Seattle-based real estate company, Redfin Corp. (RDFN, +0.14%), saw its stock plummet by 10% in after-hours trade on Thursday. The company revealed that it will take longer than expected to break even after experiencing a loss of market share in its latest quarter.
Financial Performance
In the second quarter, Redfin reported a net loss of $27.7 million, or 25 cents a share. This was an improvement from the loss of $74.9 million, or 73 cents a share, in the same period last year. However, revenue decreased to $275.6 million from $349.0 million.
These figures are slightly below the FactSet consensus, which had projected a loss of 34 cents and revenue of $276.0 million.
Adjusted EBITDA and Future Outlook
CEO Glenn Kelman acknowledged the setback and revised the timeline for breaking even on an adjusted EBITDA basis. Redfin now expects to reach this milestone within the next 12 months, as opposed to the previously projected date of 2023. However, Kelman emphasized that the company anticipates a significant improvement in adjusted EBITDA this year, exceeding $140 million.
Market Share Decline and Recovery Strategy
Redfin attributes its loss of market share to setbacks such as agent layoffs and the closure of RedfinNow. Nevertheless, Kelman expressed confidence in a turnaround, stating that Redfin.com has been performing well in driving increased traffic. He anticipates a return to quarter-over-quarter gains in the second half of the year.
Q3 Projections
For the third quarter, Redfin expects a loss ranging from $30 million to $21 million, compared to a loss of $90 million during the same period last year. Revenue is projected to be between $265 million and $279 million, reflecting a decline of 13% to 9% from the previous year.
Stock Performance
Despite the recent setback, Redfin’s stock has enjoyed a remarkable 238% gain year-to-date, outperforming the S&P 500, which has gained 17%.
