RDFN - Earnings call transcript Q1 2020

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Operator

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

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

Elena Perron

Thank you, Brandon. to ended results March welcome the call and quarter first XX afternoon, Redfin's conference financial for Good XXXX.

our Joining are me Nielsen, Glenn today CFO. Kelman, our on CEO; and the call Chris

on find can at the release You our press investors.redfin.com. website

out our Please in reasonable, Before call our of on results but our and our are we in these factors read to undertake filings together forward-looking and are future turn content risk believe today's consider these our expectations We light actual don't SEC with statements related the information some or and events. to looking. today's statements statements forward-looking start, the different. that new to update we assumptions Any note call. be of of assumptions based materially forward statements on may today, are

will the During metrics today, this most as the GAAP comparisons course otherwise prior our non-GAAP unless discuss presented basis as the on made on the in and and website. of any include measure post year, be event amortization a will well a comparable are stock-based period expenses. in In All against compensation stated. we depreciation this same the the call and call, that we financial reconciliation GAAP measures

approach call, format. new locations. virtual this patience For we're from work taking through this and separate as in dialing a We we appreciate your

let that, to turn the with me over And call Glenn.

Glenn Kelman

$XXX was revenues XX% million. first to net our than Redfin's Elena, were quarter quarter earnings projected and last first of from and up everyone. hi, Revenue Thanks, in we loss the XXXX call. better

firm's $XX XXXX. in quarter XX% working $XX core the as partners, sales increased compared from of In last brokering to Redfin through the losses our first Despite year some year. onetime costs, of other million and in agents unusual quarter the through home agents same business revenues our last quarter first million to narrowed

now, Redfin of quarter million the to buying Over selling XX%. over that title in XXXX. basis lending account, other time, our homes the first primarily and first our own XXXX Our first services, businesses, on $XX XXXX. increased points of XX by from share the our of and business in quarter market and quarter of grew revenues same million $XX grew

On leave $XX April X, Durable million of up. Capital convert $XX common that common stock and million preferred $XXX another price Adding if we stock million our stock our bought to stock gave in the this government can in balance XXXX. XX goes to March us due $XXX cash convertible including million XXXX. our That in us securities, should in are money million enough to and notes that weather through $XXX pandemic

last Chris the make easily have was March, I decide to real of in to to money. habit our heck stock. shape our to weeks just distrust raising break but obligation and all sell and the growth business has sure estate's didn't Already, loose raised improved since Redfin losing We money. resources has and companies' survive with we not first to But more come future. of X

demand buying was about for January February adjusted For and at levels, on home ending of week X, XX% the April our seasonality.

of were we my through were On furlough XX% August to on XX X, employees our left April going permanently. leaving a friends. All would XX% my layoff, which of announced Many and people lead responsibility. the who

normally to selling united the within Redfin bring until we've writing To ask long us surprising when and the customers serve, nothing those for. grates, range was how was we almost own the calling to to best The responded a rightfully anthem recently. thank our were how Some behind angry, has estate, furlough employees partners to thank has never moment Redfin at our expanded religious of having real would that many knew the agents but was we workforce back. celebrated true them had handle. that to but company in $XXX,XXX end, homes what

profit serve would We referral. customer more who won't a we'll a a through at serve loss, but generated have sometimes customers

return. our Starting demand in at been weeks. our May and of of so improved talent furloughed honor immediate to priority profits. This Our asked service X, a and, XX% expense we for come years. has demand to and home X was of can we May future level. culture gross X, on extent, the margins its XX% By buying April retain of X, employees adjusted seasonally January lesser has straight Already to to at has February gross grow

of the the new an including home But last with is were Comparing an though buying the down each with completely nearly a listing some return the from year, U.S. homes pre-pandemic the listed demand down were has from not. sales join furlough, trough will fray. unusually increase, listings, May listings of new ago large weeks customers. have market-wide, number more that same X even to is demand working agents soon has Even challenge returned ending week agent when levels, improvement X by to with is week XX%. This XX%. to for every broker, The sellers

online April, customer have XX% appeal of buyers. be home, April video of our offers rates, X% a seem in-person to customers jumped in we chat success following video and on March, deals video to tour The was by that tours the lowering buyers competitive. request less chat chat percentage the worried only but Spurred our tours, The serious for competition. a written to offers in are more rates. already would low hunt X/X and are about With tour to had than asking for rather casual glad nearly buying

who acceptance March rates other homebuyers all home were video offer saw chat, to from via those comparable For buyers.

customers have a XXXX rate new and until also wait we measure we complete met seem Service to March we months in rate gains. had for for the months and October X September success than X now of of improvements can't met a was of homebuyer customers February success the we XX higher Because in XXXX. to successive rates. customer we success sale, lifted first the is success before. customers But rate X This know that rate months years these the time we've

Even that believe reason of to drop after home continue. to for buyers these we pre-pandemic out can, gains their have search, allowing some better,

For bonuses listings or increased. that we serving customers customer homebuyer of Any homebuyer Early the prepare the customers of numbers eager rates met XX%. asking gross their us. now search A follow-up don't starting for to XX seem from cost in as margins can stores service success significantly first all have gain X include Redfin measures to is more redfin.com lift will days XXXX, our or agent increased an rate intent likelihood close. within April 'XX March, who their browse besides home in reconnect even ask with new to hear variable offer. customers April Redfin's largest sales From on

a those homes for sale. run the out this divorce, homes In declined even lives customers year, shifting selling and to difference a But XXXX, terrible XXXX, can between market, from they units folks March uncertain forever. why XXXX put will to wait are months, the difficult XX%. latter from to their between their market for recent up financial After a U.S. is depths choice. defer crisis people to in a only for category to who soon in a need and of to the number or only and a move listing April the a of but market the move no People's won't want XX% From a job stage buy. their birth, unavoidable April maybe or million who new homes June. X.X ones May next sales difficult people just market, of home million or uncertain terrible homes We're a of varied April XXXX market. have X in the sale the to housing units, of home the bull great their In and

will the by to into XXXX Comparing If exception homes price X%. buyers sellers overall the drawing home April under sale increased because likely are demand improving, it the for in conditions median The XXXX, market. be strength April been to career sell. their The $X million jobs. lost are earlier in likely single family have to hard demand are of their properties properties have entry-level most greatest these condos, are the mid-priced in homes. which buyers and to keep The

even feet to may gloves. be showings. Redfin In scheduled own a these A like aren't listings we're the Bring hosting your and get tape Joe's reported and hearing markers sidewalk, from L.A., listing now. There times Trader some there apart on waiting of mask agent agent that in. are XX

bull as homes quickly Overall, as the in in sell market. to a pandemic are just likely

of weeks XXXX in March percentage you within XX%. at and the look X listings offer debuted same debut XX If between accepting approximately XX at and XXXX, was the an that April their

preferring discount who until buyers that XX% delist a wall of run some a report into agents sellers pass. their brick shelter-in-place to orders Our home expect now with

buying continue most are very get can distressed soon will which in happen in year. wars likely summer, all. the half market the could at the this to listing inventory months and reach If We rock draw of home cities, mortgage early thus more a significant expect in and Because bottom more North to into homeowners trends than this possibly sellers second forbearance, American bidding up increase as month. as in XXXX XX sales XXXX, of if

affordability towards a was cities. smaller to for driving crisis large pandemic, to people shift We're housing already cities also small. preparing Prior seismic from the demographic this

even quarters like Madison. More San close visit, York Now a accelerate in and work and that more Charleston, office for remote wariness life for weekly likely Sacramento nearby support Boise, others Seattle, a Tacoma remote about a rising towns permissive completely Bozeman leave people close that to Francisco, some are policies and or will enough New will around trend.

for cities Since only up XX,XXX March -- populations the same XX%, in under under population XX,XXX excuse by for and while homes X period, increased than searches million homes me, increased towns searches XX%. people, XX, greater over with with

listing low to of customers offer Beyond major to The also This who for the is their buy fee with home. X.X% alternative. to channels, sell long a way who standard gain sales agent. starts Redfin only use only listing term a or Redfin traditional with Redfin. homeowners a is X.X%. better X% is new X% is for their fee giving share than home by listing choices best next fee brokerage customers the

to half less paid that, December. nationwide pricing about remaining The about this new Prior pricing our instituted more. tested and the customers listing XX% XX% in paid We early.

prediction a transaction supported revenue transaction. only March the we through offset than This made will pricing quarter. listing increased results last modest by per on more impact have Our growth,

the financial choices homeowners give fee. still beyond made increase of listing prices to low standing decision prudence. about service why listing full service out acquisitive But a we is we're share. on We our This at

own and their finger. prepare Service, to Our reaps the Concierge home to top responsibility include Service RedfinNow more original and she home choices instant or With offer sells have from for and With from RedfinNow lift both Redfin risk returns sell. and Concierge home returns, With repairs. RedfinNow, a sell staging the an reap our a takes renovating for Concierge owner dollar. it to we to doesn't but Service, still bears when the the rapidly

As but an choices as both having is when But to people is Concierge sense be our services or it that why is many one to Service. to maintaining bet This home. of enough when we've Xx a X options downturn, customer. will of as a well only said choose consider cost people of home, RedfinNow will for several it vacant each of low instant the before, makes owning full listing offer account also in presented selling sell their that

we when and buyer to in institutional higher-margin the at balance our of will Now on Redfin the turning. risk homes, market's challenge were pledge first to lower homes our about sheet. honoring data, act be only brokerage quickly We our Based major competitors. stop than to buying defense buy have

to day of the $XX that million $XX of came million. is Most credit. 'XX, we million contract in the of buy we mostly making to we On reduced $XX our under million under that March number or of XX days. XX, $XX homes that stop next offers, in to sell, $XXX had from were homes. contract owned April line By million

we gross finance, only prices buy, or XX, less the sell the paying and RedfinNow's less. expect hold, make to For for After We profit sales $X million paying the the total of project about of we of parties price homes owned employees X% we these project or sale to a we when still and the up a reduced be these $X offer. making will cost in cost March homes ended renovate to loss. third buying that million. nearly result as than homes, assumed now It's

RedfinNow is than from in do. learned had in feared. we performed better bones else some Everything our we stuff to these had a we knew was results already that downturn that What

walls it's of offices. Now just scratched into home the our

First, in a for occasionally lower our make to compensate sell downturn, discount also to offers our having on X% to at more now. money a instant instant offers portfolio us to X% but

expanding rationales profit enough on Second, Scale lever, for squint harder the of make for money economies scale do a pay it at for doesn't that discipline. each team, but renovation pricing doesn't important most and a projected will and managers other business house. much

X makes Third, can decide holding X our times, long avoid it. limits work is and within of whether we offer money harder profitable to also so This an months risk. making

a keep every present complete lower our to force our to and customer. of competitors Fourth, costs unify to set our options than sales

these and using inland Empire $X L.A. We'll we leaves purchases of mind, today, reopened in own Austin, May million money, of the for With which RedfinNow limit RedfinNow for lessons purchases. East Denver million our in $XX

can than Counting homes we in the of before. our pre-pandemic mostly we'll through starting report credit. liquidity back quarter, By At we on profitable. still earnings projections point offers We'll May the I market, to nearly haven't own expect on least on second weeks. homeowners be whether financed than fewer ones offers all at X those which market premium XXX uncertain pay purchases may, are line we'll quarter If and will for RedfinNow of which today, using lower should the likely a accepting buy our know have July, an the sold we for call. to second purchases our project we

on The have questions our for how sales never than time more we offers our just our to eagerly fortress homeowners we'll purchases with we force, To we prepare put to to Solitude. will offers RedfinNow interest and as RedfinNow the of issue that brokerage The issue RedfinNow sales support anything been force. a employees offer. By from more present cash hasn't been responded answer customer customers the respond broadly, website reopen a interest. that analytical instant through has

other best to options better qualified an are Our homeowners. ones agents are the that alongside for present instant offer most

on than our sales XXXX, more force of more narrowly take instant Unifying rest offers. should will sell competitors but houses the let focused us

to makes as our X it all as is rationale at everyone Our as to X goal: having possible for houses that have sales force easier few for home selling sell company as our services many owning while possible.

go Southern a through selling who San instant but Seattle, an Concierge Washington, want is consumer to available be mid-priced preparing or drawn to will It's be to our Any expensive offer, consider in want homes to the D.C. Francisco, hassle home also doesn't to California today sold and of Service. many likely

work a using X% sale. all we done, the bills, gets For on a pays advise our from sure the listings or the shy homeowner through market, contractors The homeowner and or on own listing the to superintendents. of fee the often how money renovation home make her depending make X.X% either

making Customers for have the homes after by agent's of fundamental before through because photos for even homes good. both and of It's how Redfin's digital look so better to but personal convenience the marketing not buyer. loved homes fixed show jaw sell the more The service just we its this an potential up through salesmanship but a or to also truth a money. illustrate home dropping

homes a weeks. the organizations minor that X been so of and ready get has we most or market on the renovations can field in programs, for software range building operational, X contractor to deliver challenge wide Our relationships demand

from the now we RedfinNow of team hit, markets pandemic XXXX services to XX of ahead Service Concierge prioritized Service. we've XXXX. assembling first and this since been start Service Concierge Until the to expand The expect home is our priority, XX by Concierge

we're expect their Redfin, low-fee a the but glitches, XX% demand. California, a by to as Though Oregon website in products may we long-time website refinancing. business we markets realtor other homebuyers broker customers Mortgage. a in also wary the The our expect the so are State, get also in still without had mortgage in few reach service in serve But served Today, rates. a pandemic, promotion, we of calls we of we but by vast Prior some offer rapidly in In week, are our ditching like majority many Redfin week open more be XX% states in choosing lender. price the Arizona, any sensitive cash this XXXX, is Redfin that's expanding of advisers we'll brokerages piloting we for offer. year-end. from planned Washington visitors and to Redfin Even to our on lower every seeking Mortgage

could and raised investment Mortgage a our we have XXXX grow loans most second in to we from to be to plummeted of loans We origination forbearance that borrower that loans repurchase our April Redfin requirements We've a as conform margins gross for been homes the to reserves also on lending for in Even due We unable want so software. margins increased improve, to hasn't loans would investors. we volatility. improvements market for federal ask sell significantly worried standards, for the likelihood we'd the the to payment reduce that for we loans, credit to before properties. loan. we and Mortgage March suspended significantly from revenues, due jumbo margins Even But improved too. far, XXXX some that own case. sell loan to but

in expected, than mortgages. in costing the But investors home-buying even have many the for their lock for our prices us low paying pay would much sell of on nearly our prices able over After we we've that fears to loans schedule, loans would customers lower declined million and March, $X been people revenue. February rates been loans though these stop

mortgage-backed At these when fell. mortgage-backed we from for $X. investors This dollar for government like but later we keep or lenders our investors that XXXX our many noticed that late February, the in this loan us starting but sufficiently to of on our bet price like processes prices lower onto when investors improved. our more revenue loans. offset But buying or securities. to less we the up prices. temporary. point less prices, risk, shift it's securities this now against in to go we'll we the lose pandemic and betting April our respond rate is only Typically, have make reporting risk still X escalating mortgage-backed when the and revenue during regardless was encouraged risk originators whether Redfin stand assumed, took paid buying declines When It inflated unprotected When revenue down. XXXX, value some supposed securities because to loans loan to again of securities hedging for in who interest left by loan, was risk interest wasn't until changes buying hedge take increase largely by predictably but the got the loans same of in only rate per We values maybe rates

avoided or but because digital and about and over between TV We we between work tours and then, X-dimensional advertising. should to is $XX scans we rates in worried on Before April March XX. can't for market largely on TV XX%. unaware spending. that Chris, running stopped stopped we've when We -- ads consumers the March XX%, our on people our many turning talk X ears, ads would and million deaf call fall in and also save XX% are noticed viewership up fine our message Since March To we open that is between the video suspect XX% are but housing chat down completely person. meet is business the money that

technologies these promoting well digital tests. in performed have Videos

this spent a quarter running world. the unknowns ahead that lots will have happened February. decade of could be us $X Investors advantage technology million of in hoped decade Changes taken at in new ends, the Even when cost a ads second home this buying building a massive June, of far would be pandemic selling Redfin overnight. gives almost consumer and There a that of or So virtual and than less. new May we'll we've process for us. in have in rightly are competitive more a assume behavior

own fat close But crawling stake in asteroid We the isn't public Seattle to a the door tours what our on It's citing were first want to advantage we listed able to their March is to past. company with protect or an publicly first did for listings to to the day on big houses in change. strike. anyone We is the now. listing for were often crater most markets, X. crucial we significant family. across to From XX-plus was are via these the guidance were a we're to our being first iPhone of rules chat March a with redfin.com's demand offer is new of self-service on the of what provide Matterport of hour The to tour we X-dimensional to own to the open fast, the company estate And March updates our in on market the to hour. to of also out the vacant buyers fourfold. brokerage home consumer homes XX. biggest valuable scans encourage in first of upgrade XX, major had little video crazy from our the real-time an our how On our nationwide with wary When outside competitive changing commerce by all reacting to by scans else February in first website first to day but world who agent on your X. April, a cancel to real just owned to It's incumbent. fast mammal, X. map March this Being April decide April were customers the XX. were you ability policy promote and health increased We to changing were isn't open Redfin drop on on call its customers X. first We on homes homes offices field March the a is

that many to here. don't could most came fallen are months this from of many ran time grinding when firsts to apart have so few discuss we is What's halt. together There other culture world and important the a the have a past that came faster company when parts

With that, let's hear from Chris.

Chris Nielsen

Thanks, Glenn.

As close the Glenn early-stage delivering on mentioned, prior start the demand, to the growth. was United first quarter strong we good to deals profitability. very guidance January saw February the onset Even of States, COVID-XX impact a a with already in virus we and off solid limited range get the we year revenue above both saw pace quarter on and the pipeline our and somewhat at the impact overall in finished as its if

brokerage estate services our our was million ago. revenue ago. Real revenue XX% $XX transactions. year XX% generated which by from revenue, up which million, million homes Revenue home from in agents partner or sold partners Brokerage our brokerage partner on RedfinNow businesses, revenue, XX% from includes The on own our was year through closed quarter a First XX% XX% X up growth XX% and segment, year-over-year. a a from consists $XX was of property increase transactions. in up up in revenue program, sales $XXX grew

million, mortgage, XX% year-over-year. services, of of and increase other an segment, contributed which includes revenue other Our title $X

decrease consecutive up and revenue. XXX% point by million, each profit year-over-year. tour in improving primarily was services productivity the Real Total field quarter up year-over-year, as point in was driven with percentage of estate same a basis was points of This gross as in the XXX a basis $XX fifth as personnel a XXX agent XXX gross costs, costs XX.X%, well year. compared the basis decrease as quarter margin prior

mortgage in gross purchase point was of X basis basis points XX.X%, his a year a Other X.X%, home had of primarily XXX Properties improvements, and ago, of a decrease up gross from in by in costs ago, a a each personnel and X,XXX percentage minus points margin point related year XXX basis our as minus Glenn driven as decrease costs by capitalized X revenue. driven discussed decrease margin comments. from basis primarily segment business, XXX

were development XX% and year, expenses personnel expenses of represented of down grew XX% campaigns operating increase while expenses suspended in year-over-year by revenue X in administrative March. marketing last ago. costs. from an XX% and increased brand digital declined General driven XX% year XX% flat Total our as marketing we revenue, and from year-over-year Technology and and expenses

Our year including in $XX loss net a with loss was and per to an investment $X.XX another X and million We $XX depreciation, $X.X million charge compared stock-based Included first was loss, in of $X.XX per net to compensation for took million in in share first several net loss these compared COVID-XX. of company, $X.X net of home ago. our tech are inventory. the quarter share quarter of XXXX. Diluted results unusual driven related million we items part write-down impact recorded by the a a

of credit stock likelihood $X.X units compensation. hitting We also reevaluated on the and stock-based million recorded a targets performance

and second quarter be expected million of X% and the for between $XXX to million, is expectations year-over-year financial to Revenue X%. $XXX between decrease turning XXXX. Now representing

We $XX property expect our $XX to revenue. million segment of for account to million our

Net be quarter net second million $XX a expected in XXXX. million compared million the and loss of loss to $XX between with $XX is

revisions furlough costs It guidance are legal both includes of further of estimates. including of to severance $X.X $X.X million restructurings benefits. $X.X Our and settlements contains investments, costs, million depreciation guidance also that no concluded of among that amortization. million and approximately and no million acquisitions, are or compensation other things, The assumes, approximately and compensation there stock-based stock-based $X.X business additional

And with your that, let's questions. take

Operator

question from come will first Securities. with Our Instructions] Arounian Wedbush Ygal [Operator

Ygal Arounian

characterization? to touch you're the what's for then X you you and in? relatively on Would from Redfin you become staying what this that the expecting is California, since of I'm kind than Was heard you there the more piece more react ask ever quick learn And And business most on that Redfin? Can there on iBuying. fees higher I've changed bullish right the launched that something how well. the in can lower views the Hope been you've thoughts you pick all bigger you is to customers recent Redfin up? going over Anything opportunity offers. recently? environment? -- what Is think hopefully might time we iBuying Have that expect Direct pandemic? on should means, a I before particularly Glenn, And were on interested Direct, might going people your to essentially what in were -- ones. of that has think

Glenn Kelman

Thanks.

hard So it's with effects. all, separate improved to first from market Redfin for merchandising us of Direct,

and that event, hire and will they estate same and the they in online really going just that transactional, So gotten defer way have that we definitely long promoting to service, are But how more tours, work shifted think the just be also because market so homes an starting is changes aggressive or which at Redfin people are a see There the been have a we real final offers that can't tour to possibility X about looked offers. may result, and that only without excited Direct, the website more has be favor they've effects. to may those distinguish are more want agent. people as we on-demand at would X, more an our agent. about more and people X wait We're Redfin. And many to look very to people going

it won't RedfinNow said point that past. is on be sounded I rational. emphasize to be more second but RedfinNow, consumers option being what option. consider, excited is about I've the I more the that try now bullish I'm in And I'm about bullish what felt On than their always often best that think will should that the one market wondering that

had are You've so in I more much have is just we every much of now house to trying making that market money where And but us. money better competitive space focused on all for think a buy going on share, be people to that buy. been us

that feel now for proportion take share. our more players. higher don't all for better it's know will it more I error, lowering But We're margin sales But that going we're that, think going means to about don't RedfinNow I good think that. and ourselves give the is I to a offers. take that I of

Operator

will from The Oppenheimer. Helfstein next question Jason come with

Jon Braatz

for is on call the This Jon Jason.

gain driving a point in had Is increase? guys anything you'd the industry guys Redfin versus XQ. market XX offering? this you is that one, and call out is Where where self-touring. virtual of to in you share share to my basis think you in other is feature are then first regards there the question XX And smaller the So relative that rest a do

Glenn Kelman

virtual share with I'll and Chris about if talk invite Chris? about then to that's self-touring and talk you, all right

Chris Nielsen

It sound good.

Glenn Kelman

was agents real the their helped that capability. proprietary of the to can properties RedfinNow and without on us how agents is have the you buyers. in long homebuyers use has where preferred chat that application that brokerage from we let else something been it locks we door rapidly and estate working listing to present. with Most the that's they that property, easily let iPhone, and really time open video advertise just a adopting they a touring, tours. we've being March more insight has have capability could But on attract And buyers been Other a popular. Redfin see can a It's an at don't much able they something are applied don't install self-service into it for someone being ask One own to scale. an install seeing just those to on it anyone lock probably

to conversation built want there just that to listing the decade house. They want a really customers happened successful, you or the ago. been forward. a right that anyone lock that want people happens. to in when able the It be is, listen, to see depends don't to glad capabilities started with wanted on bring put we our door. and XXXX your And different away, XXXX to else that we're to so be which it we in we the there and building be has have that app on And We renovations

Chris, talk to do share? you want about

Chris Nielsen

Sure.

So points the of share first the first in quarter year. the to year gain last comparing of quarter was XX basis

really variety through to about quarter-to-quarter some terms a good going share our forward fundamentally at feel gain do gain in share on conditions. we gain. see our hasn't We of changed But ability different share all. view of Our prospects market bounciness and

So that. of a from conclusion draw I wouldn't too much

Glenn Kelman

later be I for should I should you comparison time, share the our sure reason, to be was that almost than not that it's attribute the saying And point cuff, going noticed over seasonal. to to whatever gain this say not to the something share any quarters or gains I'm yet always it just off seasonal. lower always. want just with not have to know is years. what quarter argued I of tiers year-over-year we've but analysts first let

Operator

The Brent next question from Jefferies. with Thill come will

Brent Thill

just curious last more you could just little weeks. I'm a X color give about if the Glenn,

most back can little And build. shift you terms of You continue dipping color Can and a us you'll you buying just mentioned were how encouraging get sense more what the give how as demand of toe the here the see your that to aggressive you in give signs? then again, in the just builds? water a demand on to you're us

Glenn Kelman

Sure.

I'm now There even sense it offer because they in to was at to for their when prepared really pull-through about really market win a about are strong. give going X was so color easy people home you leaving sure wouldn't been to home-buying someone what house. the we oats. that that it worried other months weren't not ago feel look we've that and homebuyers had and and to to their competition. It's that less when iPhone make the own now But X, to And be through the more pull they without a and home an people that those other What somewhat feel face offers, that So demand. futility the looky-loos probably are of or because was people video that won. compete serious they actually confident to chat it's use can were a who going than enough had X writing offers would is to against they just feeling they are write wouldn't that get tour, demand it time an XX earlier,

your about water. feel we how toe in just As was think the I for question about dipping RedfinNow, our

people I a pay think the liquidity. for real question premium just will is

on in the many sidelines right they'll are their now So or that in resume June have so put there place shelter May are market again. who worried sellers then and home on the

a they're it why charge out We iBuyer offer, when if and just we immediate And might pay risk and it. that inventory holding so market an what is instant to don't That's us think an that give know. that that falling And will the ask bear. to least them offer may compensate to fast, take premium is that for that for in they'll risk for so we just be out. ourselves risk, increase market the every find want we I But at the and going we're open shut. small taking them

homes. if $XX going we're just I'm can million, settle we're again, back. We're sound willing to coming I to interrogating RedfinNow. make. into $XX on people offer prices on reasoned so spend I And sound million but And to bullish myself. will hope Did see it the on I too

Operator

Capital will question come with The Yruma from Markets. Edward next KeyBanc

Kasey O’Brien

X for This is have ones. Edward quick O'Brien Yruma. I Kasey on

remain the return you're any today? what pricing can Also, And new using that more to will levels? as color on that when soft? percent First, normal agents versus is of lead give listings partner you

Glenn Kelman

Sure.

many tell we we can versus at So our partner beginning have. March, every we is the some furlough What we don't how agents employees, actually report or could have ourselves. layoff inquiry that of you the we we own I agents barrel when were many possible of staring of that to down lead having kept on how for

normally don't minutes were we've an has handling Since least uncertain homes more on keep and time. We want driving more focus normally bring was willing And brought customer, again a really to hour, meet our started $XXX,XXX that people busy. back picked also we've and $XXX,XXX demand to away handle down. furlough going just But is had send XX to some homes has, drive up. them and who everybody furlough, we to or try an it. demand because agents be back sending we of if people at then we home-buying demand than be and wouldn't to then, partners or to up $XXX,XXX from So sales XX when to and to such up, it's business a

week. taking week from of ourselves of to one as it's from to bit And market. almost insulate use risk, around we're our we bouncing for partners. it just in by At low to that was. that's So And quite it a but market also volatility lever demand the were we limit some to as now the once the not and all sending point, ourselves, some

it. across did own in talk of pricing goes, to is own emphasize demand. buy-side actually listings their they're can't on Early-stage demand And terms As we somebody side, our buy-side home, that when the that no far listings demand April. there, listing just the tried as But whole you year-over-year And across our XX% because down the way to we they that see look Redfin other We measure forms about sell not down interested but segment it. listing we there's are decides in inquiries demand at of industry-wide. not The in our for reason just the the industry. market. of list from can tours, selling comes month and are

on not on a pandemic. but listing the buy mean take The to sales. -- I this was our we only to are did still So to it's we numbers and overall The own And side smaller share. share the share much side. business release nicely going of listing now about be comment be sell to share, growing on we'll think prior set growing is able gains

next before thing question. the we one to go And other

hope. is pretty before of months far. weren't but price the better struck, increase a offering not I of hurt line. nationwide couple a we'd it were they what worse and They results much in right than pandemic hoped, than were it expected transaction we Sorry, going keep other The to we about it's we thing. growth thinking And exactly so only be one to have but little,

Operator

next Capital will with from question Li markets. come The RBC Jean

Jean Li

for is Mahaney. This Mark Jean

question. a Just

you furlough Sorry impact much pronounced much will end QX. if QX guide this also agent to to your about longer And be the also impact if mentioned your margin. term, the of people's just that furlough remarks, in the willingness of maybe the that earlier just if is probably of covered the you at a order the How on talk can more can you rank impact kind to quarter the virtual but in impact -- show. hit that like in just and uptick just just

innovations as there well. some have You

you higher behavior then a that is to your do perhaps sales? and in permanent much of scalability change permanent productivity how and see Just a

Chris Nielsen

Sure.

pay would regard to no in that this the the Chris. be the of impact the happened year. the of All furlough, activity there the information With And in is of quarter that impact second So of the year. first including who the that quarter we've benefits during employees about for that is the on of there be will the that provided continue furlough a of quarter, the furlough. are to on that the million $X.X cost course we'll

to deals. haven't you the pick other want with in are for continue impact are we regard to the margin gross So provided pay on... margin, that that, But even to working course, the with actively and expectations of closing quarter then for guidance people has the not do to And those second any of we though year. dollars company up on the Glenn, regard

Glenn Kelman

tours, to share one use to chat was with and some It may see we point, we information buyers out given walk it. to buyers of a them but record are yet. can it as We developed way that go think gain that primarily to to be haven't sharing and X tour Most video chat have multiple for rather competitors. sensitive the video at those I cost. house through In their lower we that than still capability

chat to to do able that be take to of it thrust just share. video every is So the so I can can agents that agent not than think and something other we do advertise tours main better

Operator

Zelman come with will question next McKeveny & The Ryan from Associates.

Ryan McKeveny

course, doing and through well this. managing of glad And you're

squeeze to I'll in. So try X

of going credit and is end was that's taking. And So very mortgage market the you're Glenn, day, the severe on disruption helpful on your realize. more people I than of the probably actions some of tightening the some comments think at been course, the

So say, the in some in easing the last let's actual consumer other home the tightness question regulators forward? or taken? anticipating stability on the actions of is, few question FHFA, easing you are sensing with for tightness any or, box underwriting my of that consumers prices. of second have kind Or remains for you are credit or this you going for consumer And weeks,

you trajectory of your going skewed think a moving I but you prices. home some to forward, kind I to what's wonder a I the more different view some or basis just rising actually dynamics. course, views. And starting But your guys have around pending home home recent different actual bit is seeing that seen we're from know listing very real-time actual just are the I discussion even things. indication So to of in and around just sales of to on Others some data, think debate pricing price but data get pricing prices, the there's We've prices we've trends? weeks take more probably happen what of probably on on what contracts are and appreciation on others contracts, list with the access obviously or you other positively.

-- perspective go price you're disruption. seeing So just this actual from think today kind on of in period what what and, you of home ultimately, might curious an you're how

Glenn Kelman

Sure.

forbearance to XX or we're other even credit overlays a to and So time investor. it like ask There we Freddie for the that to are risk less Redfin, so where going be quickly, sell that that even Fannie in sell means to and for loan hold worried lenders that to someone's it forbearance an prevalent. become when we're to for XX, mortgage was going period, easier some days, originator for loans, much that going created not or has gotten able

some. market said in loan mortgage. loans. market buy easier industry efforts make middle and have Fannie to pipeline a back was to government of a up trying discount, for spring would different especially mean to was stepped after money was loans. prop when ago, a to the X the that albeit figure the forbearance, X We investors largely, have mean Redfin. succeeded. in us in jam and and at made going of borrowers But a the make And people fact still servicing mole out Freddie April, didn't I to buy whole The loans place weeks up sure they'll the just in April, jam, the pay And come have trying has or So of parts X game whack were their we that were don't that it leaks another. and has early really I how a playing those in just to

I So think gotten better. that's

people all are be right we a early unemployment as to prices more certain prices ago, their a whatever by But also jobs stock likely saying They doing price single-family of homes long-term think to houses. for no them you're I doesn't well. have eliminated under building liquidating mean are a sad long even and are which to and confidence crisis house homeownership so had the and that we've hit significant half Vacation does. condos, are richer Americans, are well, that enough them about willing that mean you're said, an through consumer than have someone they're that people still just anxiety market, likely going that and America, we home. less don't for has in it why working-class homes comment than urban the we there that buy. There large, And and can't who's buyers, a to the that just downturn distress if -- and shoot all probably doesn't some demand types just consumer are time are that housing because the mostly list back their short-term It the decline. properties shortage and at they for that far when we very to faster buying we so it portfolios to inventory would and see just confidence most are career. are anymore will started homes prices. trend Airbnb time doing this declined. That's rest, they're for especially, can. you bullish opportunity the ripple see is homes any on are home It long affordability buy-side buying by buyers may But a be so the was reasonably and in their bought kind be their to are housing basis And on from come of home going to much of And has eliminated people there's looking through that any roof.

Operator

from with John The will Micenko next come question SIG.

John Micenko

some i.e. Does maybe you virtual in-house, quarter technology tours. of more about get like peak of If the have, -- consumers this sort understanding wondering first you in a permanently. demand. lower changing in of that more forced you do I'm by of your model that and that you of over of can has your agent the been acceptance partner release valve that times thinking with both and sort time kind did

Glenn Kelman

through question. rather So ourselves partner right? Has inquiries proportion understand I agents, want can with we our to make sure than let is I that us own your agents that the of technology handle increase

John Micenko

lessons this Yes. consumer side. I given particularly, of guess or the some or last X months forced adoption sort with of the in of X And the sort or so X on

Glenn Kelman

experience. if Redfin other with one our some to that partner, up weird end just outcome. to way offering still we outcome think only of make more partner working tools be a possible ask agents some that's a house. the to that question, used That but I maybe could efficient. a the now you It's for get a sell bonus, digitally that estate good a thing enhanced service But so real you to be and did we start it's

I really of think approach. behavior consumer will has shifted a and that. piece consumer want And other attitudes agents that Redfin's so towards And

John Micenko

It with more my as follow-up, I you're I don't to want a said, like think broad market you -- -- then to sales coming the prospectively had And sounds pitch.

the the agent quote. RedfinNow comes here's So agent, okay, says, in brokerage your and

versus months what's quote how Here's correctly? Am what like think that X, the regular here's looks did And the maybe option. I things concierge ago? you changed if we am, X X, and interpreting I

Glenn Kelman

a focused changed your that. service, than You offering, you is much specialized interpret it are on what's listing have correctly. that And when salespeople you is who listing less mature have your product that full-service selling

to were RedfinNow struggle So to frame trained real offer earlier listing when own through And or had offers. them. estate for that who deliver offers X,XXX really its instant had the on same And agents, prepare you deliver prepare we our a they X,XXX instant that time they depending to counted consult. to had tried in salespeople

have before, the the you're to need give probably they're way hit, have we've offers or we most error, be to agents going we foundered That's we to selling offer going And by rooms. than already work. they somewhat. competitive higher-margin the we'll our pandemic effort slightly house. we're man, of is this that make look, your to these But make a advantage, people, offer, living to if if in money lower that So but that thought, when be X,XXX is you got the that instant making, able just just all tell

low, to how going inventory You just are about prices is heard talk up. hold me

are believe list instant their the advice want that dang house, really to that's to call, an customer want along just listening with them every customers would give you this If to offer. we and and you

list but house. Take don't the need through money go the if you to it, Concierge make it is you want to is. use it most the way to if our Service. And just Here hassle, the

Operator

Stephen next William The from come question Sheldon with Blair. will

Stephen Sheldon

the more Would out years? away Does about shift potentially homebuyer demand. to to the ask the that add on over in agent on play capacity potential from incremental that Wanted other that maybe cities? next this, plan to side build smaller the more over mentioned medium way city focusing few the change the trend term? starting you you potentially to demand of And agents urban smaller

Glenn Kelman

does. It

how to it applies a in big or it subtle plays make website. need San or our see we cities, build we every test agents a we Boston, feature, in but even live Peoria, just Seattle when it to we It's too. coastal effect. think in I your But time works Francisco sure how

somebody So And benefits that a when is Boise, agent way really we're estate customers, going the know moves to they'll people or in from likely migrating. be cities us if we Seattle, our coming less brand. they're drive traffic, they're country, like across that be more the to inquiries a aggressive trying smaller sales because place with Idaho see about real Montana. serve to as in Bozeman, familiar get And

that And Redfin no so real absolutely estate benefit you are but you local, our get national local. brokerages can agents Most stand for Most has are a building some the matter brand. same thesis go. been thing where

will think somebody going Charleston, we're So benefit another and to And I sell really help one us. in Carolina. home buy South San Francisco that in

launched later. We in more we're seeing our growth But smaller already markets. them

advantage, an earlier just have they some gas on So fire. could and pour this the

more the that one can agents. have lead agent. the places, signal is see a then in just starting We And hiring that's and to is demand there don't hiring us that to we the to lead comment those materialize for by undertake

based is So and on here and the on of we that's how we think that. flow we take see kinds action various that other about this inquiries that demand website the

Operator

question Compass come Point. from Chris Gamaitoni [Operator next The Instructions] with will

Chris Gamaitoni

wanted -- follow the de-urbanization to urban on up it, the concept. I call

that focused seeing model buyers home out, really was said me you've But think the productivity gross of that's thing on are is intent, the your for in of increase prices. doing home. waste, already higher potential significant you're a that seems a other that the So and which historically, of agent I business put ultimately the less don't margin lot people as to coastal kind you indicate higher the region's now tours struck a has, buy that

how in you do So under term offset price do higher how your reposition do by more think areas, to potentially how about your thought home changes buyers. with And or gross home I'm potentially you deal intent make you long sales lower that business construct? of margins wondering

Glenn Kelman

for intent now. all, increased, fifth success the Homebuyer first enter capability massive think, clear agent uniquely it a a deliver. make quarter. I toward of Well, productivity a There's shift straight I can seeing that just which is want broker higher pipeline to rate buyers We're the virtualization, improved. as that we

think that to well we make us on and the cities are to we're long exactly challenge this. mission term. been this going which $XXX,XXX you underway sold, that's And is product the It smaller I those close was is for a challenge one towards that shift has can massive home money make the progress that make sure and be then is a rates, tailwinds how solve lower at price that of way buy adumbrated, point. to we've made the every that's can goods people that before a increased on, recently. And cost

just coastal niche works America while happen every that And think every being product town. almost from to Redfin has So ago. city now in for that a it's something faster. in I markets And happened or a going to gone

Chris Gamaitoni

product Okay. thoughts And then on change.

is, aren't that ability with, So it, on-demand show to inventory. My in estate of call moving put question real the operate we the and on doors occupied. industry kind forward, your homes the locks

more inventory call be cases. stock products, solution. on a -- It's You're seems to do need to to. I bridge home that about instantaneously How are does homes trying a are, seems -- than or the that standpoint it, something How you some almost demand? trend that? of consumer product a you different the be changes? don't thinking industry to in have It's just moving type most think where sell from And something and buy

Glenn Kelman

of loose before to than predatory And today. to just think that's another. that government easily problem. response a And works We more way make where to was off has X just outlaw the that. had And could then get one you we iBuying to with liquidity you should obligation is and who the iBuying fundamental that, replace something but lending. fine credit X money from do government. Well, can that between mortgages are the working-class still it -- else much that, I people absolutely stuck home for It's

But we when sell to that somebody that parties for inefficiency the it's a dues you X next. getting they're house trying transfer of owning for to the just it cheaper ignores just the shelter have fact that paying home from when There's cut, man to to when going a idea party middle a is also the acknowledge it's homeowners the is the getting you're vacant fundamental property. to different and cost grass money, the X easier

hole a burning just our in pocket. it's us, For

problem, as can we a original owner going home the always to pay the it it. presenting to as solve but idea the think of somehow it's be to premium you certainly I for to the pay service be sale, that, that why just we're And liquidity a it's brokered that that cost to going liquidity So going but problem that have It seems for. The option same have. solves me, is that most that's unlikely. like expensive we

You're know choice, only not those can much them are, choices that when your that good And and all people, some out quite of just going house. they make But provide their what want to company trade choices. off. for to get as we that's we're the a

say, and way, going know sticking extra hard hour. companies I half for are tonight. guys, thanks, today, we be billion earnings to got By know the for you're with to there the just working reporting how I us

So just in bear rating the on you put that mind when Redfin. buy

mean don't that. I

But call for your thanks it Just time. you like see it.

more have We don't questions, right? any

Operator

are sir. remarks. back There further turn to for it questions, Elena Perron no further I'll

Elena Perron

look Thank for appreciate Thanks, interest you, with quarter. Redfin everyone, and in today. joining to again next us speaking We forward your you Brandon.

Glenn Kelman

Bye.

Operator

everyone. Thanks,

now your may of Enjoy the day. lines. your You rest disconnect

Redfin (RDFN) 9 May 202020 Q1 Earnings call transcript