Despite revenue uptick, Redfin posts $60M loss in Q1
Forced virtualization of real estate gives company an advantage, Kelman says
Redfin posted a $60 million loss in the first three months of 2020, a period in which the company’s revenues and expenses grew dramatically before crashing in March amid the coronavirus pandemic.
The Seattle-headquartered residential real estate brokerage and listings website reported a 73 percent growth in revenue to $191 million, compared to the first three months of 2019. During the first quarter, the company continued the expansion of its instant or “iBuying” platform of directly acquiring homes on its web portal and selling them.
The sales jump, though, was countered by additional operating expenses in new technology and marketing campaigns.
What – if any – significance these numbers portend for Redfin’s future is unclear.
Company founder and CEO Glenn Kelman outlined a preliminary coronavirus recovery strategy during a Thursday afternoon earnings call that included a limited reintroduction of Redfin Now, the company’s iBuying platform that Redfin suspended suspended in March.
Kelman said Redfin will reopen the platform in Austin, Denver, and “east of L.A.,” and provide “lower instant offers” than before, with the idea a large volume of sales can help jumpstart revenue.
The CEO, though, made a point of saying iBuying is one weapon in the company’s arsenal, repeatedly chiding a market analyst who referred to Kelman as “bullish” on iBuying.
Redfin’s announcement comes three days after OpenDoor said it would resume iBuying.
Redfin closed March laying off 400 employees, or approximately 10 percent of the company’s workforce.
Kelman also placed approximately 1,000 employees on furlough including salaried agents, who the company head said were better off collecting unemployment benefits.
In a statement accompanying the earnings report, Kelman expressed optimism that the company’s foray into iBuying and other tech-focused changes could weather the pandemic.
“Real estate commerce has probably virtualized itself more in the past two months than it had in the prior 20 years. This makes Redfin’s technology advantage over other brokers more important than ever,” he said.