Redfin Corporation (NASDAQ:RDFN) Q3 2019 Earnings Conference Call Transcript

Nov 06, 2019 • 04:30 pm ET

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Redfin Corporation (NASDAQ:RDFN) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day and welcome to the Redfin Corporation Third Quarter 2019 Earnings Call. [Operator Instructions].

At this time I would like to turn the conference over to Elena Perron. Please go ahead ma'am.

Executive
Elena Perron

Thank you Brandon. Good afternoon and welcome to Redfin financial results conference call for the third quarter ended September 30 2019. Joining me on the call today are Glenn Kelman our CEO; and Chris Nielsen our CFO. You can find the press release on our website at investors.redfin.com. Before we start note that some of our statements on today's call are forward looking. We believe our assumptions and expectations related to these forward-looking statements are reasonable but our actual results may turn out to be materially different. Please read and consider the risk factors in our SEC filings together with the content of today's call. Any forward-looking statements are based on our assumptions to date and we don't undertake to update these statements in light of new information or future events. During the call the financial metrics will be presented on a GAAP basis and includes stock-based compensation as well as depreciation and amortization expenses. In the event we discuss any non-GAAP measures today we will post the most comparable GAAP measure and a reconciliation on our website. All comparisons made in the course of this call are against the same period in the prior year unless otherwise stated.

With that let me turn the call over to Glenn.

Executive
Glenn Kelman

Thanks Elena and hi everyone. Redfin's third quarter revenues and net income were better than we projected in our last earnings call. Compared to the third quarter last year revenue was up 70% $239 million and net income was up $3.3 million to $6.8 million. And our core business of brokering home sales through Redfin agents and through other firms agents working as our partners Revenues increase 22% compared to the same quarter last year. This was an acceleration from the second quarter 17% year over year growth. The first quarter is 15% growth and the 13% growth in the fourth quarter of 2018. Our share gains also continued with 11 basis point game from the third quarter of 2018. This is the same year over year game we saw in the second quarter, and an improvement on the 10 point share gains we saw in each of the two quarters before that red 10. Now our business the buying and selling homes on our own accounts grew revenues from $11 million in the third quarter of 2018 to $80 million in the third quarter of 2019. Over that same time our other businesses primarily lending and title services grew 92% an acceleration from the second quarter's 89% year-over-year growth and the first quarter's 59% year-over-year growth. Perhaps most important third quarter gross margins improved year-over-year in all of our businesses.

Year-over-year growth in the average monthly visitors to our website in mobile applications moderated from a rate of 27% in the second quarter to 22% in the third.