Redfin Faces Market Share Decline and Earnings Miss, Stock Dips
Redfin experiences a drop in U.S. market share and misses profit and revenue targets, leading to a lowered full-year forecast.
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Highlights
- Redfin's U.S. market share decreased, causing missed profit and sales forecasts.
- The company lowered its full-year adjusted EBITDA projections amidst challenging market conditions.
- CEO Glenn Kelman revealed that sales in August and September fell short of expectations.
Shares of Redfin (RDFN) declined sharply after the online real estate platform reported disappointing quarterly results and trimmed its outlook due to shrinking U.S. market share.
In Q3, Redfin posted a loss of $33.8 million, or $0.28 per share, compared to a $19 million loss, or $0.17 per share, in the prior year. Revenue increased modestly by 3.4% to $278 million, both figures falling short of analyst estimates.
Adjusted EBITDA dropped nearly 50%, falling to $3.9 million from $7.7 million in 2023. The company's share of U.S. existing home sales by units slipped from 0.78% to 0.76% year-over-year.
CEO Glenn Kelman noted that mortgage and brokerage sales in August and September were $7 million below projections. Despite a slight dip in interest rates in August, the housing market did not improve as expected, and conditions worsened unexpectedly.
Redfin's shares fell approximately 15% on the day and have shown a modest decline over the year.
Kelman also acknowledged unforeseen expenses totaling $3 million related to transitioning agent compensation structures and integrating the rental property segment.
The company revised its full-year adjusted EBITDA loss guidance to a range of $15 million to $22 million, down from an earlier expectation of breaking even.
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