It’s financial reporting season and we’re keeping tabs on the wins and losses across the real estate and mortgage industries. And despite a declining market, Redfin CEO Glenn Kelman announced that the company managed to improve its second-quarter net income by $50 million.
“We expect to break-even on an adjusted-EBITDA basis over the next 12 months rather than in 2023, which is a setback, but still we project that our adjusted EBITDA this year will improve by more than $140 million,” Kelman said via company statement. “We lost market share due to one-time setbacks from agent layoffs and the closure of RedfinNow, but we expect to return to quarter-over-quarter gains in the second half, as Redfin.com has been competing better for traffic. The year-over-year change in visitors to Redfin.com was 17 points better in the second quarter than it was for the two largest portals to for-sale listings, an acceleration from our first-quarter advantage of 12 points. Gross margins in our core real-estate-services business improved by nearly two percentage points. We believe Redfin is set up for profitable growth.”
As a whole, Redfin’s Q2 revenue was $275.6 million, a decrease of 21 percent compared to the second quarter of 2022. Gross profit was $100.2 million, a decrease of 10 percent year-over-year.
The company’s real estate services gross profit was $56.2 million, down 24 percent year-over-year, and real estate services gross margin was 31 percent, compared to 29% in the second quarter of 2022. Net loss was $27.4 million, an improvement over a net loss of $78.1 million in the second quarter of 2022.
Opendoor also put out its Q2 report this week, leading with $2 billion in revenue, down 53 percent year-over-year and down 37 percent versus Q1 of 2023. Gross profit stood at $149 million, with net income of $23 million, compared to $54 million one year ago and $101 million last quarter.
“We exceeded the high end of our guidance in the second quarter as we continue to focus on what we can control and operate with discipline in this environment. Our results reflect the progress we’ve made in strengthening our offering, driving cost efficiencies and managing risk,” said Carrie Wheeler, CEO of Opendoor. “We expect the third quarter to mark our return to positive contribution margin levels. As of quarter end, 99 percent of the homes we made offers on between March and June of last year were sold or under resale contract and our new book of inventory is generating positive unit economics in what continues to be an uncertain time in the U.S. housing market. We believe the actions we are taking will allow us to emerge from this cycle more resilient and positioned for market leadership and long-term profitability,”
Opendoor reported that the company sold 5,383 homes between March-June, down 49 percent year-over-year and down 35 percent compared to the first quarter of 2023.