Executive Summary

Q2 2024 delivered 7% revenue growth to $295.2M and 9% gross profit growth to $109.6M; adjusted EBITDA was approximately breakeven, while diluted loss per share improved to $(0.23) from $(0.25) YoY .
Segment performance was mixed: Rentals posted positive adjusted EBITDA and 12% revenue growth; Mortgage revenue rose 5% with gross margin improving to 19%; Real Estate Services revenue rose 4% but gross margin compressed due to the Redfin Next transition costs .
Q3 2024 guidance introduces a positive adjusted EBITDA range ($4M–$12M) on $273M–$285M revenue (1%–6% YoY), with explicit expense components (marketing $29M, SBC $18M, D&A $9M, net interest $6M) and a preferred dividend of 30,640 shares .
Management emphasized profitability progression driven by structural changes (Redfin Next, Rent integration, title/digital growth) and expects share gains; near-term demand remains uncertain despite lower rates, framing catalysts around execution and efficiency rather than macro relief .

What Went Well and What Went Wrong

What Went Well

Market share rose to 0.77% (first YoY gain in nearly two years); management highlighted execution improvements and Redfin Next scaling to markets covering ~74% of brokerage revenue in August .
Rentals achieved positive adjusted EBITDA with revenue up 12% YoY; new leadership and integration lowered opex and supported sustained profitability (“Rent this year will generate its first full year adjusted EBITDA profit”) .
Mortgage attach rate reached 28% (ex-cash) and Mortgage gross margin improved to 19.0%; title business attach rates above 60% and >50% revenue growth suggest stronger ancillary economics .

What Went Wrong

Real Estate Services gross margin declined YoY to ~28.6% (press release cites 29%) due to transition costs and higher personnel/transaction bonuses under Redfin Next, partially offset by lower touring/field expenses .
Net loss remained elevated at $27.9M vs. $27.4M YoY; commentary flagged worsening housing market conditions and muted consumer response to falling mortgage rates, increasing uncertainty for 2H demand .
Guidance for Q3 implies sequential revenue decline vs seasonality norms; management attributes conservatism to recent demand softness and lack of visibility on rate-driven recovery (“Twilight Zone” reaction to rates) .

Financial Results

Consolidated Metrics (YoY and sequential comparison)

Metric (USD, scale noted)	Q2 2023	Q1 2024	Q2 2024
Revenue ($ Thousands)	$275,556	$225,479	$295,203
Gross Profit ($ Thousands)	$100,190	$70,812	$109,586
Diluted EPS (Continuing Ops)	$(0.25)	$(0.57)	$(0.23)
Adjusted EBITDA ($ Thousands)	$(6,925)	$(27,594)	$(28)

Notes: Management stated total gross margin expanded YoY from 36% to 37% in Q2; Real Estate Services margin compressed YoY and sequentially under Redfin Next transition .

Segment Revenues and Gross Profit (USD $ Thousands)

Segment	Q2 2023 Revenue	Q1 2024 Revenue	Q2 2024 Revenue	Q2 2024 Gross Profit
Real Estate Services	$180,641	$131,180	$187,569	$53,706
Rentals	$45,356	$49,518	$50,927	$39,297
Mortgage	$38,426	$33,819	$40,179	$7,651
Other	$11,133	$10,962	$16,528	$8,932
Total	$275,556	$225,479	$295,203	$109,586

Segment Margins (current period detail)

Segment Margin	Q2 2024	Prior Period Reference
Total Gross Margin %	37% (YoY expansion)	36% in Q2 2023
Real Estate Services Gross Margin %	29%	31% in Q2 2023; 15% in Q1 2024
Rentals Gross Margin %	77.2%	77.0% in Q2 2023
Mortgage Gross Margin %	19.0%	10.8% in Q2 2023
Other Gross Margin %	54.0%	44.1% in Q2 2023

KPIs

KPI	Q2 2023	Q1 2024	Q2 2024
U.S. Market Share (units)	0.75%	0.77%	0.77%
Monthly Avg Visitors (000s)	52,308	48,803	51,619
Mortgage Attach Rate (ex-cash)	24% (implied YoY +4 pts to 28%)	28% (best on record)	28%
Loyalty Sales Share	N/A	34%	37%
Avg Lead Agents	1,876	1,658	1,719

Footnote: Inclusive attach rate (denominator includes cash transactions) was 22% in Q2 2024 vs 19% in Q2 2023 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance / Actual	Change
Total Revenue ($M)	Q2 2024	$285–$298	Actual $295.203	Met near upper end
Real Estate Services Rev ($M)	Q2 2024	$180–$188	Actual $187.569	At high end
Rentals Rev ($M)	Q2 2024	$50–$51	Actual $50.927	In range
Mortgage Rev ($M)	Q2 2024	$39–$42	Actual $40.179	In range
Other Rev ($M)	Q2 2024	~16	Actual $16.528	Slight beat
Total Revenue ($M)	Q3 2024	N/A	$273–$285	Initiated
Real Estate Services Rev ($M)	Q3 2024	N/A	$171–$179	Initiated
Rentals Rev ($M)	Q3 2024	N/A	$50–$51	Initiated
Mortgage Rev ($M)	Q3 2024	N/A	$36–$39	Initiated
Other Rev ($M)	Q3 2024	N/A	$15–$16	Initiated
Total Net Loss ($M)	Q3 2024	N/A	$(30)–$(22)	Initiated
Adjusted EBITDA ($M)	Q3 2024	N/A	$4–$12	Initiated
Expense Components	Q3 2024	N/A	Marketing ~$29M; SBC ~$18M; D&A ~$9M; Net interest ~$6M	Detailed components added
Preferred Dividend	Q3 2024	N/A	30,640 common shares to preferred holder	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2023)	Previous Mentions (Q1 2024)	Current Period (Q2 2024)	Trend
Redfin Next (agent pay)	Pilot success; faster breakeven vs salaried; aggressive hiring upside	Expansion to 7 additional markets; strong agent demand	Expanding to cover ~74% of brokerage revenue; margin compression near-term; long-term similar/better margins expected	Scaling rapidly; near-term margin headwind, longer-term efficiency and share gain
NAR settlement / buyer agency	Expect broader adoption of buyer agency agreements; consumer choice growing	Preparations via Sign & Save and All You Can Meet	Anticipate buy-side fee compression; using price as weapon to gain share; early market observations (e.g., 2.5% trend)	Structural pricing shift; Redfin positioned to benefit via value proposition
Rentals integration & profitability	Rent posted positive adj. EBITDA; integration with shared functions and infra	Continued integration; opex savings expected	Q2 adjusted EBITDA positive; opex down 19% YoY with similar marketing; full-year adj. EBITDA profit expected	Sustained profitability; reinvestment into traffic and sales
Mortgage attach and margin	Improving attach rates; industry capacity supports margins	Best quarter on record attach (28% Q1); system investments	28% attach; 19% gross margin; zero net loss; adj. EBITDA +$1M	Better economics; attach steady; potential refi upside if rates drop
Title and digital (Other)	Title and digital revenue growth; improving margins	Title expansion to new markets	Title attach >60%; revenue growth >50%; Other margin 54%	Strong ancillary momentum supporting consolidated margin
Traffic/product and AI	AI features; traffic outpacing rivals; product improvements	Ask Redfin AI launched; rental info enhancements	AI used for rental photo optimization; Redfin Redesign; Comscore traffic +4% YoY	Consistent product-led traffic gains
Macro/rates & demand	Concern about rate volatility; cautious outlook	Market worsened YTD; cautious on visibility	Unusual muted demand amid falling rates; expect 2025 stronger if rates stay low	Near-term uncertainty; medium-term optimism

Management Commentary

“Second quarter adjusted EBITDA was breakeven… our first year-over-year share gain in nearly 2 years… we expect these gains to continue… largely on the strength of Redfin Next.” — Glenn Kelman .
“This restructuring of Rent caps a series of seismic changes… Redfin is more efficient, resilient and ready to scale… we expect to be roughly adjusted EBITDA breakeven for the full year.” — Glenn Kelman .
“Total gross margin expanded from 36% to 37%… operating expenses were down $10M YoY… adjusted EBITDA was flat.” — Chris Nielsen .
“Title Forward’s performance has been extraordinary… attach rates above 60% and year-over-year revenue growth above 50%… long-term gross margin goal was 20%, but the second quarter showed it could be greater than 30%.” — Glenn Kelman .
“Plan B is… we’re ready to take share if the market grows, we’re ready to take share if it doesn’t.” — Glenn Kelman (on rates/demand uncertainty) .

Q&A Highlights

Margins under Redfin Next: Long-term similar/better margins from Redfin-sourced demand; some industry-wide pressure offset by efficiency (support/management) as agents become more entrepreneurial .
Other segment drivers: Strength from both title and advertising revenue growth across the website; capabilities expanded for advertisers .
NAR buy-side fees: Early evidence of fee compression (e.g., 2.5% vs 2.75%); Redfin plans to trade lower fees for higher volume via Sign & Save and direct offers to gain share .
Guidance rationale: Sequential decline reflects slow recent months and lack of visibility on rate-driven demand; conservatism not assuming market improvement .
EBITDA breakeven drivers: Achieved via “self-help”—cost discipline, digital growth, and Redfin Next—not dependent on macro tailwinds .

Estimates Context

S&P Global/Capital IQ consensus estimates were unavailable for RDFN at the time of analysis due to a data mapping error in the SPGI CIQ company map. As a result, we cannot provide a comparison of actual results versus Wall Street consensus for Q2 2024 or forward periods using S&P Global data. We attempted to retrieve Primary EPS Consensus Mean, Revenue Consensus Mean, and Target Price Consensus Mean for Q2/Q3/FY24/FY25 but received an error indicating missing mapping for RDFN in the CIQ company map.
Implication: Use company guidance ranges and reported results for benchmarking until S&P Global estimates become available [GetEstimates attempt error].

Key Takeaways for Investors

Execution-led profitability: Breakeven adjusted EBITDA in Q2, positive adjusted EBITDA guide for Q3, and ongoing cost discipline suggest improving earnings quality independent of macro .
Structural catalysts: Redfin Next rollout, Rentals integration/profitability, and strong title/digital expansion can lift consolidated margins and reduce cyclicality; near-term RES margin pressure should ease post-transition .
Share gains: Market share increased to 0.77% with loyalty sales rising; pricing/value strategy post-NAR settlement positions Redfin to capture volume even with lower per-transaction fees .
Mix shifts matter: Growth in high-margin Rentals/Other and margin-improved Mortgage (attach steady at 28%) enhance overall margin trajectory despite brokerage headwinds .
Guidance supports positive inflection: Q3 revenue $273–$285M with adjusted EBITDA $4–$12M; explicit expense components improve transparency—monitor sequential trajectory vs historical seasonality .
Trading setup: With consensus unavailable, price reactions may hinge on confidence in Next scaling, ancillary segment performance, and any evidence of demand reacceleration as rates fall—watch management’s tone and monthly KPIs (traffic, attach, loyalty) .
Risk factors: Muted consumer response to lower rates, potential commission compression industry-wide, and margin volatility during Redfin Next transition; management’s “self-help” posture mitigates but does not eliminate macro sensitivity .

Redfin Corp (RDFN)·Q2 2024 Earnings Summary