Redfin continued a multi-quarter hot streak Wednesday, revealing that during the third quarter of this year it raked in $239 million in revenue.

The online brokerage’s revenue represented a jump of 70 percent year-over-year. Gross profit also jumped from $42.3 million a year ago to $53.4 million this quarter, an increase of 26 percent. And earnings per share ended up at $0.07.

All of those figures easily beat analyst expectations. Leading into Wednesday’s report, financial experts had expected to see the company bring in $230.14 million in revenue, an increase of merely 64.1 percent year-over-year. Analysts also expected earnings-per-share to remain unchanged from a year ago at $0.04.

Glenn Kelman

In a statement Wednesday, CEO Glenn Kelman said that the “third quarter was strong across the board.” He also said that Redfin is investing in disruptive technology, better service and other programs such as instant cash offers.

“These are big strides toward our long-term goal of redefining real estate in the consumers’ favor,” Kelman added in the statement.

Redfin stock shot up in after-hours trading Wednesday after Redfin released its earnings results. Prices ultimately ended up just below $20, a climb of more than $1.25 per share.

Leading into Wednesday’s report, the company’s stock was trading below $19 per share. The shares have had a bumpy ride over the last year, rising from just under $15 per share last November to more than $23 in April. Prices then collapsed to less than $15 per share by May and have been fluctuating up and down ever since.

Credit: Google

During its last earnings report in August, Redfin also handily beat analysts’ expectations when it revealed it brought in $197.8 million in revenue during the second quarter of 2019. At the time, Kelman referred to that quarter as a “turning point” for the company.

Prior to the August earnings report, Redfin had consistently posted strong revenue in recent quarters. 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 Wednesday’s earnings call, Kelman offered a positive outlook for Redfin’s future. He expects to see traffic growth to Redfin’s website, better sales execution and higher close rates. Awareness of Redfin as a brand is growing, Kelman also said, and the firm’s market share is increasing.

“I feel reasonably good about next year,” Kelman concluded late in the call, adding a moment later, “hot dang, I think we’re going to do pretty well.”

Aside from earnings reports, Redfin has been busy lately expanding various business operations. Last month, it entered markets in Tennessee, Georgia and Kentucky for the first time. It has steadily grown its iBuyer program RedfinNow. And it debuted a new resource, called Redfin Direct, that lets unrepresented buyers make offers on the company’s listings.

Additionally, recent weeks have seen Kelman fast becoming one of the highest-profile supporters of a proposal from the National Association of Realtors that would ban most off-market and pocket listings.

Kelman also highlighted the strengths of Redfin’s various business ventures during Wednesday’s call, saying among other things that in the coming years Redfin Direct “could be a significant driver of profits.”

“It’s a very high margin business segment,” he added.

Beefing up Redfin Direct is also part of the company’s strategy to pioneer and capture the market for consumers who want to approach real estate on their own rather than with an agent. Kelman suggested consumers who have experience buying and selling homes may fall into that category, and he sees it as an area of potential growth.

“That customer segment that wants to do it itself is the new segment, and it’s the one we want to have a leadership role in developing,” he added.

Kelman additionally had some praise for rival Opendoor, a Softbank-backed iBuying startup which the Redfin CEO said has “driven us to raise our game.”

“Those guys have been doing instant offers for a long time,” he explained, “and they really put the instant in instant offers.”

Finally, Kelman also said that the U.S. housing market is probably stronger than the overall U.S. economy at this point and, thanks to factors like low interest rates, should remain robust into next year.

“We may see broader price gains in the first half of 2020,” he concluded, “and the return of bidding wars.”

Update: This post was updated after publication with additional information from Redfin’s earnings call. 

Email Jim Dalrymple II

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