Redfin’s Q1 2019 earnings report indicated that the company’s revenue increased +15% y/y to $85.9M. This revenue increase was 2% higher than it was in Q4 2018. Additionally, Redfin’s market share increased 10 basis points to 0.83%.
Redfin’s ancillary businesses expanded at an even faster pace. RedfinNow, the company’s flipping operations, increased to $21.4M in Q1 2019 from $3M in Q4 2018. All of its ancillary businesses soared by 59% with its mortgage and title services driving most of that increase.
Redfin’s total revenue jumped +38% to $110.1M in Q1 2019.
The company’s losses also grew due primarily to Redfin’s planned increase in marketing expenses. The net loss for the company was $67.2M or $0.74/share compared with $36.4M or $0.44/share in Q4 2018.
Looking forward, Redfin anticipates its revenue to rise between +29% – +35% up to the range of $183.7M – $193.1M into Q2-Q3 2019. Redfin also forecasts a net loss of between $11.3M – $14.7M.
Redfin’s CEO Glenn Kelman, said, “Our growth over the next two quarters will largely be limited by the number of real estate agents, lenders and renovation professionals we hired earlier this year…the company had as much demand as we could handle at times in March and April.”
Clearly, Redfn intends to boost its employee headcount to meet increasing demand and accelerate growth in the coming quarters.
Meanwhile, after a short two-month honeymoon, Redfin and RE/MAX ended its partnership just after Redfin’s Q1 earnings report was released. This partnership was originally formulated between the two companies whereby RE/MAX agents would have first access to Redfin’s partner agent program in areas where Redfin did not have a presence in the US and in Canada, ie. in 5,000 zip codes. RE/MAX agents were to pay 25% of commissions on closed deals as part of the partnership if buyers were to come from Redfin leads.
The deal breaker? Redfin announced a new platform that allows consumers without buying agents to place offers on the internet for Redfin listed homes via its Redfin Direct program now operating in Boston. The goal of Redfin Direct is to give a seller a competitive offer that require only a 2% commission, 1% to the Redfin listing agents and 1% to cover transaction fees.
RE/MAX/s immediate concern was that this program would greatly impact buying agents. Adam Contos, CEO of RE/MAX, sent a letter announcing the dissolution of the two-month partnership, “Given Redfin’s recent announcement at its Redfin Direct program that would encourage buyers not to use agents on listings where sellers are represented by Redfin, we cannot continue with an official, corporate level relationship at this time.”
Thanks to both The Motley Fool for data on Redfin’s Q1 2019 earnings report and Patrick Kearns’ article in Inman News on the dissolution of the RE/MAX – Redfin partnership.
