Discount brokerage Redfin saw its Q1 revenue slump by 45% year on year to $326 million, with gross profit falling by 23% to $56.2 million over the period.

Real estate services gross profit stood at $15.8 million, having slid by 33% y-o-y, while the real estate services gross margin was 12%, versus 13% in the first quarter of 2022.

The brokerage curbed its net loss from $90.8 million in Q1 2022 to $60.8 million last quarter, ended March 31.

Announcing its quarterly results, Redfin revealed that its Q1 market share was 0.78% of U.S. existing home sales by units, compared to 0.79% in Q1 2022.

Its mobile apps and website reached more than 50 million average monthly users, down from 51 million in the first quarter of 2022.

The falling indicators come amid a sharp downturn in U.S. home transactions as mortgage rates have more than doubled since early 2022. Redfin last month laid off 201 people, or 4% of its workforce, the company’s third headcount cut in less than a year.

“Redfin’s first-quarter revenues and earnings exceeded our expectations, keeping us on track for full-year adjusted EBITDA in 2023,” said CEO Glenn Kelman, citing some positives amid the gloomy picture.

“We’re drawing online visitors away from our main rivals, and our brokerage has gotten more efficient. For the second quarter, we expect gross-margins gains in our core business for the first time since 2021.”

He added that the two companies Redfin had acquired over the past two years to earn additional revenue from the users of its site and brokerage were also starting to deliver results, with Rent’s revenue growth accelerating, Bay Equity’s net income having improved, and more than one in five Redfin homebuyers getting a mortgage from Bay Equity in the first quarter.

“And finally, our competitive position has materially improved, as we’ve reduced our debt by more than $300 million, and sold all but five of our RedfinNow homes. We wouldn’t wish a housing downturn on anyone, but it has made Redfin leaner, hungrier and better,” added Kelman.

In Q1, the Seattle, Washington-based company expanded its Redfin Premier service nationwide and made it available to homebuyers for the first time. “With this launch, we made significant branding, marketing and website improvements that make it easier for customers to identify and connect with Premier agents,” said the brokerage.

It forecasts total revenue of between $268 million and $281 million in Q2, a year-on-year fall of between 24% and 20%, and total net losses of between $44 million and $35 million, down from a net loss of $78 million in the year-age period.

Redfin, which offers home-selling services on a fixed-fee basis, was the No. 5 brokerage in the U.S. by sales volume in 2021, according to the National Association of Realtors. Its website carries comprehensive home listings across the U.S., not just its own, and is the third most visited real estate portal in the country after Zillow and Realtor.com.

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