Redfin(US:RDFN)2025-02-28 05:10Financial Data and Key Metrics Changes - Redfin's Q4 2024 revenue was $244 million, up 12% year-over-year, marking the fourth consecutive quarter of growth [8] - Adjusted EBITDA loss for Q4 was $3 million, an improvement from a loss of $13 million in the prior year, with a full-year adjusted EBITDA loss of $27 million, improving by $53 million over 2023 [9][30] - Net loss for Q4 was $36 million, compared to a net loss of $23 million in the prior year, which was below the guidance range [31] Business Line Data and Key Metrics Changes - Real estate services revenue was $149 million, up 12% year-over-year, with brokerage revenue increasing by 13% [32] - Rentals segment revenue was $52 million, a 5% increase, marking its ninth consecutive quarter of growth [35] - Mortgage segment revenue was $30 million, up 15% year-over-year, with gross margin improving from 4.6% to 10.9% [37][28] Market Data and Key Metrics Changes - Real estate services market share was 0.72%, flat year-over-year, despite a significant increase in the sales force [12] - The number of days a listing took to sell increased by 15% year-over-year, indicating a mixed market environment [27] Company Strategy and Development Direction - The company plans to aggressively expand its sales force and improve monetization across all business segments, including a partnership with Zillow to enhance rental listings [13][19] - Redfin aims to increase real estate gross margins to approximately 30% in 2025, with expectations of improved profitability from the Zillow partnership [15][14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the housing market, noting that while home sales may not significantly recover in 2025, the worst of the downturn is likely behind [25][27] - The company anticipates a gradual recovery in home sales, particularly in the summer, as inventory increases and sellers become less aggressive on pricing [26] Other Important Information - The company expects first-quarter revenue to be between $214 million and $225 million, representing a year-over-year change of down 5% to roughly flat [40] - Significant restructuring charges are anticipated in the first quarter, primarily related to the Zillow partnership and workforce reduction [42] Q&A Session Summary Question: Regarding ad spending and marketing strategy - Management indicated that advertising is being ramped up early to capture homebuyer interest, with expectations of significant profitability in 2025 [48][50] Question: On lead agent count and hiring - The lead agent count increased by 25% from the previous quarter, with a focus on hiring experienced agents who are outperforming tenured agents [60][61] Question: About the rentals business and revenue expectations - Revenue from the rentals segment is expected to decrease initially due to the transition but is projected to triple adjusted EBITDA over 2024 on a run rate basis [43][68] Question: On market share trends in Next markets - Management noted that the transition to the Next program has been successful, particularly in high-end markets, and they are optimistic about future share gains [78][80] Question: On the economics of Redfin Next - The company is focused on maximizing gross profit from online audiences and has made adjustments to agent compensation to improve margins [110][114]