Financial Data and Key Metrics Changes - Third quarter revenue grew year-over-year by 128%, from $237 million to $540 million, with $40 million from the RentPath acquisition [9][55] - Net income swung from a profit of $34 million in Q3 2020 to a loss of $19 million in Q3 2021, with RentPath accounting for $17 million of the losses [11][67] - Gross profit was $127 million, an increase of $34 million year-over-year, but gross margins declined from 39% to 24% [12][60] Business Line Data and Key Metrics Changes - Real estate services revenue grew 23% to $258 million, with market share increasing to 1.16% [10][55] - Revenue from the properties segment (RedfinNow) was $238 million, up from $19 million in the prior year, reflecting a year-over-year transaction growth of 949% [58] - RentPath generated $40 million in revenue, contributing approximately 17 percentage points to total revenue growth [55] Market Data and Key Metrics Changes - Average monthly visitors to Redfin.com remained stable, with search-share gains against Realtor.com [17][18] - The housing market is returning to sustainable levels, with year-over-year price gains narrowing from 24% in May 2021 to 13% in September [46] - The percentage of Redfin's offers facing competition decreased from 74% to 59% from April to September [47] Company Strategy and Development Direction - The company aims to broaden its audience to include renters and enhance service delivery through technology [14][15] - Redfin is committed to being a complete real estate solution, offering various options for customers rather than focusing solely on iBuying [32][80] - The company plans to expand its renovations capacity and improve service offerings to enhance customer experience and profitability [31][100] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the last quarter of 2021 and 2022, anticipating strong homebuyer demand and a more balanced market [14][52] - The company is cautious about hiring agents and buying homes, emphasizing the need to monitor market conditions closely [112][114] - Management acknowledged the challenges in the mortgage segment but is focused on scaling operations and improving service [39][40] Other Important Information - Operating expenses increased by $91.1 million year-over-year, representing 27% of revenue [63] - The company expects consolidated revenue for Q4 2021 to be between $585 million and $606 million, with a projected net loss of $36 million to $31 million [68][69] Q&A Session Summary Question: Commitment to iBuying business - Management is committed to the iBuying business as part of a complete real estate solution, emphasizing caution in capital allocation [80] Question: Market conditions for iBuying - Favorable conditions for iBuying include low interest rates and low inventory, but the market is shifting towards more brokerage sales [85][86] Question: Update on title and mortgage attach rates - Management acknowledged the need for improvement in title and mortgage attach rates and is focused on leadership changes to enhance performance [89] Question: Progress in newer iBuyer markets - Management noted a willingness to renovate homes and invest in higher-end markets, which has provided a competitive advantage [96][100] Question: Hiring plans and market outlook - Management plans to hire agents regardless of market conditions but will remain cautious as the market evolves [112][114]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission file number 001-38160 Redfin Corporation (Exact name of registrant as specified in its charter) Delaware 74-3064240 (State or other ...

REDFIN A Technology-Powered Real Estate Company Q2 2021 Earnings Slides Important Legal Information This presentation contains forward-looking statements. All statements contained in this presentation other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, our market growth and trends, and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "estimate," ...

Redfin Corporation (NASDAQ:RDFN) Q2 2021 Earnings Conference Call August 5, 2021 4:30 PM ET Company Participants Meg Nunnally – Head-Investor Relations Glenn Kelman – Chief Executive Officer Chris Nielsen – Chief Financial Officer Conference Call Participants Edward Yruma – KeyBanc Capital Markets Jason Helfstein – Oppenheimer Ygal Arounian – Wedbush Securities John Campbell – Stephens Ivy Zelman – Zelman & Associates Tom Champion – Piper Sandler Operator Good day, and welcome to the Redfin Corporation Q2 2 ...

PART I - FINANCIAL INFORMATION This section provides Redfin Corporation's unaudited consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited consolidated financial statements, including the balance sheets, statements of comprehensive loss, cash flows, and changes in equity, along with detailed notes explaining accounting policies, business combinations, segment reporting, financial instruments, and other critical financial information for Redfin Corporation and its subsidiaries [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This table presents a snapshot of Redfin's assets, liabilities, and equity at specific points in time, highlighting key financial positions Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2021 | December 31, 2020 | | :-------------------------- | :-------------- | :------------------ | | Total Assets | $2,001,075 | $1,360,520 | | Total Liabilities | $1,635,633 | $730,140 | | Total Stockholders' Equity | $325,596 | $590,557 | | Inventory | $249,003 | $49,158 | | Goodwill | $407,228 | $9,186 | | Intangibles, net | $203,782 | $1,830 | [Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) This table details Redfin's revenues, costs, and net loss over specific reporting periods, reflecting overall financial performance Consolidated Statements of Comprehensive Loss Highlights (in thousands, except per share) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenue | $471,315 | $213,665 | $739,634 | $404,660 | | Gross Profit | $126,136 | $46,039 | $168,494 | $58,918 | | Loss from Operations | $(30,317) | $(4,426) | $(64,829) | $(61,856) | | Net Loss | $(27,878) | $(6,611) | $(63,662) | $(66,728) | | Net Loss per Share (Basic and Diluted) | $(0.29) | $(0.08) | $(0.65) | $(0.71) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This table summarizes Redfin's cash inflows and outflows from operating, investing, and financing activities over specific periods Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Category | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--------------------------------------- | :------------------------------- | :------------------------------- | | Net cash (used in) provided by operating activities | $(213,638) | $8,744 | | Net cash used in investing activities | $(544,078) | $(51,262) | | Net cash provided by financing activities | $599,578 | $155,546 | | Net change in cash, cash equivalents, and restricted cash | $(158,138) | $113,006 | | Cash, cash equivalents, and restricted cash (End of period) | $787,682 | $360,454 | [Consolidated Statements of Changes in Mezzanine Equity and Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Mezzanine%20Equity%20and%20Stockholders'%20Equity) This table tracks the changes in Redfin's mezzanine equity and stockholders' equity components over time, including preferred stock and accumulated deficit Changes in Stockholders' Equity (in thousands) | Metric | Balance, December 31, 2020 | Balance, June 30, 2021 | | :-------------------------- | :------------------------- | :--------------------- | | Series A Convertible Preferred Stock | $39,823 | $39,846 | | Common Stock (Amount) | $103 | $105 | | Additional Paid-in Capital | $860,556 | $651,627 | | Accumulated Deficit | $(270,313) | $(326,213) | | Accumulated Other Comprehensive Income | $211 | $77 | | Total Stockholders' Equity | $590,557 | $325,596 | - The accumulated deficit increased from **$(270.3) million** at December 31, 2020, to **$(326.2) million** at June 30, 2021, reflecting the net loss incurred during the period[21](index=21&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the consolidated financial statements, covering accounting policies and specific financial items [Note 1: Summary of Accounting Policies](index=11&type=section&id=Note%201:%20Summary%20of%20Accounting%20Policies) This note outlines the significant accounting principles and methods used in preparing Redfin's financial statements, including recent standard adoptions - Redfin early adopted ASU 2020-06 as of January 1, 2021, using the modified retrospective approach, which removes the liability and equity separation models for convertible instruments[42](index=42&type=chunk) Impact of ASU 2020-06 Adoption (in thousands) | Account | Ending Balance as of Dec 31, 2020 | ASU 2020-06 Adjustments | Beginning Balance as of Jan 1, 2021 | | :-------------------------------- | :-------------------------------- | :---------------------- | :-------------------------------- | | Convertible senior notes, net | $22,482 | $2,723 | $25,205 | | Convertible senior notes, net, noncurrent | $488,268 | $159,755 | $648,023 | | Additional paid-in capital | $860,556 | $(170,240) | $690,316 | | Accumulated deficit | $(270,313) | $7,762 | $(262,551) | - The **$7.8 million** adjustment to accumulated deficit represents a reduction to non-cash interest expense related to the accretion of the debt discount under the historical separation model[42](index=42&type=chunk) [Note 2: Business Combinations](index=13&type=section&id=Note%202:%20Business%20Combinations) This note details Redfin's acquisition activities, including the financial impact and valuation of acquired assets and liabilities from business combinations - On April 2, 2021, Redfin acquired RentPath Holdings, Inc. for **$608 million** in cash to enter the real estate rentals market[43](index=43&type=chunk) RentPath Acquisition Financial Impact (in thousands) | Metric | Amount | | :--------------------------------------- | :------- | | Purchase Consideration | $608,000 | | RentPath Revenue Contribution (Q2 2021) | $42,548 | | Goodwill Recognized | $398,042 | | Total Identifiable Intangible Assets | $211,000 | Preliminary Valuation of RentPath Intangible Assets (in thousands) | Intangible Asset | Estimated Fair Value | Estimated Useful Life (in years) | | :----------------------- | :------------------- | :------------------------------- | | Trade names | $70,000 | 10 | | Developed technology | $60,500 | 3 | | Customer relationships | $80,500 | 10 | | Total | $211,000 | | [Note 3: Segment Reporting and Revenue](index=14&type=section&id=Note%203:%20Segment%20Reporting%20and%20Revenue) This note provides a breakdown of Redfin's revenue and gross profit by its distinct operating segments, including real estate services, properties, and rentals - Redfin now has three reportable segments: real estate services, properties, and rentals, with the rentals segment added due to the RentPath acquisition[50](index=50&type=chunk) Revenue by Segment (in thousands) | Segment | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Real estate services | $252,199 | $135,049 | $420,808 | $243,685 | | Properties | $172,445 | $72,184 | $265,171 | $151,282 | | Rentals | $42,548 | $0 | $42,548 | $0 | | Other | $8,521 | $7,246 | $17,878 | $11,496 | | Total Revenue | $471,315 | $213,665 | $739,634 | $404,660 | Gross Profit by Segment (in thousands) | Segment | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Real estate services | $88,074 | $46,250 | $128,466 | $61,324 | | Properties | $5,025 | $(1,164) | $6,620 | $(1,365) | | Rentals | $34,978 | $0 | $34,978 | $0 | | Other | $(1,941) | $953 | $(1,570) | $(1,041) | | Total Gross Profit | $126,136 | $46,039 | $168,494 | $58,918 | [Note 4: Financial Instruments](index=15&type=section&id=Note%204:%20Financial%20Instruments) This note describes Redfin's financial instruments, including derivatives and convertible senior notes, and their fair value measurements and risk management - Redfin uses forward sales commitments on whole loans and mortgage-backed securities to manage interest rate and price risk on loans held for sale[55](index=55&type=chunk) Notional Amounts of Derivatives (in thousands) | Instrument | June 30, 2021 | December 31, 2020 | | :------------------------ | :-------------- | :------------------ | | Forward sales commitments | $110,918 | $130,109 | | IRLCs | $115,211 | $88,923 | Fair Value of Convertible Senior Notes (in thousands) | Issuance | Net Carrying Amount (June 30, 2021) | Estimated Fair Value (June 30, 2021) | | :--------- | :---------------------------------- | :----------------------------------- | | 2023 notes | $23,428 | $50,106 | | 2025 notes | $649,403 | $747,808 | | 2027 notes | $562,114 | $571,107 | [Note 5: Inventory](index=19&type=section&id=Note%205:%20Inventory) This note details the composition and changes in Redfin's inventory, primarily properties held for sale, and related purchase and sale activities Inventory Components (in thousands) | Component | June 30, 2021 | December 31, 2020 | | :-------------------------- | :-------------- | :------------------ | | Properties for sale | $90,391 | $17,153 | | Properties not available for sale | $45,132 | $7,225 | | Properties under improvement | $113,480 | $24,780 | | Total Inventory | $249,003 | $49,158 | - Inventory increased significantly from **$49.2 million** at December 31, 2020, to **$249.0 million** at June 30, 2021, primarily driven by increased home purchases for the properties business[67](index=67&type=chunk) Home Purchase and Sale Activity (in thousands) | Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--------------------------------------- | :------------------------------- | :------------------------------- | | Homes purchased | $410,960 | $70,052 | | Homes sold (cost basis) | $213,921 | $133,172 | [Note 6: Property and Equipment](index=19&type=section&id=Note%206:%20Property%20and%20Equipment) This note provides a breakdown of Redfin's property and equipment, net of depreciation, and related capital expenditures and amortization expenses Property and Equipment, Net (in thousands) | Component | June 30, 2021 | December 31, 2020 | | :-------------------------------- | :-------------- | :------------------ | | Property and equipment, gross | $97,946 | $79,909 | | Accumulated depreciation and amortization | $(49,713) | $(41,614) | | Construction in progress | $5,674 | $5,693 | | Property and equipment, net | $53,907 | $43,988 | Depreciation and Amortization Expense (in thousands) | Period | Depreciation and Amortization Expense | | :------------------------------- | :------------------------------------ | | Three Months Ended June 30, 2021 | $4,751 | | Three Months Ended June 30, 2020 | $3,435 | | Six Months Ended June 30, 2021 | $8,970 | | Six Months Ended June 30, 2020 | $6,621 | - Capitalized software development costs, including stock-based compensation, increased to **$8.4 million** for the six months ended June 30, 2021, from **$5.5 million** in the prior year[68](index=68&type=chunk) [Note 7: Leases](index=20&type=section&id=Note%207:%20Leases) This note outlines Redfin's lease arrangements, including operating and finance lease costs, weighted-average lease terms, and discount rates Lease Costs (in thousands) | Lease Type | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total operating lease cost | $3,976 | $3,237 | $7,417 | $6,469 | | Total finance lease cost | $161 | $20 | $226 | $39 | Lease Term and Discount Rate | Metric | June 30, 2021 | December 31, 2020 | | :------------------------------------------ | :-------------- | :------------------ | | Weighted-average remaining operating lease term (years) | 5.3 | 5.2 | | Weighted-average remaining finance lease term (years) | 3.4 | 3.5 | | Weighted-average discount rate for operating leases | 4.4 % | 4.4 % | | Weighted-average discount rate for finance leases | 5.4 % | 5.4 % | [Note 8: Commitments and Contingencies](index=21&type=section&id=Note%208:%20Commitments%20and%20Contingencies) This note discloses Redfin's legal proceedings, potential liabilities, and other contractual commitments that could impact its financial position - Redfin is involved in several legal proceedings, including a patent infringement lawsuit by David Eraker, a lawsuit alleging Fair Housing Act violations, and multiple lawsuits alleging misclassification of independent contractors[74](index=74&type=chunk)[75](index=75&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) - A potential employment claim under California's PAGA was submitted, with a rejected settlement offer, and additional losses are reasonably possible but unestimable[80](index=80&type=chunk) - Other commitments include **$222.4 million** in homes under contract to purchase for the properties business as of June 30, 2021[81](index=81&type=chunk) [Note 9: Acquired Intangible Assets and Goodwill](index=23&type=section&id=Note%209:%20Acquired%20Intangible%20Assets%20and%20Goodwill) This note details the valuation and amortization of intangible assets acquired through business combinations and the carrying amount of goodwill Acquired Intangible Assets (in thousands) | Asset | Gross Amortization (June 30, 2021) | Net (June 30, 2021) | | :-------------------- | :--------------------------------- | :------------------ | | Trade names | $71,040 | $68,588 | | Developed technology | $63,480 | $56,427 | | Customer relationships | $81,360 | $78,767 | | Total | $215,880 | $203,782 | Amortization Expense (in thousands) | Period | Amortization Expense | | :------------------------------- | :--------------------- | | Three Months Ended June 30, 2021 | $8,926 | | Three Months Ended June 30, 2020 | $122 | | Six Months Ended June 30, 2021 | $9,048 | | Six Months Ended June 30, 2020 | $244 | Goodwill Carrying Amount (in thousands) | Metric | Amount | | :-------------------------- | :------- | | Balance as of Dec 31, 2020 | $9,186 | | Goodwill resulting from acquisition | $398,042 | | Balance as of June 30, 2021 | $407,228 | [Note 10: Accrued Liabilities](index=23&type=section&id=Note%2010:%20Accrued%20Liabilities) This note provides a breakdown of Redfin's accrued liabilities, including compensation, miscellaneous accruals, and deferred payroll taxes Accrued Liabilities Components (in thousands) | Component | June 30, 2021 | December 31, 2020 | | :---------------------------------- | :-------------- | :------------------ | | Accrued compensation and benefits | $72,746 | $49,238 | | Miscellaneous accrued liabilities | $16,364 | $9,722 | | Payroll tax liability deferred by the CARES Act | $7,841 | $6,812 | | Customer contract liabilities | $5,394 | $3,688 | | Total Accrued Liabilities | $102,345 | $69,460 | [Note 11: Other Payables](index=24&type=section&id=Note%2011:%20Other%20Payables) This note describes the components of Redfin's other payables, primarily customer deposits held in escrow for real estate transactions - Other payables primarily consist of customer deposits held in escrow for real estate buyers using title and settlement services, recorded as a liability with a corresponding asset in restricted cash[86](index=86&type=chunk) Other Payables Components (in thousands) | Component | June 30, 2021 | December 31, 2020 | | :-------------------- | :-------------- | :------------------ | | Customer deposits | $15,269 | $11,183 | | Miscellaneous payables | $2,098 | $2,001 | | Total Other Payables | $17,367 | $13,184 | [Note 12: Mezzanine Equity](index=24&type=section&id=Note%2012:%20Mezzanine%20Equity) This note explains the classification and terms of Redfin's Series A Convertible Preferred Stock, including conversion features and redemption requirements - Redfin's Series A Convertible Preferred Stock is classified as mezzanine equity due to substantive conversion features at the option of the holder[88](index=88&type=chunk) - As of June 30, 2021, the carrying value of convertible preferred stock, net of issuance costs, was **$39.8 million**, with **40,000 shares** issued and outstanding[90](index=90&type=chunk) - Dividends accrue daily at **5.5%** per annum, payable quarterly in common stock (or cash if conditions are not met)[91](index=91&type=chunk) - Holders can convert at a **$19.51** conversion price, and automatic conversion occurs if the common stock closing price exceeds **$27.32** for 30 consecutive trading days[93](index=93&type=chunk)[94](index=94&type=chunk) - Mandatory redemption of any outstanding shares is required on November 30, 2024, with holders electing to receive cash, common stock, or a combination[95](index=95&type=chunk) [Note 13: Equity and Equity Compensation Plans](index=25&type=section&id=Note%2013:%20Equity%20and%20Equity%20Compensation%20Plans) This note details Redfin's equity compensation plans, including stock options, restricted stock units, and the associated stock-based compensation expense Shares Reserved for Future Issuance (2017 EIP) | Metric | June 30, 2021 | December 31, 2020 | | :-------------------------------- | :-------------- | :------------------ | | Stock options issued and outstanding | 4,639,132 | 5,733,738 | | Restricted stock units outstanding | 3,699,318 | 4,459,743 | | Shares available for future equity grants | 16,711,246 | 11,309,377 | | Total shares reserved for future issuance | 25,049,696 | 21,502,858 | Stock Option Activity (Six Months Ended June 30, 2021) | Metric | Number of Options | Weighted-Average Exercise Price | | :-------------------------------- | :---------------- | :------------------------------ | | Outstanding as of January 1, 2021 | 5,733,738 | $7.23 | | Options exercised | (1,089,203) | $4.77 | | Outstanding as of June 30, 2021 | 4,639,132 | $7.80 | | Options exercisable as of June 30, 2021 | 4,489,132 | $7.14 | Restricted Stock Unit Activity (Six Months Ended June 30, 2021) | Metric | Restricted Stock Units | Weighted-Average Grant-Date Fair Value | | :--------------------------------------- | :--------------------- | :------------------------------------- | | Outstanding as of January 1, 2021 | 4,459,743 | $27.44 | | Granted | 407,853 | $59.67 | | Vested | (737,403) | $22.04 | | Outstanding or deferred as of June 30, 2021 | 3,699,318 | $32.38 | Total Stock-Based Compensation Expense (in thousands) | Period | Total Stock-Based Compensation | | :------------------------------- | :----------------------------- | | Three Months Ended June 30, 2021 | $13,743 | | Three Months Ended June 30, 2020 | $7,205 | | Six Months Ended June 30, 2021 | $26,327 | | Six Months Ended June 30, 2020 | $14,416 | [Note 14: Net Loss per Share Attributable to Common Stock](index=28&type=section&id=Note%2014:%20Net%20Loss%20per%20Share%20Attributable%20to%20Common%20Stock) This note presents the calculation of Redfin's basic and diluted net loss per share attributable to common stockholders, including excluded anti-dilutive securities Net Loss per Share Attributable to Common Stock (Basic and Diluted) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to common stock (in thousands) | $(29,756) | $(7,895) | $(67,876) | $(68,012) | | Weighted-average shares (basic and diluted) | 104,391,337 | 98,785,318 | 103,912,212 | 96,114,012 | | Net loss per share | $(0.29) | $(0.08) | $(0.65) | $(0.71) | - The calculation uses the two-class method, and **26,395,602** common stock equivalents were excluded from diluted EPS for the three and six months ended June 30, 2021, as their effect would have been anti-dilutive[109](index=109&type=chunk)[111](index=111&type=chunk) [Note 15: Income Taxes](index=29&type=section&id=Note%2015:%20Income%20Taxes) This note provides information on Redfin's income tax benefit, effective tax rate, valuation allowances, and net operating loss carryforwards - Redfin recorded an income tax benefit of **$5.1 million** for the six months ended June 30, 2021, resulting in an effective tax rate of **(7.35)%**, primarily due to a deferred tax liability from the RentPath acquisition[114](index=114&type=chunk) - A full valuation allowance was recorded against U.S. deferred tax assets for the six months ended June 30, 2021 and 2020[115](index=115&type=chunk) Net Operating Loss (NOL) Carryforwards (in thousands) | Entity | As of | Federal NOLs | State NOLs (tax effected) | Foreign NOLs | Federal Business Interest Expense Carryforwards | | :------- | :------------ | :------------- | :------------------------ | :------------- | :---------------------------------------------- | | Redfin | Dec 31, 2020 | $227,751 | $12,576 | $2,050 | N/A | | RentPath | April 2, 2021 | $114,082 | N/A | N/A | $142,632 | [Note 16: Debt](index=30&type=section&id=Note%2016:%20Debt) This note details Redfin's various debt instruments, including warehouse credit facilities, secured revolving credit facilities, and convertible senior notes Warehouse Credit Facilities (in thousands) | Lender | Borrowing Capacity (June 30, 2021) | Outstanding Borrowings (June 30, 2021) | Weighted-Average Interest Rate | | :---------------------- | :--------------------------------- | :------------------------------------- | :----------------------------- | | Western Alliance Bank | $50,000 | $17,825 | 3.25% | | Texas Capital Bank, N.A. | $40,000 | $17,398 | 3.35% | | Flagstar Bank, FSB | $15,000 | $11,202 | 3.00% | | Total | $105,000 | $46,425 | | Secured Revolving Credit Facility (in thousands) | Lender | Borrowing Capacity (June 30, 2021) | Outstanding Borrowings (June 30, 2021) | Weighted-Average Interest Rate | | :---------------------- | :--------------------------------- | :------------------------------------- | :----------------------------- | | Goldman Sachs Bank USA | $125,000 | $123,770 | 3.30% | Convertible Senior Notes (in thousands) | Issuance | Maturity Date | Stated Cash Interest Rate | Aggregate Principal Amount (June 30, 2021) | Net Carrying Amount (June 30, 2021) | | :--------- | :------------ | :------------------------ | :----------------------------------------- | :---------------------------------- | | 2023 notes | July 15, 2023 | 1.75% | $23,738 | $23,428 | | 2025 notes | October 15, 2025 | 0% | $661,250 | $649,403 | | 2027 notes | April 1, 2027 | 0.50% | $575,000 | $562,114 | - The 2023 notes became convertible at a holder's option during the quarter ending September 30, 2021, due to a conditional conversion trigger, leading to their classification as current liabilities[136](index=136&type=chunk) - Redfin entered into 2027 capped call transactions covering **6,147,900 shares** of common stock to reduce potential dilution from the 2027 notes, with initial strike prices of **$93.53** per share and cap prices of **$138.56** per share[140](index=140&type=chunk) [Note 17: Subsequent Events](index=33&type=section&id=Note%2017:%20Subsequent%20Events) This note discloses significant events that occurred after the reporting period but before the financial statements were issued, impacting future financial condition - On July 20, 2021, RedfinNow Borrower amended its secured revolving credit facility with Goldman Sachs, increasing the facility's borrowing capacity to **$200 million**[141](index=141&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Redfin's financial condition and operational results, including an overview of the business, key performance metrics, detailed analysis of revenue and expenses, liquidity, capital resources, and critical accounting policies. It highlights significant growth drivers, the impact of the RentPath acquisition, and changes in financial performance compared to the prior year [Overview](index=34&type=section&id=Overview) This section provides a high-level description of Redfin's business model, services, and strategic mission within the residential real estate market - Redfin operates as a residential real estate brokerage, integrating its own agents with technology to offer faster, better, and more cost-effective services in over **100 markets** in the United States and Canada[146](index=146&type=chunk) - The company's services include originating mortgage loans, offering title and settlement services, direct home purchases (RedfinNow), and, since April 2021, connecting consumers with rental properties through digital platforms (RentPath acquisition)[147](index=147&type=chunk) - Redfin's mission is to redefine real estate in the consumer's favor[148](index=148&type=chunk) [Key Business Metrics](index=35&type=section&id=Key%20Business%20Metrics) This section presents Redfin's key operational metrics, such as website visitors, transaction volumes, and market share, indicating business performance and growth Key Business Metrics Highlights | Metric | Q2 2021 | Q2 2020 | YoY Change | | :--------------------------------------- | :------ | :------ | :--------- | | Monthly average visitors (in thousands) | 48,437 | 42,537 | +13.9% | | Total Real Estate Services Transactions | 25,603 | 16,519 | +55.0% | | U.S. market share by value | 1.18% | 0.94% | +0.24 pp | | RedfinNow homes sold | 292 | 162 | +80.2% | | Revenue per RedfinNow home sold | $570,930 | $444,690 | +28.4% | - Monthly average visitors are a leading indicator of business activity, influenced by market conditions, marketing programs, seasonality, and search engine rankings[152](index=152&type=chunk) - Increasing real estate services transactions and U.S. market share by value are critical for revenue growth and profitability, driven by service pricing, quality, and market conditions[157](index=157&type=chunk)[161](index=161&type=chunk) [Components of Our Results of Operations](index=37&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section explains the primary sources of Redfin's revenue and the major categories of its cost of revenue and operating expenses - Revenue is generated from real estate services (brokerage and partner commissions), properties (home sales), rentals (subscription-based internet listing services), and other services (mortgage origination, title settlement, data, advertising)[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) - Cost of revenue includes personnel, transaction bonuses, home-touring/field expenses, listing expenses, home costs (purchase, improvements, selling), customer fulfillment for rentals, office/occupancy, and depreciation/amortization[175](index=175&type=chunk) - Operating expenses are categorized into technology and development (software, data, infrastructure), marketing (media, personnel), and general and administrative (personnel, facilities, outside services)[177](index=177&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of Redfin's financial performance, comparing revenue, gross profit, and operating expenses across different periods [Comparison of the Three Months Ended June 30, 2021 and 2020](index=41&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202021%20and%202020) This section analyzes Redfin's financial performance for the three months ended June 30, 2021, compared to the same period in the prior year Revenue Comparison (Three Months Ended June 30, in thousands) | Metric | 2021 | 2020 | Change (Dollars) | Change (%) | | :----------------------------- | :----- | :----- | :--------------- | :--------- | | Total Revenue | $471,315 | $213,665 | $257,650 | 121% | | Real Estate Services Revenue | $252,199 | $135,049 | $117,150 | 87% | | Properties Revenue | $172,445 | $72,184 | $100,261 | 139% | | Rentals Revenue | $42,548 | — | $42,548 | n/a | Cost of Revenue and Gross Margin Comparison (Three Months Ended June 30, in thousands) | Metric | 2021 | 2020 | Change (Dollars) | Change (%) | | :----------------------------- | :----- | :----- | :--------------- | :--------- | | Total Cost of Revenue | $345,179 | $167,626 | $177,553 | 106% | | Total Gross Profit | $126,136 | $46,039 | $80,097 | 174% | | Total Gross Margin | 26.8% | 21.5% | +530 bps | | | Real Estate Services Gross Margin | 34.9% | 34.2% | +70 bps | | | Properties Gross Margin | 2.9% | (1.6)% | +450 bps | | | Rentals Gross Margin | 82.2% | — | n/a | | Operating Expenses Comparison (Three Months Ended June 30, in thousands) | Metric | 2021 | 2020 | Change (Dollars) | Change (%) | | :-------------------------- | :----- | :----- | :--------------- | :--------- | | Technology and development | $41,488 | $17,961 | $23,527 | 131% | | Marketing | $55,398 | $9,482 | $45,916 | 484% | | General and administrative | $59,567 | $23,022 | $36,545 | 159% | Other Income/Expense Comparison (Three Months Ended June 30, in thousands) | Metric | 2021 | 2020 | Change (Dollars) | Change (%) | | :-------------------------- | :----- | :----- | :--------------- | :--------- | | Interest income | $135 | $437 | $(302) | (69)% | | Interest expense | $(2,813) | $(2,665) | $(148) | (6)% | | Income tax benefit | $5,052 | — | $5,052 | n/a | [Comparison of the Six Months Ended June 30, 2021 and 2020](index=44&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202021%20and%202020) This section analyzes Redfin's financial performance for the six months ended June 30, 2021, compared to the same period in the prior year Revenue Comparison (Six Months Ended June 30, in thousands) | Metric | 2021 | 2020 | Change (Dollars) | Change (%) | | :----------------------------- | :----- | :----- | :--------------- | :--------- | | Total Revenue | $739,634 | $404,660 | $334,974 | 83% | | Real Estate Services Revenue | $420,808 | $243,685 | $177,123 | 73% | | Properties Revenue | $265,171 | $151,282 | $113,889 | 75% | | Rentals Revenue | $42,548 | — | $42,548 | n/a | Cost of Revenue and Gross Margin Comparison (Six Months Ended June 30, in thousands) | Metric | 2021 | 2020 | Change (Dollars) | Change (%) | | :----------------------------- | :----- | :----- | :--------------- | :--------- | | Total Cost of Revenue | $571,140 | $345,742 | $225,398 | 65% | | Total Gross Profit | $168,494 | $58,918 | $109,576 | 186% | | Total Gross Margin | 22.8% | 14.6% | +820 bps | | | Real Estate Services Gross Margin | 30.5% | 25.2% | +530 bps | | | Properties Gross Margin | 2.5% | (0.9)% | +340 bps | | | Rentals Gross Margin | 82.2% | — | n/a | | Operating Expenses Comparison (Six Months Ended June 30, in thousands) | Metric | 2021 | 2020 | Change (Dollars) | Change (%) | | :-------------------------- | :----- | :----- | :--------------- | :--------- | | Technology and development | $69,166 | $38,235 | $30,931 | 81% | | Marketing | $67,200 | $35,190 | $32,010 | 91% | | General and administrative | $96,957 | $47,349 | $49,608 | 105% | Other Income/Expense Comparison (Six Months Ended June 30, in thousands) | Metric | 2021 | 2020 | Change (Dollars) | Change (%) | | :-------------------------- | :----- | :----- | :--------------- | :--------- | | Interest income | $293 | $1,540 | $(1,247) | (81)% | | Interest expense | $(4,151) | $(5,109) | $958 | (19)% | | Income tax benefit | $5,052 | — | $5,052 | n/a | [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses Redfin's cash position, investments, debt obligations, and its ability to meet short-term and long-term financial commitments - As of June 30, 2021, Redfin had **$735.4 million** in cash and cash equivalents and **$65.7 million** in investments[216](index=216&type=chunk) - The company had **$1,260.0 million** in aggregate principal amount of convertible senior notes outstanding and **40,000 shares** of convertible preferred stock outstanding as of June 30, 2021[217](index=217&type=chunk)[218](index=218&type=chunk) - Redfin funds its properties business through cash on hand and a secured revolving credit facility, and its mortgage business primarily through warehouse credit facilities[219](index=219&type=chunk)[220](index=220&type=chunk) - Management believes existing liquidity and expected cash generation, along with credit facilities, will be sufficient for operational needs and obligations, but acknowledges that assumptions may change, potentially requiring additional financing[221](index=221&type=chunk) [Cash Flows](index=48&type=section&id=Cash%20Flows) This section provides a detailed breakdown of Redfin's cash flow activities, including operating, investing, and financing, and their impact on overall cash Summary of Cash Flows (Six Months Ended June 30, in thousands) | Cash Flow Category | 2021 | 2020 | | :--------------------------------------- | :--------- | :--------- | | Net cash (used in) provided by operating activities | $(213,638) | $8,744 | | Net cash used in investing activities | $(544,078) | $(51,262) | | Net cash provided by financing activities | $599,578 | $155,546 | - Net cash used in operating activities was **$213.6 million** for the six months ended June 30, 2021, primarily due to a net loss of **$63.7 million** and a **$199.8 million** increase in inventory, partially offset by non-cash items and increased payables[224](index=224&type=chunk) - Net cash used in investing activities was **$544.1 million** for the six months ended June 30, 2021, mainly driven by the **$608.0 million** RentPath acquisition and **$77.5 million** in net investments[227](index=227&type=chunk) - Net cash provided by financing activities was **$599.6 million** for the six months ended June 30, 2021, primarily from **$498.9 million** in net proceeds from 2027 notes issuance and a **$99.8 million** increase in net borrowings under the secured revolving credit facility[230](index=230&type=chunk) [Critical Accounting Policies and Estimates](index=49&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights Redfin's accounting policies that require significant management judgment and estimates, impacting reported financial results - Critical accounting policies include revenue recognition for brokerage transactions (single performance obligation, recognized at closing), properties revenue (gross basis at closing), and rentals revenue (straight-line over contract term)[235](index=235&type=chunk)[236](index=236&type=chunk)[237](index=237&type=chunk) - Determining the fair value of acquired intangible assets in business combinations requires significant management judgment and estimates regarding future cash flows, discount rates, and asset lives[239](index=239&type=chunk) - Inventory (homes for resale) is stated at cost and reviewed for lower of cost or net realizable value, which involves management judgment and estimates of market value indicators[241](index=241&type=chunk) [Recent Accounting Standards](index=51&type=section&id=Recent%20Accounting%20Standards) This section refers to disclosures regarding recently adopted and issued accounting standards and their impact on Redfin's financial statements - For information on recent accounting standards, refer to Note 1 to the consolidated financial statements[243](index=243&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details Redfin's exposure to market risks, primarily interest rate fluctuations, and outlines how these risks are managed across its investment portfolio, mortgage-related assets, and debt facilities. It also addresses foreign currency exchange risk [Interest Rate Risk](index=52&type=section&id=Interest%20Rate%20Risk) This section describes Redfin's exposure to interest rate fluctuations and the strategies employed to manage these risks across its financial instruments - Redfin is exposed to interest rate risk through its cash equivalents and investments, mortgage loans held for sale, interest rate lock commitments (IRLCs), and borrowings under its secured revolving credit facility[246](index=246&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk) - The company manages interest rate risk on mortgage-related assets and commitments using forward sales commitments on whole loans and mortgage-backed securities[248](index=248&type=chunk) - A hypothetical **10%** change in interest rates is not expected to have a material impact on financial results for the third quarter of 2021, given the short-term nature of investments and current debt structures[247](index=247&type=chunk)[249](index=249&type=chunk) [Foreign Currency Exchange Risk](index=52&type=section&id=Foreign%20Currency%20Exchange%20Risk) This section assesses Redfin's exposure to foreign currency exchange rate fluctuations, noting its limited impact due to minimal international operations - Redfin does not currently face significant foreign currency exchange rate risk due to limited operations in Canada and insignificant foreign currency balances[250](index=250&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of Redfin's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter, while also acknowledging the inherent limitations of any control system [Evaluation of Disclosure Controls and Procedures](index=53&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section reports on management's assessment of the effectiveness of Redfin's disclosure controls and procedures - Management, including the principal executive and financial officers, concluded that Redfin's disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2021[252](index=252&type=chunk) [Changes in Internal Control](index=53&type=section&id=Changes%20in%20Internal%20Control) This section addresses any material changes in Redfin's internal control over financial reporting during the reporting period - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2021, that materially affected, or are reasonably likely to materially affect, Redfin's internal control over financial reporting[253](index=253&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=53&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) This section acknowledges the inherent limitations of any control system, emphasizing that absolute assurance against errors or fraud is not possible - Management acknowledges that control systems provide only reasonable, not absolute, assurance and may not prevent or detect all errors and fraud due to inherent limitations[254](index=254&type=chunk) PART II - OTHER INFORMATION This section contains additional information not covered in Part I, including risk factors and a list of exhibits [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) This section outlines key risks that could materially and adversely affect Redfin's business, operating results, and financial condition. These risks include geographic concentration, challenges in customer acquisition, integration and performance risks related to the RentPath acquisition, and financing dependencies for its mortgage business [Risks Related to Our Business and Industry](index=54&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) This section details specific risks inherent to Redfin's business model and the real estate industry, including market concentration and acquisition integration challenges - Redfin's business is concentrated in certain major metropolitan areas (top-10 markets), making it vulnerable to downturns or shifts in demand/prices in these specific regions[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk) - The company's success depends on cost-effectively attracting homebuyers and sellers to its website and mobile application, which is influenced by search engine rankings, mobile app store visibility, and marketing effectiveness[261](index=261&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk) - The acquisition of RentPath may not yield anticipated benefits, could incur substantial integration costs, and RentPath's growth is dependent on attracting property managers' advertising spending, which is sensitive to technology changes and renter lead quality[265](index=265&type=chunk)[266](index=266&type=chunk) - Redfin Mortgage relies on uncommitted warehouse credit facilities for funding; an inability to secure sufficient borrowing capacity or a lender's decision not to extend a loan could adversely affect its growth[267](index=267&type=chunk)[268](index=268&type=chunk)[269](index=269&type=chunk) [Item 6. Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or furnished as part of the Quarterly Report on Form 10-Q, including various certifications and interactive data files List of Exhibits | Exhibit Number | Exhibit Description | | :------------- | :----------------------------------------------------------------- | | 31.1 | Certification of principal executive officer, pursuant to Rule 13a-14(a) | | 31.2 | Certification of principal financial officer, pursuant to Rule 13a-14(a) | | 32.1 | Certification of chief executive officer, pursuant to 18 U.S.C. Section 1350 | | 32.2 | Certification of chief financial officer, pursuant to 18 U.S.C. Section 1350 | | 101 | Interactive data files | | 104 | Cover page interactive data file, submitted using inline XBRL (contained in Exhibit 101) | [Signatures](index=57&type=section&id=Signatures) This section contains the official signatures of Redfin Corporation's authorized officers, certifying the submission of the Quarterly Report on Form 10-Q - The report was signed by Glenn Kelman, President and Chief Executive Officer, and Chris Nielsen, Chief Financial Officer, on August 5, 2021[274](index=274&type=chunk)

Redfin Corporation. (NASDAQ:RDFN) Q1 2021 Results Earnings Conference Call May 5, 2021 4:30 PM ET Company Participants Meg Nunnally - Head of Investor Relations Glenn Kelman - Chief Executive Officer Chris Nielsen - Chief Financial Officer Conference Call Participants Ygal Arounian - Wedbush Securities Edward Yruma - KeyBanc Capital Markets John Campbell - Stephens Inc Tom Champion - Piper Sandler John Egbert - Stifel Operator Good day, and welcome to the Redfin Corporation [Q4 2020] Earnings Call. Today’s ...

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission file number 001-38160 Redfin Corporation UNITED STATES (Exact name of registrant as specified in its charter) Delaware 74-3064240 (State or other juri ...

REDFIN A Technology-Powered Real Estate Company Investor Presentation | February 24, 2021 Important Legal Information This presentation contains forward-looking statements. All statements contained in this presentation other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans (including the closing of our acquisition, as well as integration, of RentPath), our market growth and trends, and our objectives for f ...

Redfin Corporation (NASDAQ:RDFN) Q4 2020 Earnings Conference Call February 24, 2021 4:30 PM ET Company Participants Meg Nunnally - Head of Investor Relations Glenn Kelman - Chief Executive Officer Chris Nielsen - Chief Financial Officer Conference Call Participants Ryan McKeveny - Zelman & Associates Tom White - D.A. Davidson Ygal Arounian - Wedbush Abbie Zvejnieks - KeyBanc Capital Markets John Campbell - Stephens Inc. Jason Helfstein - Oppenheimer Brent Thill - Jefferies Tom Champion - Piper Sandler Jack ...

Form 10-K Filing Information [General Information](index=1&type=section&id=General%20Information) This section provides the basic filing details for Redfin Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, including its SEC file number, state of incorporation, and principal executive offices - Redfin Corporation filed its **Annual Report on Form 10-K** for the fiscal year ended **December 31, 2020**[1](index=1&type=chunk) Registrant Details | Detail | Value | | :--- | :--- | | Exact name of registrant | Redfin Corporation | | State of incorporation | Delaware | | I.R.S. Employer Identification No. | 74-3064240 | | Address of Principal Executive Offices | 1099 Stewart Street Suite 600, Seattle WA 98101 | | Registrant's telephone number | (206) 576-8333 | [Securities and Filer Status](index=1&type=section&id=Securities%20and%20Filer%20Status) Redfin's common stock is listed on The Nasdaq Global Select Market under the symbol 'RDFN'. The company is classified as a **well-known seasoned issuer** and a **large accelerated filer**, indicating its market capitalization and compliance with SEC filing requirements Securities Registered | Title of each class | Trading Symbol | Name of each exchange on which registered | | :--- | :--- | :--- | | Common Stock, $0.001 par value per share | RDFN | The Nasdaq Global Select Market | - Redfin Corporation is a **well-known seasoned issuer** and has filed all required reports during the preceding **12 months**[2](index=2&type=chunk) Filer Status | Filer Type | Status | | :--- | :--- | | Large accelerated filer | ☒ | | Accelerated filer | ☐ | | Non-accelerated filer | ☐ | | Smaller reporting company | ☐ | | Emerging growth company | ☐ | - The aggregate market value of common stock held by non-affiliates was **$4.02 billion** as of the last business day of the most recently completed second fiscal quarter. There were **103,206,434 shares** of common stock outstanding as of **February 10, 2021**[3](index=3&type=chunk)[4](index=4&type=chunk) Table of Contents [Table of Contents](index=3&type=section&id=Table%20of%20Contents) Preliminary Notes [Note Regarding Forward-Looking Statements](index=4&type=section&id=Note%20Regarding%20Forward-Looking%20Statements) This section advises readers that the annual report contains **forward-looking statements** about future operating results, financial position, business strategy, market growth, and objectives. It highlights that these statements are subject to risks, uncertainties, and assumptions, and actual results may differ materially - The report contains **forward-looking statements** regarding future **operating results**, **financial position**, **business strategy**, market growth, and objectives[11](index=11&type=chunk) - **Forward-looking statements** are identified by words such as 'believe,' 'may,' 'will,' 'estimate,' 'continue,' 'anticipate,' 'intend,' 'expect,' 'could,' 'would,' 'project,' 'plan,' 'hope,' 'potentially,' 'preliminary,' 'likely,' and similar expressions[11](index=11&type=chunk) - Readers are cautioned not to rely on **forward-looking statements** as predictions of future events due to inherent risks, uncertainties, and assumptions, including those detailed in Item 1A[11](index=11&type=chunk) [Note Regarding Industry and Market Data](index=4&type=section&id=Note%20Regarding%20Industry%20and%20Market%20Data) This note clarifies that the report includes information from industry publications, which are believed to be reliable but have not been independently verified by Redfin. The company has not ascertained the underlying economic assumptions of this third-party data - The annual report contains information from industry publications, which are generally considered reliable but may not be accurate or complete[13](index=13&type=chunk) - Redfin has not independently verified third-party data or ascertained the underlying economic assumptions[13](index=13&type=chunk) PART I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) Redfin Corporation operates as a **residential real estate brokerage**, leveraging its own agents and technology to facilitate home buying and selling. The company also offers **mortgage origination**, **title and settlement services**, and **direct home purchases** (**RedfinNow**), aiming to provide a comprehensive, customer-centric solution - Redfin is a **residential real estate brokerage** operating in over **95 markets** in the U.S. and Canada, combining **proprietary technology** with **employed agents** to offer a faster, better, and more cost-effective service[15](index=15&type=chunk) - The company's mission is to **redefine real estate in the consumer's favor**, offering **reduced commissions** for sellers (**1%** to **1.5%** vs. **2.5%**-**3%** traditionally) and **refunds for homebuyers** (average **$1,750** in **2020**)[17](index=17&type=chunk)[18](index=18&type=chunk) - Redfin's long-term goal is to integrate brokerage, **mortgage**, **title services**, and **instant offers** (**RedfinNow**) into a single, streamlined solution for consumers[20](index=20&type=chunk) [Overview](index=5&type=section&id=Overview) - Redfin helps people buy and sell homes, operating in over **95 markets** in the United States and Canada as a **residential real estate brokerage**[15](index=15&type=chunk) - The company combines its own agents with **proprietary technology** to deliver a service that is faster, better, and costs less[15](index=15&type=chunk) - Redfin also offers **mortgage loan origination**, **title and settlement services**, and **direct home purchases** (**RedfinNow**)[16](index=16&type=chunk) [Representing Customers](index=5&type=section&id=Representing%20Customers) - Redfin shares brokerage efficiency savings with customers, charging **1%** to **1.5%** commission for sellers (vs. **2.5%**-**3%** traditionally) and refunding homebuyers an average of **$1,750** per transaction in **2020**[18](index=18&type=chunk) - Through **2020**, Redfin helped customers buy or sell over **310,000 homes** worth more than **$152 billion**, saving them nearly **$1 billion** since **2006**[20](index=20&type=chunk) - The company's website and mobile application attracted over **42 million** monthly average visitors in **2020**, a **28%** increase from **2019**[20](index=20&type=chunk) - Redfin maintains partnerships with over **6,800 agents** at other brokerages to serve customers when its own agents are unavailable due to high demand or geographic limitations, earning referral fees[19](index=19&type=chunk) [Complete Customer Solution](index=5&type=section&id=Complete%20Customer%20Solution) - Redfin's long-term vision is to integrate brokerage, **mortgage**, **title services**, and **instant offers** (**RedfinNow**) into a single, seamless solution for consumers[20](index=20&type=chunk) - Redfin Mortgage operates in **56 markets**, originating and selling loans to third-party investors without retaining or servicing them[21](index=21&type=chunk) - Title Forward offers **title and settlement services** in **27 markets**[22](index=22&type=chunk) - **RedfinNow** buys homes directly from homeowners for immediate sale and resells them, currently active in **16 markets**[23](index=23&type=chunk) [Competition](index=6&type=section&id=Competition) - The **residential brokerage industry** is highly fragmented and rapidly evolving, with Redfin competing against traditional, hybrid, and non-traditional brokerages[24](index=24&type=chunk) - Key competitive factors for Redfin include access to data, website/mobile app traffic, service speed and quality, agent retention, pricing, consumer awareness, technological innovation, and local referral networks[25](index=25&type=chunk)[26](index=26&type=chunk) - For **mortgage origination**, Redfin competes on service, product selection, interest rates, and origination fees. For **title services**, it competes on timeliness and fees. For **RedfinNow**, competition is primarily based on the prices offered to homeowners[25](index=25&type=chunk)[26](index=26&type=chunk) [Seasonality](index=7&type=section&id=Seasonality) - The impact of seasonality on Redfin's business is discussed under 'Quarterly Results of Operations and Key Business Metrics' in Item **7**[27](index=27&type=chunk) [Our Lead Agents](index=7&type=section&id=Our%20Lead%20Agents) - Redfin employs its lead agents, paying them a salary, offering cash and equity compensation, and providing benefits, unlike traditional brokerages that use independent contractors[28](index=28&type=chunk) - In **2020**, Redfin's lead agents earned a **median income twice** that of competing agents and were nearly **three times more productive**, leading to **13% higher retention rates**[28](index=28&type=chunk) - As of **December 31, 2020**, Redfin had **4,185 employees**, with an average of **1,757 lead agents** for the year[29](index=29&type=chunk) [Our Executive Officers](index=7&type=section&id=Our%20Executive%20Officers) - Key executive officers include **Glenn Kelman** (CEO), **Bridget Frey** (CTO), **Ee Lyn Khoo** (Chief HR Officer), **Scott Nagel** (President of Real Estate Operations), **Chris Nielsen** (CFO), **Christian Taubman** (Chief Product Officer), and **Adam Wiener** (Chief Growth Officer)[31](index=31&type=chunk)[32](index=32&type=chunk) [Our Regulatory Environment](index=8&type=section&id=Our%20Regulatory%20Environment) - The **residential real estate industry** is heavily regulated by federal, state, and local governments, impacting Redfin's **integrated service model** (brokerage, mortgage, title, instant offers)[33](index=33&type=chunk) - Regulations like the **Real Estate Settlement Procedures Act of 1974 (RESPA)** restrict kickbacks and referral fees, while the **Fair Housing Act of 1968 (FHA)** prohibits discrimination in home sales[34](index=34&type=chunk) - Each of Redfin's business lines (brokerage, mortgage, title) requires specific **state licenses**, and some employees also need individual licenses, which can be costly to obtain and maintain[35](index=35&type=chunk) [Our Website and Public Filings](index=8&type=section&id=Our%20Website%20and%20Public%20Filings) - Redfin's website, **www.redfin.com**, provides free access to its **Annual Reports on Form 10-K**, **Quarterly Reports on Form 10-Q**, **Current Reports on Form 8-K**, and amendments filed with the SEC[36](index=36&type=chunk) [Item 1A. Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks that could **materially and adversely affect** Redfin's business, **operating results**, **financial condition**, and **competitive position**. These risks span **macroeconomic factors**, industry-specific challenges, operational dependencies, legal and regulatory compliance, and financial obligations related to debt and preferred stock - The occurrence of any single risk or combination of risks could **materially and adversely affect** Redfin's business, **operating results**, **financial condition**, liquidity, or **competitive position**, potentially leading to slower growth, fluctuating revenue, continued losses, and reputational harm[38](index=38&type=chunk) [Risks Related to Our Business and Industry](index=9&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) - Redfin's success is highly dependent on the health of the U.S. **residential real estate industry**, which is influenced by **macroeconomic factors** such as economic growth, unemployment, inflation, mortgage rates, and **home inventory levels**[39](index=39&type=chunk) - The **COVID-19 pandemic** has affected and may continue to affect **residential real estate transaction volume** and home prices, impacting all of Redfin's revenue streams[41](index=41&type=chunk)[44](index=44&type=chunk) - **Intense competition** from numerous brokerages, including those with greater resources and brand recognition, poses a risk to Redfin's **market share and growth**[49](index=49&type=chunk) - Inability to maintain or improve **technology offerings**, obtain **accurate real estate listings**, or **attract customers** to its website and mobile application could harm the business[50](index=50&type=chunk)[55](index=55&type=chunk)[58](index=58&type=chunk) - Redfin's model of employing lead agents incurs costs not faced by competitors and creates challenges in **agent hiring, retention, and productivity**, especially during demand fluctuations[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) - **RedfinNow** faces risks of **overestimating home purchase prices** and **declines in home value**, particularly due to its geographic concentration in **six states**[73](index=73&type=chunk)[74](index=74&type=chunk) - The pending acquisition of **RentPath** may not yield anticipated benefits and could incur substantial integration costs or impairment charges[83](index=83&type=chunk) [Risks Related to Our Indebtedness](index=19&type=section&id=Risks%20Related%20to%20Our%20Indebtedness) - Redfin may lack sufficient cash flow to meet payments on its **convertible senior notes**, potentially leading to acceleration of principal amounts and bankruptcy[98](index=98&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - Conversion of a significant principal amount of **convertible senior notes** could **dilute stockholder ownership** and depress common stock price[103](index=103&type=chunk) - **RedfinNow** relies on a **secured revolving credit facility** for home purchases, and **insufficient sale proceeds** or **early repayment obligations** could lead to default and **loss of assets**[104](index=104&type=chunk)[105](index=105&type=chunk)[107](index=107&type=chunk) - Redfin Mortgage's growth depends on **sufficient financing** from **warehouse credit facilities**; inability to obtain this could hinder its **mortgage origination** business[109](index=109&type=chunk) - **Cross-acceleration and cross-default provisions** in debt agreements could trigger immediate repayment of all outstanding indebtedness if a single agreement is breached[111](index=111&type=chunk) - The **discontinuation of LIBOR** could lead to **increased borrowing costs** and **uncertainty** for Redfin's **secured revolving credit facility** and **warehouse credit facilities**[112](index=112&type=chunk) [Risks Related to Our Convertible Preferred Stock](index=22&type=section&id=Risks%20Related%20to%20Our%20Convertible%20Preferred%20Stock) - Redfin may be required to make **cash payments to preferred stockholders** for dividends or redemptions before the final redemption date of **November 30, 2024**, which could materially **reduce net working capital**[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) [Risks Relating to Ownership of Our Common Stock](index=23&type=section&id=Risks%20Relating%20to%20Ownership%20of%20Our%20Common%20Stock) - Redfin's restated certificate of incorporation designates specific Delaware and U.S. federal district courts as **exclusive forums** for certain stockholder actions, potentially **limiting stockholders' ability** to choose a **favorable judicial forum**[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) [Item 1B. Unresolved Staff Comments](index=20&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are **no unresolved staff comments** from the SEC - **No unresolved staff comments** were reported[120](index=120&type=chunk) [Item 2. Properties](index=20&type=section&id=Item%202.%20Properties) Redfin Corporation does not own any properties - **No properties were reported**[121](index=121&type=chunk) [Item 3. Legal Proceedings](index=20&type=section&id=Item%203.%20Legal%20Proceedings) This section outlines **material pending legal proceedings**, including a **patent infringement lawsuit** by David Eraker (dismissed with prejudice), a **Fair Housing Act violation lawsuit**, and two lawsuits alleging **misclassification of independent contractors** - David Eraker's complaint against Redfin, alleging concealment of a patent application, was voluntarily dismissed with prejudice on **November 20, 2020**[123](index=123&type=chunk) - A lawsuit filed on **May 11, 2020**, by Appliance Computing III, Inc. (d/b/a Surefield) alleges Redfin is infringing on Surefield's patents, seeking unspecified damages and an injunction[375](index=375&type=chunk) - A group of **ten organizations** filed a lawsuit on **October 28, 2020**, alleging Redfin's business policies and practices violate the **Fair Housing Act**, specifically regarding service availability in non-white communities and pricing structures[376](index=376&type=chunk) - Two lawsuits, filed by Devin Cook (**August 28, 2019**) and Jason Bell (**November 20, 2020**), allege **misclassification of independent contractor sales associates** as employees, seeking **unpaid wages, penalties, and other relief**[377](index=377&type=chunk)[378](index=378&type=chunk) [Item 4. Mine Safety Disclosures](index=20&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is **not applicable** to Redfin Corporation - This item is **not applicable**[124](index=124&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=21&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section provides information on Redfin's **common stock market**, **shareholder details**, **dividend policy**, **stock performance**, and **equity security transactions**. As of **February 10, 2021**, Redfin had **225 holders of record** for its common stock - Redfin's common stock is listed on The Nasdaq Global Select Market under the symbol 'RDFN'[127](index=127&type=chunk) - As of **February 10, 2021**, there were **225 holders of record** of Redfin's common stock[127](index=127&type=chunk) - On **April 1, 2020**, Redfin issued **40,000 shares** of **convertible preferred stock** at **$1,000** per share, with **dividends accruing at 5.5% per annum**, payable quarterly in common stock if certain conditions are met, or in cash otherwise[128](index=128&type=chunk) - Redfin has **no intention of paying cash dividends on common stock** in the foreseeable future[128](index=128&type=chunk) - **No equity securities were sold unregistered** under the Securities Act of **1933** during the reporting period, and **no common stock was purchased** by or on behalf of Redfin during the quarter ended **December 31, 2020**[130](index=130&type=chunk)[133](index=133&type=chunk) [Item 6. Selected Financial Data](index=22&type=section&id=Item%206.%20Selected%20Financial%20Data) This item is **not applicable** - This item is **not applicable**[134](index=134&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a **detailed discussion and analysis** of Redfin's **financial condition and results of operations** for the years ended **December 31, 2020, 2019, and 2018**. It covers **key business metrics**, **revenue and cost components**, **year-over-year comparisons**, **quarterly performance**, **liquidity**, **cash flows**, **contractual obligations**, and **critical accounting policies** - Redfin's mission is to **redefine real estate in the consumer's favor** by **combining technology and local service** to help people buy and sell homes, originate mortgages, and offer **title and settlement services**[141](index=141&type=chunk) [Overview](index=27&type=section&id=Overview) - Redfin operates as a **residential real estate brokerage** in over **95 markets** in the United States and Canada, using its own agents and technology[139](index=139&type=chunk) - The company also provides **mortgage loan origination**, **title and settlement services**, and **directly purchases homes** through **RedfinNow**[140](index=140&type=chunk) [Key Business Metrics](index=27&type=section&id=Key%20Business%20Metrics) Key Business Metrics (Year Ended December 31) | Metric | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Monthly average visitors (in thousands) | 42,862 | 33,473 | 27,261 | | Real estate services transactions (Total) | 75,800 | 65,174 | 54,562 | | Brokerage transactions | 60,510 | 53,235 | 42,954 | | Partner transactions | 15,290 | 11,939 | 11,608 | | Aggregate home value of real estate services transactions (in millions) | $37,359 | $30,532 | $25,812 | | U.S. market share by value | 1.00 % | 0.93 % | 0.81 % | | Revenue from top-10 Redfin markets as a percentage of real estate services revenue | 63 % | 63 % | 67 % | | Average number of lead agents | 1,757 | 1,553 | 1,390 | | Properties transactions | 453 | 503 | 99 | | Properties revenue per transaction | $462,883 | $478,146 | $454,470 | - Monthly average visitors to Redfin's website and mobile application increased by **28%** in **2020** compared to **2019**, serving as a **leading indicator of business activity**[143](index=143&type=chunk)[144](index=144&type=chunk) - **Total real estate services transactions** increased by **16.3%** in **2020**, with **brokerage transactions** up **13.7%** and **partner transactions** up **28.1%**[143](index=143&type=chunk) - **U.S. market share by value** grew from **0.93%** in **2019** to **1.00%** in **2020**[143](index=143&type=chunk) [Components of Our Results of Operations](index=30&type=section&id=Components%20of%20Our%20Results%20of%20Operations) - **Revenue is primarily generated** from commissions and fees on **real estate services transactions** (brokerage and partner revenue) and from the **sale of homes** (**properties revenue**)[161](index=161&type=chunk) - **Other revenue** includes fees from **mortgage origination**, **title settlement**, Walk Score data, and advertising[165](index=165&type=chunk) - **Cost of revenue** includes personnel costs, transaction bonuses, home-touring and field expenses, listing expenses, and home costs for the properties segment[167](index=167&type=chunk) - **Operating expenses** are categorized into **Technology and Development**, **Marketing**, and **General and Administrative**[169](index=169&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk) - **Interest income** is primarily from cash, **cash equivalents**, and investments, while **interest expense** includes interest on **convertible senior notes** and **secured revolving credit facilities**[172](index=172&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Consolidated Statements of Comprehensive Loss (in thousands) | Metric | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Revenue | $886,093 | $779,796 | $486,920 | | Cost of revenue | $653,983 | $635,693 | $367,496 | | Gross profit | $232,110 | $144,103 | $119,424 | | Total operating expenses | $231,318 | $223,349 | $163,358 | | Income (loss) from operations | $792 | $(79,246) | $(43,934) | | Net loss | $(18,527) | $(80,805) | $(41,978) | Revenue Breakdown (Year Ended December 31, in thousands) | Revenue Type | 2020 | 2019 | Change (2020 vs 2019) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Brokerage revenue | $607,513 | $496,480 | $111,033 | 22 % | | Partner revenue | $43,695 | $27,060 | $16,635 | 61 % | | Total real estate services revenue | $651,208 | $523,540 | $127,668 | 24 % | | Properties revenue | $209,686 | $240,507 | $(30,821) | (13)% | | Other revenue | $28,212 | $17,634 | $10,578 | 60 % | | Total revenue | $886,093 | $779,796 | $106,297 | 14 % | - **Total revenue increased by 14%** in **2020**, primarily driven by a **24%** increase in **real estate services revenue**, while **properties revenue decreased by 13%** due to **lower average inventory** and a **pause in new home offers** in response to **COVID-19**[180](index=180&type=chunk) - **Gross margin increased by 770 basis points** in **2020**, reaching **26.2%**, mainly due to the properties business contributing a lesser proportion of revenue and improvements in **real estate services** and other **gross margins**[182](index=182&type=chunk) - **Marketing expenses decreased by 28%** in **2020** due to a **temporary cessation of advertising campaigns** during Q2 **2020** in response to **COVID-19**[187](index=187&type=chunk) - **Net loss decreased significantly** from **$(80,805) thousand** in **2019** to **$(18,527) thousand** in **2020**, while **income from operations turned positive** at **$792 thousand** in **2020** from a loss of **$(79,246) thousand** in **2019**[177](index=177&type=chunk) [Quarterly Results of Operations and Key Business Metrics](index=39&type=section&id=Quarterly%20Results%20of%20Operations%20and%20Key%20Business%20Metrics) Quarterly Revenue (in thousands) | Quarter | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $244,517 | $236,916 | $213,665 | $190,995 | Quarterly Net Income (Loss) (in thousands) | Quarter | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $14,035 | $34,166 | $(6,611) | $(60,117) | - Redfin's revenue typically follows the **seasonal pattern** of the **residential real estate industry**, increasing sequentially from Q1 to Q2 and Q3, then declining in Q4[203](index=203&type=chunk) - In **2020**, this pattern was **disrupted by COVID-19**, with **negative impacts on revenue** in Q2, followed by a **rebound and sequential increases** in Q3 and Q4[204](index=204&type=chunk) - **Marketing expenses** were significantly reduced in **March** and **April 2020** due to **COVID-19**, with campaigns restarting in **May**[206](index=206&type=chunk) - **General and administrative expenses** in Q2 **2020** included a **$7,525 thousand** charge related to **employee reductions and furloughs** in response to **COVID-19**, partially offset by **CARES Act employee retention credits**[207](index=207&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity Position (as of December 31, 2020, in thousands) | Metric | Amount | | :--- | :--- | | Cash and cash equivalents | $925,276 | | Investments | $143,500 | | Convertible senior notes outstanding (aggregate principal) | $686,900 | - Redfin expects existing cash, investments, future operations, and borrowings from credit facilities to provide **sufficient liquidity** for **operational needs**, **debt obligations**, and the **pending RentPath acquisition**[215](index=215&type=chunk) - The company entered an agreement on **February 19, 2021**, to acquire **RentPath** for **$608.0 million** in cash, with a **$60.8 million** escrow deposit made[211](index=211&type=chunk) - **RedfinNow** relies on a **secured revolving credit facility** for home purchases, and Redfin Mortgage uses **warehouse credit facilities** to fund **mortgage loan originations**[213](index=213&type=chunk)[214](index=214&type=chunk) [Cash Flows](index=42&type=section&id=Cash%20Flows) Summary of Cash Flows (Year Ended December 31, in thousands) | Activity | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $61,267 | $(107,610) | $(36,702) | | Net cash used in investing activities | $(57,119) | $(115,912) | $(10,303) | | Net cash provided by financing activities | $694,227 | $31,883 | $273,402 | - **Net cash provided by operating activities** was **$61.3 million** in **2020**, a **significant improvement** from a net cash outflow of **$107.6 million** in **2019**, driven by a lower **net loss** and non-cash adjustments[218](index=218&type=chunk)[219](index=219&type=chunk) - **Net cash provided by financing activities** was **$694.2 million** in **2020**, primarily from the **issuance of 2025 notes** (**$647.5 million**) and **common/preferred stock** (**$109.5 million**), partially offset by **repurchases of 2023 notes**[226](index=226&type=chunk) [Contractual Obligations](index=44&type=section&id=Contractual%20Obligations) Contractual Obligations (as of December 31, 2020, in thousands) | Obligation | Total | Less than 1 Year | 1-3 Years | 3-5 Years | More Than 5 Years | | :--- | :--- | :--- | :--- | :--- | :--- | | Convertible senior notes | $686,876 | $1,849 | $23,777 | $661,250 | $— | | Interest on convertible senior notes | $1,058 | $416 | $642 | $— | $— | | Operating leases | $74,158 | $15,335 | $27,903 | $19,963 | $10,957 | | Finance leases | $697 | $206 | $398 | $93 | $— | | Purchase obligations | $71,761 | $63,586 | $8,175 | $— | $— | | Total | $834,550 | $81,392 | $60,895 | $681,306 | $10,957 | - **Purchase obligations** primarily relate to **noncancelable commitments** for **network infrastructure**, annual employee meetings, and **homes under contract to purchase**[230](index=230&type=chunk) [Critical Accounting Policies and Estimates](index=44&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - **Critical accounting policies and estimates** include **valuation of deferred income taxes**, **stock-based compensation**, **net realizable value of inventory**, **capitalization of software development costs**, incremental borrowing rates for leases, and **fair value of convertible senior notes**[232](index=232&type=chunk)[286](index=286&type=chunk) - Redfin accounts for its **2025 convertible senior notes** by separating proceeds into **liability and equity components**, with the liability component valued using a **discounted cash flow analysis** and **risk-adjusted yield**[233](index=233&type=chunk)[234](index=234&type=chunk) - **Revenue recognition for brokerage services** occurs upon transaction closing, less refunds/promotional offers, while **properties revenue is recorded at closing** based on the home's sales price[236](index=236&type=chunk)[237](index=237&type=chunk) - **Inventory (homes for resale)** is stated at cost and reviewed for **lower of cost or net realizable value** write-downs, with write-downs recognized if market value is lower than cost[240](index=240&type=chunk) [Recent Accounting Standards](index=46&type=section&id=Recent%20Accounting%20Standards) - Redfin adopted **ASU 2016-13, Financial Instruments—Credit Losses (Topic 326)**, in **January 2020**, which did not have a **material impact on consolidated financial statements**[344](index=344&type=chunk) - Redfin elected to early adopt **ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity**, as of **January 1, 2021**, using the **modified retrospective approach**. This is expected to **reduce non-cash interest expense** for future periods[347](index=347&type=chunk)[348](index=348&type=chunk)[349](index=349&type=chunk) [Off-Balance Sheet Arrangements](index=46&type=section&id=Off-Balance%20Sheet%20Arrangements) - Redfin has **no off-balance sheet arrangements** as defined in **Item 303(a)(4) of Regulation S-K**[243](index=243&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses Redfin's exposure to market risks, primarily fluctuations in interest rates, and its strategies for managing these risks. The company's investment policy prioritizes liquidity and capital preservation, and it uses **forward sales commitments** to manage **interest rate risk** on mortgage loans - Redfin's **primary market risk exposure** is to **fluctuations in interest rates**, particularly U.S. treasury and **mortgage interest rates**[244](index=244&type=chunk) [Interest Rate Risk](index=46&type=section&id=Interest%20Rate%20Risk) - As of **December 31, 2020**, Redfin had **$925.3 million** in **cash and cash equivalents** and **$143.5 million** in **investments**, primarily **short-term U.S. treasury securities**[246](index=246&type=chunk) - Redfin manages **interest rate risk** on **mortgage loans held for sale** and **Interest Rate Lock Commitments (IRLCs)** using **forward sales commitments**[247](index=247&type=chunk) - A **hypothetical 10% change in interest rates** is **not expected to have a material impact** on financial results for Q1 **2021**, given the short-term nature of investments and current outstanding borrowings[246](index=246&type=chunk)[248](index=248&type=chunk) [Foreign Currency Exchange Risk](index=46&type=section&id=Foreign%20Currency%20Exchange%20Risk) - Redfin does not currently face significant **foreign currency exchange rate risk** due to **limited operations in Canada** and a **non-significant balance of foreign currency**[249](index=249&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=47&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Redfin's **audited consolidated financial statements**, including **balance sheets**, **statements of comprehensive loss**, **cash flows**, and **changes in equity**, along with the **independent registered public accounting firm's reports** and **detailed notes to the financial statements** - Deloitte & Touche LLP issued an **unqualified opinion** on Redfin's **consolidated financial statements** and the **effectiveness of internal control over financial reporting** as of **December 31, 2020**[253](index=253&type=chunk)[254](index=254&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk) - A **critical audit matter** identified was the accounting for the **Convertible Senior Notes due 2025**, due to the **complexity of applying the accounting framework** and **significant estimates** in determining the **fair value of the liability component**[258](index=258&type=chunk)[260](index=260&type=chunk) [Reports of Independent Registered Public Accounting Firm](index=48&type=section&id=Reports%20of%20Independent%20Registered%20Public%20Accounting%20Firm) - Deloitte & Touche LLP provided an **unqualified opinion** on Redfin's **consolidated financial statements** for the **three years** ended **December 31, 2020**, and on the **effectiveness of internal control over financial reporting** as of **December 31, 2020**[253](index=253&type=chunk)[254](index=254&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk) - The **critical audit matter** identified was the accounting for the **Convertible Senior Notes due 2025**, specifically the separation into liability and equity components and the **fair value determination of the liability component**[258](index=258&type=chunk)[260](index=260&type=chunk) [Consolidated Balance Sheets](index=51&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet (in thousands) | Asset/Liability | December 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $925,276 | $234,679 | | Total current assets | $1,240,826 | $451,593 | | Total assets | $1,360,520 | $596,213 | | **Liabilities** | | | | Total current liabilities | $185,721 | $85,182 | | Convertible senior notes, net, noncurrent | $488,268 | $119,716 | | Total liabilities | $730,140 | $264,767 | | **Equity** | | | | Series A convertible preferred stock | $39,823 | $— | | Total stockholders' equity | $590,557 | $331,446 | - **Total assets increased significantly** from **$596.2 million** in **2019** to **$1.36 billion** in **2020**, primarily driven by a **substantial increase in cash and cash equivalents**[270](index=270&type=chunk) - **Total liabilities more than doubled** from **$264.8 million** in **2019** to **$730.1 million** in **2020**, largely due to an **increase in noncurrent convertible senior notes**[270](index=270&type=chunk) [Consolidated Statements of Comprehensive Loss](index=52&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) Consolidated Statements of Comprehensive Loss (in thousands) | Metric | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Total revenue | $886,093 | $779,796 | $486,920 | | Total cost of revenue | $653,983 | $635,693 | $367,496 | | Gross profit | $232,110 | $144,103 | $119,424 | | Total operating expenses | $231,318 | $223,349 | $163,358 | | Income (loss) from operations | $792 | $(79,246) | $(43,934) | | Net loss | $(18,527) | $(80,805) | $(41,978) | | Net loss attributable to common stock | $(22,981) | $(80,805) | $(41,978) | | Net loss per share attributable to common stock—basic and diluted | $(0.23) | $(0.88) | $(0.49) | - Redfin achieved a **positive income from operations** of **$792 thousand** in **2020**, a **significant improvement from losses** of **$(79,246) thousand** in **2019** and **$(43,934) thousand** in **2018**[273](index=273&type=chunk) - **Total revenue increased by 14%** in **2020** to **$886.1 million**, following a **60%** increase in **2019**[273](index=273&type=chunk) - **Net loss attributable to common stock decreased** from **$(80,805) thousand** in **2019** to **$(22,981) thousand** in **2020**[273](index=273&type=chunk) [Consolidated Statements of Cash Flows](index=53&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (in thousands) | Activity | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $61,267 | $(107,610) | $(36,702) | | Net cash used in investing activities | $(57,119) | $(115,912) | $(10,303) | | Net cash provided by financing activities | $694,227 | $31,883 | $273,402 | | Net change in cash, cash equivalents, and restricted cash | $698,372 | $(191,607) | $226,397 | | Cash, cash equivalents, and restricted cash: End of period | $945,820 | $247,448 | $439,055 | - **Operating activities generated $61.3 million in cash** in **2020**, a **reversal from significant cash usage** in prior years[277](index=277&type=chunk) - **Financing activities provided $694.2 million** in **2020**, primarily from the **issuance of convertible senior notes and equity**[277](index=277&type=chunk) - **Cash, cash equivalents, and restricted cash increased by $698.4 million** in **2020**, reaching **$945.8 million** at year-end[277](index=277&type=chunk) [Consolidated Statements of Changes in Mezzanine Equity and Stockholders' Equity](index=54&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Mezzanine%20Equity%20and%20Stockholders%27%20Equity) Changes in Equity (in thousands) | Metric | December 31, 2020 | December 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | :--- | | Total stockholders' equity (beginning) | $331,446 | $371,938 | $235,430 | | Issuance of convertible preferred stock, net | $39,823 | $— | $— | | Issuance of common stock, net | $69,701 | $— | $107,593 | | Equity component of convertible senior notes, net | $165,257 | $— | $27,951 | | Stock-based compensation | $39,321 | $29,095 | $20,960 | | Net loss | $(18,527) | $(80,805) | $(41,978) | | Total stockholders' equity (ending) | $590,557 | $331,446 | $371,938 | - **Total stockholders' equity increased** from **$331.4 million** in **2019** to **$590.6 million** in **2020**, primarily due to the **issuance of convertible preferred stock, common stock, and the equity component of convertible senior notes**[278](index=278&type=chunk) - **Stock-based compensation expense increased** to **$39.3 million** in **2020** from **$29.1 million** in **2019**[278](index=278&type=chunk) [Notes to Consolidated Financial Statements](index=55&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [Note 1: Description of Business and Summary of Significant Accounting Policies](index=56&type=section&id=Note%201%3A%20Description%20of%20Business%20and%20Summary%20of%20Significant%20Accounting%20Policies) - Redfin operates an **online real estate marketplace**, providing **real estate services**, **title and settlement services**, **mortgage origination**, and **direct home buying/selling**[282](index=282&type=chunk) - The company's financial statements are prepared in accordance with GAAP and include accounts of Redfin and its **wholly-owned subsidiaries**[283](index=283&type=chunk) - **Key business uncertainties** include **macroeconomic factors**, **COVID-19 impact**, **intense competition**, **technology maintenance**, **accurate listings**, and ability to **attract customers**[284](index=284&type=chunk) - In **April 2020**, Redfin **reduced its workforce by approximately 400 employees** and **furloughed 1,000**, **incurring a $7,864 thousand charge**, **partially offset by $1,348 thousand in CARES Act employee retention credits**[285](index=285&type=chunk) - **Critical estimates** include **valuation of deferred income taxes**, **stock-based compensation**, **net realizable value of inventory**, and **fair value of convertible senior notes**[286](index=286&type=chunk) [Note 2: Segment Reporting and Revenue](index=61&type=section&id=Note%202%3A%20Segment%20Reporting%20and%20Revenue) - Redfin has **five operating segments and two reportable segments**: **real estate services and properties**[350](index=350&type=chunk) Segment Revenue and Gross Profit (Year Ended December 31, in thousands) | Segment | 2020 Revenue | 2020 Gross Profit | 2019 Revenue | 2019 Gross Profit | 2018 Revenue | 2018 Gross Profit | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Real estate services | $651,208 | $234,068 | $523,540 | $150,390 | $432,168 | $123,099 | | Properties | $209,686 | $(4,696) | $240,507 | $(4,682) | $44,993 | $(1,620) | | Other | $28,212 | $2,738 | $17,634 | $(1,605) | $9,882 | $(2,055) | | Intercompany eliminations | $(3,013) | $— | $(1,885) | $— | $(123) | $— | | Consolidated | $886,093 | $232,110 | $779,796 | $144,103 | $486,920 | $119,424 | - **Real estate services revenue increased by 24%** in **2020**, while **properties revenue decreased by 13%**[352](index=352&type=chunk) - **Gross profit for real estate services increased by 56%** in **2020**, while **properties segment continued to report a gross loss**[352](index=352&type=chunk) [Note 3: Financial Instruments](index=61&type=section&id=Note%203%3A%20Financial%20Instruments) - Redfin uses **forward sales commitments on whole loans and mortgage-backed securities** to **manage interest rate and price risk** on **loans held for sale**[354](index=354&type=chunk) - **Interest Rate Lock Commitments (IRLCs)** are considered **free-standing derivatives** and are **recorded at fair value**, subject to fallout risk[355](index=355&type=chunk) Derivative Notional Amounts (as of December 31, in thousands) | Instrument | 2020 Notional Amount | 2019 Notional Amount | | :--- | :--- | :--- | | Forward sales commitments | $130,109 | $39,447 | | IRLCs | $88,923 | $37,453 | - **Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)**. **IRLCs primarily use Level 3 inputs (pull-through rate)**[294](index=294&type=chunk)[295](index=295&type=chunk)[296](index=296&type=chunk)[360](index=360&type=chunk) - An **impairment charge of $1,919 thousand** was recognized in **2020** related to a **cost method investment** in a privately-held company[365](index=365&type=chunk) [Note 4: Inventory](index=66&type=section&id=Note%204%3A%20Inventory) Inventory Components (as of December 31, in thousands) | Category | 2020 | 2019 | | :--- | :--- | :--- | | Properties for sale | $17,153 | $36,982 | | Properties not available for sale | $7,225 | $3,163 | | Properties under improvement | $24,780 | $34,445 | | Total Inventory | $49,158 | $74,590 | - **Inventory decreased from $74.6 million in 2019 to $49.2 million in 2020**[368](index=368&type=chunk) - **Inventory is stated at cost** and **reviewed for lower of cost or net realizable value** write-downs, which were **$29 thousand** in **2020** and **$143 thousand** in **2019**[368](index=368&type=chunk) [Note 5: Property and Equipment](index=66&type=section&id=Note%205%3A%20Property%20and%20Equipment) Property and Equipment, Net (as of December 31, in thousands) | Category | 2020 | 2019 | | :--- | :--- | :--- | | Property and equipment, gross | $79,909 | $68,149 | | Accumulated depreciation and amortization | $(41,614) | $(29,047) | | Construction in progress | $5,693 | $475 | | Property and equipment, net | $43,988 | $39,577 | - **Net property and equipment increased to $44.0 million in 2020 from $39.6 million in 2019**[369](index=369&type=chunk) - **Capitalized software development costs**, including **stock-based compensation**, were **$11.4 million** in **2020**[369](index=369&type=chunk) [Note 6: Leases](index=67&type=section&id=Note%206%3A%20Leases) Lease Cost (Year Ended December 31, in thousands) | Lease Type | 2020 | 2019 | | :--- | :--- | :--- | | Total operating lease cost | $12,941 | $11,618 | | Total finance lease cost | $150 | $23 | Maturity of Lease Liabilities (as of December 31, 2020, in thousands) | Year | Operating Lease Liabilities | Financing Lease Liabilities | | :--- | :--- | :--- | | 2021 | $14,194 | $206 | | 2022 | $13,582 | $206 | | 2023 | $12,572 | $192 | | 2024 | $10,761 | $93 | | 2025 | $7,364 | $— | | Thereafter | $9,536 | $— | | Total lease payments | $68,009 | $697 | - **Weighted average remaining operating lease term was 5.2 years**, and the **weighted average discount rate for operating leases was 4.4%** as of **December 31, 2020**[373](index=373&type=chunk) [Note 7: Commitments and Contingencies](index=68&type=section&id=Note%207%3A%20Commitments%20and%20Contingencies) - Redfin is **involved in legal proceedings**, including a **patent infringement lawsuit by Surefield**, a **Fair Housing Act violation lawsuit**, and two **misclassification lawsuits**[374](index=374&type=chunk)[375](index=375&type=chunk)[376](index=376&type=chunk)[377](index=377&type=chunk)[378](index=378&type=chunk) - The company **cannot estimate a range of reasonably possible losses** for these **material pending legal proceedings**[374](index=374&type=chunk) Other Commitments (as of December 31, 2020, in thousands) | Year | Amount | | :--- | :--- | | 2021 | $63,586 | | 2022 | $7,430 | | 2023 | $745 | | Total future minimum payments | $71,761 | - **Other commitments include homes under contract to purchase** through the properties business and **network infrastructure**[379](index=379&type=chunk) [Note 8: Acquired Intangible Assets](index=69&type=section&id=Note%208%3A%20Acquired%20Intangible%20Assets) Intangible Assets, Net (as of December 31, in thousands) | Category | 2020 Net | 2019 Net | | :--- | :--- | :--- | | Trade names | $390 | $494 | | Developed technology | $1,118 | $1,416 | | Customer relationship | $322 | $408 | | Total | $1,830 | $2,318 | - **Intangible assets**, primarily **trade names, developed technology, and customer relationships**, are **amortized over estimated useful lives of ten years**[311](index=311&type=chunk) - **Amortization expense totaled $488 thousand** for both **2020** and **2019**, with **$1,830 thousand** remaining to be recognized over **four years**[381](index=381&type=chunk) [Note 9: Accrued Liabilities](index=69&type=section&id=Note%209%3A%20Accrued%20Liabilities) Accrued Liabilities (as of December 31, in thousands) | Category | 2020 | 2019 | | :--- | :--- | :--- | | Accrued compensation and benefits | $49,238 | $30,462 | | Miscellaneous accrued liabilities | $9,722 | $7,021 | | Payroll tax liability deferred by the CARES Act | $6,812 | $— | | Customer contract liabilities | $3,688 | $539 | | Total accrued liabilities | $69,460 | $38,022 | - **Total accrued liabilities increased from $38.0 million in 2019 to $69.5 million in 2020**, largely due to increases in **accrued compensation and benefits** and **deferred payroll tax liability under the CARES Act**[382](index=382&type=chunk) [Note 10: Other Payables](index=70&type=section&id=Note%2010%3A%20Other%20Payables) Other Payables (as of December 31, in thousands) | Category | 2020 | 2019 | | :--- | :--- | :--- | | Customer deposits | $11,183 | $7,109 | | Miscellaneous payables | $2,001 | $775 | | Total other payables | $13,184 | $7,884 | - **Other payables primarily consist of customer deposits held in escrow** for real estate buyers, with a **corresponding asset in restricted cash**[383](index=383&type=chunk) [Note 11: Mezzanine Equity](index=70&type=section&id=Note%2011%3A%20Mezzanine%20Equity) - On **April 1, 2020**, Redfin **issued 40,000 shares of Series A Convertible Preferred Stock at $1,000 per share**, **classified as mezzanine equity**[385](index=385&type=chunk) - The **carrying value of convertible preferred stock, net of issuance costs, was $39,823 thousand** as of **December 31, 2020**[387](index=387&type=chunk) - **Dividends accrue daily at 5.5% per annum** and are **payable quarterly in common stock (if conditions met) or cash**. Holders have **participation, conversion, and liquidation rights**[388](index=388&type=chunk)[389](index=389&type=chunk)[390](index=390&type=chunk)[391](index=391&type=chunk)[392](index=392&type=chunk)[393](index=393&type=chunk)[394](index=394&type=chunk) [Note 12: Equity and Equity Compensation Plans](index=71&type=section&id=Note%2012%3A%20Equity%20and%20Equity%20Compensation%20Plans) - Redfin has **two equity incentive plans**: the **Amended and Restated 2004 Equity Incentive Plan** (terminated for new grants in **2017**) and the **2017 Equity Incentive Plan (2017 EIP)**[396](index=396&type=chunk)[397](index=397&type=chunk) Shares Reserved for Future Issuance under 2017 EIP (as of December 31) | Category | 2020 | 2019 | | :--- | :--- | :--- | | Stock options issued and outstanding | 5,733,738 | 7,792,181 | | Restricted stock units outstanding | 4,459,743 | 5,023,412 | | Shares available for future equity grants | 11,309,377 | 7,100,499 | | Total shares reserved for future issuance | 21,502,858 | 19,916,092 | - The **2017 Employee Stock Purchase Plan (ESPP)** allows **eligible employees to purchase common stock at a discount**, with **3,009,662 shares** available for issuance at the end of **2020**[399](index=399&type=chunk)[400](index=400&type=chunk) - **Total stock-based compensation expense was $36,973 thousand** in **2020**, with **$113,101 thousand** of **unrecognized compensation related to restricted stock units** remaining as of **December 31, 2020**[405](index=405&type=chunk)[403](index=403&type=chunk) [Note 13: Net Loss per Share Attributable to Common Stock](index=74&type=section&id=Note%2013%3A%20Net%20Loss%20per%20Share%20Attributable%20to%20Common%20Stock) Net Loss per Share Attributable to Common Stock (Year Ended December 31) | Metric | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net loss attributable to common stock (in thousands) | $(22,981) | $(80,805) | $(41,978) | | Weighted average shares—basic and diluted | 98,574,529 | 91,583,533 | 85,669,039 | | Net loss per share attributable to common stock—basic and diluted | $(0.23) | $(0.88) | $(0.49) | - The **calculation uses the two-class method**, as **convertible preferred stock is considered a participating security but does not share in losses**[407](index=407&type=chunk) - **Common stock equivalents**, including **convertible notes, preferred stock, stock options, and restricted stock units**, were **excluded from diluted EPS calculation due to their anti-dilutive effect** in periods of **net loss**[409](index=409&type=chunk)[410](index=410&type=chunk) [Note 14: Income Taxes](index=75&type=section&id=Note%2014%3A%20Income%20Taxes) Deferred Income Tax Assets and Liabilities (as of December 31, in thousands) | Category | 2020 | 2019 | | :--- | :--- | :--- | | Gross deferred income tax assets | $102,841 | $84,487 | | Valuation allowance | $(44,307) | $(62,274) | | Total deferred income tax assets, net of valuation allowance | $58,534 | $22,213 | | Total deferred income tax liabilities | $(58,534) | $(22,213) | | Net deferred income tax assets and liabilities | $— | $— | - Redfin has a **full valuation allowance against its U.S. deferred tax assets** due to historical operating losses and lack of taxable income[323](index=323&type=chunk) Net Operating Loss (NOL) Carryforwards (as of December 31, in thousands) | Category | 2020 | 2019 | | :--- | :--- | :--- | | Federal | $227,751 | $195,133 | | Various states | $12,576 | $10,421 | | Foreign | $2,050 | $1,212 | - The **effective income tax rate was 0%** for **2020, 2019, and 2018**, primarily due to the **full valuation allowance**[418](index=418&type=chunk) [Note 15: Debt](index=78&type=section&id=Note%2015%3A%20Debt) Warehouse Credit Facilities (as of December 31, 2020, in thousands) | Lender | Borrowing Capacity | Outstanding Borrowings | Weighted Average Interest Rate | | :--- | :--- | :--- | :--- | | Western Alliance Bank | $50,000 | $18,277 | 3.25 % | | Texas Capital Bank, N.A. | $40,000 | $12,903 | 3.35 % | | Flagstar Bank, FSB | $15,000 | $7,849 | 3.00 % | | Total | $105,000 | $39,029 | — % | Secured Revolving Credit Facility (as of December 31, 2020, in thousands) | Lender | Borrowing Capacity | Outstanding Borrowings | Weighted Average Interest Rate | | :--- | :--- | :--- | :--- | | Goldman Sachs Bank USA | $100,000 | $23,949 | 4.40 % | Convertible Senior Notes (as of December 31, 2020, in thousands) | Issuance | Aggregate Principal Amount | Unamortized Debt Discount | Unamortized Debt Issuance Costs | Net Carrying Amount | | :--- | :--- | :--- | :--- | :--- | | 2023 notes | $25,626 | $2,776 | $368 | $22,482 | | 2025 notes | $661,250 | $163,077 | $9,905 | $488,268 | - The **2023 notes became convertible at holders' option during Q1 2021** and were **reclassified as current liabilities**[433](index=433&type=chunk) - In **October 2020**, Redfin **repurchased and retired $116,914 thousand aggregate principal amount of its 2023 notes**, recognizing a **$4,586 thousand loss on extinguishment**[434](index=434&type=chunk) [Note 16: Subsequent Events](index=80&type=section&id=Note%2016%3A%20Subsequent%20Events) - On **January 12, 2021**, **RedfinNow Borrower amended its secured revolving credit facility with Goldman Sachs**, **increasing borrowing capacity to $125,000 thousand** and **extending maturity to July 12, 2022**[436](index=436&type=chunk)[437](index=437&type=chunk) - On **February 19, 2021**, Redfin **entered an agreement to acquire RentPath Holdings, Inc. for $608,000 thousand in cash**, **subject to antitrust and bankruptcy court approvals**[438](index=438&type=chunk) - A **$60,800 thousand deposit was made into an escrow account** for the **RentPath acquisition**[439](index=439&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=82&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There were **no changes in or disagreements with accountants** on accounting and financial disclosure - **No changes in or disagreements with accountants** on accounting and financial disclosure were reported[442](index=442&type=chunk) [Item 9A. Controls and Procedures](index=82&type=section&id=Item%209A.%20Controls%20and%20Procedures) Redfin's management concluded that its **disclosure controls and procedures** were **effective** at a **reasonable assurance level** as of **December 31, 2020**. The company also **maintained effective internal control over financial reporting**, as attested by its **independent registered public accounting firm** - Management, with the participation of principal executive and financial officers, concluded that **disclosure controls and procedures** were **effective** as of **December 31, 2020**[443](index=443&type=chunk) - Redfin **maintained effective internal control over financial reporting** as of **December 31, 2020**, based on the COSO framework, with an **unqualified attestation report from Deloitte & Touche LLP**[444](index=444&type=chunk) - **No changes in internal control over financial reporting materially affected** or are reasonably likely to materially affect controls during the quarter ended **December 31, 2020**[445](index=445&type=chunk) - Management acknowledges the **inherent limitations of control systems**, which can only provide **reasonable, not absolute, assurance**[446](index=446&type=chunk) [Item 9B. Other information](index=82&type=section&id=Item%209B.%20Other%20information) **No other information was reported** under this item - **No other information was reported**[447](index=447&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=83&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The information required for this item is **incorporated by reference from Redfin's proxy statement** for its **2021 Annual Meeting of Stockholders** - Information is **incorporated by reference from the 2021 Annual Meeting of Stockholders proxy statement**[450](index=450&type=chunk) [Item 11. Executive Compensation](index=83&type=section&id=Item%2011.%20Executive%20Compensation) The information required for this item is **incorporated by reference from Redfin's proxy statement** for its **2021 Annual Meeting of Stockholders** - Information is **incorporated by reference from the 2021 Annual Meeting of Stockholders proxy statement**[451](index=451&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=83&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) The information required for this item is **incorporated by reference from Redfin's proxy statement** for its **2021 Annual Meeting of Stockholders** - Information is **incorporated by reference from the 2021 Annual Meeting of Stockholders proxy statement**[452](index=452&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=83&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The information required for this item is **incorporated by reference from Redfin's proxy statement** for its **2021 Annual Meeting of Stockholders** - Information is **incorporated by reference from the 2021 Annual Meeting of Stockholders proxy statement**[453](index=453&type=chunk) [Item 14. Principal Accounting Fees and Services](index=83&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) The information required for this item is **incorporated by reference from Redfin's proxy statement** for its **2021 Annual Meeting of Stockholders** - Information is **incorporated by reference from the 2021 Annual Meeting of Stockholders proxy statement**[454](index=454&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules](index=84&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements and schedules filed as part of the annual report, along with a comprehensive list of exhibits, including agreements, plans, and certifications - **Financial statements and schedules are included under Item 8**[457](index=457&type=chunk) - **Exhibits include various agreements** (e.g., **Asset Purchase Agreement for RentPath**, **Indentures for Convertible Senior Notes**), **equity incentive plans**, and **certifications**[458](index=458&type=chunk)[459](index=459&type=chunk) [Item 16. Form 10-K Summary](index=84&type=section&id=Item%2016.%20Form%2010-K%20Summary) **No Form 10-K Summary was reported** - **No Form 10-K Summary was reported**[460](index=460&type=chunk) [Signatures](index=90&type=section&id=Signatures) This section contains the **required signatures** for the Annual Report on Form 10-K, including those of the **Chief Executive Officer**, **Chief Financial Officer**, and **members of the Board of Directors**, **certifying the report's accuracy** - The report is signed by **Glenn Kelman** (**Chief Executive Officer**) and **Chris Nielsen** (**Chief Financial Officer**) on **February 24, 2021**[463](index=463&type=chunk)[464](index=464&type=chunk) - Signatures from the **Chairman of the Board** and **other Directors** are also included[464](index=464&type=chunk)