Redfin, the residential brokerage that went public this summer in a closely-watched IPO, reported year-over-year revenue growth of 35 percent in the second quarter. Still, the company said it expects to once again lose money for the overall year.
Redfin pulled in $105 million in the second quarter, compared to $77.7 million during the same period last year. Net income for the quarter was $4.3 million, up from $1.4 million in the second quarter of 2016.
During the second quarter, Redfin closed 10.2 million home sales, compared to 7.5 million during the same period last year. It pulled in $101 million in brokerage commissions, a 33 percent year-over-year jump.
But Redfin CEO Glenn Kelman, speaking on an earnings call Thursday, described those profits as “seasonal” and said the brokerage “expects to lose money for the full year.” In 2016, Redfin lost a total of $22.5 million, with the bulk of those losses coming in the first quarter. This year followed the same trend; Redfin lost $28.1 million during the first quarter.
Launched in 2004, Redfin, which resembles Compass in its self-positioning as a tech company and its success attracting venture capital, aims to be a different kind of real estate brokerage. It hires salaried agents rather than the standard independent contractors, offering lower buyer fees and operating almost exclusively online. Before its IPO, it raised $170 million from investors (Compass has raised about $225 million.)
So far, it’s had a successful run in the public markets, despite skeptics warning that the company is only pretending to disrupt the industry and warning of its decelerating growth.
On its first day of trading, Redfin’s stock price soared 45 percent from $15 to $21.72, giving it a market cap of $1.73 billion. Redfin stock closed at $25.06 per share on Thursday, valuing the company at more than $2 billion.
Even before the IPO, Redfin’s web traffic was on the upswing with 24.4 million monthly visitors during the second quarter, compared to 17 million in 2016’s second quarter and 12.4 million in 2015, the company said Thursday.
Kelman has talked about going after traditional franchise brokerages like Century 21, RE/MAX and Keller Williams. “It’s going to be a tough fight, but we’re in it for the long haul,” he said in August .
The industry has been watching Redfin closely, with many believing it will foretell the future of tech-enabled brokerage.