Executive Summary

Q4 2024 revenue rose 12% year over year to $244.3M; GAAP diluted EPS was -$0.29, below widely reported Street consensus (-$0.23 to -$0.24), while revenue modestly topped consensus (~$242.5M) — a mixed print with an EPS miss and slight revenue beat .
Management guided Q1 2025 revenue to $214–$225M and adjusted EBITDA loss to $39–$32M, citing ~$40M marketing spend and $21–$24M restructuring tied to the Zillow rentals partnership; real estate services gross margin expected to rise 150–290 bps YoY .
Strategic drivers: Redfin Next (commission-only agents) expanded nationally, lifting agent census (+25% vs six months prior) and expected to improve real estate gross margins in 2025; rentals monetization to accelerate post-Zillow deal ($100M upfront) with layoffs to reduce costs .
Investor reaction risk: Stock moved lower on below-consensus Q1 guidance despite operational progress, highlighting near-term margin/EBITDA pressure and restructuring charges as catalysts .

What Went Well and What Went Wrong

What Went Well

Fourth straight quarter of revenue growth (+12% YoY); total gross margin “held steady at 34%” and adjusted EBITDA improved YoY across segments in Q4, with rentals/title/monetization showing profit gains .
Title segment strengthened: Q4 revenue $9M (+58% YoY), gross margin 26.2% (vs 2.2% last year), adjusted EBITDA ~$2M (vs -$0.4M) .
Strategic positioning: “headed into 2025 with more demand, and a bigger and better sales force… agent census now 25% higher… expect real-estate-services gross margins to improve year-over-year throughout 2025” (CEO) . Rentals partnership with Zillow and $100M payment enable +38% ad spend while aiming for full-year adjusted-EBITDA profit in 2025 (CEO) .

What Went Wrong

EPS miss and adjusted EBITDA controversy: PR/8-K headline claimed adjusted EBITDA +$2.9M, but segment reconciliation shows total adjusted EBITDA -$2.85M and CFO said adjusted EBITDA loss ~$3M due to higher-than-expected agent pay — a discrepancy investors will scrutinize .
Real estate services margin contracted: Q4 real estate services gross margin 21.9% (down ~60 bps YoY) driven by higher personnel/transaction bonuses; brokerage adjusted EBITDA remained negative .
Near-term guide soft: Q1 2025 revenue down 5% to flat YoY, adjusted EBITDA loss guided larger ($39M–$32M) on marketing increase and restructuring; rentals revenue expected to decrease as model shifts to lead payments, though profitability expected to more than triple run-rate .

Financial Results

Headline Metrics vs Prior Periods and Street

Metric	Q4 2023	Q3 2024	Q4 2024	Q4 2024 Consensus (proxy)
Revenue ($USD Millions)	$218.1	$278.0	$244.3	$242.5
GAAP Diluted EPS ($)	-$0.20	-$0.28	-$0.29	-$0.23 to -$0.24
Total Gross Margin (%)	~34%	37%	~34%	—
Adjusted EBITDA ($USD Millions)	-$13.5	$3.9	-$2.85 (see note)	—

Note: Q4 adjusted EBITDA shows conflicting figures — press release/8-K narrative states +$2.9M while the segment reconciliation totals -$2.85M, and CFO described a ~$3M adjusted EBITDA loss due to higher agent bonuses .

Segment Revenue and Margins (YoY)

Segment	Q4 2023 Revenue ($M)	Q4 2024 Revenue ($M)	Q4 2023 Gross Margin (%)	Q4 2024 Gross Margin (%)
Real Estate Services	$132.9	$149.0	22.5%	21.9%
Rentals	$49.2	$51.6	77.5%	76.2%
Mortgage	$26.3	$30.2	4.6%	10.9%
Title	$5.8	$9.1	2.2%	26.2%
Monetization	$4.0	$4.4	—	—

KPIs

KPI	Q4 2023	Q3 2024	Q4 2024
Monthly average visitors (thousands)	51,309	49,413	42,680
U.S. market share by units (%)	0.78%	0.76%	0.72%
Average number of lead agents	1,744	1,757	1,927
Brokerage transactions (units)	13,075	13,324	11,441
Partner transactions (units)	4,351	3,440	2,922
Mortgage originations ($M)	$1,110	$1,214	$1,035
Mortgage originations (units)	2,786	2,900	2,434

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue ($M)	Q1 2025	—	$214–$225	New
Real Estate Services Revenue ($M)	Q1 2025	—	$126–$131	New
Rentals Revenue ($M)	Q1 2025	—	$49–$51	New
Mortgage Revenue ($M)	Q1 2025	—	$27–$30	New
Title Revenue ($M)	Q1 2025	—	~$8	New
Monetization Revenue ($M)	Q1 2025	—	~$4	New
Real Estate Services Gross Margin (%)	Q1 2025	—	17–18 (up ~150–290 bps YoY)	Raised vs prior year
Total Net Loss ($M)	Q1 2025	—	$(94)–$(83); includes ~$40M marketing, $21–$24M restructuring, $15M SBC, $9M D&A, $6M net interest	New
Adjusted EBITDA ($M)	Q1 2025	—	$(39)–$(32)	New
Total Marketing Expense ($M)	Q1 2025	—	~$40	New
Restructuring Expense ($M)	Q1 2025	—	$21–$24 (Zillow partnership & Jan RIF)	New
Total Revenue ($M)	Q4 2024	$237–$247	Actual: $244.3	Met (in range)
Net Loss ($M)	Q4 2024	$(32)–$(25)	Actual: $(36.4)	Lower than guide (miss)
Adjusted EBITDA ($M)	Q4 2024	$1–$8	Actual: -$2.85 (see discrepancy note)	Miss

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 2024)	Current Period (Q4 2024)	Trend
Redfin Next (commission-only) & agent hiring	Piloted in CA; planned nationwide; agent census to grow; margins neutral to better over time; focus on support cost efficiency	Nationwide rollout completed; agent census +25% vs Q3 avg; higher-than-expected transition costs weighed on Q4 EBITDA; expect gross margin improvement through 2025	Scaling; near-term cost friction; medium-term margin uplift
Marketing spend & demand generation	Preparing larger campaigns; breakeven FY adjusted EBITDA targeted via self-help	Q1 marketing ~$40M (+$15M YoY); +38% 2025 advertising enabled by Zillow $100M upfront; January demand +5%	Aggressive spend; demand lift emerging
Rentals monetization & Zillow partnership	Rentals integrated; positive EBITDA; traffic investments planned	Shift to Zillow lead-pay model; Q1 includes ~$2.5M deferred revenue; rentals revenue to decline but EBITDA to more than triple run-rate post-transition; ~450 layoffs to reduce costs	Lower revenue, higher profitability
NAR settlement & buy-side fees	Expect fee compression; strategy to trade margin for volume via Sign & Save; attach rates key	Early data: negotiated buyer fees often similar to pre-settlement; plan to drive share if consumers become price-sensitive; title attach >60%; mortgage attach ~27%	Mixed fee impact; focus on bundling
Macro/interest rates & housing demand	Unusual nonresponse to falling rates; cautious 2H guidance; self-help focus	Expect slow recovery; inventory up; regional divergence; buyers/sellers balance volatile; demand +5% in Jan, but 2025 rebound uncertain	Gradual recovery thesis; execution-driven growth
Title & monetization segments	Strong title attach and margin; monetization growing ads & lender marketplace	Title margin 26.2% with $2M net income; monetization revenue $4M and ~$3M net income	Continued strength

Management Commentary

“After recording our fourth straight quarter of revenue growth, with profits improving year-over-year in every business segment, we’re headed into 2025 with more demand, and a bigger and better sales force… we now expect real-estate-services gross margins to improve year-over-year throughout 2025” (CEO) .
“Our adjusted EBITDA loss of $3 million was below our guidance range due to higher-than-expected pay for our real estate agents… every business improved fourth quarter adjusted EBITDA from 2023 to 2024” (CEO) .
“On February 6, we signed a rentals partnership with Zillow… The $100 million payment… strengthens our balance sheet and partly funds a 38% increase in 2025 advertising” (CEO) .
“Real estate services gross margin was 21.9%, down 60 basis points year-over-year… driven by a 700 basis point increase in personnel costs and transaction bonuses, partially offset by a 380 basis point decrease in home touring and field expenses” (CFO) .
“Total revenue [Q1 2025]… $214–$225M… adjusted EBITDA loss… $39–$32M… rentals revenue will decrease, but expenses will decrease even more… adjusted EBITDA… more than triple on a run rate basis” (CFO) .

Q&A Highlights

Marketing timing and profitability: Management is “advertising early” to capture peak homebuyer interest; aim for “significant adjusted EBITDA” in 2025 with cost savings offsetting higher media spend .
Agent census and ramp: Current lead agent count >2,200 vs 1,757 Q3 average (~25% increase); experienced agents shorten ramp and outperform at “meeting customers and winning offers”; ramp to revenue ~4–6 months .
Rentals revenue trajectory: Expected to decrease meaningfully (shutting digital services and lead-based payments) but not “90%”; profitability to improve materially post-partnership (Zillow handles cost of sale) .
Clear Cooperation: Redfin favors broad listing visibility; expects listings to be posted to large sites given consumer interest; sees stronger listing demand, enhancing industry leverage .
Redfin Next economics: Mix of self-sourced vs Redfin-sourced sales largely as expected; entitlements cut to offset higher costs; managerial/support efficiencies targeted to improve margins .

Estimates Context

S&P Global consensus retrieval was unavailable due to missing mapping for RDFN in the CIQ database; therefore, comparisons use widely reported third-party consensus (Seeking Alpha, Nasdaq/Zacks). Values retrieved from S&P Global were unavailable.
Pre-earnings consensus proxies indicated EPS of -$0.23 to -$0.24 and revenue ~$241.5–$242.6M; Redfin delivered EPS -$0.29 (miss) and revenue $244.3M (beat) .

Metric	Consensus (proxy)	Actual	Surprise
Revenue ($USD Millions)	$242.5	$244.3	+$1.8M (beat)
GAAP Diluted EPS ($)	-$0.23 to -$0.24	-$0.29	-$0.05 to -$0.06 (miss)

Key Takeaways for Investors

Near-term setup: Expect Q1 2025 to be weak on headline profitability (large adjusted EBITDA loss and restructuring), with ad spend front-loaded to capture spring buyer demand — a potential negative catalyst for EPS but positive for demand KPIs later in the year .
2025 path to profits: Management targets “significant adjusted EBITDA” for 2025 leveraging higher-margin title/monetization, improved real estate services margins via Next, and rentals profitability under Zillow lead-pay model — monitor conversion, attach rates, and margin mix .
Watch for execution on hiring and ramp: Agent census has expanded materially; the 4–6 month ramp implies sequential improvements in close rates and margins by Q2/Q3 2025 — track brokerage transactions per agent and real estate services margins .
Segment resilience: Title and monetization segments are delivering outsized margin gains; sustained performance can buffer brokerage cyclicality and improve consolidated gross margin quality .
Estimates adjustments likely: Street may cut near-term EPS on higher marketing/restructuring yet lift medium-term EBITDA forecasts if demand, attach rates, and margin improvements materialize as guided .
Narrative movers: EPS miss vs revenue beat, Q1 guide softness, and the adjusted EBITDA discrepancy warrant caution; expect stock volatility around margin progression and demand indicators (site traffic, tours, attach rates) .
Strategic optionality: If buy-side fees compress in 2025, Redfin’s price/value positioning plus bundling (mortgage/title) may enable share gains — a medium-term thesis centered on execution, scale, and monetization .

Redfin Corp (RDFN)·Q4 2024 Earnings Summary