Two real estate giants reported earnings on Thursday, with each telling a very different story around their second-quarter performance.
Redfin Corp. on Thursday reported increased revenue and a narrower loss for the second quarter as the company saw a surge in demand fueled largely by low interest rates.
Redfin’s shares were up 3.5% Thursday afternoon to $42.97 on the news.
Specifically, the Seattle-based company said its revenue was up 8% year over year to $213.7 million in the second quarter, compared to $197.8 for the same period last year.
It still reported a loss, but a smaller one of $6.6 million, or 8 cents per share, compared to $12.6 million, or 14 cents per share, in the second quarter of 2019.
Redfin CEO Glenn Kelman commented that Redfin “blew away” its second quarter financial targets.
“Within the span of a single quarter, year-over-year changes in demand went from -41% to +40%, a level of volatility that I have never seen in nearly 30 years of business,” he said.
Over the past two months, since the COVID-19 pandemic hit, Redfin’s online visits and customer inquiries have been growing at a faster clip than at any point in the last three years, Kelman added.
“We’re inside a tornado, hiring agents, lenders and closing specialists at breakneck speed to keep up with demand, but also mindful that the bottom of the economy could fall out a second time,” he said.
Redfin has worked to adapt in the COVID-19 environment by creating new technologies and policies aimed at keeping customers and employees safe, he added. Those include:
- Making it easier for customers to request an in person or virtual tour or listing appointment and giving agents the power to specify their preference for in-person or video appointments within Redfin’s scheduling software
- Updating the web and mobile search experience to highlight homes with virtual walkthroughs and recorded video tours
- Launching a new Agent Dashboard, allowing agents from any brokerage to upload a video tour or virtual walkthrough to Redfin
- Launching a virtual comparative market analysis presentation for Redfin agents to present to a seller during consultation
Kelman said the company has also “welcomed back” most Redfin employees who were furloughed in early April and resumed hiring in a number of markets “to meet resurgence of customer demand.”
Looking ahead to the third quarter, Redfin issued guidance of revenue of between $214 million and $225 million, representing a year-over-year decrease between 10% and 6% compared to the third quarter of 2019.
It also projected net income of between $18 million and $23 million, compared to net income of $6.8 million in the third quarter of 2019.
Realogy Holdings Corp. on Thursday also announced its second-quarter earnings and they told a different story. The Madison, N.J.-based company reported revenue of $1.2 billion for the three months ended June 30, a year-over-year decrease of 27%, or $457 million, compared to $1.6 billion in Q2 2019.
Realogy also recorded net income of $28 million from continuing operations and a net loss of $14 million, or 12 cents per share, including discontinued operations for the second quarter. That compares to $69 million in net income, or 60 cents per share, in the same period last year.
Realogy CEO and president Ryan Schneider said the company “delivered substantial operating EBITDA” in the quarter as it moved quickly “to navigate through the turbulent environment.”
EBITDA declined to $172 million in the second quarter, compared to $235 million in the same period last year.
“We continued to enhance our digital technology offerings, invest in strategic priorities, and improve our balance sheet,” Schneider said. “We believe that progress, combined with recent positive market data, positions us well for the future.”