Key Takeaways
- Redfin missed profit and sales estimates as its market share in the U.S. slipped.
- The online real estate site also reduced its guidance for full-year adjusted EBITDA.
- CEO Glenn Kelman said August and September sales were below the company’s expectations.
Redfin (RDFN) shares sank Friday after the online real estate business posted worse-than-expected results and lowered its guidance as it lost market share in the U.S.
Redfin reported a third quarter loss of $33.8 million, or $0.28 per share, up from a loss of $19 million, or $0.17 a year ago. Revenue rose 3.4% to $278 million. Both were short of estimates.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was cut roughly in half, tumbling to $3.9 million from $7.7 million in 2023. The company’s market share of U.S. existing home sales by units fell to 0.76% from 0.78% a year ago.
CEO Glenn Kelman said August and September mortgage and brokerage sales were $7 million below the company’s expectations. While Redfin didn’t see lower interest rates in August doing much to improve the housing market, he said, “we also didn’t expect it to get worse.”
Shares of Redfin, down about 15% today, are modestly in the red this year.
Kelman said that the company failed to forecast $2 million in costs from its move to replace agent salaries with higher bonuses, and a $1 million expense to integrate its rental property program.
Redfin reduced its full-year adjusted EBITDA loss forecast to between $15 million and $22 million. Previously, the company had been looking for adjusted EBITDA to be breakeven.