Revenue from partners was down 37% on a 26% decrease in transactions and mix shift to lower-value houses, according to Nielsen. Overall, real estate services revenue per transaction was up 1% year-over-year. The property segment, which consists primarily of homes sold through RedfinNow, generated $300 million in revenue, up 26% from a year ago and driven by a 37% increase in homes sold.
The company’s rentals business generated $39 million, down 4% from a year ago, but up slightly from the second quarter of 2022, marking the company’s second consecutive quarter of sequential rentals revenue growth.
The mortgage segment generated $48 million in revenue. The firm’s other segment, which now includes title and other services, contributed revenue of $7 million, an increase of 122% year over year, driven by increased attach rates for its title and closing services. Total gross profit was $58 million, down 54% year over year with a total gross margin of 9.7%. Total operating expenses were down $4.1 million or 3% year over year.
The company’s CEO, Glenn Kelman, said the 13% reduction of force disclosed this week – largely via closure of the of the RedfinNow unit – follows earlier cuts that began on April 30. Collectively, both series of reductions account for the elimination of 27% of the company’s workforce, Kelman noted.
While one previous round of layoffs was reactive, the latest one is proactive amid projections of further market challenges, Kelman suggested: “Our June layoff was a reaction to slowing 2022 home sales,” he told investors and financial journalists during the earnings call. This week’s layoffs, on the other hand, “…assumes a housing downturn that lasts at least through 2023, letting us earn adjusted EBITDA next year even if home sales declined at the levels of the great financial crisis when the U.S. population was 10% smaller,” the CEO explained.