Redfin's product expansion led to revenue spikes in 2018
With a growing market share of home sales and wider breadth of services, Redfin posted huge annual revenue gains.
Over the entirety of 2018, Redfin's revenue jumped 32% year-over-year to $487 million, with profits rising 7% to $119.4 million. The fourth quarter of 2018 had a similar revenue increase, going up 30% year-over-year to $124 million. However, gross profit fell 10% to $26.2 million from $29.2 million in the fourth quarter of 2017.
"Redfin's fourth-quarter results again exceeded our expectations, with continued year-over-year gains in market share, and a new report showing that our customer satisfaction is 49% higher than our competitors," Redfin CEO Glenn Kelman said in a press release.
The real estate brokerage expects the good times to roll into the coming year. Redfin projects between $101.5 million and $105 million in total revenue for the first quarter of 2019 — a year-over-year growth of 32% at the high end.
"But what we're most excited about are the first signs that our broader vision is coming to life in 2019: more Redfin homebuyers are choosing a Redfin mortgage because of an investment in local service, more Redfin home sellers are signing up for our concierge service to spruce up the home before its market debut, and then more of those home sellers are also meeting our agents to buy their next place," Kelman continued.
Redfin started providing digital mortgage closing through Notorize in November 2018, joining the trend of real estate companies widening its loan offerings.
"RedfinNow, our business of buying a home on our own account and then selling it, is increasingly drawing on our brokerage’s field organization and systems, giving us more confidence that we can grow this business quickly without having to build everything from scratch," said Kelman.
The company hit a 0.81% market share of existing-home sales by value in the fourth quarter of 2018, edging up 0.1 percentage points from the year prior.