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Coming off a challenging quarter, Redfin managed to post a year-over-year increase in profits Thursday despite a decline in revenue, according to third-quarter earnings released Thursday.
The Seattle-based company announced overall profits of $98.3 million, up 8 percent from the third quarter of 2022, while tallying $269 million in revenue, a decrease of 12 percent from a year ago, falling short of Wall Street expectations.
Profits for real estate services clocked in at $54.1 million, a decrease of 2 percent year over year according to the data, with gross margins improved by four points to 30 percent in the quarter. Net losses, meanwhile, fell to $19 million in the quarter, compared to a loss of $90.2 million in the third quarter of 2022.
“In a worsening housing market, Redfin earned an adjusted EBITDA profit, a $59 million improvement over the third quarter of 2022, all while growing traffic and gaining share,” Redfin CEO Glenn Kelman said during the call. “In October, we raised capital, began generating revenues from a new digital business, and launched all-variable agent pay in California. This downturn has only made us stronger.”
Among the third-quarter highlights, Kelman touted the company’s apps and website, which drew more than 51 million average monthly users, up 1 percent from a year earlier, and a rise in mortgage cross-selling despite strong headwinds with mortgage demand down. Sales from loyalty customers also rose modestly, from 33 percent in the third quarter of 2022 to 36 percent this quarter, according to the results.
The second quarter brought more of the same for Redfin. In early August, the Seattle-based company’s revenues fell 21 percent year over year to $275.6 million, down from $606.9 million a year earlier.
However, Redfin’s gross profits from real estate services suffered a far greater decline in the second quarter, falling 24 percent year over year to $56.2 million.
For the fourth quarter, which ends in December, Redfin projects revenue falling between $211 million to $216 million.
This story is developing. Check back later for more details.