Redfin(US:RDFN)2021-11-05 03:21Financial 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]