Executive Summary

Q3 revenue grew 3% YoY to $278.0M, with gross profit up 4% to $101.9M; however, net loss widened to $33.8M and adjusted EBITDA was $3.9M, at/below the low end of guidance due to ~$4M one-time costs and softer August/September volumes. Management acknowledged falling short of full-year profitability plans and outlined fixes and cost reductions already implemented .
Redfin issued Q4 guidance calling for 9–13% YoY revenue growth ($237–$247M) and adjusted EBITDA of $1–$8M, with Real Estate Services gross margin expected to be ~29% (>600 bps YoY improvement) as Redfin Next changes reduce winter seasonality; this sets up a potential inflection narrative into 2025 as ad spend ramps and agent hiring accelerates .
Strategic execution: mortgage attach improved to 27% (ex-cash) from 22% YoY; rentals revenue rose 9% YoY with high margins; “Other” (title/digital) delivered stronger profit. Redfin Next was rolled out nationwide Oct 27 and is tied to higher close rates, luxury penetration, and recruiting; >500 agents hired under Next to date .
Stock reaction catalysts: Q4 margin expansion and return to revenue growth, continued attach-rate gains, rentals momentum, and clarity that one-time costs tied to Redfin Next transition are behind them; offsets include Q3 guide misses, macro housing volumes, and competitive ad spend from portals .

What Went Well and What Went Wrong

What Went Well
- Mortgage and title attach momentum: mortgage attach reached 27% ex-cash (21% inclusive), up from 22% YoY; title usage above 60%, becoming a “significant source of profit” .
- Rentals and “Other” segments executed: Rentals revenue +9% YoY with 76.1% gross margin; “Other” revenue grew to $15.6M with gross margin 54.2% and adjusted EBITDA of $7.1M, up from $3.1M YoY .
- Redfin Next rollout and KPIs: Company transitioned all agents to Redfin Next on Oct 27; management cited materially higher close rates in pilot markets and strong recruiting (plans to hire hundreds of agents) as key drivers of expected share gains. Quote: “we’re emerging … ready to go on the attack” .
What Went Wrong
- Q3 profitability shortfall vs plan: adjusted EBITDA of $3.9M landed at/below the low end of guidance, and net loss of $33.8M was slightly worse than guidance due to ~$3M restructuring (home repair closure) and ~$4M Redfin Next transition costs; volumes in Aug/Sep were $7M below forecast .
- Real Estate Services margin compression: segment gross margin fell to 27.8% from 30.0% YoY, primarily on higher personnel/bonus costs as the mix shifted under Next; brokerage revenue per transaction declined 3% QoQ .
- Market share and traffic headwinds: unit share slipped 2 bps YoY (0.76% vs 0.78%); management cited Homes.com’s unprecedented ad spend and Redfin’s own pullback earlier in the year; ad spend will step up in 2025 to re-accelerate traffic .

Financial Results

Metric	Q3 2023	Q2 2024	Q3 2024
Revenue ($M)	$268.956	$295.203	$278.015
Gross Profit ($M)	$98.340	$109.586	$101.863
Net Loss ($M)	$(18.972)	$(27.880)	$(33.782)
Diluted EPS (GAAP)	$(0.17)	$(0.23)	$(0.28)
Adjusted EBITDA ($M)	$7.651	$(0.028)	$3.948
Real Estate Services Gross Margin %	30.0%	29.0%	27.8%

Segment revenue and profitability

Segment	Q3 2023 Revenue ($M)	Q2 2024 Revenue ($M)	Q3 2024 Revenue ($M)	Q3 2023 GP ($M)	Q2 2024 GP ($M)	Q3 2024 GP ($M)
Real Estate Services	177.750	187.569	175.136	54.066	53.706	48.715
Rentals	47.410	50.927	51.660	36.586	39.297	39.294
Mortgage	32.923	40.179	35.621	3.294	7.651	5.407
Other	10.873	16.528	15.598	4.394	8.932	8.447

KPIs

KPI	Q1 2024	Q2 2024	Q3 2024
Monthly Avg Visitors (000s)	48,803	51,619	49,413
U.S. Unit Market Share	0.72%	0.77%	0.76%
Avg Lead Agents	1,658	1,719	1,757
Total Real Estate Transactions	12,730	17,573	16,764
Brokerage Revenue/Txn ($)	12,433	12,545	12,363
Partner Revenue/Txn ($)	2,367	2,859	3,025
Mortgage Originations ($M)	969	1,338	1,214
Mortgage Units	2,365	3,192	2,900

Notes: Company highlighted total gross margin of ~37% in Q3 (unchanged YoY), Rentals gross margin 76.1%, Mortgage gross margin 15.2%, and “Other” 54.2% .

Guidance Changes

Q3 2024 guidance (issued Aug 6) vs actual

Metric	Q3 2024 Guidance (8/6)	Q3 2024 Actual	Change
Revenue ($M)	$273–$285	$278.015	In-range
Net Loss ($M)	$(30)–$(22)	$(33.782)	Below (worse) vs guide on restructuring costs
Adjusted EBITDA ($M)	$4–$12	$3.948	Slightly below low end
Marketing Expense ($M)	~29	27.186 (actual OpEx line)	Lower than guided
SBC ($M)	~18	18.302 (component of Q3)	In-line
D&A ($M)	~9	N/A disclosed at consolidated quarterly level; mgmt notes $4M YoY decrease in amortization	—
Net Interest Expense ($M)	~6	Interest expense $8.537; interest income $1.839 (implies ~6.70 net)	~In-line with guidance magnitude

Q4 2024 guidance (issued Nov 7)

Metric	Previous Guidance	Current Guidance	Change
Total Revenue ($M)	N/A	$237–$247 (+9% to +13% YoY)	New
Real Estate Services Rev ($M)	N/A	$144–$150	New
Rentals Rev ($M)	N/A	$51	New
Mortgage Rev ($M)	N/A	$28–$32	New
Other Rev ($M)	N/A	$13–$14	New
Net Loss ($M)	N/A	$(32)–$(25)	New
Adjusted EBITDA ($M)	N/A	$1–$8	New
Real Estate Services Gross Margin	N/A	~29%, >600 bps YoY improvement	New
Marketing Expense ($M)	N/A	~22 (included in guidance)	New
SBC ($M)	N/A	~18	New
D&A ($M)	N/A	~9	New
Net Interest Expense ($M)	N/A	~7	New
Dividend (Preferred)	N/A	final dividend of 20,427 common shares	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2024)	Current Period (Q3 2024)	Trend
Redfin Next (agent compensation), close rates	Pilot markets showed materially higher close rates, luxury penetration; expanding to more markets (Q1)	Nationwide transition completed 10/27; higher close rates, stronger recruiting; some one-time transition costs (~$2M) impacted Q3; 2025 hiring ramp	Positive; scaling nationally
Mortgage/title attach	Mortgage attach hit 30% in March; integration with Bay Equity systems driving attach (Q1)	Q3 attach 27% ex-cash (21% inclusive) vs 22% YoY; title >60% usage	Positive; durable cross-sell
AI/technology	Ask Redfin chat rolled out; Redfin Redesign AI staging expanding MLS reach (Q1/Q2)	Continued Redfin Redesign rollout; investments in AI for recommendations and sales execution emphasized	Positive; sustained investment
Macro/rates/tariffs	Mixed demand; inventory constraints; sensitivity to rates (Q1)	Demand strengthened post 9/18 rate cut, then resilient even as rates ticked back up; uncertainty from tariffs/deficits highlighted	Cautious; volatile macro
NAR settlement / buyer agreements	Prepared for rule changes; Sign & Save boosts close rates ~20% in pilots (Q1)	Integrated fee agreement into tour flow; management surprised buyer agent fees often similar post-change; consumer-friendly approach	Managed transition; neutral to slightly positive
Competitive ad spend	Pulled back on mass media in 1H; focus on efficiency (Q1)	Homes.com ad surge pressured traffic/share; plan to step up 2025 media as cost structure improves	Turning more offensive in 2025
Rentals strategy	Positive EBITDA; focus on SEO and marketplace growth (Q1)	Listings up sharply; net bookings rose to $6.0M; plan more ad spend in 2025	Positive; scaling

Management Commentary

Strategic posture and accountability: “we’re emerging from a year of record low U.S. home sales ready to go on the attack” (Kelman); “I owe our shareholders an apology… we fell short of our goal” (Kelman) .
On Q3 variance and one-time costs: “volumes were lower than we expected… additional costs… particularly related to [Redfin] Next… and [closing] our home repair service” (CFO), quantifying ~$3M restructuring not in guidance .
Margin trajectory under Next: “Real Estate Services gross margin is expected to be approximately 29% and up more than 600 bps YoY in Q4… Next agents’ earnings are more volatile, limiting margin pressure in summer and improving margins in winter” .
Demand/market: “Home buying demand significantly strengthened since [9/18]… buyers… unflinching as those savings disappeared… uncertainty around tariffs/deficits” (Kelman) .
Growth investments: “Pairing our sales machine with more advertising should let us grow faster in 2025… increase ad spending significantly from 2024 to 2025” .

Q&A Highlights

Profitability path and marketing: 2024 EBITDA range widened by Q3 miss; management will fund 2025 ad ramp with cost efficiencies and benefit from 2H’24 cuts annualizing in 2025 .
Redfin Next expansion: Early indications consistent with pilot gains; improved close rates (esp. luxury), higher agent census, fewer managers/support costs to boost margins; hiring “hundreds” of experienced agents .
Share dynamics and competitive ads: Homes.com’s heavy ad spend and Redfin’s pullback weighed on traffic/share; plan to step up 2025 spend as attach economics improve .
Macro outlook: Management expects 2025 volumes to improve from 2024’s lows but flagged rate/geopolitical uncertainty .
Policy/regulatory: Company supports clear cooperation; integrated consumer fee disclosure in processes; sees neutral-to-positive implications as price transparency rises .

Estimates Context

S&P Global consensus estimates for RDFN were unavailable via our data connection at this time; we could not retrieve consensus EPS/Revenue/EBITDA for comparison. As a proxy, versus its own guidance: revenue finished within range, adjusted EBITDA was slightly below the low end, and net loss was worse than guided due to restructuring and Redfin Next transition costs .
We therefore do not present consensus beat/miss figures for Q3 2024; lack of S&P Global data mapping prevented retrieval.

Key Takeaways for Investors

Q3 topline steady but profitability missed internal targets due to one-time costs and late-quarter softness; management has addressed Next program cost leakage and closed non-core home repair service .
Q4 guide points to a return to YoY revenue growth (+9–13%) and meaningful YoY margin improvement in Real Estate Services (~29%), aided by structural seasonality benefits under Next .
Cross-sell remains a core lever: mortgage attach 27% ex-cash (21% inclusive), title >60%; improved attach economics underpin a 2025 paid media ramp while keeping unit economics rational .
Rentals and “Other” are stabilizing and accretive: rentals revenue +9% YoY with >75% gross margin; title/digital profit growth supports consolidated margin mix .
Competitive environment (portal ad spend) pressured share/traffic in 2024; management intends to counter-punch with higher 2025 spend and stronger agent capacity under Next .
Balance sheet/financing: term loan capacity used to repurchase converts through 1H; debt stack and cash flows remain key watch items against the path to sustainable EBITDA profitability .
Near-term trading setup: watch for Q4 margin execution vs guide, seasonal benefits from Next, and signs of share stabilization/improvement as ad spend and agent hiring scale; macro rate path and housing turnover remain primary exogenous risks .

Supporting sources: Q3 2024 press release and 8-K ; Q3 2024 earnings call ; Q2 2024 press release (for prior-quarter comps and guidance) ; Q1 2024 call (for trend context) .

Redfin Corp (RDFN)·Q3 2024 Earnings Summary