CEO Glenn Kelman said Thursday that Redfin’s various ventures that touch on iBuying, mortgage and title services are entering a “more aggressive phase of market expansion.”
Redfin managed to extend a winning streak Thursday when it announced it had tallied $197.8 million in revenue during the second quarter of 2019, handily beating analysts’ expectations for the company.
That revenue represents a jump of 39 percent year-over-year, according to a company statement. Redfin also saw a net loss of $12.6 million during 2019’s second quarter, as well as a net loss per share of $0.14.
Leading into Thursday’s earnings report, analysts had expected Redfin to report $190.39 million in revenue for the quarter, which would have been up 33.5 percent year-over-year. They also expected the company to see a quarterly loss of $0.15 per share.
In a statement, Redfin CEO Glenn Kelman described the second quarter of 2019 as “a turning point for our company.”
“Year-over-year growth in website traffic, brokerage sales and revenues overall accelerated for the second straight quarter,” Kelman added. “Our new businesses have built the infrastructure and delivered the results needed for more rapid expansion, with significant margin gains in mortgage and title and integrated field execution for instant-offers and the brokerage.”
Prior to Thursday’s report, Redfin had consistently posted strong revenue. In May, for example, the company beat analysts’ expectations when it reported $110 million in revenue. Redfin also beat expectations in February, when it revealed it brought in $124 million in revenue during the final quarter of 2018.
During an earnings call Thursday, Kelman painted an optimistic picture of Redfin’s fortunes. Among other things, he said that the company “has more than 4 times the traffic of the next nearest brokerage competitor.” Redfin also saw a 27 percent increase in visitors to its website and mobile apps during the second quarter of 2019, according to the company’s statement.
Kelman further explained that Redfin’s various ventures in iBuying as well as mortgage and title services are entering a “more aggressive phase of market expansion.”
“Our goal is to be the first national brokerage provider of a complete real estate solution,” he continued.
In addition to consistently beating analysts’ expectations, Redfin has also made a number of major business moves this year. One of the most significant of those moves was the launch of Redfin Direct, which lets buyers make offers on Redfin-listed homes without being represented by an agent. The service first went live in Massachusetts and has since expanded to Virginia.
During Thursday’s call, Kelman said that before the launch of Redfin Direct he expected many offers from unrepresented buyers to be “ludicrous or half-baked.” However, in practice, the service has ended up eliciting offers that are mostly “within 5 percent of the asking price.”
So far, the percentage of Redfin-listed homes in Massachusetts and Virginia selling to unrepresented buyers remains in the “low single digits,” Kelman further explained. However, he also said that in the future “we hope to be able to sell 10 percent of listings to an unrepresented buyer.
Redfin has also spent 2019 steadily expanding Redfin Now, its iBuying service. In January, the program moved into Los Angeles, making it available in essentially all of Southern California, and it has subsequently launched in multiple Texas cities.
Despite offering its own iBuyer service, Redfin also recently embarked on a partnership with dedicated iBuying firm Opendoor. Kelman spoke positively about the partnership Thursday, saying that there are “good vibes” between the two companies.
“For years to come, we plan to compete with Opendoor,” he added, “and to remain partners.”
Kelman also was asked during Thursday’s call about the recently announced partnership between Amazon and Realogy. The partnership will see Realogy agents get referrals from visitors to Amazon’s website, but Kelman expressed skepticism that it would have a major impact on the industry.
“What they’re doing here,” he said, “I’m not sure is a really serious move into the real estate market.”
Looking forward, Redfin said in its statement Thursday that it expects total revenue in the third quarter of 2019 to fall between $223 million and $233 million.