Q1 2024 Redfin Corp Earnings Call

Yes.

Operator: Greetings and welcome to the Redfin Corporation first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. And as a reminder, this conference is being recorded. It is now my pleasure to introduce you to your host, Meg Nunnally, Head of Investor Relations. Thank you, Meg. You may begin.

Greetings and welcome to the Redfin Corporation first quarter 2024 earnings Conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.

Meg Nunnally: And as a reminder, this conference is being recorded it is now my pleasure to introduce you to your host Megan Natalie head of Investor Relations. Thank you Ma'am you may begin.

Meg Nunnally: Good afternoon, and welcome to Redfin financial results Conference call for the first quarter ended March 31st 2024.

Meg Nunnally: Good afternoon, and welcome to Redfin's financial results conference call for the first quarter ended March 31st, 2024. I'm Meg Nunnally, Redfin's Head of Investor Relations. Joining me on the call today is Glenn Kelman, our CEO, and Chris Nielsen, our CFO.

Meg Nunnally: Meg mentally redfin as head of Investor Relations joining me on the call today is Glenn Kelman, our CEO and Chris Gilson, our CFO before we start note that some of our statements on today's call are forward looking we believe our assumptions and expectations related to these forward looking statements are reasonable, but our actual results may turn out to be materially different.

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

Meg Nunnally: <unk>.

Meg Nunnally: Please read and consider the risk factors in our SEC filings together with the contents of today's call any forward looking statements are based on our assumptions today and we don't undertake to update these statements in light of new information or future events.

Meg Nunnally: On this call, we will present non-GAAP measures when discussing our financial results. We encourage you to review today's earnings release, which is available on our website at investors.redfin.com, for more information regarding our non-GAAP measures, including the most strictly comparable GAAP financial measure and related reconciliation. All comparisons made in the course of this call are against continuing operations for the same period in the prior year, unless otherwise stated. Lastly, we will be providing a copy of our prepared remarks on our website by the conclusion of today's call, and a full transcript and audio replay will also be available soon after the call. With that, I'll turn the call over to Glenn.

Meg Nunnally: On this call we will present non-GAAP measures when discussing our financial results. We encourage you to review today's earnings release, which is available on our website at investors that redfin dot com for more information regarding our non-GAAP measures, including the most directly comparable GAAP financial measure.

Glenn: And related reconciliation.

Meg Nunnally: All comparisons made in the course of this call are against the continuing operations for the same period in the prior year unless otherwise stated.

Meg Nunnally: Lastly, we will be providing a copy of our prepared remarks on our website by the conclusion of today's call and a full transcript and audio replay will also be available soon after the call with that I'll turn the call over to Glenn.

Glenn: Thanks, Meg and hi, everyone.

Glenn Kelman: Thanks, Meg, and hi, everyone. Redfin's first-quarter earnings exceeded the guidance we gave investors on our last call, an adjusted EBITDA loss of $28 million compared to guidance of $29 million to $36 million, on revenues of $225 million compared to guidance of $214 to $223 million. Each of our four business segments was at or above the top of our revenue guidance compared to the first quarter of 2023, and gross profits grew 22%. The share of home sales brokered by our own agents and through referrals to our partner agents increased from 0.72% in the fourth quarter of 2023 to 0.77% in the first quarter of 2024.

Glenn Kelman: Red sense first quarter earnings exceeded the guidance, we gave investors on our last call on an adjusted EBITDA loss of $28 million compared to guidance of 29 million to $36 million.

Glenn Kelman: On revenues of $225 million compared to guidance of $214 million to $223 million.

Glenn Kelman: Each of our four business segments was at or above the top of our revenue guidance compared to the first quarter of 2023 gross profits grew 22%.

Glenn Kelman: The share of home sales brokered by our own agents and through referrals to our partner agents increased from <unk>, 72% in the fourth quarter of 2023 to <unk>, 77% in the first quarter of 2024.

Glenn Kelman: We expect a year-over-year share gain in the second quarter of 2024. These results put Redfin in a good position to earn a full-year adjusted EBITDA profit despite the recent increase in mortgages. Since 2015, our largest quarterly loss has always been in the first quarter, when we invest in serving customers who close in the first quarter.

Glenn Kelman: We expect our year over year share gain in the second quarter of 2024.

Glenn Kelman: These results put redfin in a good position to earn a full year adjusted EBITDA profit. Despite the recent increase in mortgage rates.

Glenn Kelman: Since 2015, our largest quarterly loss has always been in the first quarter.

Glenn Kelman: When we invest in serving customers who closed in the summer.

Glenn Kelman: Compared to a first quarter adjusted EBITDA loss of $67 million in 2023, we're nearly 40 million bucks ahead of where we were a year ago. Beyond turning an adjusted EBITDA profit this year, our goal isn't just to reduce costs or to break even, but to offer shareholders the largest growth opportunity in real estate. We'll do that by pairing a thriving online marketplace with a disruptive broker and a best-in-class lender. After a year of unprecedented investment from a new rival, we're competing effectively for traffic and adding customers to our rental marketplace, which is now a source of profit. Our brokerage restructuring has generated immediate share gains, and our lending attach rate hit an all-time high.

Glenn Kelman: Impaired to a first quarter adjusted EBITDA loss of $67 million in 2023 were nearly 40 million Bucks ahead of where we were a year ago.

Glenn Kelman: Beyond turning an adjusted EBITDA profit this year, our goal isn't just to reduce costs or to breakeven, but to offer shareholders. The largest growth opportunity in real estate, we will do that by pairing of thriving online marketplace with a disruptive broker and best in class lender after a year of unprecedented investment.

Glenn Kelman: From a new rival we're competing effectively for traffic and adding customers to our rentals marketplace, which is now a source of profit.

Glenn Kelman: Our brokerage restructuring has generated immediate share gains our lending attach rate hit an all time high.

Glenn Kelman: Best of all, our mission to redefine real estate in consumers' favor has prepared us to capitalize on the industry. According to Comscore, first-quarter visitors to Redfin.com grew 2% year-over-year, the same rate as Realtor.com and slightly faster than Zillow. Keeping pace with other major real estate sites is remarkable given that Redfin ran television ads in the first quarter of 2023 but not in the first quarter of 2024. Since Redfin has added listings over the years by expanding its brokerage and supporting rentals, we expect more online visitors from search engines.

Glenn Kelman: First of all our mission to redefine real estate in consumers' favour has prepared us fertilize on industry change.

Glenn Kelman: According to Comscore first quarter visitors to redfin Dot com grew 2% year over year, the same rate as realtor dot com and slightly faster than Zillow dot com keeping.

Glenn Kelman: Keeping pace with other major real estate sites is remarkable given that redfin ran TV ads in the first quarter of 2023, but not in the first quarter of 2024.

Glenn Kelman: As Reade said has added listings over the years by expanding our brokerage and supporting rentals, we expect more online visitors from search engines.

Glenn Kelman: Projects to publish more commentary from our agents about listings and neighborhoods should also increase trust. But to engage that audience, we're increasingly turning to artificial intelligence. AI has long been effective at bringing visitors back to redfin.com, listing recommendations for home buyers, and home value updates for home owners. In the fourth quarter of 2023, we first began using generative artificial intelligence to imagine how the roofs in a home for sale could be redecorated.

Glenn Kelman: Projects to publish more commentary from our agents about listings in neighborhoods should also increase traffic.

Glenn Kelman: But to engage that audience, we are increasingly turning to artificial intelligence artificial intelligence has long been effective at bringing visitors back to red Dot com.

Glenn Kelman: <unk> recommendations for home buyers and home value updates for homeowners.

Glenn Kelman: This capability is available in five markets. More recently, on March 7th, we piloted AskRedfin, an online chat tool for our iPhone application. Ask Redfin uses large language models for instant answers to visitors' questions about a listing.

Glenn Kelman: In the fourth quarter of 2023, we first began using generative artificial intelligence to imagine how the rooms in our home for sale could be redecorated.

Glenn Kelman: This capability is available in five markets more recently on March seven we piloted ask red hat and online chat tool for iPhone application.

Glenn Kelman: I'll ask redfin uses large language models for instant answers to visitors questions about our listing.

Glenn Kelman: Since more online visitors have, as a result, scheduled meetings with our agents, our iPhone application began offering chat nationwide on April 24. We plan to offer Ask Redfin on our website and our Android application later this year. As curious as Redfin has been about our online audience, we're moving even faster to improve sales execution. On our last call, we outlined three sales initiatives: Redfin Next, which replaces agent salaries with higher bonuses, All You Can Meet, which assigns a homebuyer to an agent only if the agent can host the first tour, and Sign and Save, which refunds commissions for customers who sign an exclusive buyer's agency agreement.

Glenn Kelman: That's more online visitors have as a result scheduled meetings with our agents. Our iPhone application began offering chat nationwide on April 24, we plan to offer <unk> on our website and our Android application later this year.

Glenn Kelman: As acquisitive as redfin has been about our online audience, we're moving even faster to improve sales execution.

Glenn Kelman: In our last call, we outlined three sales initiatives Redfin next which replaces agent salaries with higher bonuses. All you can meet which assigns a homebuyer to an agent only if the agent can host the first tour and sign and say, which refunds commissions for customers, who signed an exclusive buyers agency agreement.

Glenn Kelman: Of these initiatives, the most transformational is Redfin NEXT. In the first quarter, the four California markets piloting Redfin Next grew market share, luxury sales, and loyalty sales significantly faster than the rest of Redfin. The aggregate growth margins across the four markets were better in the first quarter of 2024 than in the first quarter of 2023.

Glenn Kelman: All of these initiatives. The most transformational is redfin next in the first quarter the for California markets piloting Redfin next grew market share luxury sales and loyalty sales significantly faster than the rest of Redstone.

Glenn Kelman: Aggregate gross margins across the four markets, we're better in the first quarter of 2024, and the first quarter of 2023.

Glenn Kelman: We've been concerned that agents who lost their salaries would quit, hurting our culture and our market share. But attrition so far in new markets has been only slightly higher than our national rate. We expanded Redfin Next to seven additional markets on May 5, with a much larger third wave of markets planned for the summer. We're also broadening other sales initiatives. All You Can Meet, which expanded nationwide except for a handful of small markets on April 1, has lifted the percentage of homebuyers who meet their Redfin age on a first tour above 90%. The historical range for this metric, which accounts only for customers new to Redfin, has mostly been between 60% and 65%.

Glenn Kelman: We have been concerned that agents, who lost their salaries would quit hurting our culture and our market share.

Glenn Kelman: But attrition so far index markets and spent only slightly higher than our national rate.

Glenn Kelman: We expanded redfin next to seven additional markets on May five with a much larger third wave of markets planned for the summer.

Glenn Kelman: We're also broadening other sales initiatives.

Glenn Kelman: All you can me, which expanded nationwide except for a handful of small markets on April one has lifted the percentage of homebuyers, who meet their redfin agent on our first tour above 90% in April.

Glenn Kelman: The historical range for this metric, which accounts only for customers new to redfin has mostly been between 60% and 65% balance of customers meet contractors from redfin pays to provide short noticed property access.

Glenn Kelman: The balance of customers meet contractors whom Redfin pays to provide short-notice property access. Redfin still uses these contractors frequently for subsequent tours, but we need our best salespeople to treat the first tour like a listing consultation in which we tell customers about our credentials, then ask for a sale. That's where the third initiative comes in, sign and save.

Glenn Kelman: Redfin still uses these contract just frequently for subsequent source, but we need our best salespeople to treat the first tour like a listing consultation in which we tell customers about our credentials then ask for a sale.

Glenn Kelman: That's where the third initiative comes in dine.

Glenn Kelman: <unk> homebuyers, who sign of buyers agency agreement before their second Redfin home tour I've gotten the commission refund between two 5% and 5% of the home's value.

Glenn Kelman: Homebuyers who sign a buyer's agency agreement before their second Redfin home tour have gotten a commission refund between 0.25% and 0.5% of the home's value. However, this commission refund has been easily offset by more sales. Comparing close rate gains in pilot markets and control markets indicates that customers in sign and save markets are about 20% more likely to close with Redfin on a sale. Such an increase, if it does, in fact, pull through across the whole year, would be Redfin's first full year buyer close rate gain in a decade.

Glenn Kelman: This commission refund has been easily offset by more sales comparing close rate gains in pilot markets and control markets indicates that customers are signing safe markets are about 20% more likely to close with redfin on a sale.

Glenn Kelman: We began piloting Sign and Save in September 2023. That's March 7 is now available in all but the handful of markets where commission refunds are still somehow, The discipline of presenting a buyer's agency agreement to our customers will serve us well later this year, when rule changes proposed by the National Association of Realtors are scheduled to take effect. The first major rule change requires agents to document our fees before every first tour.

Glenn Kelman: Such an increase if it does in fact pull through across the whole year would be red fence posts.

Glenn Kelman: First full year buyer close rate gain in a decade, we began piloting sign and save in September 2023.

Glenn Kelman: <unk> seven is been available in all but a handful of markets where commission refunds are still somehow illegal.

Glenn Kelman: The discipline of presenting a buyer's agency agreements our customers will serve us well later this year when rule changes proposed by the National Association of Realtors are scheduled to take effect.

Glenn Kelman: First major rule change requires agents to document our fees before every first tour.

Glenn Kelman: Though as of last week, it became unclear if the fiat issue is just for the tour or for the entire purchase of a home. In June, Redfin will start adding these disclosures to our online forms for requesting a first tour, likely testing one version that says the tour is free, with another explaining the fee for the ultimate purchase of that home. We'll leave it to our agents to present a full buyer's agency agreement after that. We'll have the whole summer to learn how best to explain our fees without confusing prospective customers.

Glenn Kelman: So as of last week it became unclear if the fee at issue is just for the tour or for the entire purchase of a home.

Glenn Kelman: In June Redfin will start adding these disclosures to our online forms for requesting a first tour likely testing one version that sets the tourists free with another explaining the fee for the ultimate purchase of that hump, we'll leave it to our agents to present, a full buyers agency agreement after that tour.

Glenn Kelman: We will have the whole summer to learn how best to explain our fees without confusing perspective customers.

Glenn Kelman: The second, much larger change will prevent a listing from promising a fee to the buyer's agent by the multiple listing services, or MLSs, used by agents to share listings, though brokers may still share fees through other channels. If the home buyer has to include the fee for a buyer's agent in an offer, that could, over time, reduce how much that agent earns because a lower buyer's agent fee will make an offer more competitive.

Glenn Kelman: Second much larger change will prevent a listing from promising a fee to the buyer's agent by the multiple listing services. Our MLS is used by agents to share listings.

Glenn Kelman: So brokers may still share fees by other channels.

Glenn Kelman: If the homebuyer has to include the fee for a buyer's agent in an offer that could overtime reduced how much that agent earns because of lower buyer's agent fee will make an offer more competitive.

Glenn Kelman: Beyond the rule changes themselves, the press coverage of these changes seems likely to raise consumer awareness of brokerage fees. That, in turn, could benefit Redfin. For nearly our entire history, our low fees have been poorly understood by homebuyers who believe their own agent is free.

Glenn Kelman: Beyond the rule changes themselves. The press coverage of these changes it seems likely to raise consumer awareness of brokerage fees.

Glenn Kelman: That in turn could benefit redfin for nearly our entire history, our low fees have been poorly understood by homebuyers, who believe their own agent is free. If later this year or next buyers' agents are going to compete on price. We hope the world will beat a path to redfin door.

Glenn Kelman: If, later this year or next, buyers' agents are going to compete on price, we hope the world will beat a path to Redfin's door. We believe we can serve those customers profitably. Redfin's original service prepared offers, negotiated inspections, and handled closings using software and agents based in a sales center at less than half the fee in dollars that we charge today. Later, we built a network of contractors for On-Demand Property Act.

Glenn Kelman: We believe we can serve those customers profitably Red <unk> original service prepared offers negotiated inspections and handled closings using software and agents based on a sales center at less than half the dollars that we charged today.

Glenn Kelman: Later, we built a network of contractors for on demand property access.

Glenn Kelman: These competitive assets are still in place, and let Red Pin thrive at a price other brokers may struggle with. If the fees do start to fall, many listing agents may seek to represent the buyer of that listing as well as the seller, lowering the total fee for selling a home while still protecting that agent's income. This is where Redfin's online audience, the largest by far of any broker, gives us a competitive advantage in recruiting both listing customers and listing agents because we can connect potential buyers of the listing directly to the listing agent. Since October 2023, we've also been preparing software to let agents at other brokerages get the same routing for their own listings on Redfin.com. For a fee service, we expect to launch it.

Glenn Kelman: These competitive assets are still in place and let redfin thrive at a price other brokers may struggle to match.

Glenn Kelman: These do start to fall many listing agents may seek to represent the buyer of that listing as well as the seller lowering the total fee for selling a home while still protecting that agent's income.

Glenn Kelman: This is why redfin online audience, the largest by far of any broker gives us a competitive advantage in recruiting both listing customers and listing agents because we can connect potential buyers of the listing directly to the listing agent.

Glenn Kelman: Since October 2023.

Glenn Kelman: <unk> also been preparing software to let agents at other brokerages get the same routing for their own listings on redfin Dot com a for fee service, we expect to launch this summer.

Glenn Kelman: Redfin's preparation for the possibility of lower fees goes beyond our efforts to make our brokerage more efficient. Our fundamental belief is that a brokerage as a standalone entity will be replaced over time by businesses that combine online search with agents, lenders, and title services. The cost of meeting a homebuyer and earning her trust is too high to be paid for by the fees from a single sale.

Glenn Kelman: <unk> preparation for the possibility of lower fees goes beyond our efforts to make our brokerage more efficient our fundamental belief is that a brokerage as a standalone entity will be replaced over time by businesses that combined online search with agents lenders and title services.

Glenn Kelman: Cost of meeting a homebuyer and earning her trust is too high to be paid for by the fees from a single sale lenders and title companies waste too much money. According the agents, who build that initial relationship with the buyer.

Glenn Kelman: Lenders and title companies waste too much money courting the agents who build that initial relationship with the buyer. This is why Redfin bought BayEquity in 2022 and why we've worked so hard to increase the rate at which our homebuying customers use BayEquity for a mortgage. Those efforts are now paying off. Of the Redfin homebuyers who got a mortgage in the first quarter, 28% used Redfin for the loan, up from 25% in the fourth quarter and 22% in the third.

Glenn Kelman: This is why redfin bought pay equity in 2022, and why we've worked so hard to increase the rate at which our home buying customers use pay equity for a mortgage those efforts are now paying off of the redfin homebuyers, who got a mortgage in the first quarter, 28% use redfin for the loan up from 25% in the fourth quarter and 22.

Glenn Kelman: Percent in the third in March this number hit 30%, which is a major reason why bay earned adjusted EBITDA in the first quarter of 2024.

Glenn Kelman: In March, this number hit 30%, which is a major reason why Bay earned adjusted EBITDA in the first quarter of 2022. Some of the attach rate gains are the result of integrating Redfin and BayEquity customer communication. But the gains are mostly due to our having bought the right lender with fantastic customer service and a never-say-die management team that is two years into the acquisition, entirely intact and completely all in. As competitive pressures ease even slightly and our gains on sale increase, Bay equity can become a major source of Redfin profits, especially when rates fall far enough to create refinancing opportunities for the millions of homebuyers in our data. For many of the same reasons, we also feel enthusiastic about our title business, which is included in our other segments.

Glenn Kelman: Some of the attach rate gains are the result of integrating redfin and day equity customer communication systems.

Glenn Kelman: But the gains mostly due to our having bought the right lender with fantastic customer service and a never say die management team. It is two years into the acquisition entirely contact and completely all in as.

Glenn Kelman: As competitive pressures, even slightly in our gains on sale increase pay equity can become a major source of revenue and profit, especially when rates fall far enough to create refinancing opportunities for the millions of home buyers in our database.

Glenn Kelman: For many of the same reasons, we also feel enthusiastic about our title business, which is included in our other segment.

Glenn Kelman: The other segment also comprises digital businesses like our mortgage marketplace display ads on redfin dot com regeneration for builders and the syndication of walk score data to other real estate sites. Since the downturn began red finished focused on generating high margin revenues from digital channels.

Glenn Kelman: The other segment also comprises digital businesses like the Mortgage Marketplace, Display Apps on Redfin.com, Lead Generation for Builders, and the syndication of Walk Score data to other real estate sites. Since the downturn began, Redfin has focused on generating high-margin revenues from digital channels. As a result of this focus, Adjusted EBITDA from the other segment improved from about $400,000 in the first quarter of 2023 to $3.3 million in the first quarter of 2024. Almost all of our executive hiring has been to bring in digital monetization talent within real estate services, and an industry veteran to run our partner business. In our other segment, a leader in our display ads business.

Glenn Kelman: As a result of this focus adjusted EBITDA from the other segment improved from about $400000 in the first quarter of 2023 to $3 3 million in the first quarter of 2020 for almost all of our executive hiring has been to bring in digital monetization talent within real estate services, an industry veteran to run our partner business.

Glenn Kelman: In our other segment a leader of our display ads business and our rental segment, our new sales driven precedent of rent the marketplace, we acquired out of bankruptcy in 2021.

Glenn Kelman: In our rental segment, we hired a new sales-driven president of Rent, the marketplace we acquired out of bankruptcy. As these bets pay off, Redfin shareholders should reap the full value of an online real estate audience of approximately 50 million monthly visitors. The most important of these digital bets is on rent, which earned its third straight quarter of adjusted EBITDA of about $500,000 on 16% year-over-year revenue growth in the first quarter of 2023. This segment's adjusted EBITDA was a $9.7 million loss.

Glenn Kelman: As these bets pay off red since shareholders should reap the full value of an online real estate audience of approximately 50 million monthly visitors.

Glenn Kelman: The most important of these digital bets is on rentals, which earned its third straight quarter of adjusted EBITDA of about $500000 on 16% year over year revenue growth in the first quarter of 2023. This segment's first quarter adjusted EBITDA was $9 $7 million loss.

Glenn Kelman: First quarter net bookings were $5 2 million compared to $11 $3 million a year ago, but the quality of revenue has been higher in 2024 more of our sales were high margin marketplace sales. We also sell digital marketing solutions in which we use software and staff to run our customers, Google Facebook and tick.

Glenn Kelman: First quarter net bookings were $5.2 million compared to $11.3 million a year ago, but the quality of revenue has been higher in 2024. More of our sales were high-margin marketplace sales. We also sell digital marketing solutions, where we use software and staff to run our customers' Google, Facebook, and TikTok campaigns.

Glenn Kelman: <unk> campaigns, but marketplace growth is more lucrative and more important to our competitive position, even better more of our marketplace sales were year long rather than month to month contracts, which should be steadier growth.

Glenn Kelman: But marketplace growth is more lucrative and more important to our competitive position. Even better, more of our marketplace sales are year-long rather than month-to-month contracts, which should lead to steadier growth. Despite higher industry marketing expenses in the second quarter, we expect full-year profits from rent, driven not only by revenue gains but also cost savings. Integrating rent with Redfin has let us operate both businesses more efficiently, with one group, not two, running a department like HR, finance, legal, or technology infrastructure.

Glenn Kelman: Despite higher industry marketing expenses in the second quarter, we expect full year profits from rent driven not only by revenue gains, but also cost savings integrating rent with redfin has let us operate both businesses more efficiently with one group not to running an apartment like HR finance legal our technology infrastructure.

Glenn Kelman: Already, expenses in the first quarter of 2024 were $51 million, compared to $57 million in the first quarter of 2020. These efficiency gains should continue through the first quarter of 2025, giving us more money for growth or profit. The benefit from integrating the two companies isn't just cost savings; we can also draw on one another's expertise in attracting and engaging online visitors to our sites. Rent's largest sites, which include rent.com and apartmentguide.com, ranked higher in Google searches in March than in February, their first combined month-over-month gain in years.

Glenn Kelman: Already expenses in the first quarter of 2024 were $51 million compared to $57 million in the first quarter of 2023.

Glenn Kelman: These efficiency gains should continue through the first quarter of 2025, giving us more money for growth or profits.

Glenn Kelman: The benefit from integrating the two companies isn't just cost savings. So you can also draw on one another's expertise that attracting and engaging online visitors to our sites.

Glenn Kelman: Its largest sites, which include rent dot com and apartment guide Dot com ranked higher in Google searches in March than in February. The first combined month over month gain in years ranked slid back in April, but we expect more gains and losses in the months ahead, just because search engine optimization and visitor engagement.

Glenn Kelman: Rankings slid back in April, but we expect more gains than losses in the months ahead, just because search engine optimization and visitor engagement are such long-standing areas of Redfin. As our rental marketplace adds more listening customers and draws more online visitors, rent can drive much bigger long-term revenue gains, changing the shape of Redfin's overall business to be more profitable and less. Before turning the call over to Chris, let's discuss the housing market, which suffered another setback when mortgage rates rose from 6.85% on March 8th to 7.50% on April 16th.

Glenn Kelman: <unk> long standing areas of redfin expertise as our rentals marketplace, that's more listing customers and drives more online visitors rent can drive much bigger long term revenue gains change in the shape of redfin overall business to be more profitable and less cyclical.

Glenn Kelman: Before turning the call over to Chris, let's discuss the housing market, which suffered another setback when mortgage rates rose from $6 eight 5% on March eight to seven 5% on April 16.

Glenn Kelman: Since then, growth in new listings has slowed, a factor which, perhaps more than any other, may limit sales this summer. Over the last two weeks, our agents have reported less foot traffic in open houses and fewer offers, even for desirable listings. The number of Redfin.com visitors asking to tour homes has, from the start of 2024, been below 2023 levels. But this comparison hasn't been entirely accurate.

Glenn Kelman: Since then growth in new listings has slowed a factor, which perhaps more than any other may limit sales. This summer.

Glenn Kelman: Over the last few weeks, our agents have reported less foot traffic and open houses had fewer offers even for desirable listings.

Glenn Kelman: The number of Redfin dot com visitors asking the tour homes has from the start of 2024, then below 2023 levels, but this comparison hasn't been entirely fair low.

Glenn Kelman: Low rates in the first four months of last year encouraged many people to tour homes who didn't close. Our hope has been that sales have held up better than demand so far in 2024 because some of the same buyers who deferred moving in 2023 will be more determined in 2024. Redfin has also been better prepared for a rate increase this year. After a rate increase broke our hearts in 2023, we limited hiring and spending through the first quarter of 2024 to see how many sales actually closed later this year. The song I've been singing to Chris since January is "Won't Get Fooled Again."

Glenn Kelman: Low rates in the first four months of last year encourage many people the tour homes, who didn't close.

Glenn Kelman: Our hope has been that sales have held up better than demand. So far in 2024, because some of the same buyers who deferred moving in 2023 will be more determined in 2020 for redfin has also been better prepared for a rate increase this year. After a rate increase broke our hearts in 2023 Red said limited.

Glenn Kelman: Hiring and spending through the first quarter of 2024 to see how many sales actually close later this year. The song I've been singing to Chris Since January is won't get fooled again.

Glenn Kelman: More of our agents are exclusively paid on sales and since more of our sales are coming from returning customers with less dependent on first time homebuyers are initiatives to meet our customers face to face have made it easier to guide them through this volatile market, we're earning more money from digital channels and we're spending less.

Glenn Kelman: More of our agents are exclusively paid on sales, and since more of our sales are coming from returning customers, we're less dependent on first-time home buyers. Our initiatives to meet our customers face-to-face have made it easier to guide them through this volatile market. We're earning more money from digital channels, and we're spending less. But our bet isn't that the market will get better. The reason Redfin will win this year is because we've gotten better. We still have a long way to go, but the direction we're going is, we think, mostly up. Take it away.

Glenn Kelman: That isn't that the market will get better the reason redfin will win this year is because we've gotten better we still have a long way to go but the direction. We're going is we think mostly.

Chris: Take it away Chris.

Speaker Change: Thanks, Glenn first quarter revenue was $225 million up 5% from a year ago. This marks our first organic revenue growth since interest rates started to rise at the same time gross profit of $71 million was up 22% year over year and total gross margin expanded from 27%.

Chris Nielsen: Thanks, Glenn. First quarter revenue was $225 million, up 5% from a year ago. This marks our first organic revenue growth since interest rates started to rise. At the same time, gross profit of $71 million was up 22% year over year, and total gross margin expanded from 27% to 31%. Total operating expenses were $140 million, down $18 million year-over-year for our continuing operation. The decrease was primarily attributable to $13 million in lower marketing expenses.

Chris Nielsen: 31%.

Chris Nielsen: Total operating expenses were $140 million down $18 million year over year for our continuing operations. The decrease was primarily attributable to $13 million and lower marketing expenses.

Chris Nielsen: $6 million from foregoing our annual company-wide event and $5 million of lower personnel costs. This is partially offset by a $9 million increase in legal contingencies primarily connected to the proposed settlement that we announced yesterday with an 8K filing.

Chris Nielsen: 6 million from $6 million from foregoing, our annual company wide of that and $5 million of lower personnel costs. This was partially offset by a $9 million increase in legal contingencies, primarily connected to the proposed settlement that we announced yesterday with an 8-K filing.

Chris Nielsen: The $9.25 million settlement amount was recorded in our first quarter results and is excluded from our adjusted EVA calculation. Our adjusted EBITDA loss of $28 million was up from a loss of $64 million in the prior year. Seasonal losses in the first quarter are to be expected, but we're making steady progress toward positive adjusted EBITDA. Our trailing 12-month adjusted EBITDA loss now stands at $40 million today, compared to a loss of $145 million one year ago. We expect to continue narrowing that gap in the second and third quarters and to post-positive adjusted EBITDA on a consolidated basis for the full year.

Chris Nielsen: The $9 million to $5 million settlement amount was recorded in our first quarter results and is excluded from our adjusted EBITDA calculation.

Chris Nielsen: Our adjusted EBITDA loss of $28 million was up from a loss of $64 million in the prior year.

Chris Nielsen: Seasonal losses in the first quarter are to be expected, but we're making steady progress toward positive adjusted EBITA. Our trailing 12 month adjusted EBITA loss now stands at $40 million today compared to a loss of $145 million one year ago, We expect to continue narrowing that gap in the second and third quarters in postpaid.

Chris Nielsen: Adjusted EBITDA on a consolidated basis for the full year.

Chris Nielsen: The net loss was $67 million compared to a net loss from continuing operations of $57 million in the prior year, or $61 million including discontinued operations. This was in line with our $72 million to $65 million loss guidance range. Neither the $9 million in legal contingencies nor the $6 million gain on extinguishment of notes was contemplated at the time of guidance.

Chris Nielsen: Net loss of $67 million compared to a net loss from continuing operations of $57 million in the prior year or <unk> $61 million, including discontinued operations. This was in line with our $72 million to $65 million loss guidance range.

Chris Nielsen: Neither the $9 million in legal contingencies, nor the $6 million gain on extinguishment of notes was contemplated at the time of guidance.

Chris Nielsen: In the prior year, we had a $42 million gain from the extinguishment of nuts. Our adjusted EBITDA from continuing operations was $28 million, which was slightly better than the top end of our guidance range. Diluted loss per share from continuing operations attributed to common stock was $0.57 compared with $0.52 one year ago. Now turning to our segment results, real estate services generated $131 million in revenue, up 3% year over year. Brokerage revenue, or revenue from home sales closed by our own agents, was up 5% on a 3% decrease in brokerage transactions offset by an 8% increase in brokerage revenue per transaction.

Chris Nielsen: In the prior year, we had a $42 million gain from the extinguishment of nuts.

Chris Nielsen: Our adjusted EBITDA from continuing operations was $28 million, which was slightly better than the top end of our guidance range.

Chris Nielsen: So alluded loss per share from continuing operations attributable to common stock was 57 cents compared with 50 to one year ago.

Chris Nielsen: Now turning to our segment results real estate services generated $131 million in revenue up 3% year over year.

Chris Nielsen: Brokerage revenue or revenue from home sales closed by our own agents was up 5% on a 3% decrease in brokerage transactions offset by an 8% increase in brokerage revenue per transaction.

Chris Nielsen: Revenue from our partners decreased 23% on a 16% decrease in transactions and a mixed shift to lower value houses. Real estate services gross margin was 15.4%, up 300 basis points year over year. This is primarily driven by a 280 basis point decrease in tour and field costs, a 220 basis point decrease related to not holding a company-wide event in 2024, and an 80 basis point decrease in personnel costs and transaction bonuses. These were offset by a 220 basis point increase in solar home improvement expenses.

Chris Nielsen: Revenue from our partners decreased 23% on a 16% decrease in transactions and mix shift to lower value houses.

Chris Nielsen: Real estate services gross margin was 15, 4% up 300 basis points year over year. This was primarily driven by 280 basis point decrease in tour and field costs at 220 basis point decrease related to not holding a company in light of that in 2024, and an 80 basis point decrease in personnel costs and transaction bonuses.

Chris Nielsen: These were offset by 220 basis point increase in solar home improvement expenses.

Chris Nielsen: Total net loss for real estate services was $39 million, up from a net loss of $58 million in the prior year. And our adjusted EBITDA loss of $25 million was up from $44 million in the prior year. The increase was tributable to higher gross margin and lower operating expenses, as well as revenue. Our rental segment posted its sixth straight quarter of growth with revenue of $50 million and growth of 16%.

Chris Nielsen: Net loss for real estate services was $39 million up from a net loss of $68 million in the prior year and our adjusted EBITDA loss of $25 million was up from $44 million in the prior year. The increase was attributable to higher gross margin and lower operating expenses as well as revenue growth.

Chris Nielsen: Our rental segment posted its sixth straight quarter of growth with revenue of $50 million and growth of 16%.

Chris Nielsen: Total net loss for rental was $13 million, up from a net loss of $23 million in the prior year. Adjusted EBITDA for the quarter was about $460,000, marking the Reynolds segment's third straight quarter positive adjusted EBITDA. Our mortgage segment generated $34 million in revenue, down 7% year over year. However, this result was above our guidance range. Strong progress on the attach rate drove incremental volume. Mortgage gross margin was 23.4%, up from 19.9% a year ago.

Chris Nielsen: Total net loss for rentals was $13 million up from a net loss of $23 million in the prior year.

Chris Nielsen: Adjusted EBITDA for the quarter it was about $460000 Mark in the metals segment third straight quarter of positive adjusted EBITDA.

Chris Nielsen: Our mortgage segment generated $34 million in revenue down 7% year over year.

Chris Nielsen: This result was above our guidance range of strong progress on attach rate drove incremental volume.

Chris Nielsen: <unk> gross margin was 23, 4% up from 19, 9% a year ago.

Chris Nielsen: The net loss for mortgage was nil compared to a loss of $1 million in the prior year. Adjusted EBITDA was positive $1 million, which was roughly flat compared to the prior year. Our other segment generated revenue of $11 million compared to $7 million in the prior year, as both our title and digital revenue businesses grew. Other segment gross margin was 41.7%, up from 26.3% a year ago.

Chris Nielsen: Net loss for mortgage was nil compared to a loss of $1 million in the prior year.

Chris Nielsen: Adjusted EBITDA was positive $1 million, which was roughly flat compared to the prior year.

Chris Nielsen: Our other segment generated revenue of $11 million compared to $7 million in the prior year as both our title and digital revenue businesses group.

Chris Nielsen: Other segment gross margin was 41, 7% up from 26, 3% a year ago.

Chris Nielsen: Total net income was $3 million compared to a small net loss in the prior year, and adjusted EBITDA was positive $3 million compared to roughly flat in the prior year. Now, turning to our consolidated financial expectations for the second quarter. The second quarter of 2024 total revenue is expected to be between $285 million and $298 million, representing a year-over-year growth between 4% and 8% compared to the second quarter of 2023. Included within total revenue are real estate services revenue between $180 million and $188 million, rental revenue between $50 million and $51 million, mortgage revenue between $39 million and $42 million, and other revenue between approximately $16 million.

Chris Nielsen: Total net income was $3 million compared to a small net loss in the prior year and adjusted EBITDA was positive $3 million compared to roughly flat in the prior year.

Chris Nielsen: Total net loss is expected to be between $34 million and $28 million, compared to a net loss of $27 million in the second quarter of 2023. Just Adiba's losses are expected to be between negative $4 million on the low end and positive $2 million on the high end, which at the midpoint would narrow our trailing 12 months of Just Adiba to a loss of $34 million. This guidance includes approximately $41 million in total marketing expenses.

Chris Nielsen: Now turning to our consolidated financial expectations for the second quarter.

Chris Nielsen: The second quarter of 2020 for total revenue is expected to be between $285 million from $298 million, representing a year over year growth between 4% and 8% compared to the second quarter of 2023.

Chris Nielsen: Included within total revenue, our real estate services revenue between $180 million and $188 million.

Chris Nielsen: <unk> revenue between $50 million and $51 million.

Chris Nielsen: <unk> revenue between $39 million and $42 million in other revenue of approximately $16 million.

Chris Nielsen: Total net loss is expected to be between $34 million and $28 million compared to a net loss of $27 million in the second quarter of 2023 <unk>.

Chris Nielsen: Adjusted EBITDA is expected to be between negative $4 million on the low end and positive $2 million on the high end, which at the midpoint would narrow our trailing 12 month adjusted EBITDA loss of $34 million.

Chris Nielsen: This guidance includes approximately $41 million in total marketing expenses.

Chris Nielsen: We're currently planning to spend approximately $115 million in marketing for the full year, which is down 2% compared to 2023 and reflects our decision to pull back on mass media advertising in light of the rising rate environment.

Chris Nielsen: We're currently planning to spend approximately $115 million on marketing for the full year, which is down 2% compared to 2023 and reflects our decision to pull back on mass media advertising in light of the rising rate environment. On a final note, we've signed a letter of intent to sell nearly all of our mortgage servicing rights, which were valued approximately $32 million on our balance sheet as of March 31, 2024. We've not included any potential gain or loss from the sale within our guidance and expect to complete the transaction during the second quarter. Now, let's open the lines for your questions.

Chris Nielsen: One final note, we've signed a letter of intent to sell nearly all of our mortgage servicing rights and mortgage servicing rights were valued at approximately $32 million on our balance sheet as of March 31, 2024, we've not included any potential gain or loss from the sale within our guidance and expect to complete the transaction during the second quarter.

Chris Nielsen: Now, let's open the lines for your questions.

Speaker Change: Thank you we will now be conducting the question and answer session.

Operator: Thank you. We will now be conducting the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in service. You may press star 2 if you'd like to remove a question. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button.

Operator: Like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the queue. You May press star two if you'd like to remove a question from the queue.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: One moment, please, while we poll for questions. And the first question comes from the line of Naved Khan with B. Reilly Securities. Please proceed with your question. Yeah, hi. Thanks a lot.

Operator: Please while we poll for questions.

Naved Ahmad Khan: And the first question comes from the line of Nevada, Kang with B Riley Securities. Please proceed with your question.

Naved Ahmad Khan: Yeah, hi, thanks a lot. A couple of questions for me. Glenn, maybe just talk about, you know, you gave us some color on the housing market and, you know, how the interest rate... Thank you. Attage rates increased to around 30%. Can you maybe talk about what you're seeing in maybe your best markets in terms of attach, and where do you think this attach rate can realistically end up in the medium term?

Naved Ahmad Khan: Yeah, Hi, Thanks, a lot a.

Naved Ahmad Khan: A couple of questions from me Glenn maybe just talk about.

Naved Ahmad Khan: You gave us some color on the housing market and how the interest rate.

Naved Ahmad Khan: It's kind of in.

Naved Ahmad Khan: <unk> recently, but just give us a sense of what do you think.

Naved Ahmad Khan: You know how the year would look like especially as we enter the peak period for.

Naved Ahmad Khan: For the second and the third quarter.

Naved Ahmad Khan: So that's one and the other question I had is around mortgage attached so it's great to see.

Naved Ahmad Khan: Attach rate increase to around 30% can you maybe talk about what are you seeing and maybe your best market syndrome to attach and where do you think.

Naved Ahmad Khan: This tax rate can realistically end up in the medium term.

Speaker Change: Glenn I think he may be on mute button.

Operator: Glenn, I think you may be on mute.

Speaker Change: Okay, that's a dingbat kind.

Glenn Kelman: Hey, such a dingback. I started answering the question while I was on mute.

Speaker Change: Kind of add I started answering the question while I was on mute.

Glenn Kelman: But this is only to say that we have prepared some color in the remarks, and everything I could add would be consistent with that, which is that rates have come up. We are hopeful that since this happened last year and so many people put off their home-buying plans, this year they are slightly more likely to go through with it. But there's no question that rates are going to take their toll on the market. What's been interesting to me, especially just hearing the anecdotes from this weekend, is how mixed the response has been where we are.

Glenn Kelman: But.

Speaker Change: This is only to say that we've prepared some color in the remarks.

Glenn Kelman: And everything I could add would be consistent to that which is that rates have come up we are hopeful that since this happened last year and so many people put off their home buying plans that this year. They are slightly more likely to go through with it but there's no question that rates are going to take their toll on the market. What's been interesting to me, especially just hearing the anecdotes from the <unk>.

Glenn Kelman: Weekend is how mixed the response has been.

Glenn Kelman: Where we are getting.

Glenn Kelman: Signals that buyers are still going to go through with it, that sellers are coming on to the market, that sales are going to keep happening. Elsewhere, there are price drops, and often, even within a market, we're seeing listings sit on the market. So I think the consumer is very confused right now.

Glenn Kelman: Signals that buyers are still going to go through with that sellers are coming onto the market that sales are going to keep happening elsewhere. There are price drops often even with Ana market. We're seeing listing sit on the market. So I think the consumer is very confused right now I think they are very sensitive to macroeconomic news and obviously interest rates.

Glenn Kelman: I think they are very sensitive to macroeconomic news and, obviously, interest rates. It's just a jittery time in the overall economy and in the housing market. That has made the signals that we're getting just very mixed and very confusing. Top of the funnel has been light almost all through the year.

Glenn Kelman: It's just it's jittery time, and the overall economy and in the housing market and that has made the signals that we're getting just very mixed and very confusing.

Glenn Kelman: Top of the funnel has been light almost all through the year.

Glenn Kelman: Yes.

Glenn Kelman: It's surprising how many of those customers that do come to us end up buying or selling a home. I think the most worrisome trend is that we saw this acceleration in the number of listings coming on the market at the beginning of the year, and that is really starting to slow. Interest rates eased just over the past few days, so maybe that trend will reverse again, but mostly, this market has been inventory constrained.

Glenn Kelman: Hence surprising is how many of those customers that do come to us end up buying or selling a home.

Glenn Kelman: I think the most worrisome trend is that we saw this acceleration in the number of listings coming onto the market at the beginning of the year and that is really starting to slow interest rates east just over the past few days. So maybe that trend will reverse again, but mostly this market has been inventory constrained. So when we see more listings come onto the market.

Glenn Kelman: So when we see more listings come onto the market, we see more sales. No matter how much interest rates have risen, and that's affected buyers, it affects sellers more because they just decide they can't move up; they can't afford their own house when the mortgage goes from a 3% rate to a 7% rate if they had to buy it again. So that's the first part on a mortgage attached. Our best markets are closer to the high 30s and low 40s.

Glenn Kelman: We see more sales no matter, how much interest rates have risen and that's affected buyers. It affects sellers more because they just decided they can't move up they can't afford their own house when the mortgage goes from a 3% rate to a 7% rate if they had to buy it again. So that's the first part on a mortgage attach our best markets or closer to high <unk>.

Glenn Kelman: Low forty's.

Glenn Kelman: You know, it really is a function of price and service and the relationship between the agent and the lender. And just in the past two or three years, we've been working much better together. I wish there was a silver bullet that we could point to, but most of it is actually just perseverance, building these alliances one by one.

Glenn Kelman: It really is a function of price and service and the relationship between the agent and the lender and just over the past two or three years, we've been working much better together.

Glenn Kelman: I wish there was a silver bullet that we could point to but most of it is actually just perseverance building. These alliances one by one.

Glenn Kelman: But it has certainly helped that we are doing two things. Number one, we mentioned that we integrated our systems with Bay Equity's systems. So when somebody completes a tour, we tell them, "Why don't you talk to your Bay Equity loan officer?" And when somebody writes an offer, we alert the Bay Equity loan officer that someone is making a bid. And so that kind of systematic integration has helped augment the relationships that the agent has with the lender.

Glenn Kelman: It has certainly helped that we are doing two things number one we mentioned that we integrated our systems with pay equity system. So that when somebody completes the tour. We tell them why don't you talk to your Bay equity loan officer. When somebody writes an offer we alert the bay equity loan officer that someone is making a bid and so that kind of systematic integration.

Glenn Kelman: Has helped augment the relationships that the agent has with the lender and then the second point.

Glenn Kelman: And then the second point is that we have introduced in some markets an incentive for real estate agents to recommend Bay Equity. And the results of that have actually been mixed. The systems integration, and relationship building have worked better than the money. I couldn't believe it!

Glenn Kelman: Is that.

Glenn Kelman: We have introduced in some markets and incentive for real estate agents to recommend by equity and the results of that have actually been mixed.

Glenn Kelman: The systems integration the relationship building has worked better than the money.

Glenn Kelman: Couldn't believe it.

Speaker Change: Thanks, Dan I appreciate the color.

Naved Ahmad Khan: Thanks, Glenn. I appreciate the call.

Naved Ahmad Khan: Thanks.

Operator: And the next question comes from the line of John Campbell with, Please proceed with, Hey guys.

Naved Ahmad Khan: The next question comes from the line of John Campbell with Stephens, Inc. Please proceed with your question.

John Robert Campbell: Hey guys, good afternoon. Congratulations on a solid quarter. Glenn, I just wanted to maybe go back to the buyer agency agreement. I actually asked about it on this last earnings call, but I was asking whether you thought it would be standard. It seems like we're kind of heading down that path now. I wanted to get your take on that. And, you know, you guys, I think one of the challenges you face is you've had some low intent or maybe no intent consumers that have kind of used it as a hobby.

John Robert Campbell: Hey, guys. Good afternoon, congrats on a solid quarter.

John Robert Campbell: So I think that we're thinking that maybe buyer agency agreements will help kind of knock out some of that out of the mix, right? Where you get higher intent consumers. So I want to ask about that if you think that that's going to play out. And then, on a sign and save, it sounds like you're going to keep that in place where you'll, you know, continue to give the rebate even with a mandated buyer agency agreement. So I was going to see if that's, you know, if you have the potential to take away that rebate again.

John Robert Campbell: Glenn I just wanted to maybe go back to the buyer agency agreement.

John Robert Campbell: Actually I asked about this last earnings call, but was asking whether you thought it would be a standard it seems like we're kind of heading down that path now.

John Robert Campbell: Wanted to get your take on that end.

John Robert Campbell: I think one of the challenges you face is you've had some low intent or maybe no intent consumers at a kind of use it as a hobby. So I think were thinking that maybe Barry disagreements will help kind of knock out some of that out of the mix right, where you get higher intent consumers.

John Robert Campbell: I want to ask about that if you think that that's going to play out and then on the sign and save it sounds like you're going to keep that in place. We will continue to give the rebate even with a mandate to buyer agency agreement. So I'm just gonna see if that's you know if you have the potential to takeaway that rebate again.

Glenn Kelman: I'll answer the second question first. We don't anticipate eliminating the refund. But we do feel that sign and save has been a seismic change in our business. We've been trying to get the close rate up for nearly a decade, and to have it go up 20% is massive for us. The biggest problem Redfin has had over the years is that the website keeps generating more opportunities for our agents, but the close rate keeps going down. And I think that's really a function not just of what Redfin is doing, but what other portals are doing.

Speaker Change: Well I'll answer the second question first we don't anticipate eliminating the refund.

Glenn Kelman: But we do feel that sign and say it has been a seismic change in our business. We've been trying to get close rate up for nearly a decade and have it go up 20%.

Glenn Kelman: Is massive for us.

Glenn Kelman: The biggest problem redfin has had over the years since at the website keeps generating more opportunities for our agents, but close rate keeps going down and I think that's really a function not just of what redfin is doing but what other portals are doing its really created real estate as a hobby for people to go tour homes. So they feel no emotional obligation to the agent and so thats.

Glenn Kelman: It's really created real estate as a hobby for people to go tour homes where they feel no emotional obligation to the agent. And so that secular change in consumer behavior was just blowing a hole in our P&L. And instead of having it go down 5%, 10% a year, to have it go up 20% a year, it just really changes the economics of our business, but it also changes the morale within the sales force because we're making more out of less, and it's certainly why we are fairly confident that we're going to do well this year, despite a worsening housing market.

Glenn Kelman: Secular change in consumer behavior was just blowing a hole in our P&L.

Glenn Kelman: And instead of having it go down 5%, 10% a year to have it go up 20% a year.

Glenn Kelman: It just really changes the economics of our business, but it also changes the.

Glenn Kelman: The morale within the sales force that we're making more out of less.

Glenn Kelman: And it's certainly why we are fairly confident that we're going to do well this year. Despite a worsening housing market.

Glenn Kelman: So we built this sales muscle to get buyer's agency agreements signed. But not all of our customers want to sign them. About half of our sales come from customers who say, you know what? I'm not going to sign it, but I just want to keep touring with you. So we need sales from both groups, and that's a good reason to keep the incentive. The fact that we have rolled this out broadly only in the last couple of months means that I think the best results are yet to come.

Glenn Kelman: So we built this sales muscle to get buyers agency agreements signed.

Glenn Kelman: Not all of our customers want to sign them about half of our sales comes from customers, who say you know what I'm not going to sign it but I just wanted to keep touring with you and then the other half comes from those who do sign it.

Glenn Kelman: So we need to.

Glenn Kelman: Sales from from both groups and that's a good reason to keep the incentive.

Glenn Kelman: The fact that we rolled this out broadly only in the last couple of months means that I think the best results are yet to come.

Glenn Kelman: Okay, that's a great answer. And then, you know, just kind of staying at a high level. I mean, some of your own from the portal landscape, some of your competitors have obviously late kind of laid the seeds for listing or the sell side agent ad products. They seem to be off to a pretty good start. I know you guys probably don't want to cannibalize obviously your core business, like in your top markets, but you know, for the markets where you're subscale, have you guys considered launching a similar kind of listing advertising product that you could run alongside?

Speaker Change: Okay, that's great answer and then.

Glenn Kelman: Just kind of staying at the high level I mean, some of your own from a portal landscape. Some of your competitors have obviously late kind of lead the seats for listing or the sell side agent ad products.

Glenn Kelman: They seem to be off to a pretty good start I know you guys, probably don't want to cannibalize, obviously your core business like in your top markets, but for the markets, where you're subscale have you guys considered launching a similar kind of listing advertising product that you can run alongside.

Glenn Kelman: Yes, well if you go back to the prepared remarks, there is some detail there about how we're launching a similar product.

Glenn Kelman: Yes, well, if you go back to the prepared remarks, there's some detail there about how we're launching a similar product. So we're doing that both for our own agents and for agents at traditional brokerages. They can claim a listing, and then the buyers who are interested in touring that listing or bidding on that listing, instead of being routed to a Redfin agent on the buy side, would instead be routed to the listing agent. So that could be a Redfin listing agent if it's our listing, or it could be, um, a traditional agent's listing, but they would have to pay to claim that listing. So,

Glenn Kelman: We're doing that both for our own agents and for agents. The traditional brokerages that can claim a listing and then the buyers who are interested in touring that listing or bidding on that listing instead of being routed to a redfin agent on the buy side would instead be routed to the listing agents so that could be a redfin listing agent if it's our listing.

Glenn Kelman: Or it could be.

Glenn Kelman: A traditional agents listening, but they would have to pay to claim that listing so.

John Robert Campbell: Obviously, we want to be economically rational about this. We understand how much money we make off each listing when we connect those buyers to our own buyer agents. And the listing agents would instead have to pay us a higher fee than what we could make that way. But we see it as consistent with our mission, John, because we could be facilitating a direct sale that lets consumers save money. And we think it's part of this larger strategy that we've discussed for the last 18 months, to have a digital shift where we make more of our revenue digitally.

Glenn Kelman: Obviously, we want to be economically rational about this we understand how much money, we make off each listing when we connect those buyers to our own buyers' agents and the listing agents would instead have to pay us a higher fee than what we could make that way, but we see it as consistent with our mission John because we could be facilitating a direct.

John Robert Campbell: Sale that lets consumers save money.

John Robert Campbell: And we think it's part of this larger strategy that we've discussed for the last 18 months.

John Robert Campbell: Have a digital shift where we're making more of our revenue digitally with the working on that since about October of 2023, we.

John Robert Campbell: We've been working on that since about October of 2023. We do not think that a company that is bet entirely on that model is the right choice. We don't think betting entirely on the buyer's agent is the right choice. What you really want to support is the consumer being able to decide, do I want to buy directly from the listing agent, or do I want my own representation? You want to be able to monetize both audiences. We think this is a good balance, and we hope to launch it in the summer.

John Robert Campbell: We do not think that a company that has been entirely on that model is the right choice. We don't think betting entirely on buyer's agent is the right choice. What you really want to support is the consumer being able to decide do I want to buy directly from the listing agent or do I want my own representation, you want to be able to monetize both audiences. So.

John Robert Campbell: We think this is a good balance and we hope to launch it in the summer.

Jason Stuart Helfstein: Thanks a lot, Glenn. And the next question comes from the line of Jason Helfstein with Oppenheimer. Please proceed with your question. Thanks. So it sounds like you're having good success with the newer commission structure, assuming that you end up

Speaker Change: Thanks, a lot of sense. Thanks, Glenn.

Jason Stuart Helfstein: And the next question comes thank you Jason <unk> with Oppenheimer. Please proceed with your question.

Jason Stuart Helfstein: And the next question comes from the line of Jason Helfstein with Oppenheimer. Please proceed with your question. Thanks.

Jason Stuart Helfstein: So it sounds like you're having good success with the the newer commission structure, assuming that you end up moving to this let's say for the.

Jason Stuart Helfstein: The bulk of transactions, how do you think that that kind of changes.

Jason Stuart Helfstein: The financial model and just like what are are there other kind of like fixed costs or just other changes you would make once you get to what you would consider kind of full scale with that type of model. Thank you.

Jason Stuart Helfstein: Well I'll start with Chris you May want to comment here. The goal has been to run a similar gross margin business, but one that has more scale. Jason you are the one who pointed out that we.

Glenn Kelman: Well, I'll start, but Chris, you may want to comment here. The goal has been to run a similar gross margin business, but one that has more scale. Jason, you were the one who pointed out that we lose on the upside, we lose on the downside, when the market really takes off, we don't have enough capacity when it goes down very quickly. We're paying agents salaries, and it's blowing a hole in our P&L, and we think we've addressed that, but the real benefit is that our incentives are aligned with the agent.

Glenn Kelman: We lose on the upside we lose on the downside when the market really takes off we don't have enough capacity when it goes down very quickly.

Glenn Kelman: We're paying agent salaries, and it's blowing a hole in our P&L and we think we've addressed that but the real benefit is that.

Glenn Kelman: Our incentives are aligned with the agent, we're taking share faster, we're able to recruit and retain a higher quality agents. The results from the initial four California markets couldnt be better from a revenue growth perspective from a share perspective. So the goal really has been at least in this initial pilot two <unk>.

Glenn Kelman: We're taking share faster. We're able to recruit and retain a higher quality agents. The results from the initial four California markets couldn't be better from a revenue growth perspective, from a share perspective. So the goal really has been, at least in this initial pilot, to grab more revenue, to get more share, to improve our service, especially in the luxury segment, where we sometimes struggle to keep and hire the best agents. And that part has just paid off.

Glenn Kelman: Grab more revenue to get more share to improve our service, especially to the luxury segment, where we sometimes struggle to keep and hire the best agents and that part has just paid off in what we were worried would happen is that when we did that gross margins would suffer that we'd be getting more revenue, but it.

Glenn Kelman: And what we were worried would happen is that when we did that, gross margins would suffer, that we'd be getting more revenue, but it would be lower quality revenue. In fact, it seems that the quality of the revenue has held up, and we're just getting higher share gains, and it's across the board. So we're doing better overall with loyalty sales and with luxury sales. So could we go to an even more variable model?

Glenn Kelman: B lower quality revenue in fact, it seems that the quality of the revenue has held up and we're just getting higher share gains and it's across the board. So we're doing better overall with loyalty sales with luxury sales. So could we go to an even more variable model.

Glenn Kelman: It's possible, and then that would allow us to take out other costs. But really, what we were responding to wasn't the need so much to take out a huge amount of overhead, as it was trying to grab more share; there would be fewer managers, but that trend was already happening. We're lowering support costs; that trend was already happening. I think having an all-variable workforce where, you know, they are looking at this and comparing the split at Remax or Keller or some other traditional brokerage, it just forces us to work harder and harder to lower all of our field overhead costs. So it's been a really good alignment of incentives, and the main benefit has been gaining share on the same sheet. Chris, do you have anything to add to that? Now, that's good news.

Speaker Change: It is possible and then that would allow us to take out other costs, but really what we were responding to wasn't the need so much too.

Chris Nielsen: Take out a huge amount of overhead.

Chris Nielsen: It was trying to grab more share there will be fewer managers, but that trend was already happening. We're lowering support costs that trend was already happening I think having an all variable workforce where they.

Glenn Kelman: Hey.

Chris Nielsen: Are looking at this and comparing the split.

Chris Nielsen: At Remax or color or some other traditional brokerage it just forces us to work harder and harder to lower all of our field overhead costs.

Chris Nielsen: So it's been a really good alignment of incentives and the main benefit has been gaining share at the same shape business.

Glenn Kelman: Chris do you have anything to add to that.

Chris Nielsen: No. That's a good overview I think we've been as Glenn said really pleased with how the program has gone so far.

Chris Nielsen: Now that's a good overview. I think we've been, as Glenn said, really pleased with how the program has gone so far.

Chris Nielsen: Okay I appreciate the color. Thank you.

Chris Nielsen: I think youll see some margin benefits beyond just the revenue growth and the share growth.

Chris Nielsen: I think you'll see some margin benefits beyond just the revenue growth and the share growth in volatile situations when things really take off or when things plummet. The incentives are aligned better.

Chris Nielsen: In volatile situations when.

Chris Nielsen: Things really take off or when things plummet.

Chris Nielsen: The incentives are aligned better and we just.

Unknown Speaker: Unknown Speaker 003......But mostly we've been trying to give agents a good deal and still take. And the next question comes from the line of Bernie McTernan with Needham. Please proceed with your question. Hey, this is, uh, Stephanos Crist calling in.

Chris Nielsen: Have your salaries to pay.

Bernard Jerome McTernan: But mostly we have been trying to give agents a good deal and still take share.

Bernard Jerome McTernan: And the next question.

Bernard Jerome McTernan: And the next question comes from the line of Bernie McTernan. Please proceed with your questions.

Bernard Jerome McTernan: Comes from the line of Bernie Mcternan with Needham. Please proceed with your question.

Stephanos Crist: Hey, this is stefanos crist, calling in for Bernie Thanks for taking our questions.

Stephanos Crist: I just wanted to touch on rentals grew 16% year over year.

Stephanos Crist: Any sense any sense, how much that was market growth versus share gains than anything that you've been seeing on just competitive intensity.

Bernard Jerome McTernan: Sure.

Bernard Jerome McTernan: Our census at the Big players are getting bigger and the small players are getting smaller and we wanted to get on the right side of that.

Glenn Kelman: Our sense is that the big players are getting bigger, and the small players are getting smaller, and we want to get on the right side of that. So, there has been a flight to size.

Glenn Kelman: So.

Bernard Jerome McTernan: There has been a.

Bernard Jerome McTernan: Flight to size I don't know if the overall market is getting bigger, but zillow and costar.

Glenn Kelman: I don't know if the overall market is getting bigger, but Zillow and CoStar have been trying to grab more customers at the expense of some of the smaller players. And so, you know, we thought this was a respectable result. We're glad to keep growing. It's amazing that we went from losing $10 million in this segment a year ago in Q1 to making money for the third straight quarter now. But the next stage in the rent acquisition is to try to grab a share, hand over fist, and really grow the online marketplace.

Glenn Kelman: Ben <unk>.

Glenn Kelman: Trying to grab more customers at the expense of some of the smaller players and so.

Glenn Kelman: We thought this was a respectable result, we're glad to keep growing its amazing that we went from losing $10 million in this segment a year ago in Q1 to making money for the third straight quarter now.

Glenn Kelman: But the next stage and the rent acquisition.

Glenn Kelman: Is to try to grab share hand over fist and really to grow the online marketplace I thought the most encouraging trends.

Glenn Kelman: I hope the most encouraging trend in the revenue report from rent is just that that revenue growth came from the online marketplace. Sometimes we were getting revenue growth from lower margin tool sales when really what's crucial to our competitive position and to our profits is getting it in that high margin marketplace. So the main activity here to make us more competitive is just to go hog wild on search engine optimization, visitor engagement, and conversion rate optimization. These are the strong suits of Redfin, and so on.

Glenn Kelman: And the revenue report from rent is just that that revenue growth came from the online marketplace. Sometimes we were getting revenue growth from lower margin tool sales win really what's crucial our competitive position and our profits is getting it in a high margin marketplace. So the main activity here to make us more competitive.

Glenn Kelman: It is just to go hog wild on search engine optimization visitor engagement conversion rate optimization. These are the strong suits of redfin and so <unk>.

Glenn Kelman: Integrating the two website teams so that we can work together on this, we think we can generate more demand for our property management customers and really turn that flywheel. That's the big challenge is that, you know, we've got costs under control, we've stabilized the marketplace, it's growing nicely, but we want to do way better than just grow nicely. We think there's an opportunity here, just given the historical ranks of rent and apartment guide, to do much better than that. Now, that's what you should look for from us over the next eight. That's great. Thank you.

Glenn Kelman: Integrating the two website teams so that we can work together on this we think we can generate more demand for our property management customers and really turned that flywheel, but thats.

Glenn Kelman: That's the Big Challenge is that we've got cross under control, we stabilize the marketplace, it's growing nicely, but we wanted to do way better than growing nicely, we think theres an opportunity here.

Glenn Kelman: Just given the historical ranks of rent an apartment guide.

Glenn Kelman: To do much better than that.

Glenn Kelman: So.

Glenn Kelman: And that's what you should look for from US over the next 18 months.

Speaker Change: No that's great. Thank you.

Glenn Kelman: Maybe just follow up on some of the consumer-facing AI applications, you know, what do you see that doing in the next 12 months and, you know, adding to the business? Well, our hope is that Ask Redfin is going to have a meaningful effect. You know, we talked about two new generative AI applications, and the first was this redecorating capability where you can click a button and reimagine how a house looks.

Glenn Kelman: Maybe just follow up on some of the consumer facing AI applications, what do you see that in doing in the next 12 months.

Glenn Kelman: Adding to the business.

Glenn Kelman: Well, our hope is that as Greg said, it's going to have a meaningful effect.

Glenn Kelman: We talked about two new generative AI applications in the first was.

Glenn Kelman: This redecorating capability, where you can click a button and re imagine how house looks it is so cool.

Glenn Kelman: It is so cool, but I don't know that it's going to have a massive commercial impact, whereas Ask Redfin has really changed the volume of questions that are coming in, and it's allowed us to instantly answer them. We worked really hard on that because we were so worried about being compliant with fair housing laws. We'd actually worked with partners earlier last year, you may remember, and we did not feel that they were being careful about fair housing laws, so I think we've been at the forefront of this. But, you know, I kind of thought it was baloney, and then I used it, and it was like freaky good and weird and special and magical.

Glenn Kelman: But I don't know that its going to have a massive commercial impact, whereas ask redfin has really changed the volume of questions that are coming in.

Glenn Kelman: And it's allowed us to instantly answer them, we worked really hard on that because we were so worried about being compliant with fair housing laws.

Glenn Kelman: We've actually worked with partners earlier last.

Glenn Kelman: Last year, you may remember and we did not feel that they were being careful about fair housing laws. So I think we've been at the forefront of this.

Glenn Kelman: But you know I kind of thought it was baloney and then I used it.

Glenn Kelman: Was like Freaky, good and weird and special and magical.

Glenn Kelman: So we just think we can be this instant response website for answering a wide range of homebuyer questions, and it can increase demand. And the reason I sound a little vague on how much it will increase demand is that right away, you get a lot more people contacting you, and we're still trying to sift through how many of those are actually going to buy a house. But usually, when we have a boatload of people contacting us, it has a gross margin impact because we have to answer all those questions for people.

Glenn Kelman: So we just think we can be.

Glenn Kelman: This incident response website for answering a wide range of homebuyer questions and it can increase demand.

Glenn Kelman: And the reason I sound a little vague on how much it will increase demand is it right away you get a lot more people contacting you and we're still trying to sift through how many of those are actually going to buy a house, but usually when we have.

Glenn Kelman: Boatload of people contacting us it has a gross margin impact as we have to answer all those questions with people.

Glenn Kelman: This time, it's kind of a cost-free experiment where we're getting a lot more volume at the top of the funnel without incurring additional costs in terms of labor. So we're pretty bullish on it. We wouldn't have rolled it out more broadly if we weren't. You know, it's not just for the earnings release or for the press. We're trying to sell more houses here, and we think this is going to help.

Glenn Kelman: This time it is kind of a cost free experiment, where we're getting a lot more volume at the top of the funnel without incurring additional cost in terms of labor.

Glenn Kelman: So we're pretty bullish on it we wouldn't have rolled it out more broadly if we weren't.

Glenn Kelman: Not just for the earnings release or for the press.

Glenn Kelman: We're trying to sell more houses here and we think this is going to help us.

Speaker Change: Got it makes sense. Thank you.

Glenn Kelman: And the next question comes from the line Mcevilly with Zelman and Associates. Please proceed with your question.

Ryan McEvaney: And the next question comes from the line of Ryan McEvaney with Zellman & Associates. Please proceed with your question.

Ryan McEvaney: Hi, there nice job on the quarter and thanks for taking the questions.

Ryan McEvaney: Hi there. Nice job on the quarter, and thanks for taking the questions. To follow up on Jason's earlier question about Redfin Next, so Glenn, I think a comment you made a couple quarters ago was that it should work in high-priced markets, but, you know, the structure might need to have some modification to work in mid- or low-priced markets. So I guess I'm curious, with this next round of seven markets going to Redfin Next, which seems to probably include some mid-predicates, like maybe a Dallas, I guess, is there any differentiation in the, you know, economic model you're bringing to the various next markets at this point in time, and, you know, just generally, you know, how you're thinking about maybe this expansion of these next seven markets to do some more maybe testing and iteration in that process of, you know, potentially expanding further, like what are those milestones you're looking for to feel good about additional markets down the road?

Ryan McEvaney: To follow up on Jason's earlier question about Reds next so Glenn I think a comment you made a couple of quarters ago was that it should work in high price markets, but you know the structure might need to have some modification to work in mid or low priced markets. So.

Glenn Kelman: Sure, you know, as I was answering Ryan's rental question, I started thinking more about Jason's question, so I'm glad you circled back to it because you're really asking the same question. Jason was asking if there are changes to our cost structure that Redfin Next is going to drive, and you're asking how it's going to work at some of these lower-cost markets. What I should have said then that I can say now is that as we've gone to lower cost markets, it's put more pressure on our support costs because suddenly you're exposing yourself to the agent. Here's why your split is what it is.

Ryan McEvaney: I'm curious with this next round of certain markets going to Redfin next which seems to probably include some it's like maybe a Dallas I guess is there any differentiation in the.

Glenn Kelman: Economic model Youre, bringing too to the various next markets at this point in time and.

Glenn Kelman: Just generally.

Glenn Kelman: How you're thinking about maybe this expansion of these next set of markets to do some more maybe testing and duration in that process of.

Glenn Kelman: Essentially expanding further like what are those milestones you are looking for.

Glenn Kelman: To feel good about additional market in Europe. Thank you.

Glenn Kelman: Sure.

Glenn Kelman: Answering Ryan's rental question I started thinking more about Jason's question. So I'm glad you circle back to it because you're really asking the same question.

Glenn Kelman: Jason was asking if there are changes to our cost structure that redfin next is going to drive and Youre asking how it's going to work at some of these lower cost markets.

Glenn Kelman: And.

Glenn Kelman: What I should have said then that I can say now is that as we've gone to lower cost markets. It's put more pressure on our support costs. Because suddenly you are exposing to the agent Here's why your split is what it is youre paying this much for a transaction coordinator you're paying this much for associate agents to help you handle the second.

Glenn Kelman: You're paying this much for a transaction coordinator. You're paying this much for associate agents to help you handle the second, third, or fourth tour. And those agents have said, well, I'm not sure I want to pay that.

Glenn Kelman: Third or fourth tour.

Glenn Kelman: And those agents have said well I'm not sure I want to pay that.

Glenn Kelman: So that has been really healthy for our business to align the agent's incentives with the company's incentives so that we're all trying to sell as many houses as we can and keep as much of that commission as we can for either the agent or the company, and, of course, for the customer. And so going to Chicago, in particular, has been a market where we have been really aggressive about trying to figure out how we can get more efficient.

Glenn Kelman: So that has been really healthy for our business to align the agents incentives with the company's incentives. So that we're all trying to sell as many houses as we can and keep as much of that commission is we can't rather the agent or the company and of course, given the customer good deal too.

Glenn Kelman: And so going to Chicago in particular.

Glenn Kelman: It has been in the market, where we have been really aggressive about trying to figure out how we can get more efficient. So we can offer agents. These fantastic splits and still have a great gross margin for redfin, because as you know our model does give us much better gross margins than other brokerages, we have more leverage because we source the.

Glenn Kelman: So we can offer agents these fantastic splits and still have a great gross margin for Redfin. Because, as you know, our model does give us much better gross margins than other brokerages. We have more leverage because we source the customer.

Glenn Kelman: Customer.

Glenn Kelman: So, I would say that we've been pleasantly surprised at how well the role has gone to mid-priced markets and even lower mid-priced markets as opposed to premium markets. There is one other difference between the high price markets and the mid-priced markets that you should be aware of, which is that in California, we were at a deficit of agents. We had more demand than supply of agents, and in some of these mid-priced markets, that hasn't been as much the case.

Glenn Kelman: So I would say that we've been pleasantly surprised at how well the rollout has gone to mid priced markets and even lower mid priced markets as opposed to premium markets. There is one other difference between the high price markets and the mid price markets that you should be aware of.

Glenn Kelman: Which is that in California, we were at a deficit of agents, we had more demand than supply of agents and in some of these mid priced markets that hasn't been as much the case.

Glenn Kelman: So we think there will be a pretty strong reaction as we bring Next to all these other markets. If it's anything like California, it'll be a miracle. But even if it's half of what it was in California, it'll be pretty good.

Glenn Kelman: So we think there will be a pretty strong reaction as we bring next to all of these other markets. If it's anything like California, it'll be a miracle, but even if it's half of what it was in California, it'll be pretty good and so I think it might not be quite as strong as it was in California, because Chicago or Dallas are already well staff.

Glenn Kelman: And so I think it might not be quite as strong as it was in California because Chicago or Dallas are already well-staffed. And what we found is that as we bring in more Next agents, we just get more sales. I know that's a pretty simple direct relationship, but we've been pleased to see that it's true. So we might just get more aggressive about hiring in those markets, too, above and beyond what we'd originally expected. Agents want to come work with us. Recruiting has been going reasonably well. And we think we need extra agents to take an extra share.

Glenn Kelman: <unk>.

Glenn Kelman: And what we found is that as we bring in more next agents. We just get more sales. So I know, that's a pretty simple direct relationship.

Glenn Kelman: But we've been pleased to see that it's true. So we might just get more aggressive about hiring in those markets to above and beyond what we originally expected.

Glenn Kelman: Just want to come work with us recruiting it's been going reasonably well.

Glenn Kelman: We need the extra agents to take extra sure.

Speaker Change: That's very helpful. Thank you Glenn and Chris one for you just on the balance sheet capital side of things.

Ryan McEvaney: That's very helpful. Thank you, Glenn.

Chris Nielsen: And Chris, one for you, just on the balance sheet capital side of things, I think the 25 notes, obviously you've bought back a good amount over the last year or so. Any thoughts you can share as to how you're thinking about the maturity date? I think it's next October.

Chris Nielsen: I think the 25 notes, obviously you bought back a good amount over the last year or so.

Chris Nielsen: And any thoughts you can share as to how you're thinking about the convert maturity I think it's next October.

Chris Nielsen: Just any general thoughts on how you're thinking about that going forward? Thank you. Sure.

Chris Nielsen: Any general thoughts on how youre thinking about that.

Speaker Change: That going forward. Thank you.

Chris Nielsen: Sure. So we've been making a yield-based decision here, which is when we see a good price on those notes, we want to buy them back. I expect we'll continue to follow that strategy. We've still got board authorization to repurchase notes. There's about $145 million outstanding at this point, and as we've talked about before, we have an additional $125 million available on our Apollo term loan, which does give us plenty of firepower to continue to be kind of thoughtful and aggressive here.

Chris Nielsen: Sure. So we've been making a yield base decision here, which is when we see a good price on those notes we've been wanting to buy them back I expect we'll continue to follow that strategy. We've still got board authorization to repurchase notes, there's about $145 million outstanding at this point and as we've.

Chris Nielsen: Talking about before we have an additional $125 million available on our Apollo term loan, which does give us plenty of firepower to continue to be kind of thoughtful and aggressive here. So we've been pleased with how this has gone so far and I think you'll see us continue to follow a similar strategy going forward again based.

Chris Nielsen: So we've been pleased with how this has gone so far, and I think you'll see us continue to pursue a similar strategy going forward, again based on the yield we see and the price that those notes are offered at.

Chris Nielsen: On the yield we see them and the price that does not show up or down.

Speaker Change: Thank you.

Chris Nielsen: Yeah.

Ygal Arounian: And the next question comes from the line of Ygal Arounian with Citigroup. Please proceed with your question.

Chris Nielsen: And the next question comes from the line of Yigal Iranian with Citigroup. Please proceed with your question.

Ygal Arounian: Hey, good afternoon, guys. On the evolving buyer-agent landscape that we're going to see later in the year, I guess if we maybe simplify it and think through one of the arguments that there will be a lower pool of fees, especially on the buyer side as, you know, some people opt out or some people probably shop a little bit more. You know, your competitive advantage has been on the lower fee side, for sure.

Ygal Arounian: Hey, good afternoon guys.

Ygal Arounian: On the.

Ygal Arounian: Evolving buyer agent landscape that we're going to see later in the year I guess.

Ygal Arounian: If we maybe simplify it and.

Ygal Arounian: Through one of the arguments that.

Ygal Arounian: There'll be a lower for lower pool of fees.

Ygal Arounian: Especially on the buyer side has some.

Ygal Arounian: Some people opt out or some people probably shop, a little bit more your your competitive advantage has been.

Ygal Arounian: Do you think as that happens, some of the competitive positioning, you know, narrows, or do you think it strengthens in that kind of environment where, you know, Glenn just pointed to some of your competitors being less profitable? Get smaller. I know you're looking at some things that you've talked about here on the call on the seller side to offset some of that. But is there enough to capture all of what might get lost in maybe like a more moderate to or medium to severe case of that?

Ygal Arounian: On the lower fee side for sure do you think as that happens some of the competitive positioning.

Ygal Arounian: Narrows or do you think it strengthens then.

Ygal Arounian: That kind of environment, where Glenn you just point to tug and your competitors being less profitable.

Ygal Arounian: Do you think that could actually put them.

Ygal Arounian: And just.

Ygal Arounian: Disadvantage and then if you are seeing the overall pool.

Ygal Arounian: Get smaller and I know, you're you're looking at some things that you've talked about some of them here on the call on on the seller side to offset.

Ygal Arounian: Some of that.

Ygal Arounian: Is there enough to capture.

Ygal Arounian: All of what might get lost.

Ygal Arounian: And then maybe like a more moderate.

Ygal Arounian: Or medium severe.

Ygal Arounian: Case of that.

Ygal Arounian: Sure well, maybe just to provide an emotional response to your question.

Glenn Kelman: Sure, well maybe just to provide an emotional response to your question. I've heard other executives on earnings calls say that they don't expect much change at all. It will happen fairly slowly. I think that is the consensus among most high-level executives of real estate brokerages and portals. But if you talk to the agents on the ground, I think they are much more concerned about the possibility of significant change. And so, I'm not trying to say that all heck is going to break loose, that the Four Horsemen and the Apocalypse are coming in August or something like that.

Glenn Kelman: I've heard other executives on earnings calls say that.

Glenn Kelman: We don't expect much change at all it will happen fairly slowly I think that is the consensus among most high level executives of real estate brokerages and portals.

Glenn Kelman: But if you talk to the agents on the ground.

Glenn Kelman: I think they are much more concerned about the possibility of significant change.

Glenn Kelman: And so.

Glenn Kelman: I'm not trying to say that.

Glenn Kelman: All heck is going to break loose that the four horsemen in the Apocalypse are coming in August or something like that but I do think that there could be a medium level of change.

Glenn Kelman: And.

Glenn Kelman: But I do think that there could be a medium level of change. As someone who has been trying to give consumers a better deal, only to discover that homebuyers have been completely indifferent to price for the past 15 years because they've been trained to believe that a buyer's agent is free. We have to welcome the possibility that those consumers will now become more aware of The Fee, and we'll shop based on value and price.

Glenn Kelman: As someone who has been trying to give consumers a better deal only to discover that homebuyers are completely indifferent to price over the past 15 years, because they've been trained to believe that a buyer's agent is free we.

Glenn Kelman: We have to welcome the possibility that those consumers will now become more aware.

Glenn Kelman: Of the fees and will shop based on value and price that is what redfin has been hoping for all along that when you give people a better deal they actually beat a path to your door.

Glenn Kelman: That is what Redfin has been hoping for all along, that when you give people a better deal, they actually beat a path to your door. And I know your question is about whether lower revenue per deal can be offset by share gain. I think there are two offsets, and only one of them is share gain.

Glenn Kelman: And I know your question is about whether lower revenue per deal can be offset by share gains.

Glenn Kelman: I think there's two offsets and only one of them is the share gains. The other is that you can operate more efficiently. So that you can earn a similar gross profit from sale.

Glenn Kelman: The other is that you can operate more efficiently so that you can earn a similar gross profit from each sale just by working at a higher margin. So my expectation is that if you're working with somebody who's a first-time homebuyer, there are so many efficiencies that we used to pursue that we stopped pursuing because those homebuyers were indifferent almost to price. When we tried to tell them we were saving them money, they'd say, "What are you talking about?"

Glenn Kelman: Just by working at a higher margin. So my expectation is that if you're working with somebody who's.

Glenn Kelman: Our first time homebuyer, there's so many efficiencies that we use to pursuit that we stopped pursuing because those homebuyers were indifferent almost to price. When we tried to tell him we were saving them money they'd say what are you talking about a buyer's agent is free.

Glenn Kelman: My buyer's agent is free, so I think we can run at a good gross margin and take a lot of share. You know, if you asked me 10 years ago, if you could change one thing about the American consumer, what would it be? I'd say.

Glenn Kelman: So I think we can run.

Glenn Kelman: I had a good gross margin.

Glenn Kelman: And we can take a lot of share.

Glenn Kelman: If you'd asked me 10 years ago, if you could change one thing about the American consumer what would it be I'd say.

Glenn Kelman: You know, make sure they know how much a buyer's agent really costs and make them care about it. We've already seen that with the sell side. The reason that we clean up in every listing consultation is that the seller is paying her own real estate agent. And anytime we get in front of a listing customer, we're almost certain to get the listing and then close the sale. The problem is that our website is filled with homebuyers. They are people looking at pretty pictures of houses and deciding what action they want to take. It's not a list of property, but to TOR 1.

Glenn Kelman: Make sure they know how much a buyer's agent really costs and make them care about it.

Glenn Kelman: We've already seen that with the sell side. The reason that we clean up and every listing consultation is the seller is paying her own real estate agent.

Glenn Kelman: And anytime we get in front of a listing customer.

Glenn Kelman: We're almost certain to get the listing and then to close the sale. The problem is that our website is filled with homebuyers. There are people looking at pretty pictures of houses in the action. They want to take is not the list of property.

Glenn Kelman: And so... I'm pretty optimistic that if there is a significant change, we'll be able to adapt to it much better than anyone else. Am I also worried about uncertainty? Of course, but you want a CEO to be worried. We have better cards than anyone else, though.

Glenn Kelman: But to tour one and so.

Glenn Kelman: I'm pretty optimistic that if there is a significant change we will be able to adapt to it much better than anyone else.

Glenn Kelman: Also worried about uncertainty.

Glenn Kelman: Of course, but you want a CEO to be worried.

Glenn Kelman: We had better cars than anyone else so.

Ygal Arounian: I appreciate the thoughtfulness, and I agree. I think you want to be at least worried or thoughtful rather than just brush it off as a non-event.

Speaker Change: I appreciate the thoughtfulness and I agree. Thank you want to be at least worried a thoughtful but rather than just brush it off as a non event.

Glenn Kelman: And then just to follow up on the Adjusted Eats Without Profitability path for this year, I know the macro's been kind of a moving needle here, but is it embedded in that expectation? Is it that macro stays similar and rates stay elevated at this newly elevated level? Is it an expectation that it gets better, or does it not matter as much now, given what you guys have put in place, and you feel like you can get that if it moves up a little and moves down a little? No.

Ygal Arounian: And then just to follow up on on the adjusted EBITDA profitability path for this year.

Glenn Kelman: I know the macros been kind of a moving needle here, but.

Glenn Kelman: Embedded in that expectation is it.

Glenn Kelman: The macro stays similar.

Glenn Kelman: Rates stay elevated at this sort of this newly elevated level is it.

Glenn Kelman: <unk> is that it gets better or.

Glenn Kelman: It does not matter as much now given.

Glenn Kelman: Kind of what you guys have put in place and you feel like you can you can get that.

Glenn Kelman: If it moves up they were open was down a little no.

Glenn Kelman: No, we updated our whole budget, including our spending, on the assumption that the housing market would be like it is right now for the rest of the year. It could get worse.

Glenn Kelman: No we updated our our whole budget, including our spending on.

Glenn Kelman: On the assumption that the housing market would be like it is right now for the rest of the year it could get worse.

Glenn Kelman: Um, and then we'd have to take other measures, I guess, but the big difference is that last year. There were so many people touring houses in the first quarter; none of them seemed to close because rates went up right after we paid all this cost to meet, and we were just in a 60, $70 million hole in Q1. So being $40 million better than that coming out of this Q1 and running more efficiently across the next three quarters. Sales initiatives that should improve close rates. And, you know, all these digital businesses generate profit instead of incurring losses.

Glenn Kelman: And then we'd have to take other measures I guess, but the big difference is that last year.

Glenn Kelman: There were so many people touring houses in the first quarter, none of them seem to close.

Glenn Kelman: Because rates went up right. After we paid all this cost to meet them.

Glenn Kelman: And we were just in a $60 million to $70 million hole in Q1. So.

Glenn Kelman: Being $40 million better than that coming out of this Q1 and running more efficiently across the next three quarters with sales initiatives that should improve close rate.

Glenn Kelman: And all of these digital businesses generating profit instead of incurring losses.

Glenn Kelman: There are no guarantees in life, but this is about as good of a position as we could be in with the housing market being about as data positions. It could be a 4 million units $4 1 million units.

Glenn Kelman: There are no guarantees in life, but this is about as good of a position as we could be in, with the housing market being in about as bad a position as it could be in. Four million units, 4.1 million units. That's about as low as you can go.

Glenn Kelman: That's about as low as you can go.

Glenn Kelman: You know, there's a placeholder in the earning script for me to write the housing section, and I don't do it until, um, like a day or two before the earning scripts, but the placeholder was called the whale turd slides off a shelf and somehow falls into a trench to the bottom of the ocean. So, that means that, yes, housing was bad in Q4, Q1, but now we expect it to be worse, and we don't think it could get that much worse.

Speaker Change: This holder in the earnings script for me to write the housing section and I don't do it until.

Glenn Kelman: Like a day or two before the earnings script, but the placeholder was called the wheelchair slides off a shelf and somehow falls into a trench to the bottom of the ocean.

Glenn Kelman: So that means that yes housing was bad.

Glenn Kelman: In Q4, Q1, but now we.

Glenn Kelman: We expect it to be worse, and we don't think it could get that much worse. The people. We're talking to right now are the people who have to move they've been divorced for a year and they've been living with someone who is driving them crazy.

Glenn Kelman: The people we're talking to right now are the people who have to move. They've been divorced for a year, and they've been living with someone who's driving them crazy. They had a third child, and they're still living in a townhouse with one extra bedroom.

Glenn Kelman: A third child and they are still being in town house with one extra bedroom.

Thomas Cauthorn White: Very helpful. Thank you. And the next question comes from the line of Tom White. Hey, this is Wyatt.

Speaker Change: Very helpful. Thank you.

Thomas Cauthorn White: And the next question comes from the line of Tom White with D.A. Davidson. Please proceed with your question.

Thomas Cauthorn White: And the next question comes from the line of Tom White with D. A Davidson. Please proceed with your question.

Wyatt: Hey, this is why on for Tom Thanks for taking our questions I just had one on buyers wrap agreement requirements could you help us understand what the net effect that this could have on your business like do you foresee that it might negatively impact on your ability to convert some of your traffic into customers or.

Thomas Cauthorn White: Could it pressures the ROI on the leads you send to partner agents.

Thomas Cauthorn White: Thank you.

Glenn Kelman: We don't think it'll have much of an impact, but it's hard to say. So, last week.

Thomas Cauthorn White: We don't think it'll have much of an impact, but it's hard to say.

Glenn Kelman: So.

Thomas Cauthorn White: Last week.

Thomas Cauthorn White: Some of the brokers, some of the portals talked about having a very nominal agreement where instead of disclosing the ultimate price that a real estate agent would charge, you'd simply say that the tour is free, and all we're doing is sending you out on a tour with a contract that covers one day or one tour. And the notice requirements like that could be when you sign up for the tour or could be after the tour.

Thomas Cauthorn White: Some of the brokers some of the portal has talked about.

Thomas Cauthorn White: Having a very nominal agreement where instead of.

Thomas Cauthorn White: Disclosing the ultimate price that a real estate agent with charge would simply say that the tour is free and all we're doing is sending you on a tour with a contract that covers <unk>.

Thomas Cauthorn White: One day or one tour and the notice requirement side that could be.

Thomas Cauthorn White: When you sign up for the Tor or could be after the tour.

Thomas Cauthorn White: Also, we saw several states, like the state of Maryland, object to this. So we're trying to respond to it in real time. Obviously, we want to do what's right for the consumer. We're going to comply with all of the rules that are being put out by the National Association of Realtors and others. We're just trying to figure out the lay of the land. But it seems pretty clear right now that the industry is trying to figure out a low-friction way for websites to introduce homebuyers to real estate agents.

Thomas Cauthorn White: Also we saw several states like the state of Maryland object to this.

Thomas Cauthorn White: So we're trying to respond to it in real time.

Thomas Cauthorn White: Obviously, we want to do what's right for the consumer and we're going to comply with <unk>.

Thomas Cauthorn White: All of the rules that are being put out by the National Association of Realtors and others. We're just trying to figure out the lay of the land.

Thomas Cauthorn White: But it seems pretty clear right now that they.

Thomas Cauthorn White: The industry is trying to figure out a low friction way for websites to introduce homebuyers to real estate agents.

Thomas Cauthorn White: And so, you know, we'll be on the same playing field as other real estate websites, and we think that the friction will be fairly low. A separate question as to whether or not that's the way it should be. You know, we've always been an advocate for consumers. And sometimes we've wanted to create a more transparent marketplace around the fees that different agents charge. But that's easier said than done. Okay, that's helpful. Thank you. Right now, it's trending toward low friction, very low.

Thomas Cauthorn White: And so we'll be on the same playing field as other real estate websites and we think that the friction will be fairly low.

Thomas Cauthorn White: A separate question as to whether or not that's the way it should be.

Thomas Cauthorn White: You know, we've always been an advocate for consumers and sometimes we wanted to create a more transparent marketplace around the fees the different agents charge.

Thomas Cauthorn White: It's easier said than done.

Thomas Cauthorn White: Okay. That's helpful. Thank you.

Thomas Cauthorn White: Right now it's trending towards low friction very low friction.

Day Lee: And as a reminder, if you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is. You may press star 2 to remove any questions. Our next question comes from the line of Day Lee with J.P. Morgan. Please proceed with your question. Great, thanks for taking my question.

Thomas Cauthorn White: And as a reminder, if you would like to ask a question. Please press star one on your telephone keypad are calling for my mission tone will indicate that your line is in the queue. You May press star two to remove any question from the queue.

Day Lee: Our next question comes from the line of day at Lee with Jpmorgan. Please proceed with your question.

Chris Nielsen: I kind of felt like 1Q was an interesting quarter from a marketing and engagement perspective. Again, it's a significant marketing push from one of your rivals. So just curious, is there any learning that you can share around what you might have learned from this dynamic in 1Q? And then, I think going forward, you said marketing would be $115 million in 2024, which does suggest you're expecting either sequential growth or...

Chris Nielsen: Great, thanks for taking my question. This one's for you, Chris.

Day Lee: Great. Thanks for taking my question just one for.

Chris Nielsen: For you Chris.

Speaker Change: <unk> was an interesting quarter from a marketing and engagement.

Chris Nielsen: Okay, that's a significant marketing push from one of your rivals.

Chris Nielsen: Just curious are there any learnings you can share around what you might have.

Speaker Change: I have learned from this dynamic among Q.

Chris Nielsen: And going forward with some marketing won't be $115 million.

Chris Nielsen: Sure.

Chris Nielsen: You're expecting a sequential growth or growth in <unk>, just curious on what's giving you the confidence to being back into marketing.

Speaker Change: About half of the year.

Chris Nielsen: Yeah, Let me start with the second question first which is we did provide guidance on marketing spend for the full year as well as for the second quarter and in general what you should take away from that is that we spent dollars in Q1, we will spend more in Q2, but then both in Q3 and Q4.

Chris Nielsen: Yeah, let me start with the second question first, which is we did provide guidance on marketing spend for the full year, as well as for the second quarter. And in general, what you should take away from that is that we spent dollars in Q1, we'll spend more in Q2, but then both in Q3 and Q4. sequentially, our marketing spend will be down. And that is related to what Glenn was talking about earlier, which is we're taking a look at the macro environment here and just being really careful about spending those dollars in a housing market that is not super strong right now.

Chris Nielsen: Sequentially, our marketing spend will be down and that is related to what Glen was talking about earlier, which is we're taking a look at the macro environment here would just be really really careful about spending those dollars into a housing market that is not super strong right now and so mostly what you'll see us doing them again.

Chris Nielsen: And so mostly what you'll see us doing, again, is spending less as the year goes on on marketing. And then just in terms of Q1, what worked well, how that's gone, this is really tried and true within Redfin, which is that we compete really well for website visitors. Our teams just do an excellent job of having the right information, the right data structures, the right initiatives to allow consumers to find information, but also for search ranking sites to have a good view of the quality of the information that we provide. And so competing for traffic in that way is the most important thing that we did in the first quarter, and it's the most important thing that we do, frankly, all the time.

Chris Nielsen: Spending less as the year goes on on on marketing and then just in terms of Q1, what worked well how that's gone. This is really tried and true within red sandwiches, we compete really well for website visitors. Our team's just doing an excellent job of having the right information right data struck.

Chris Nielsen: Sure, it's the right initiatives.

Chris Nielsen: To allow consumers to find information, but also for search ranking site to have a good view on the quality of the information that we provide and so competing for traffic in that way is the most important thing that we did in the first quarter and I think the most important thing that we do frankly, all the time.

Day Lee: Got it. And just as a follow-up, and I'm sorry to keep going back to the representation agreement and the commission piece, but how do you plan on positioning, like, who's going to pay for the fee when you roll out the representation agreement? It does sound like there are a lot of different views around, like, actual implementation and who's going to be paying for the buyer-agent. I'm just curious to hear how you're thinking about this as you plan to test the agreement.

Speaker Change: Got it.

Speaker Change: Just a follow up.

Day Lee: Sorry to keep going back to the representation agreement.

Day Lee: Around the commission piece, but how do you plan on positioning like who's going to pay for the fee when you rollout direct communication with remote.

Day Lee: It does feel like there's a lot of different views around like actual implementation of those.

Speaker Change: Of course, we'll be paying for the far east. So just curious to hear how you were thinking of hospitals.

Day Lee: Thank you plan to test them.

Chris Nielsen: The question is somewhat moot because the buyer's agent is going to be paid out of the proceeds from the sale in most cases, so we could say that the buyer's paying that because he's the only one bringing a checkbook to the closing table. Or we could say the seller is paying that because that's money that would have otherwise been wired into his account. It's just being deducted from the proceeds. And from the agent's perspective, what's important is that the buyer doesn't have to pay for this out-of-pocket in advance of a transaction. Essentially, that it can be fine.

Day Lee: The question is somewhat moot, because the buyer's agent is going to be paid out of the proceeds from the sale in most cases so we.

Chris Nielsen: We could say that the buyers paying that because he's the only one bringing a checkbook to the closing table. We could say the seller is paying that because that's money that would have otherwise been wired into his account.

Chris Nielsen: It's just being deducted from the proceeds from the agent's perspective, what's important is that the buyer doesn't have to pay for this out of pocket in advance of a transaction.

Chris Nielsen: Essentially that it can be financed.

Speaker Change: Got it understood. Thank you.

Day Lee: Got it. I understand. Thank you.

Jay McCanless: And the next question comes from the line of Jay McCanless with Wedbush Securities. Please proceed with your question.

Day Lee: And the next question comes from the line of Jay Mccanless with Wedbush Securities. Please proceed with your question.

Jay McCanless: Thanks for taking my question. The first one I had the pullback that you talked about Glenn in traffic and foot traffic in April and into May. Have you seen that same type of decline in sign and save markets? Or is it too early to tell? Since I think you said in the comments that you went fully live with that on March 7?

Jay McCanless: Thanks for taking my question. The first one I had the pullback that you talked about Glen and traffic and foot traffic in April and into May have you seen that same type of decline in the Simon save markets or is it too early to tell since I think you said in the comments.

Jay McCanless: You went fully live with that on March 7th.

Jay McCanless: Yeah, I can only presume that the pullback has been universal across silence save markets and non scientists take markets remember.

Glenn Kelman: Yeah, I can only presume that the pullback has been universal across sign-and-safe markets and non-sign-and-safe markets. But remember, we're not talking about...

Glenn Kelman: We're not talking about.

Glenn Kelman: Pure Redfin buyers, per se. We're talking about our own listings when we host an open house. How many people are coming through that open house? They could be neighbors.

Glenn Kelman: Fewer redfin buyers per se, we're talking about on our own listings when we host an open house, how many people are coming through that open house they could be neighbors. They could be buyers represented by other brokers that could be buyers represented by redfin, but most of them are just going to be members of the general public or customers of other brokerages.

Glenn Kelman: They could be buyers represented by other brokers. They could be buyers represented by Redfin. But most of them are just gonna be members of the general public or customers of other brokerages. And I think what we were really trying to say here wasn't a comment on what portion of home sales we were gonna represent the home buyer. Sign and Save is helping with that.

Glenn Kelman: And I think what we're really trying to say here wasn't a comment on what portion of home sales where are we going to represent the homebuyer sign and say it is helping with that I think we are commenting on how many people want to buy houses generally and houses that used to get eight or 10 offers are now getting two or three houses that got two or three.

Glenn Kelman: I think we were commenting on how many people want to buy houses generally, and houses that used to get eight or 10 offers are now getting two or three. Houses that got two or three offers are now sitting for an extra week. We're seeing more price drops just over the past eight or 10 days. The data that we have that not everyone can access, aside from the anecdotes from our agents about what happened this weekend, is the number of people who were touring who didn't end up writing an offer, the number of listings that after a week or two weeks didn't withdraw from the market because they'd accepted an offer, and the number of listings that dropped their price. So before sales go down,

Glenn Kelman: Offers are now sitting for an extra week, we're seeing more price drops just over the past eight or 10 days. The data that we have that not everyone can access aside from the anecdote from our agents about what happened. This weekend is number of people who were touring who didn't end up writing and offer number of listings.

Glenn Kelman: Is that after a week or two weeks.

Glenn Kelman: Didnt withdraw from the market because they'd accepted an offer number of listings that dropped their price so before sales goes down.

Glenn Kelman: What you see is activity in the market go down in ways that we can track a little bit better. And we saw that go down a little bit. So, you know, that's in line with the interest rate increase, and the only thing I would say contrary to that is that... The signals have been mixed. Like, we had a crappy week last week and then we had an awesome weekend. It's just crazy right now where things look really bad, and then they look really good, and then they look really bad, and then they look really good.

Glenn Kelman: What you see is active.

Glenn Kelman: Activity in the market go down in ways that we can track a little bit better and we saw that go down a little bit.

Glenn Kelman: So that's in line with.

Glenn Kelman: The interest rate increase and the only thing I would say contra to that.

Glenn Kelman: It's just that.

Glenn Kelman: The signals have been mixed like we.

Glenn Kelman: We had a crappy week last week and then we had an awesome weekend.

Glenn Kelman: It's just crazy right now where things look really bad and then they look really good and then they look really bad and then they look really good.

Glenn Kelman: So I think the concern will settle down a little bit. It's kind of netting out to, you know, what we think is going to happen across the year, and we're pretty comfortable with it, but lots of mixed signals.

Glenn Kelman: So I think the consumer will settle down a little bit it's kind of netting out.

Glenn Kelman: To what we think is going to happen across the year and we're pretty comfortable with it.

Glenn Kelman: But lots of mixed signals.

Speaker Change: Got it and then.

Jay McCanless: And then second question, I know you published the details around the lawsuit settlement. Could you just remind us what other potential lawsuits are out there that you might need to settle? And I guess, in terms of the Sitzer suit, any impact we need to be mindful of as it relates to Redfin?

Jay McCanless: Second question I know you all published the details around the lawsuit settlement.

Speaker Change: Could you just re.

Jay McCanless: Remind us what other potential lawsuits are out there that you might need to just subtle.

Jay McCanless: And I guess in terms of the sensor suite any impact we need to be mindful of as it relates to redfin.

Jay McCanless: We think that settlement was.

Glenn Kelman: We think the settlement was worthwhile. It's small relative to what other brokerages pay, consistent with our having been a consumer advocate. There are two other cases out there that name Redfin. They are at a much earlier stage instead of being on behalf of sellers, they are on behalf of buyers; our defenses are

Glenn Kelman: Worthwhile.

Glenn Kelman: It's small relative to what other brokerages pay consistent with our having been a consumer advocate there are two other cases.

Glenn Kelman: That are out there that named redfin, there much earlier stage instead of being on behalf of sellers there on behalf of buyers our defenses.

Glenn Kelman: A really good.

Speaker Change: Okay, great. Thank you that's all.

Jay McCanless: Okay, great. Thank you. That's all I have.

Speaker Change: And at this time there are no further questions at isn't it.

Glenn Kelman: That's it, isn't it?

Glenn Kelman: I would like to turn the floor back over to Glenn for any closing comments.

Glenn Kelman: We just appreciate your sticking with us through thick and thin.

Glenn Kelman: We just appreciate you sticking with us through thick and thin. This business has gotten meaningfully better, and it ain't the same old song. Even though the housing market is bad, Redfin has put its shoulder to the wheel, and we think we're going to keep taking share, and we think we're going to have a good year. So, appreciate your listening to all these crazy questions and all of our crazy scripts over the past year, but we're pretty excited about 2024. Thanks, everybody.

Glenn Kelman: This business has gotten meaningfully better and at the same old song, even though the housing market is bad.

Glenn Kelman: Redfin has put our shoulder to the wheel and we think we're going to keep taking share and we think we're going to have a good year.

Glenn Kelman: Appreciate you are listening to all these crazy questions and all of our crazy scripts over the past year.

Glenn Kelman: But we're pretty excited about 2024, thanks everybody.

Operator: Ladies and gentlemen, that does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change: Ladies and gentlemen that does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation.

Operator: ?? ?? ?? ?? ?? ?? ?? ?? ?? ??

Operator: Hum.

Operator: Hum.

Operator: Hum.

Operator: [music].

Operator: Hum.

Operator: [music].

Operator: Hum.

Operator: Hum.

Operator: [music].

Operator: Yeah.

Operator: Uh huh.

Operator: Hum.

Operator: [music].