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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission file number 001-38160
Redfin Corporation
(Exact name of registrant as specified in its charter)

Delaware
74-3064240
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
1099 Stewart Street
Suite 600
Seattle
WA
98101
(Address of Principal Executive Offices)
(Zip Code)
(206)
576-8333
Registrant's telephone number, including area code
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.001 par value per shareRDFNThe Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒
Yes
☐
 No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒
Yes
☐
 No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer  
☐
Smaller reporting company
☐
Emerging growth company
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐
 Yes
☒
 No

The registrant had 115,241,638 shares of common stock outstanding as of October 27, 2023.


Redfin Corporation

Quarterly Report on Form 10-Q
For the Quarter Ended September 30, 2023

Table of Contents


As used in this quarterly report, the terms "Redfin," "we," "us," and "our" refer to Redfin Corporation and its subsidiaries taken as a whole, unless otherwise noted or unless the context indicates otherwise. However, when referencing (i) the 2023 notes, the 2025 notes, and the 2027 notes, the terms “we,” “us,” and “our” refer only to Redfin Corporation and not to Redfin Corporation and its subsidiaries taken as a whole, and (ii) each warehouse credit facility, the terms "we," "us," and "our" refer to Bay Equity LLC.

Note Regarding Forward-Looking Statements

This quarterly report contains forward-looking statements. All statements contained in this report other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, our market growth and trends, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” "hope,” “potentially,” “preliminary,” “likely,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described under Item 1A of our annual report for the year ended December 31, 2022, as supplemented by Part II, Item 1A of this report. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the effect of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, you should not rely on forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this report or to conform these statements to actual results or revised expectations.

Note Regarding Industry and Market Data

This quarterly report contains information using industry publications that generally state that the information contained therein has been obtained from sources believed to be reliable, but such information may not be accurate or complete. While we are not aware of any misstatements regarding the information from these industry publications, we have not independently verified any of the data from third-party sources nor have we ascertained the underlying economic assumptions relied on therein.
i
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Redfin Corporation and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share amounts, unaudited)
September 30, 2023December 31, 2022
Assets
Current assets
Cash and cash equivalents$125,803 $232,200 
Restricted cash1,414 2,406 
Short-term investments41,752 122,259 
Accounts receivable, net of allowances for credit losses of $2,529 and $2,223
55,118 46,375 
Loans held for sale137,680 199,604 
Prepaid expenses26,248 34,006 
Other current assets8,811 7,449 
Current assets of discontinued operations— 132,159 
Total current assets396,826 776,458 
Property and equipment, net48,405 54,939 
Right-of-use assets, net35,150 40,889 
Mortgage servicing rights, at fair value34,773 36,261 
Long-term investments5,474 29,480 
Goodwill461,349 461,349 
Intangible assets, net133,031 162,272 
Other assets, noncurrent10,857 11,247 
Noncurrent assets of discontinued operations— 1,309 
Total assets$1,125,865 $1,574,204 
Liabilities, mezzanine equity, and stockholders' equity
Current liabilities
Accounts payable$11,996 $11,065 
Accrued and other liabilities88,191 106,763 
Warehouse credit facilities132,320 190,509 
Convertible senior notes, net— 23,431 
Lease liabilities16,317 18,560 
Current liabilities of discontinued operations— 4,311 
Total current liabilities248,824 354,639 
Lease liabilities, noncurrent31,416 36,906 
Convertible senior notes, net, noncurrent799,665 1,078,157 
Deferred tax liabilities260 243 
Noncurrent liabilities of discontinued operations— 392 
Total liabilities1,080,165 1,470,337 
Commitments and contingencies (Note 7)
Series A convertible preferred stock—par value $0.001 per share; 10,000,000 shares authorized; 40,000 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively
39,947 39,914 
Stockholders’ equity
Common stock—par value $0.001 per share; 500,000,000 shares authorized; 115,210,998 and 109,696,178 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively
115 110 
Additional paid-in capital806,330 757,951 
Accumulated other comprehensive loss(257)(801)
Accumulated deficit(800,435)(693,307)
Total stockholders’ equity5,753 63,953 
Total liabilities, mezzanine equity, and stockholders’ equity$1,125,865 $1,574,204 

See Notes to the consolidated financial statements.
1
Redfin Corporation and Subsidiaries
Consolidated Statements of Comprehensive Loss
(in thousands, except share and per share amounts, unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Revenue$268,956 $305,774 $758,595 $877,639 
Cost of revenue170,616 215,109 501,927 624,089 
Gross profit98,340 90,665 256,668 253,550 
Operating expenses
Technology and development44,392 43,335 139,196 135,678 
Marketing24,095 33,242 97,531 131,352 
General and administrative55,380 57,976 186,584 182,640 
Restructuring and reorganization— 284 7,159 18,399 
Total operating expenses123,867 134,837 430,470 468,069 
Loss from continuing operations(25,527)(44,172)(173,802)(214,519)
Interest income2,060 1,174 8,170 1,948 
Interest expense(1,603)(2,219)(5,291)(6,648)
Income tax expense(239)(132)(882)(425)
Gain on extinguishment of convertible senior notes6,495 — 68,848 — 
Other expense, net(158)(902)(537)(3,077)
Net loss from continuing operations(18,972)(46,251)(103,494)(222,721)
Net loss from discontinued operations— (43,994)(3,634)(36,476)
Net loss$(18,972)$(90,245)$(107,128)$(259,197)
Dividends on convertible preferred stock(335)(272)(858)(1,416)
Net loss from continuing operations attributable to common stock—basic and diluted$(19,307)$(46,523)$(104,352)$(224,137)
Net loss attributable to common stock—basic and diluted$(19,307)$(90,517)$(107,986)$(260,613)
Net loss from continuing operations per share attributable to common stock—basic and diluted$(0.17)$(0.43)$(0.93)$(2.08)
Net loss attributable to common stock per share—basic and diluted$(0.17)$(0.83)$(0.96)$(2.42)
Weighted-average shares to compute net loss per share attributable to common stock—basic and diluted114,592,679 108,618,491 112,141,342 107,566,894 
Net loss$(18,972)$(90,245)$(107,128)$(259,197)
Other comprehensive income
Foreign currency translation adjustments(15)27 (73)65 
Unrealized gain on available-for-sale debt securities
210 34 617 812 
Comprehensive loss$(18,777)$(90,184)$(106,584)$(258,320)

See Notes to the consolidated financial statements.

2
Redfin Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands, unaudited)
Nine Months Ended September 30,
20232022
Operating Activities
Net loss
$(107,128)$(259,197)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization48,443 47,438 
Stock-based compensation55,382 51,672 
Amortization of debt discount and issuance costs2,873 4,358 
Non-cash lease expense12,909 11,313 
Impairment costs113 913 
Net (gain) loss on IRLCs, forward sales commitments, and loans held for sale(1,767)4,228 
Change in fair value of mortgage servicing rights, net1,065 (1,472)
Gain on extinguishment of convertible senior notes(68,848)— 
Other(2,013)3,254 
Change in assets and liabilities:
Accounts receivable, net(238)(17,052)
Inventory114,232 56,990 
Prepaid expenses and other assets9,696 (2,721)
Accounts payable177 (1,875)
Accrued and other liabilities, deferred tax liabilities, and payroll tax liabilities, noncurrent(19,346)(24,202)
Lease liabilities(14,864)(12,435)
Origination of mortgage servicing rights(699)(2,774)
Proceeds from sale of mortgage servicing rights1,122 1,314 
Origination of loans held for sale(2,798,337)(3,091,099)
Proceeds from sale of loans originated as held for sale2,858,656 3,082,858 
Net cash provided by (used in) operating activities91,428 (148,489)
Investing activities
Purchases of property and equipment(9,235)(17,496)
Purchases of investments(76,866)(145,273)
Sales of investments124,681 12,946 
Maturities of investments59,383 66,055 
Cash paid for acquisition, net of cash, cash equivalents, and restricted cash acquired— (97,341)
Net cash provided by (used in) investing activities97,963 (181,109)
Financing activities
Proceeds from the issuance of common stock pursuant to employee equity plans5,790 9,679 
Tax payments related to net share settlements on restricted stock units(15,961)(6,650)
Borrowings from warehouse credit facilities2,803,589 3,080,606 
Repayments to warehouse credit facilities(2,861,779)(3,069,728)
Borrowings from secured revolving credit facility— 552,051 
Repayments to secured revolving credit facility— (549,416)
Cash paid for secured revolving credit facility issuance costs— (764)
Principal payments under finance lease obligations(73)(680)
Repurchases of convertible senior notes(212,401)— 
Repayments of convertible senior notes(23,512)— 
Net cash (used in) provided by financing activities(304,347)15,098 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(73)(65)
Net change in cash, cash equivalents, and restricted cash(115,029)(314,565)
Cash, cash equivalents, and restricted cash:
Beginning of period(1)
242,246 718,281 
End of period(2)
$127,217 $403,716 
Supplemental disclosure of cash flow information
Cash paid for interest
$13,540 $12,887 
Non-cash transactions
Stock-based compensation capitalized in property and equipment3,173 2,983 
Property and equipment additions in accounts payable and accrued liabilities29 28 

(1) Cash, cash equivalents, and restricted cash consisted of the following (beginning of period):
As of December 31,
20222021
Continuing operations
Cash and cash equivalents$232,200 $571,384 
Restricted cash2,406 5,244 
Total 234,606 576,628 
Discontinued operations
Cash and cash equivalents7,640 19,619 
Restricted cash— 122,034 
Total7,640 141,653 
Total cash, cash equivalents, and restricted cash$242,246 $718,281 

(2) Cash, cash equivalents, and restricted cash consisted of the following (end of period):
As of September 30,
20232022
Continuing operations
Cash and cash equivalents$125,803 $345,871 
Restricted cash1,414 2,562 
Total127,217 348,433 
Discontinued operations
Cash and cash equivalents— 13,852 
Restricted cash— 41,431 
Total— 55,283 
Total cash, cash equivalents, and restricted cash$127,217 $403,716 
See Notes to the consolidated financial statements.
3
Redfin Corporation and Subsidiaries
Consolidated Statements of Changes in Mezzanine Equity and Stockholders’ Equity
(in thousands, except share amounts, unaudited)

Series A Convertible Preferred StockCommon StockAdditional Paid-in CapitalAccumulated DeficitAccumulated Other Comprehensive LossTotal Stockholders' Equity
SharesAmountSharesAmount
Balance, June 30, 202340,000 $39,936 113,934,673 $114 $791,302 $(781,463)$(452)$9,501 
Issuance of convertible preferred stock, net— 11 — — — — — — 
Issuance of common stock as dividend on convertible preferred stock— — 30,640 — — — — — 
Issuance of common stock pursuant to exercise of stock options— — 15,836 — 123 — — 123 
Issuance of common stock pursuant to settlement of restricted stock units— — 1,761,678 2 (2)— — — 
Common stock surrendered for employees' tax liability upon settlement of restricted stock units— — (531,829)(1)(4,862)— — (4,863)
Stock-based compensation— — — — 19,769 — — 19,769 
Other comprehensive income
— — — — — — 195 195 
Net loss— — — — — (18,972)— (18,972)
Balance, September 30, 2023
40,000 $39,947 115,210,998 $115 $806,330 $(800,435)$(257)$5,753 
Balance, December 31, 2022
40,000 $39,914 109,696,178 $110 $757,951 $(693,307)$(801)$63,953 
Issuance of convertible preferred stock, net— 33 — — — — — — 
Issuance of common stock as dividend on convertible preferred stock— — 91,920 — — — — — 
Issuance of common stock pursuant to employee stock purchase program— — 1,150,703 1 4,214 — — 4,215 
Issuance of common stock pursuant to exercise of stock options— — 579,000 1 1,574 — — 1,575 
Issuance of common stock pursuant to settlement of restricted stock units— — 5,330,317 5 (5)— — — 
Common stock surrendered for employees' tax liability upon settlement of restricted stock units— — (1,637,120)(2)(15,959)— — (15,961)
Stock-based compensation— — — — 58,555 — — 58,555 
Other comprehensive income— — — — — — 544 544 
Net loss— — — — — (107,128)— (107,128)
Balance, September 30, 2023
40,000 $39,947 115,210,998 $115 $806,330 $(800,435)$(257)$5,753 
Series A Convertible Preferred StockCommon StockAdditional Paid-in CapitalAccumulated DeficitAccumulated Other Comprehensive LossTotal Stockholders' Equity
SharesAmountSharesAmount
Balance, June 30, 202240,000 $39,891 108,415,939 $108 $723,251 $(541,116)$(990)$181,253 
Issuance of convertible preferred stock, net— 11 — — — — — — 
Issuance of common stock as dividend on convertible preferred stock— — 30,640 — — — — — 
Issuance of common stock pursuant to exercise of stock options— — 50,585 — 344 — — 344 
Issuance of common stock pursuant to settlement of restricted stock units— — 305,603 1 — — — 1 
Common stock surrendered for employees' tax liability upon settlement of restricted stock units— — (85,777)— (2,906)— — (2,906)
Stock-based compensation— — — — 19,000 — — 19,000 
Other comprehensive loss— — — — — — (61)(61)
Net loss— — — — — (90,245)— (90,245)
Balance, September 30, 2022
40,000 $39,902 108,716,990 $109 $739,689 $(631,361)$(1,051)$107,386 
Balance, December 31, 202140,000 $39,868 106,308,767 $106 $682,084 $(372,164)$(174)$309,852 
Issuance of convertible preferred stock, net— 34 — — — — — — 
Issuance of common stock as dividend on convertible preferred stock— — 91,920 — — — — — 
Issuance of common stock pursuant to employee stock purchase program— — 661,054 1 4,629 — — 4,630 
Issuance of common stock pursuant to exercise of stock options— — 695,705 1 4,971 — — 4,972 
Issuance of common stock pursuant to settlement of restricted stock units— — 1,362,071 1 (1)— — — 
Common stock surrendered for employees' tax liability upon settlement of restricted stock units— — (402,527)— (6,649)— — (6,649)
Stock-based compensation— — — — 54,655 — — 54,655 
Other comprehensive loss— — — — — — (877)(877)
Net loss— — — — — (259,197)— (259,197)
Balance, September 30, 2022
40,000 $39,902 108,716,990 $109 $739,689 $(631,361)$(1,051)$107,386 

See Notes to the consolidated financial statements.
4
Index to Notes to Consolidated Financial Statements

5
Redfin Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(in thousands, except share and per share amounts, unaudited)

Note 1: Summary of Accounting Policies

Basis of Presentation—The consolidated financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

The financial information as of December 31, 2022 that is included in this quarterly report is derived from the audited consolidated financial statements and notes for the year ended December 31, 2022 included in Item 8 in our annual report for the year ended December 31, 2022. Such financial information should be read in conjunction with the notes and management’s discussion and analysis of the consolidated financial statements included in our annual report.

The unaudited consolidated interim financial statements, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position as of September 30, 2023, our statements of comprehensive loss, and statements of changes in mezzanine equity and stockholders’ equity for the three and nine months ended September 30, 2023 and 2022, as well as our statements of cash flows for the nine months ended September 30, 2023 and 2022. The results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any interim period or for any other future year.

We completed the wind-down of our properties segment as of June 30, 2023, at which time it met the criteria for discontinued operations in our consolidated financial statements. As a result, certain amounts presented in prior period consolidated balance sheets and statements of comprehensive loss have been reclassified to conform to the current period financial statement presentation. The changes do not affect previously reported consolidated net loss or previously reported total assets, liabilities, or stockholders’ equity on our consolidated balance sheets. See Note 2 for additional information.

Principles of Consolidation—The unaudited consolidated interim financial statements include the accounts of Redfin Corporation and its wholly owned subsidiaries, including those entities in which we have a variable interest and of which we are the primary beneficiary. Intercompany transactions and balances have been eliminated.

Use of Estimates—The preparation of consolidated financial statements, in conformity with GAAP, requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and results of operations during the respective periods. Our estimates include, but are not limited to, valuation of deferred income taxes, stock-based compensation, capitalization of website and software development costs, the incremental borrowing rate for the determination of the present value of lease payments, recoverability of intangible assets with finite lives, fair value of our mortgage loans held for sale (“LHFS”) and mortgage servicing rights, estimated useful life of intangible assets, fair value of reporting units for purposes of allocating and evaluating goodwill for impairment, and current expected credit losses on certain financial assets. The amounts ultimately realized from the affected assets or ultimately recognized as liabilities will depend on, among other factors, general business conditions and could differ materially in the near term from the carrying amounts reflected in the consolidated financial statements.

In July 2023, we completed an assessment of the useful lives of our website and internally developed software. Due to improvements, efficiencies, and advancements in how we develop, implement, and use our website and internally developed software, we determined we should increase their estimated useful lives from 2-3 years to 3-5 years. This change in accounting estimate was effective beginning the third quarter of 2023. The effects of this change for the three months ended September 30, 2023 were as follows: (1) reduced technology and development expenses by $1,648, (2) decreased net loss by $1,648, and (3) increased basic and diluted net loss per share by $0.01.

Recently Adopted Accounting Pronouncements—None applicable.

Recently Issued Accounting Pronouncements—None applicable.
6

Note 2: Discontinued Operations

In November 2022, our management and board of directors made the decision to wind down RedfinNow. The financial results of RedfinNow have historically been included in our properties segment. Winding-down RedfinNow was a strategic decision we made in order to focus our resources on our core businesses in the face of the rising cost of capital. The wind-down of our properties segment was complete as of June 30, 2023, at which time it met the criteria for discontinued operations in our consolidated financial statements.

The major classes of assets and liabilities of our discontinued operations were as follows:
September 30, 2023December 31, 2022
Assets
Current assets
Cash and cash equivalents$— $7,640 
Accounts receivable, net— 8,504 
Inventory— 114,232 
Prepaid expenses— 500 
Other current assets— 1,283 
Total current assets of discontinued operations— 132,159 
Property and equipment, net— 167 
Right-of-use assets, net— 1,142 
Total assets of discontinued operations$— $133,468 
Liabilities
Current liabilities
Accounts payable$— $754 
Accrued and other liabilities— 2,980 
Lease liabilities— 577 
Total current liabilities of discontinued operations— 4,311 
Lease liabilities, noncurrent— 392 
Total liabilities of discontinued operations$— $4,703 

7
The major classes of line items of the discontinued operations included in our consolidated statement of comprehensive loss were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Revenue$— $294,744 $122,576 $927,139 
Cost of revenue(1)
— 327,331 124,422 932,072 
Gross profit (loss)— (32,587)(1,846)(4,933)
Operating expenses
Technology and development(1)
— 4,728 552 13,531 
Marketing(1)
— 506 523 2,480 
General and administrative(1)
— 3,030 638 9,065 
Restructuring and reorganization— — 75 271 
Total operating expenses
— 8,264 1,788 25,347 
Loss from discontinued operations
— (40,851)(3,634)(30,280)
Interest expense— (3,140)— (6,192)
Other expense, net— (3)— (4)
Net loss from discontinued operations$— $(43,994)$(3,634)$(36,476)
Net loss from discontinued operations per share—basic and diluted$0.00 $(0.41)$(0.03)$(0.34)
(1) Includes stock-based compensation as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Cost of revenue$— $221 $46 $872 
Technology and development— 1,018 86 2,806 
Marketing— 26 19 85 
General and administrative— 381 83 947 
Total stock-based compensation$— $1,646 $234 $4,710 

Significant non-cash items and capital expenditures of the discontinued operations were as follows:
Nine Months Ended September 30,
20232022
Amortization of debt discount and debt issuance costs$— $461 
Stock-based compensation234 4,710 
Depreciation and amortization89 1,780 
Capital expenditures— 1,213 
Cash paid for interest— 5,731 
8

Charges specifically relating to the wind-down of our properties segment were as follows:
Cost typeFinancial statement line itemNine Months Ended September 30, 2023Cumulative amount recognized
Employee termination costsRestructuring and reorganization$539 $8,587 
Asset write-offsRestructuring and reorganization— 493 
OtherRestructuring and reorganization(465)(890)
Acceleration of debt issuance costsInterest expense— 481 
Total$74 $8,671 

Restructuring and reorganization charges related to our continuing operations primarily consist of employee termination costs (including severance, retention, benefits, and payroll taxes) associated with the restructuring and reorganization activities from our acquisitions of Bay Equity LLC (“Bay Equity”), our mortgage business, and Rent Group Inc. (“Rent.”), our rentals business, and from our June 2022 and April 2023 workforce reductions. These expenses are included in restructuring and reorganization in our consolidated statements of comprehensive loss and in accrued and other liabilities on our consolidated balance sheets.

Note 3: Segment Reporting and Revenue

In its operation of our business, our management, including our chief operating decision maker ("CODM"), who is also our chief executive officer, evaluates the performance of our operating segments based on revenue and gross profit. We do not analyze discrete segment balance sheet information related to long-term assets, substantially all of which are located in the United States. We have five operating segments and three reportable segments, real estate services, rentals, and mortgage. As a result of our decision to wind-down RedfinNow operations in November 2022, we report our properties segment as a discontinued operation as we completed wind-down of the business during the three months ended June 30, 2023.

We generate revenue primarily from commissions and fees charged on each real estate services transaction closed by our lead agents or partner agents, from subscription-based product offerings for our rentals business, and from the origination, sales, and servicing of mortgages. Our key revenue components are brokerage revenue, partner revenue, rentals revenue, mortgage revenue, and other revenue.

9
Information on each of our reportable and other segments and reconciliation to net (loss) income from continuing operations is presented in the tables below. We have assigned certain previously reported expenses to each segment to conform to the way we internally manage and monitor our business. We allocated indirect costs to each segment based on a reasonable allocation methodology, when such costs are significant to the performance measures of the segments.
Three Months Ended September 30, 2023
Real estate servicesRentalsMortgageOtherCorporate overheadTotal
Revenue
$177,750 $47,410 $32,923 $10,873 $— $268,956 
Cost of revenue123,684 10,824 29,629 6,479 — 170,616 
Gross profit54,066 36,586 3,294 4,394 — 98,340 
Operating expenses
Technology and development25,711 15,813 800 1,133 935 44,392 
Marketing10,785 12,245 1,088 20 (43)24,095 
General and administrative18,418 21,838 6,670 952 7,502 55,380 
Total operating expenses54,914 49,896 8,558 2,105 8,394 123,867 
(Loss) income from continuing operations(848)(13,310)(5,264)2,289 (8,394)(25,527)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net41 42 (73)207 6,338 6,555 
Net (loss) income from continuing operations$(807)$(13,268)$(5,337)$2,496 $(2,056)$(18,972)
Three Months Ended September 30, 2022
Real estate servicesRentalsMortgageOtherCorporate overheadTotal
Revenue(1)
$211,540 $38,686 $48,469 $7,079 $— $305,774 
Cost of revenue156,632 8,676 43,783 6,018 — 215,109 
Gross profit54,908 30,010 4,686 1,061 — 90,665 
Operating expenses
Technology and development25,709 15,385 985 751 505 43,335 
Marketing18,772 12,678 1,653 48 91 33,242 
General and administrative20,244 22,722 7,073 784 7,153 57,976 
Restructuring and reorganization— — — — 284 284 
Total operating expenses64,725 50,785 9,711 1,583 8,033 134,837 
Loss from continuing operations(9,817)(20,775)(5,025)(522)(8,033)(44,172)
Interest income, interest expense, income tax expense, and other expense, net— 397 (129)40 (2,387)(2,079)
Net loss from continuing operations$(9,817)$(20,378)$(5,154)$(482)$(10,420)$(46,251)
(1) Included in revenue is $4,920 from providing services to our discontinued properties segment.
10
Nine Months Ended September 30, 2023
Real estate servicesRentalsMortgageOtherCorporate overheadTotal
Revenue(1)
$485,687 $135,636 $107,838 $29,434 $— $758,595 
Cost of revenue359,625 31,016 93,108 18,178 — 501,927 
Gross profit126,062 104,620 14,730 11,256 — 256,668 
Operating expenses
Technology and development82,650 48,081 2,177 3,475 2,813 139,196 
Marketing51,849 42,509 3,122 46 5 97,531 
General and administrative58,997 73,445 20,323 3,049 30,770 186,584 
Restructuring and reorganization— — — — 7,159 7,159 
Total operating expenses193,496 164,035 25,622 6,570 40,747 430,470 
(Loss) income from continuing operations(67,434)(59,415)(10,892)4,686 (40,747)(173,802)
Interest income, interest expense, income tax expense, gain on extinguishment of convertible senior notes, and other expense, net41 115 (224)475 69,901 70,308 
Net (loss) income from continuing operations$(67,393)$(59,300)$(11,116)$5,161 $29,154 $(103,494)
(1) Included in revenue is $1,244 from providing services to our discontinued properties segment.
Nine Months Ended September 30, 2022
Real estate servicesRentalsMortgageOtherCorporate overheadTotal
Revenue(1)
$640,835 $114,979 $104,484 $17,341 $— $877,639 
Cost of revenue488,114 23,769 95,616 16,590 — 624,089 
Gross profit152,721 91,210 8,868 751 — 253,550 
Operating expenses</