Redfin reports falling revenue, higher losses in Q1 2025

Despite the buzz around being acquired by Rocket Companies, the first quarter of 2025 was a rough one for Redfin. 

In a document filed with the Securities and Exchange Commission (SEC) on Tuesday, Redfin announced that it recorded $221.0 million in revenue in Q1 2025, down 2% annually, while its net loss for the quarter came in at $92.5 million, up from a net loss of $66.8 million in Q1 2024. 

These decreases came as Redfin’s market share dropped to 0.75% of all U.S. existing home sale transactions from 0.77% a year ago. Additionally, the listing portal’s web traffic was also down on an annual basis, dropping to 46 million monthly average visitors in Q1 2025, down from 49 million a year ago.

Despite these negatives, there were some bright spots in Redfin’s earning’s release, one of which was agent count, which was up 32% annually to an average lead agent count of 2,190 in Q1 2025. At the end of March 2025, Redfin reported that this number was up to 2,265 lead agents. 

Redfin CEO Glenn Kelman attributed the increase in lead agent count to Redfin’s new agent payment plan, which pays agents entirely on commission. 

Redfin’s mortgage operation was another bright spot, as the attach rate rose to 29%, up from 28% a year prior. However, Redfin’s mortgage arm did just $887 million in mortgage origination volume, down from $969 million a year ago and $1.035 billion in Q4 2024, as the number of mortgages originated dropped to 2,111, down from 2,365 a year ago and 2,434 a quarter ago. 

It remains unclear as to what will happen to Bay Equity Home Loans post-Rocket acquisition, but in a statement a Rocket spokesperson said the company is “excited for the highly skilled loan officers at Bay Equity Home Loans” who will join the firm after the acquisition closes.

The majority of Redfin’s revenue for the quarter was generated by its real estate services sector, which pulled in $126.278 million in revenue, followed by rentals at $52.288 million, mortgage at $29.318 million and title at $8.637 million. On a year-over-year basis, revenue for all segments except title was down. 

Unfortunately, Redfin’s real estate services sector also posted the largest net loss at $51.673 million. The mortgage sector also posted a net loss of $2.286 million, while the rentals sector recorded at $3.588 million net profit and the title sector saw a $974,000 net profit for the quarter. 

In light of Redfin’s acquisition by Rocket for $1.75 billion, the firm did not host a Q1 2025 earnings call with investors and analysts. 

In a prepared statement, Kelman said that since the announcement of the acquisition, “many Redfin employees, from agents to engineers, have been over the moon about Rocket’s vision of a home-ownership platform.”

“We can’t wait to join Rocket and build the future of homeownership,” Kelman said. 

Prior to the announcement of Rocket’s acquisition, Redfin’s future appeared murky, especially after reporting a net loss of $164.8 million in 2024, $34 million higher than the net loss recorded in 2023. 

Analysts, including Ryan Tomasello at Keefe, Brunette & Woods and John Campbell of Stephens, attributed some of Redfin’s woes to its previous agent compensation plan, in which agents were salaried. This forced Redfin to bear the costs of maintaining these agents even when transactions were down and it limited the pool of potential recruits and experienced agents did not like the compensation plan. 

The acquisition by Rocket, which is releasing its Q1 2025 earnings on Thursday, is expected to close during the second or third quarter of 2025. 

Post-merger, Rocket shareholders will own 95% of the combined company on a fully diluted basis, with Redfin shareholders holding 5%. Kelman will remain with the company, reporting directly to Rocket CEO Varun Krishna.