$	(42,903)					$	(21,404)					$	(14,612)					$	(2,782)					$	(23,216)					$	(104,917)

(1) Interest income includes $7.3 million of interest income related to originated mortgage loans for the nine months ended September 30, 2023.

(2) Interest expense includes $5.6 million of interest expense related to our warehouse credit facilities for the nine months ended September 30, 2023.

(3) Stock-based compensation consists of expenses related to stock options, restricted stock units, and our employee stock purchase program. See Note 11 to our consolidated financial statements for more information.

(4) Acquisition-related costs consist of fees for external advisory, legal, and other professional services incurred in connection with our acquisition of other companies.

(5) Restructuring and reorganization expenses primarily consist of personnel-related costs associated with employee terminations, furloughs, or retention due to the restructuring and reorganization activities from our acquisitions of Bay Equity and Rent., and from our June 2022, October 2022, and March 2023 workforce reductions.

(6) Impairment consists of an impairment loss due to subleasing one of our operating leases.

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Reconciliation of Adjusted EBITDA Guidance to Net Loss Guidance

(unaudited, in millions)

			Q4 2023
			Low						High
Net loss			(27)						(18)
Net interest expense			3						2
Depreciation and amortization			15						15
Stock-based compensation			18						18
Gain on extinguishment of notes			(27)						(27)
Adjusted EBITDA			(19)						(9)

Note: Figures may not sum due to rounding.

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