Redfin Corporation (NASDAQ:RDFN) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 04:30 pm ET

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Redfin Corporation (NASDAQ:RDFN) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, and welcome to the Redfin Corporation Q2 2020 Earnings Call. Today's conference is being recorded.

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

Executive
Elena Perron

Thank you, Casey. Good afternoon, and welcome to Redfin's financial results conference call for the second quarter ended June 30, 2020. 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 today and we don't undertake to update these statements in light of new information or future events.

During this call, the financial metrics will be presented on a GAAP basis and include 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 second quarter revenue net loss were better than we projected in our last earnings call. Revenue was up 8% from the second quarter of 2019 to $214 million. Losses narrowed from $12.6 million in the second quarter last year to $6.6 million in the second quarter of 2020.

RedfinNow, our business of buying and selling homes on our own account, grew revenues from $40 million in the second quarter of 2019 to $72 million in the second quarter of 2020. Over that same time, our other businesses, primarily lending and title services, grew 37%.

In our core business of brokering home sales through Redfin agents and through other firms' agents working as our partners, revenues declined 12% compared to the same quarter last year, but those declines were confined to April, when core revenues fell 28% compared to the same month last year, and to May, when core revenues fell 17%. In June, revenues generated by our own agents and by our referrals to partners' agents increased 4%.

Our market share decreased by one basis point from the second quarter of 2019. The loss is due largely to the high proportion of sales Redfin gets from western parts of the U.S. that almost entirely shut down in March and April.

But we also need to hire more agents. Our commitment to employing agents lets us set pricing and service levels and safeguards the welfare of many of our workers, but that commitment also limits our brokerage capacity when demand spikes, as it did