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Delaware
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74-3064240
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(State of Incorporation)
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(I.R.S. Employer
Identification No.)
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1099 Stewart Street, Suite 600
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Seattle, Washington
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98101
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☒
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(Do not check if a smaller reporting company)
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Smaller reporting company
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☐
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Emerging growth company
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☒
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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December 31,
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June 30,
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Pro Forma, June 30,
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||||||
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2016
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2017
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2017
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||||||
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||||||
Assets:
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||||||
Current assets:
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||||||
Cash and cash equivalents
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$
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64,030
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$
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54,210
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Restricted cash
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3,815
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11,848
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||||
Short-term investments
|
1,749
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1,504
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||||
Prepaid expenses
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4,388
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2,546
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||||
Accrued revenue, net of allowance for doubtful accounts of $150 at December 31, 2016 and June 30, 2017
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10,625
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14,509
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||||
Other current assets
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8,781
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2,298
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||||
Loans held for sale
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—
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545
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||||
Total current assets
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93,388
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87,460
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||||
Property and equipment, net
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19,226
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22,137
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Intangible assets, net
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3,782
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3,538
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Goodwill
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9,186
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9,186
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||||
Deferred offering costs
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720
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2,299
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||||
Other assets
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7,175
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6,798
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Total assets:
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$
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133,477
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$
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131,418
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Liabilities, redeemable convertible preferred stock and stockholders' equity (deficit):
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||||||
Current liabilities:
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||||||
Accounts payable
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$
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5,385
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$
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3,081
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Accrued liabilities
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22,253
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30,248
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Other payables
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3,793
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11,607
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Loan facility
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—
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529
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Current portion of deferred rent
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1,512
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1,092
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Total current liabilities
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32,943
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46,557
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Deferred rent, net of current portion
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8,852
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10,473
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Total liabilities
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41,795
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57,030
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Commitments and contingencies (Note 10)
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||||||
Redeemable convertible preferred stock—par value $0.001 per share; 166,266,114 shares authorized; 55,422,002 issued and outstanding; and aggregate liquidation preference of $167,488
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655,416
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791,106
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$
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—
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Stockholders’ equity (deficit)
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||||||
Common stock—par value $0.001 per share; 290,081,638 and 290,081,638 shares authorized, respectively; 14,687,024 and 14,988,646 shares issued and outstanding, respectively
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15
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15
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70
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|||
Additional paid-in capital
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—
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—
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212,081
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Accumulated deficit
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(563,749
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)
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(716,733
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)
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(137,763
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)
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Total stockholders’ equity (deficit)
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(563,734
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)
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(716,718
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)
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$
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74,388
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|
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Total liabilities, redeemable convertible preferred stock and stockholders’ equity:
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$
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133,477
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$
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131,418
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Three Months Ended June 30,
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Six Months Ended June 30,
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||||||||||||
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2016
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2017
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2016
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2017
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Revenue
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$
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77,714
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$
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104,935
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$
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119,349
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$
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164,802
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Cost of revenue
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50,303
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67,975
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88,808
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121,467
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Gross profit
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27,411
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36,960
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30,541
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43,335
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Operating expenses:
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Technology and development
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8,060
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10,090
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15,958
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19,762
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Marketing
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8,486
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10,132
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17,697
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20,591
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General and administrative
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9,526
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12,466
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19,912
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26,833
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Total operating expenses
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26,072
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32,688
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53,567
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67,186
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Income (loss) from operations
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1,339
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4,272
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(23,026
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)
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(23,851
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)
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||||
Interest income and other income, net:
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||||||||
Interest income
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49
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32
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96
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76
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|
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Other income, net
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—
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—
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37
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13
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Total interest income and other income, net
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49
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32
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133
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89
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Net income (loss)
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$
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1,388
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$
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4,304
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$
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(22,893
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)
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$
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(23,762
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)
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Accretion of redeemable convertible preferred stock
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65,082
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(110,921
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)
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59,869
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(135,690
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)
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||||
Undistributed earnings attributable to participating securities
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(52,805
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)
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—
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(29,397
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)
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—
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|
||||
Net income (loss) attributable to common stock—basic
|
$
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13,665
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|
$
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(106,617
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)
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$
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7,579
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|
|
$
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(159,452
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)
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Net income (loss) attributable to common stock—diluted
|
$
|
1,388
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|
|
$
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(106,617
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)
|
|
$
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(22,893
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)
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|
$
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(159,452
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)
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Net income (loss) per share attributable to common stock—basic
|
$
|
0.95
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|
$
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(7.15
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)
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$
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0.53
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|
$
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(10.74
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)
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Net income (loss) per share attributable to common stock—diluted
|
$
|
0.02
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$
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(7.15
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)
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$
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(0.33
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)
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|
$
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(10.74
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)
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Weighted average shares used to compute net income (loss) per share attributable to common stock—basic
|
14,340,333
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14,913,234
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14,288,550
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|
14,840,759
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|
||||
Weighted average shares used to compute net income (loss) per share attributable to common stock—diluted
|
74,080,026
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14,913,234
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|
69,710,552
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|
14,840,759
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|
||||
Pro forma net income (loss) per share attributable to common stock—basic and diluted
|
|
|
$
|
0.06
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$
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(0.34
|
)
|
||||
Pro forma weighted-average shares used to compute net income (loss) per share attributable to common stock—basic and diluted
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70,335,236
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|
|
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|
70,262,761
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|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2017
|
||||
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|
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|
||||
Operating Activities
|
|
||||||
Net income (loss)
|
$
|
(22,893
|
)
|
|
$
|
(23,762
|
)
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
2,935
|
|
|
3,539
|
|
||
Stock-based compensation.
|
3,734
|
|
|
5,320
|
|
||
Change in assets and liabilities:
|
|
|
|
|
|
||
Restricted cash
|
(8,610
|
)
|
|
(8,032
|
)
|
||
Prepaid expenses
|
4,523
|
|
|
1,842
|
|
||
Accrued revenue
|
(7,168
|
)
|
|
(3,885
|
)
|
||
Other current assets
|
(10
|
)
|
|
6,482
|
|
||
Other long-term assets
|
(5,816
|
)
|
|
377
|
|
||
Accounts payable
|
332
|
|
|
901
|
|
||
Accrued expenses
|
5,859
|
|
|
8,481
|
|
||
Other payables
|
8,609
|
|
|
7,814
|
|
||
Deferred lease liability
|
(157
|
)
|
|
1,097
|
|
||
Origination of loans held for sale
|
—
|
|
|
(3,022
|
)
|
||
Proceeds from sale of loans originated as held for sale
|
—
|
|
|
2,477
|
|
||
Net cash used in operating activities
|
(18,662
|
)
|
|
(371
|
)
|
||
Investing activities
|
|
|
|
||||
Maturities of short-term investments
|
1,644
|
|
|
1,239
|
|
||
Purchases of short-term investments
|
(1,644
|
)
|
|
(992
|
)
|
||
Purchases of property and equipment
|
(2,660
|
)
|
|
(9,435
|
)
|
||
Net cash used in investing activities
|
(2,660
|
)
|
|
(9,188
|
)
|
||
Financing activities
|
|
|
|
||||
Proceeds from exercise of stock options
|
462
|
|
|
1,017
|
|
||
Payment of deferred initial public offering costs
|
—
|
|
|
(1,807
|
)
|
||
Borrowings from warehouse credit facilities
|
—
|
|
|
2,932
|
|
||
Repayments of warehouse credit facilities
|
—
|
|
|
(2,403
|
)
|
||
Net cash provided by (used in) financing activities
|
462
|
|
|
(261
|
)
|
||
Net change in cash and cash equivalents
|
(20,860
|
)
|
|
(9,820
|
)
|
||
Cash and cash equivalents:
|
|
|
|
||||
Beginning of period
|
85,597
|
|
|
64,030
|
|
||
End of period
|
$
|
64,737
|
|
|
$
|
54,210
|
|
Supplemental disclosure of non-cash investing and financing activities
|
|
|
|
||||
Accretion of redeemable convertible preferred stock
|
$
|
59,869
|
|
|
$
|
(135,690
|
)
|
Stock-based compensation capitalized in property and equipment
|
$
|
(39
|
)
|
|
$
|
(131
|
)
|
Deferred initial public offering cost accruals
|
$
|
—
|
|
|
$
|
(343
|
)
|
Leasehold improvements paid directly by lessor
|
$
|
—
|
|
|
$
|
(104
|
)
|
|
Redeemable Convertible
Preferred Stock |
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Accumulated Deficit
|
|
Total Stockholders' Deficit
|
||||||||||||||||
|
Shares
|
|
Amount
|
|
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||
Balance, January 1, 2016
|
55,422,002
|
|
|
$
|
599,915
|
|
|
|
14,059,601
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
(495,727
|
)
|
|
$
|
(495,713
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Exercise of stock options
|
—
|
|
|
—
|
|
|
|
627,423
|
|
|
1
|
|
|
1,494
|
|
|
—
|
|
|
1,495
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
8,512
|
|
|
—
|
|
|
8,512
|
|
|||||
Accretion of redeemable convertible preferred stock
|
—
|
|
|
55,501
|
|
|
|
—
|
|
|
—
|
|
|
(10,006
|
)
|
|
(45,496
|
)
|
|
(55,502
|
)
|
|||||
Net income (loss)
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,526
|
)
|
|
(22,526
|
)
|
|||||
Balance, December 31, 2016
|
55,422,002
|
|
|
$
|
655,416
|
|
|
|
14,687,024
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
(563,749
|
)
|
|
$
|
(563,734
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cumulative stock-based compensation adjustment
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
522
|
|
|
(522
|
)
|
|
—
|
|
|||||
Exercise of stock options
|
—
|
|
|
—
|
|
|
|
301,622
|
|
|
—
|
|
|
1,017
|
|
|
—
|
|
|
1,017
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
5,451
|
|
|
—
|
|
|
5,451
|
|
|||||
Accretion of redeemable convertible preferred stock
|
—
|
|
|
135,690
|
|
|
|
—
|
|
|
—
|
|
|
(6,990
|
)
|
|
(128,700
|
)
|
|
(135,690
|
)
|
|||||
Net income (loss)
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,762
|
)
|
|
(23,762
|
)
|
|||||
Balance, June 30, 2017
|
55,422,002
|
|
|
$
|
791,106
|
|
|
|
14,988,646
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
(716,733
|
)
|
|
$
|
(716,718
|
)
|
|
Three Months Ended
June 30, |
|
Six Months Ended June 30,
|
||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
|
|
|
|
|
|
|
Valuation methodology:
|
|
|
|
|
|
|
|
Income approach (private company)
|
15.0%
|
|
N/A
|
|
15.0%
|
|
12.5%
|
Market approach (private company)
|
15.0%
|
|
N/A
|
|
15.0%
|
|
12.5%
|
PWERM (IPO)
|
52.5%
|
|
N/A
|
|
52.5%
|
|
60.0%
|
PWERM (M&A)
|
17.5%
|
|
N/A
|
|
17.5%
|
|
15.0%
|
IPO revenue multiple
|
3.0x-4.0x
|
|
N/A
|
|
3.0x-4.5x
|
|
2.8x-3.0x
|
Forecasted revenue growth rate
|
28.0%-40.0%
|
|
N/A
|
|
28.0%-40.9%
|
|
31.1%-40.0x
|
Discount rate
|
20.0%
|
|
N/A
|
|
20.0%-25.0%
|
|
20.0%
|
|
|
|
Fair Value
|
||||
Financial Instrument
|
Fair Value Hierarchy
|
|
December 31, 2016
|
|
June 30, 2017
|
||
|
|
||||||
|
|
|
|
|
|
||
Money market funds (included in cash and cash equivalents)
|
Level I
|
|
46,357
|
|
|
22,930
|
|
Certificates of deposit (included in short-term investments)
|
Level II
|
|
1,749
|
|
|
1,504
|
|
Interest rate lock commitments
|
Level II
|
|
—
|
|
|
2
|
|
Redeemable convertible preferred stock (mezzanine equity)
|
Level III
|
|
(655,416
|
)
|
|
(791,106
|
)
|
|
|
|
December 31, 2016
|
|
June 30, 2017
|
|
Useful Lives
|
|
|
||
|
(years)
|
|
|
|
|
Leasehold improvements
|
Shorter of lease term or economic life
|
|
$4,911
|
|
$15,350
|
Website and software development costs
|
1-3
|
|
10,114
|
|
12,146
|
Computer and office equipment
|
3
|
|
2,846
|
|
3,350
|
Software
|
3
|
|
1,367
|
|
1,367
|
Furniture
|
7
|
|
2,406
|
|
2,836
|
Construction in progress
|
|
|
10,856
|
|
—
|
|
|
|
32,500
|
|
35,049
|
Accumulated depreciation and amortization
|
|
|
(13,274)
|
|
(12,912)
|
Property and equipment, net
|
|
|
$19,226
|
|
$22,137
|
|
|
|
December 31, 2016
|
|
June 30, 2017
|
||||||||||||||||||||
|
Useful
Live (years) |
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Trade Names
|
10
|
|
$
|
1,040
|
|
|
$
|
(234
|
)
|
|
$
|
806
|
|
|
$
|
1,040
|
|
|
$
|
(286
|
)
|
|
$
|
754
|
|
Developed technology
|
10
|
|
2,980
|
|
|
(670
|
)
|
|
2,310
|
|
|
2,980
|
|
|
(820
|
)
|
|
2,160
|
|
||||||
Customer relationships
|
10
|
|
860
|
|
|
(194
|
)
|
|
666
|
|
|
860
|
|
|
(237
|
)
|
|
624
|
|
||||||
|
|
|
$
|
4,880
|
|
|
$
|
(1,098
|
)
|
|
$
|
3,782
|
|
|
$
|
4,880
|
|
|
$
|
(1,343
|
)
|
|
$
|
3,538
|
|
|
|
Six Months Ended June 30,
|
|||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Real estate
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
75,649
|
|
|
$
|
100,658
|
|
|
$
|
116,006
|
|
|
$
|
159,030
|
|
Cost of revenue
|
48,293
|
|
|
63,436
|
|
|
85,022
|
|
|
114,592
|
|
||||
Gross profit
|
$
|
27,356
|
|
|
$
|
37,222
|
|
|
$
|
30,984
|
|
|
$
|
44,438
|
|
Other
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
2,065
|
|
|
$
|
4,277
|
|
|
$
|
3,343
|
|
|
$
|
5,772
|
|
Cost of revenue
|
2,010
|
|
|
4,539
|
|
|
3,786
|
|
|
6,875
|
|
||||
Gross profit
|
$
|
55
|
|
|
$
|
(262
|
)
|
|
$
|
(443
|
)
|
|
$
|
(1,103
|
)
|
Consolidated
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
77,714
|
|
|
$
|
104,935
|
|
|
$
|
119,349
|
|
|
$
|
164,802
|
|
Cost of revenue
|
50,303
|
|
|
67,975
|
|
|
88,808
|
|
|
121,467
|
|
||||
Gross profit
|
$
|
27,411
|
|
|
$
|
36,960
|
|
|
$
|
30,541
|
|
|
$
|
43,335
|
|
Operating expenses
|
26,072
|
|
|
32,688
|
|
|
53,567
|
|
|
67,186
|
|
||||
Net income (loss)
|
$
|
1,388
|
|
|
$
|
4,304
|
|
|
$
|
(22,893
|
)
|
|
$
|
(23,762
|
)
|
|
Three Months Ended
June 30, |
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Real estate revenue
|
|
||||||||||||||
Brokerage revenue
|
$
|
71,401
|
|
|
$
|
95,069
|
|
|
$
|
109,388
|
|
|
$
|
149,540
|
|
Partner revenue
|
4,248
|
|
|
5,589
|
|
|
6,618
|
|
|
9,490
|
|
||||
Total real estate revenue
|
$
|
75,649
|
|
|
$
|
100,658
|
|
|
$
|
116,006
|
|
|
$
|
159,030
|
|
|
As of December 31, 2016
|
||||||||
|
Shares Authorized
|
|
Shares Issued and Outstanding
|
|
Aggregate Liquidation Preference
|
|
Proceeds, Net of Issuance Costs
|
||
Series A-1
|
4,378,284
|
|
1,459,427
|
|
500,000
|
|
|
462,000
|
|
Series A-2
|
109,552
|
|
36,517
|
|
11,000
|
|
|
11,000
|
|
Series A-3
|
9,099,610
|
|
3,033,202
|
|
259,000
|
|
|
241,000
|
|
Series B
|
36,338,577
|
|
12,112,853
|
|
7,998,000
|
|
|
7,952,000
|
|
Series C
|
33,388,982
|
|
11,129,656
|
|
12,000,000
|
|
|
11,950,000
|
|
Series D
|
28,574,005
|
|
9,524,665
|
|
10,269,000
|
|
|
10,201,000
|
|
Series E
|
12,041,148
|
|
4,013,712
|
|
14,924,000
|
|
|
14,841,000
|
|
Series F
|
20,808,580
|
|
6,936,186
|
|
50,536,000
|
|
|
50,453,000
|
|
Series G
|
21,527,376
|
|
7,175,784
|
|
70,991,000
|
|
|
68,062,000
|
|
Total
|
166,266,114
|
|
55,422,002
|
|
167,488,000
|
|
|
164,173,000
|
|
|
As of June 30, 2017
|
||||||||||
|
Shares Authorized
|
|
Shares Issued and Outstanding
|
|
Aggregate
Liquidation Preference |
|
Proceeds, Net of Issuance Costs
|
||||
Series A-1
|
4,378,284
|
|
|
1,459,427
|
|
|
500,000
|
|
|
462,000
|
|
Series A-2
|
109,552
|
|
|
36,517
|
|
|
11,000
|
|
|
11,000
|
|
Series A-3
|
9,099,610
|
|
|
3,033,202
|
|
|
259,000
|
|
|
241,000
|
|
Series B
|
36,338,577
|
|
|
12,112,853
|
|
|
7,998,000
|
|
|
7,952,000
|
|
Series C
|
33,388,982
|
|
|
11,129,656
|
|
|
12,000,000
|
|
|
11,950,000
|
|
Series D
|
28,574,005
|
|
|
9,524,665
|
|
|
10,269,000
|
|
|
10,201,000
|
|
Series E
|
12,041,148
|
|
|
4,013,712
|
|
|
14,924,000
|
|
|
14,841,000
|
|
Series F
|
20,808,580
|
|
|
6,936,186
|
|
|
50,536,000
|
|
|
50,453,000
|
|
Series G
|
21,527,376
|
|
|
7,175,784
|
|
|
70,991,000
|
|
|
68,062,000
|
|
Total
|
166,266,114
|
|
|
55,422,002
|
|
|
167,488,000
|
|
|
164,173,000
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Series A-1
|
$
|
1,620
|
|
|
$
|
(3,085
|
)
|
|
$
|
1,535
|
|
|
$
|
(3,785
|
)
|
Series A-2
|
41
|
|
|
(77
|
)
|
|
38
|
|
|
(95
|
)
|
||||
Series A-3
|
3,275
|
|
|
(6,478
|
)
|
|
3,192
|
|
|
(7,843
|
)
|
||||
Series B
|
13,443
|
|
|
(25,601
|
)
|
|
13,111
|
|
|
(31,052
|
)
|
||||
Series C
|
12,352
|
|
|
(23,523
|
)
|
|
11,707
|
|
|
(28,531
|
)
|
||||
Series D
|
10,571
|
|
|
(20,131
|
)
|
|
10,019
|
|
|
(24,417
|
)
|
||||
Series E
|
4,695
|
|
|
(8,130
|
)
|
|
4,342
|
|
|
(9,936
|
)
|
||||
Series F
|
8,322
|
|
|
(12,522
|
)
|
|
7,292
|
|
|
(15,643
|
)
|
||||
Series G
|
10,763
|
|
|
(11,374
|
)
|
|
8,633
|
|
|
(14,388
|
)
|
||||
Total
|
$
|
65,082
|
|
|
$
|
(110,921
|
)
|
|
$
|
59,869
|
|
|
$
|
(135,690
|
)
|
|
December 31,
|
|
June 30,
|
||
|
2016
|
|
2017
|
||
Redeemable convertible preferred stock outstanding
|
55,422,002
|
|
|
55,422,002
|
|
Stock options issued and outstanding
|
13,291,684
|
|
|
13,782,401
|
|
Shares available for future equity grants
|
4,941,504
|
|
|
4,148,810
|
|
Total
|
73,655,190
|
|
|
73,353,213
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended June 30,
|
||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
|
|
|
|
|
|
|
Expected life
|
7 years
|
|
7 years
|
|
7 years
|
|
7 years
|
Volatility
|
39.81%
|
|
40.97%
|
|
39.81%-41.36%
|
|
37.88%-40.97%
|
Risk-free interest rate
|
1.51%
|
|
1.96%
|
|
1.51%-1.66%
|
|
1.96%-2.26%
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
|
—%
|
Weighted-average grant date fair value
|
3.96
|
|
4.89
|
|
3.99
|
|
4.86
|
|
Number Of Options |
|
Weighted- Average Exercise Price
|
|
Weighted Average Remaining Contractual Life (years)
|
|
Aggregate Intrinsic Value |
||||
Outstanding at December 31, 2016
|
13,291,684
|
|
$
|
5.85
|
|
|
7.74
|
|
$
|
61,774
|
|
Options granted
|
1,137,046
|
|
10.78
|
|
|
|
|
|
|||
Options exercised
|
(301,622)
|
|
3.37
|
|
|
|
|
2,294
|
|
||
Options forfeited or canceled
|
(344,707)
|
|
8.01
|
|
|
|
|
|
|||
Outstanding at June 30, 2017
|
13,782,401
|
|
6.26
|
|
|
7.46
|
|
65,065
|
|
||
Options exercisable at June 30, 2017
|
7,827,279
|
|
$
|
4.38
|
|
|
6.34
|
|
$
|
51,683
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
$
|
525
|
|
|
$
|
699
|
|
|
$
|
1,043
|
|
|
$
|
1,414
|
|
Technology and development
|
559
|
|
|
751
|
|
|
1,098
|
|
|
1,482
|
|
||||
Marketing
|
112
|
|
|
123
|
|
|
221
|
|
|
242
|
|
||||
General and administrative
|
718
|
|
|
1,065
|
|
|
1,372
|
|
|
2,182
|
|
||||
Total stock-based compensation
|
$
|
1,914
|
|
|
$
|
2,638
|
|
|
$
|
3,734
|
|
|
$
|
5,320
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
1,388
|
|
|
$
|
4,304
|
|
|
$
|
(22,893
|
)
|
|
$
|
(23,762
|
)
|
Accretion of redeemable convertible preferred stock
|
65,082
|
|
|
(110,921
|
)
|
|
59,869
|
|
|
(135,690
|
)
|
||||
Undistributed earnings attributable to participating securities
|
(52,805
|
)
|
|
—
|
|
|
(29,397
|
)
|
|
—
|
|
||||
Net income (loss) attributable to common stock—basic
|
13,665
|
|
|
(106,617
|
)
|
|
7,579
|
|
|
(159,452
|
)
|
||||
Net income (loss) attributable to common stock—diluted
|
1,388
|
|
|
(106,617
|
)
|
|
(22,893
|
)
|
|
(159,452
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average shares used to compute net income (loss) per share attributable to common stock—basic
|
14,340,333
|
|
|
14,913,234
|
|
|
14,288,550
|
|
|
14,840,759
|
|
||||
Weighted average shares used to compute net income (loss) per share attributable to common stock—diluted
|
74,080,026
|
|
|
14,913,234
|
|
|
69,710,552
|
|
|
14,840,759
|
|
||||
Net income (loss) per share attributable to common stock—basic
|
$
|
0.95
|
|
|
$
|
(7.15
|
)
|
|
$
|
0.53
|
|
|
$
|
(10.74
|
)
|
Net income (loss) per share attributable to common stock—diluted
|
$
|
0.02
|
|
|
$
|
(7.15
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(10.74
|
)
|
|
|
|
|
|
|
|
|
||||||||
(1) A reconciliation of net income (loss) attributable to common stock—basic to net income (loss) attributable to common stock—diluted is as follows:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to common stock—basic
|
$
|
13,665
|
|
|
|
|
$
|
7,579
|
|
|
|
||||
Add-back: Accretion due to application of if-converted
|
(65,082
|
)
|
|
|
|
(59,869
|
)
|
|
|
||||||
Add-back: Undistributed earnings attributable to participating securities due to application of if-converted
|
52,805
|
|
|
|
|
29,397
|
|
|
|
||||||
Net income (loss) attributable to common stock—diluted
|
$
|
1,388
|
|
|
|
|
$
|
(22,893
|
)
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||
|
|
|
|
|
|
|
|
||
Redeemable convertible preferred stock
|
—
|
|
|
55,422,002
|
|
—
|
|
|
55,422,002
|
Options outstanding
|
4,205,443
|
|
13,782,401
|
|
11,614,015
|
|
13,782,401
|
||
Total
|
4,205,443
|
|
69,204,403
|
|
11,614,015
|
|
69,204,403
|
|
Facility Leases
|
|
Other Commitments
|
||||||||||||
|
December 31, 2016
|
|
June 30, 2017
|
|
December 31, 2016
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|||||||||
2017
|
$
|
4,803
|
|
|
$
|
2,974
|
|
|
$
|
2,123
|
|
|
$
|
3,251
|
|
2018
|
6,227
|
|
|
6,641
|
|
|
848
|
|
|
889
|
|
||||
2019
|
6,652
|
|
|
7,041
|
|
|
—
|
|
|
—
|
|
||||
2020
|
5,563
|
|
|
5,943
|
|
|
—
|
|
|
—
|
|
||||
2021 and thereafter
|
32,262
|
|
|
32,577
|
|
|
—
|
|
|
—
|
|
||||
Total minimum lease payments
|
$
|
55,507
|
|
|
$
|
55,176
|
|
|
$
|
2,971
|
|
|
$
|
4,140
|
|
|
December 31,
|
|
June 30,
|
||||
|
2016
|
|
2017
|
||||
Accrued compensation and benefits
|
$
|
16,659
|
|
|
$
|
21,427
|
|
Legal fees and settlements
|
2,795
|
|
|
2,381
|
|
||
Miscellaneous accrued liabilities
|
2,799
|
|
|
6,440
|
|
||
Total accrued liabilities:
|
$
|
22,253
|
|
|
$
|
30,248
|
|
•
|
4,159,659
shares of common stock under the Amended and Restated 2004 Equity Incentive Plan, as of July 27, 2017, which shares were added to the shares reserved under the 2017 EIP in connection with the IPO;
|
•
|
3,700,000
shares of common stock under the 2017 EIP; and
|
•
|
1,600,000
shares of common stock under the 2017 ESPP.
|
|
|
||||||||||||||||||||||||||||||||||
|
Jun. 30, 2015
|
|
Sep. 30, 2015
|
|
Dec. 31, 2015
|
|
Mar. 31, 2016
|
|
Jun. 30, 2016
|
|
Sep. 30, 2016
|
|
Dec. 31, 2016
|
|
Mar. 31, 2017
|
|
Jun. 30, 2017
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Monthly average visitors (in thousands)
|
12,381
|
|
|
13,060
|
|
|
11,142
|
|
|
13,987
|
|
|
17,021
|
|
|
17,795
|
|
|
16,058
|
|
|
20,162
|
|
|
24,400
|
|
|||||||||
Real estate transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Brokerage
|
5,465
|
|
|
5,653
|
|
|
4,510
|
|
|
4,005
|
|
|
7,497
|
|
|
7,934
|
|
|
6,432
|
|
|
5,692
|
|
|
10,221
|
|
|||||||||
Partner
|
2,456
|
|
|
2,718
|
|
|
2,273
|
|
|
1,936
|
|
|
2,602
|
|
|
2,663
|
|
|
2,281
|
|
|
2,041
|
|
|
2,874
|
|
|||||||||
Total
|
7,921
|
|
|
8,371
|
|
|
6,783
|
|
|
5,941
|
|
|
10,099
|
|
|
10,597
|
|
|
8,713
|
|
|
7,733
|
|
|
13,095
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Real estate revenue per real estate transaction:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Brokerage
|
$
|
9,243
|
|
|
$
|
9,343
|
|
|
$
|
9,242
|
|
|
$
|
9,485
|
|
|
$
|
9,524
|
|
|
$
|
9,333
|
|
|
$
|
9,428
|
|
|
$
|
9,570
|
|
|
$
|
9,301
|
|
Partner
|
1,164
|
|
|
1,191
|
|
|
1,177
|
|
|
1,224
|
|
|
1,633
|
|
|
1,932
|
|
|
1,991
|
|
|
1,911
|
|
|
1,945
|
|
|||||||||
Aggregate
|
6,738
|
|
|
6,696
|
|
|
6,539
|
|
|
6,793
|
|
|
7,491
|
|
|
7,474
|
|
|
7,481
|
|
|
7,548
|
|
|
7,687
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Aggregate home value of real estate transactions (in millions)
|
3,601 |
|
|
3,837 |
|
|
2,984 |
|
|
2,599 |
|
|
4,684 |
|
|
4,898 |
|
|
4,018 |
|
|
3,470 |
|
|
6,119
|
|
|||||||||
U.S. market share by value
|
0.44
|
%
|
|
0.46
|
%
|
|
0.46
|
%
|
|
0.48
|
%
|
|
0.53
|
%
|
|
0.57
|
%
|
|
0.56
|
%
|
|
0.58
|
%
|
|
0.64
|
%
|
|||||||||
Revenue from top-10 Redfin markets as a percentage of real
estate revenue |
78
|
%
|
|
76
|
%
|
|
73
|
%
|
|
71
|
%
|
|
74
|
%
|
|
72
|
%
|
|
71
|
%
|
|
68
|
%
|
|
69
|
%
|
|||||||||
Average number of lead agents
|
568
|
|
|
621
|
|
|
667
|
|
|
743
|
|
|
756
|
|
|
756
|
|
|
796
|
|
|
935
|
|
|
1,010
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
||||||||||||||
Revenue
|
$
|
77,714
|
|
|
$
|
104,935
|
|
|
$
|
119,349
|
|
|
$
|
164,802
|
|
Cost of revenue
(1)
|
50,303
|
|
|
67,975
|
|
|
88,808
|
|
|
121,467
|
|
||||
Gross profit
|
27,411
|
|
|
36,960
|
|
|
30,541
|
|
|
43,335
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Technology and development
(1)
|
8,060
|
|
|
10,090
|
|
|
15,958
|
|
|
19,762
|
|
||||
Marketing
(1)
|
8,486
|
|
|
10,132
|
|
|
17,697
|
|
|
20,591
|
|
||||
General and administrative
(1)
|
9,526
|
|
|
12,466
|
|
|
19,912
|
|
|
26,833
|
|
||||
Total operating expenses
|
26,072
|
|
|
32,688
|
|
|
53,567
|
|
|
67,186
|
|
||||
Income (loss) from operations
|
1,339
|
|
|
4,272
|
|
|
(23,026
|
)
|
|
(23,851
|
)
|
||||
Total interest income and other income, net
|
49
|
|
|
32
|
|
|
133
|
|
|
89
|
|
||||
Net income (loss)
|
$
|
1,388
|
|
|
$
|
4,304
|
|
|
$
|
(22,893
|
)
|
|
$
|
(23,762
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
||||||||||||||
Cost of revenue
|
$
|
525
|
|
|
$
|
699
|
|
|
$
|
1,043
|
|
|
$
|
1,414
|
|
Technology and development
|
559
|
|
|
751
|
|
|
1,098
|
|
|
1,482
|
|
||||
Marketing
|
112
|
|
|
123
|
|
|
221
|
|
|
242
|
|
||||
General and administrative
|
718
|
|
|
1,065
|
|
|
1,372
|
|
|
2,182
|
|
||||
Total
|
$
|
1,914
|
|
|
$
|
2,638
|
|
|
$
|
3,734
|
|
|
$
|
5,320
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||
|
|
|
|
|
|
|
|
||||
|
(as a percentage of revenue)
|
||||||||||
Cost of revenue
|
0.7
|
%
|
|
0.7
|
%
|
|
0.9
|
%
|
|
0.9
|
%
|
Technology and development
|
0.7
|
|
|
0.7
|
|
|
0.9
|
|
|
0.9
|
|
Marketing
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|
0.1
|
|
General and administrative
|
0.9
|
|
|
1.0
|
|
|
1.1
|
|
|
1.3
|
|
Total
|
2.4
|
%
|
|
2.5
|
%
|
|
3.1
|
%
|
|
3.2
|
%
|
|
|
Three Months Ended June 30,
|
|
|
Change
|
||||||||||
|
|
2016
|
|
2017
|
|
Dollars
|
|
Percentage
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
Percentage (in thousands, except percentages)
|
|||||||||||||
Real estate revenue:
|
|
|
|
|
|
|
|
|
|||||||
Brokerage revenue
|
|
$
|
71,401
|
|
|
$
|
95,069
|
|
|
$
|
23,668
|
|
|
33
|
%
|
Partner revenue
|
|
4,248
|
|
|
5,589
|
|
|
1,341
|
|
|
32
|
|
|||
Total real estate revenue
|
|
75,649
|
|
|
100,658
|
|
|
25,009
|
|
|
33
|
|
|||
Other revenue
|
|
2,065
|
|
|
4,277
|
|
|
2,212
|
|
|
107
|
|
|||
Revenue
|
|
$
|
77,714
|
|
|
$
|
104,935
|
|
|
$
|
27,221
|
|
|
35
|
|
Percentage of revenue
|
|
|
|
|
|
|
|
|
|||||||
Real estate revenue:
|
|
|
|
|
|
|
|
|
|||||||
Brokerage
|
|
91.9
|
%
|
|
90.6
|
%
|
|
|
|
|
|||||
Partner revenue
|
|
5.5
|
|
|
5.3
|
|
|
|
|
|
|||||
Total real estate revenue
|
|
97.3
|
|
|
95.9
|
|
|
|
|
|
|||||
Other revenue
|
|
2.7
|
|
|
4.1
|
|
|
|
|
|
|||||
Revenue
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Change
|
|||||||||||
|
2016
|
|
2017
|
|
Dollars
|
|
Percentage
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(in thousands, except percentages)
|
|||||||||||||
Cost of revenue
|
|
|
|
|
|
|
|
|||||||
Real estate
|
$
|
48,293
|
|
|
$
|
63,436
|
|
|
$
|
15,143
|
|
|
31
|
%
|
Other
|
2,010
|
|
|
4,539
|
|
|
2,529
|
|
|
126
|
|
|||
Total cost of revenue
|
$
|
50,303
|
|
|
$
|
67,975
|
|
|
$
|
17,672
|
|
|
35
|
|
|
|
|
|
|
|
|
|
|||||||
Gross profit
|
|
|
|
|
|
|
|
|||||||
Real estate
|
$
|
27,356
|
|
|
$
|
37,222
|
|
|
$
|
9,866
|
|
|
36
|
%
|
Other
|
55
|
|
|
(262
|
)
|
|
(317
|
)
|
|
(576
|
)
|
|||
Total gross profit
|
$
|
27,411
|
|
|
$
|
36,960
|
|
|
$
|
9,549
|
|
|
35
|
|
|
|
|
|
|
|
|
|
|||||||
Gross margin (percentage of revenue)
|
|
|
|
|
|
|
|
|||||||
Real estate
|
36.2
|
%
|
|
37.0
|
%
|
|
|
|
|
|||||
Other
|
2.6
|
|
|
(6.1
|
)
|
|
|
|
|
|||||
Total gross margin
|
35.3
|
|
|
35.2
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Change
|
|||||||||||
|
2016
|
|
2017
|
|
Dollars
|
|
Percentage
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(in thousands, except percentages)
|
|||||||||||||
Technology and development
|
$
|
8,060
|
|
|
$
|
10,090
|
|
|
$
|
2,030
|
|
|
25
|
%
|
Marketing
|
8,486
|
|
|
10,132
|
|
|
1,646
|
|
|
19
|
|
|||
General and administrative
|
9,526
|
|
|
12,466
|
|
|
2,940
|
|
|
31
|
|
|||
Total operating expenses
|
$
|
26,072
|
|
|
$
|
32,688
|
|
|
$
|
6,616
|
|
|
25
|
|
Percentage of revenue
|
|
|
|
|
|
|
|
|||||||
Technology and development
|
10.4
|
%
|
|
9.6
|
%
|
|
|
|
|
|||||
Marketing
|
10.9
|
|
|
9.7
|
|
|
|
|
|
|||||
General and administrative
|
12.3
|
|
|
11.9
|
|
|
|
|
|
|||||
Total operating expenses
|
33.6
|
%
|
|
31.2
|
%
|
|
|
|
|
|
Six Months Ended June 30,
|
|
Change
|
|||||||||||
|
2016
|
|
2017
|
|
Dollars
|
|
Percentage
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Real estate revenue:
|
Percentage (in thousands, except percentages)
|
|||||||||||||
Brokerage revenue
|
$
|
109,388
|
|
|
$
|
149,540
|
|
|
$
|
40,152
|
|
|
37
|
%
|
Partner revenue
|
6,618
|
|
|
9,490
|
|
|
2,872
|
|
|
43
|
|
|||
Total real estate revenue
|
116,006
|
|
|
159,030
|
|
|
43,024
|
|
|
37
|
|
|||
Other revenue
|
3,343
|
|
|
5,772
|
|
|
2,429
|
|
|
73
|
|
|||
Revenue
|
$
|
119,349
|
|
|
$
|
164,802
|
|
|
$
|
45,453
|
|
|
38
|
|
Percentage of revenue
|
|
|
|
|
|
|
|
|||||||
Real estate revenue:
|
|
|
|
|
|
|
|
|||||||
Brokerage
|
91.7
|
%
|
|
90.7
|
%
|
|
|
|
|
|||||
Partner revenue
|
5.5
|
|
|
5.8
|
|
|
|
|
|
|||||
Total real estate revenue
|
97.2
|
|
|
96.5
|
|
|
|
|
|
|||||
Other revenue
|
2.8
|
|
|
3.5
|
|
|
|
|
|
|||||
Revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
Six Months Ended June 30,
|
|
Change
|
|||||||||||
|
2016
|
|
2017
|
|
Dollars
|
|
Percentage
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(in thousands, except percentages)
|
|||||||||||||
Cost of revenue
|
|
|
|
|
|
|
|
|||||||
Real estate
|
$
|
85,022
|
|
|
$
|
114,592
|
|
|
$
|
29,570
|
|
|
35
|
%
|
Other
|
3,786
|
|
|
6,875
|
|
|
3,089
|
|
|
82
|
|
|||
Total cost of revenue
|
$
|
88,808
|
|
|
$
|
121,467
|
|
|
$
|
32,659
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|||||||
Gross profit
|
|
|
|
|
|
|
|
|||||||
Real estate
|
$
|
30,984
|
|
|
$
|
44,438
|
|
|
$
|
13,454
|
|
|
43
|
%
|
Other
|
(443
|
)
|
|
(1,103
|
)
|
|
(660
|
)
|
|
149
|
|
|||
Total gross profit
|
$
|
30,541
|
|
|
$
|
43,335
|
|
|
$
|
12,794
|
|
|
42
|
|
|
|
|
|
|
|
|
|
|||||||
Gross margin (percentage of revenue)
|
|
|
|
|
|
|
|
|||||||
Real estate
|
26.7
|
%
|
|
27.9
|
%
|
|
|
|
|
|||||
Other
|
(13.3
|
)
|
|
(19.1
|
)
|
|
|
|
|
|||||
Total gross margin
|
25.6
|
|
|
26.3
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
Change
|
||||||||||
|
2016
|
|
2017
|
|
Dollars
|
|
Percentage
|
|||||||
|
|
|
|
|
|
|
|
|||||||
|
(in thousands, except percentages)
|
|||||||||||||
Technology and development
|
$
|
15,958
|
|
|
$
|
19,762
|
|
|
$
|
3,804
|
|
|
24
|
%
|
Marketing
|
17,697
|
|
|
20,591
|
|
|
2,894
|
|
|
16
|
|
|||
General and administrative
|
19,912
|
|
|
26,833
|
|
|
6,921
|
|
|
35
|
|
|||
Total operating expenses
|
$
|
53,567
|
|
|
$
|
67,186
|
|
|
$
|
13,619
|
|
|
25
|
|
Percentage of revenue
|
|
|
|
|
|
|
|
|||||||
Technology and development
|
13.4
|
%
|
|
12.0
|
%
|
|
|
|
|
|||||
Marketing
|
14.8
|
|
|
12.5
|
|
|
|
|
|
|||||
General and administrative
|
16.7
|
|
|
16.3
|
|
|
|
|
|
|||||
Total operating expenses
|
44.9
|
%
|
|
40.8
|
%
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2017
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Net cash used in operating activities
|
$
|
(18,662
|
)
|
|
$
|
(371
|
)
|
Net cash used in investing activities
|
(2,660
|
)
|
|
(9,188
|
)
|
||
Net cash provided by financing activities
|
$
|
462
|
|
|
$
|
(261
|
)
|
•
|
increased interest rates;
|
•
|
increased unemployment rates or stagnant or declining wages;
|
•
|
slow economic growth or recessionary conditions;
|
•
|
weak credit markets;
|
•
|
low consumer confidence in the economy or the U.S. residential real estate industry;
|
•
|
adverse changes in local or regional economic conditions in the markets that we serve;
|
•
|
fluctuations in local and regional home inventory levels;
|
•
|
constraints on the availability of mortgage financing, enhanced mortgage underwriting standards, or increased down payment requirements;
|
•
|
federal and state legislative, tax or regulatory changes that would adversely affect the U.S. residential real estate industry, including potential reform relating to Fannie Mae, Freddie Mac and other government sponsored entities that provide liquidity to the mortgage market, and limitations on the deductions of certain mortgage interest expenses;
|
•
|
increases in the exchange rate for the U.S. dollar compared to foreign currencies, causing
|
•
|
foreign regulatory changes or capital controls that would make it more difficult for foreign purchasers to withdraw capital from their home countries or purchase and hold U.S. real estate;
|
•
|
strength of financial institutions;
|
•
|
high levels of foreclosure activity in particular markets;
|
•
|
a decrease in home ownership rates;
|
•
|
political uncertainty relating to the new presidential administration; or
|
•
|
acts of nature, such as hurricanes, earthquakes, and other natural disasters, as well as adverse environmental and climate changes that disrupt the local or regional real estate markets we serve.
|
•
|
our inability to grow market share;
|
•
|
increased competition in the U.S. residential real estate industry;
|
•
|
changes in our commission rates;
|
•
|
our failure to realize our anticipated efficiency through our technology and business model;
|
•
|
failure to execute our growth strategies;
|
•
|
declines in the U.S. residential real estate industry; and
|
•
|
unforeseen expenses, difficulties, complications and delays, and other unknown factors.
|
•
|
seasonal variances of home sales, which historically peak during the summer and are weaker during the first and fourth quarters of each year;
|
•
|
cyclical periods of slowdowns or recessions in the U.S. real estate market;
|
•
|
our ability to increase market share;
|
•
|
fluctuations in sale prices and transaction volumes in our top markets;
|
•
|
the price of homes bought or sold by Redfin homebuyers and home sellers;
|
•
|
price competition;
|
•
|
volume of transactions in markets with a higher than average mean home price;
|
•
|
mix of transactions;
|
•
|
impairment charges associated with goodwill and other intangible assets;
|
•
|
the timing and success of new offerings by us and our competitors;
|
•
|
changes in local market conditions;
|
•
|
changes in interest rates and the mortgage and credit markets;
|
•
|
the time it takes new lead agents to become fully productive;
|
•
|
changes in federal, state, or local laws or taxes that affect real estate transactions or residential brokerage, title insurance, and mortgage insurance industries;
|
•
|
changes in multiple listing services, or MLSs, or other rules and regulations affecting the residential real estate industry; and
|
•
|
any acquisitions of, or investments in, third-party technologies or businesses.
|
•
|
successfully expand and deepen our business and market share;
|
•
|
respond to seasonality and cyclicality in the real estate industry and the U.S. economy;
|
•
|
compete with the pricing and offerings of our competitors;
|
•
|
attract more customers to our website and mobile application;
|
•
|
successfully invest in developing technology, tools, features, and products;
|
•
|
maintain high levels of customer service;
|
•
|
maximize our lead agents’ productivity;
|
•
|
attract and retain high-quality lead agents;
|
•
|
successfully contract with high-quality partner agents; and
|
•
|
increase our brand awareness.
|
•
|
increased costs to develop, distribute, or maintain our mobile website or mobile application;
|
•
|
changes to the terms of service or requirements of a mobile application store that requires us to change our mobile application development or features in an adverse manner; and
|
•
|
changes in mobile operating systems, such as Apple’s iOS and Google’s Android, that disproportionately affect us, degrade the functionality of our mobile website or mobile application, require that we make costly upgrades to our offerings, or give preferential treatment to competitive websites or mobile applications.
|
•
|
violations of laws and regulations governing the residential brokerage, title, or mortgage industries;
|
•
|
employment law claims, including claims regarding worker misclassification;
|
•
|
compliance with wage and hour regulations;
|
•
|
privacy, cybersecurity incidents, and data breach claims;
|
•
|
intellectual property disputes;
|
•
|
consumer protection and fraud matters;
|
•
|
brokerage disputes such as the failure to disclose hidden property defects, as well as other claims associated with failure to meet our client legal obligations, or incomplete or inaccurate listings data;
|
•
|
claims that our agents or brokerage engage in discriminatory behavior in violation of the FHA;
|
•
|
liability based on the conduct of individuals or entities outside of our control, such as independent contractor partner agents or independent contractor associate agents;
|
•
|
disputes relating to our commercial relationships with third parties; and
|
•
|
actions relating to claims alleging other violations of federal, state, or local laws and regulations.
|
•
|
cease offering or using technologies that incorporate the challenged intellectual property;
|
•
|
make substantial payments for judgments, legal fees, settlement payments, ongoing royalties, or other costs or damages;
|
•
|
obtain a license, which may not be available on reasonable terms or at all, to use the relevant technology; or
|
•
|
redesign our technology to avoid infringement.
|
•
|
resulting in time-consuming and costly litigation;
|
•
|
diverting management’s time and attention from developing our business;
|
•
|
requiring us to pay monetary damages or enter into royalty and licensing agreements that we would not normally find acceptable;
|
•
|
requiring us to redesign certain components of our software using alternative non-infringing source technology or practices, which could require significant effort and expense;
|
•
|
disrupting our customer relationships if we are forced to cease offering certain services;
|
•
|
requiring us to waive certain intellectual property rights associated with our release of open source software, or contributions to third-party open source projects;
|
•
|
requiring us to disclose our software source code; and
|
•
|
requiring us to satisfy indemnification obligations.
|
•
|
diverting management time and focus from operating our business to acquisition integration;
|
•
|
disrupting our respective ongoing business operations;
|
•
|
customer and industry acceptance of the acquired company’s offerings;
|
•
|
our ability to implement or remediate the controls, procedures, and policies of the acquired company;
|
•
|
retaining and integrating acquired employees;
|
•
|
failing to maintain important business relationships and contracts;
|
•
|
liability for activities of the acquired company before the acquisition;
|
•
|
litigation or other claims arising in connection with the acquired company;
|
•
|
impairment charges associated with goodwill and other acquired intangible assets; and
|
•
|
other unforeseen operating difficulties and expenditures.
|
•
|
overall performance of the equity markets and the performance of technology or real estate companies in particular;
|
•
|
variations in our results of operations, cash flows, and other financial metrics and non-financial metrics, and how those results compare to analyst expectations;
|
•
|
changes in the financial projections we may provide to the public or our failure to meet those projections;
|
•
|
failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;
|
•
|
recruitment or departure of key personnel;
|
•
|
variations in general market, financial markets, economic, and political conditions in the United States;
|
•
|
changes in mortgage interest rates;
|
•
|
variations in the housing market, including seasonal trends and fluctuations;
|
•
|
negative publicity related to the real or perceived quality of our website and mobile application, as well as the failure to timely launch new products and services that gain market acceptance;
|
•
|
rumors and market speculation involving us or other companies in our industry;
|
•
|
announcements by us or our competitors of significant technical innovations, new business models, or changes in pricing;
|
•
|
acquisitions, strategic partnerships, joint ventures, or capital commitments;
|
•
|
new laws, regulations, or executive orders, or new interpretations of existing laws or regulations applicable to our business;
|
•
|
changes in MLS or other broker rules and regulations, or new interpretations of rules and regulations applicable to our business;
|
•
|
lawsuits threatened or filed against us, or unfavorable determinations or settlements in any such suits;
|
•
|
developments or disputes concerning our intellectual property or our technology, or third- party proprietary rights;
|
•
|
changes in accounting standards, policies, guidelines, interpretations, or principles;
|
•
|
other events or factors, including those resulting from war, incidents of terrorism, or responses to these events;
|
•
|
the expiration of contractual lock-up or market standoff agreements; and
|
•
|
sales of shares of our common stock by us or our stockholders.
|
•
|
establish a classified board of directors so that not all members of our board are elected at one time;
|
•
|
permit only the board of directors to establish the number of directors and fill vacancies on the board;
|
•
|
provide that directors may only be removed “for cause” and only with the approval of two-thirds of our stockholders;
|
•
|
require super-majority voting to amend some provisions in our restated certificate of incorporation and restated bylaws;
|
•
|
authorize the issuance of “blank check” preferred stock that our board could use to implement a stockholder rights plan, also known as a “poison pill”;
|
•
|
eliminate the ability of our stockholders to call special meetings of stockholders;
|
•
|
prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;
|
•
|
prohibit cumulative voting; and
|
•
|
establish advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
|
|
|
REDFIN CORPORATION
|
||
|
|
|
|
|
|
|
By:
|
|
/s/ Glenn Kelman
|
|
|
|
|
Glenn Kelman
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
||
|
|
By:
|
|
/s/ Chris Nielsen
|
|
|
|
|
Chris Nielsen
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
Filed Herewith
|
3.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
4.1
|
|
|
S-1/A
|
|
333-219093
|
|
4.1
|
|
July 26, 2017
|
|
|
|
10.1
|
|
|
S-1/A
|
|
333-219093
|
|
10.1
|
|
July 17, 2017
|
|
|
|
10.2
|
|
|
S-1
|
|
333-219093
|
|
10.2
|
|
June 30, 2017
|
|
|
|
10.3
|
|
|
S-1/A
|
|
333-219093
|
|
10.3
|
|
July 17, 2017
|
|
|
|
10.4
|
|
|
S-1/A
|
|
333-219093
|
|
10.11
|
|
July 17, 2017
|
|
|
|
10.5
|
|
|
S-1
|
|
333-219093
|
|
10.4
|
|
June 30, 2017
|
|
|
|
10.6
|
|
|
S-1
|
|
333-219093
|
|
10.5
|
|
June 30, 2017
|
|
|
|
10.7
|
|
|
S-1
|
|
333-219093
|
|
10.6
|
|
June 30, 2017
|
|
|
|
10.8
|
|
|
S-1
|
|
333-219093
|
|
10.7
|
|
June 30, 2017
|
|
|
|
10.9
|
|
|
S-1
|
|
333-219093
|
|
10.8
|
|
June 30, 2017
|
|
|
|
10.10
|
|
|
S-1
|
|
333-219093
|
|
10.9
|
|
June 30, 2017
|
|
|
|
10.11
|
|
|
S-1
|
|
333-219093
|
|
10.10
|
|
June 30, 2017
|
|
|
|
10.12
|
|
|
S-1/A
|
|
333-219093
|
|
10.12
|
|
July 17, 2017
|
|
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
32.1*
|
|
|
|
|
|
|
|
|
|
|
X
|
|
32.2*
|
|
|
|
|
|
|
|
|
|
|
X
|
|
101.INS
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
*
|
|
The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with SEC and are not to be incorporated by reference into any filing of Redfin Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.
|
Dated: August 2, 2017
|
|
|
|
REDFIN CORPORATION
|
||
|
|
|
|
|||
|
|
|
|
By:
|
|
/s/ Glenn Kelman
|
|
|
|
|
Name:
|
|
Glenn Kelman
|
|
|
|
|
Title:
|
|
Chief Executive Officer
|
|
|
|
Page
|
Article I - STOCKHOLDERS
|
1
|
Section 1.1:Annual Meetings
|
1
|
Section 1.2:Special Meetings
|
1
|
Section 1.3:Notice of Meetings
|
1
|
Section 1.4:Adjournments
|
1
|
Section 1.5:Quorum
|
2
|
Section 1.6: Organization
|
2
|
Section 1.7: Voting; Proxies
|
2
|
Section 1.8: Fixing Date for Determination of Stockholders of Record
|
3
|
Section 1.9: List of Stockholders Entitled to Vote
|
3
|
Section 1.10:Inspectors of Elections
|
4
|
Section 1.11:Notice of Stockholder Business; Nominations
|
5
|
Article II - BOARD OF DIRECTORS
|
9
|
Section 2.1:Number; Qualifications
|
9
|
Section 2.2:Election; Resignation; Removal; Vacancies
|
9
|
Section 2.3:Regular Meetings
|
9
|
Section 2.4:Special Meetings
|
9
|
Section 2.5:Remote Meetings Permitted
|
10
|
Section 2.6:Quorum; Vote Required for Action
|
10
|
Section 2.7:Organization
|
10
|
Section 2.8:Unanimous Action by Directors in Lieu of a Meeting
|
10
|
Section 2.9:Powers
|
10
|
Section 2.10:Compensation of Directors
|
10
|
Article III - COMMITTEES
|
10
|
Section 3.1: Committees
|
10
|
Section 3.2: Committee Rules
|
11
|
Article IV - OFFICERS
|
11
|
Section 4.1: Generally
|
11
|
Section 4.2:Chief Executive Officer
|
12
|
Section 4.3:Chairperson of the Board
|
12
|
Section 4.4:President
|
12
|
Section 4.5:Chief Technology Officer
|
12
|
Section 4.6:Chief Financial Officer
|
13
|
Section 4.7:Treasurer
|
13
|
Section 4.8:Vice President
|
13
|
Section 4.9:Secretary
|
13
|
Section 4.10:Delegation of Authority
|
13
|
Section 4.11:Removal
|
13
|
Article V - STOCK
|
14
|
Section 5.l:Certificates; Uncertificated Shares
|
14
|
Section 5.2:Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates or Uncertificated Shares
|
14
|
Section 5.3:Other Regulations
|
14
|
Article VI - INDEMNIFICATION
|
14
|
Section 6.1:Indemnification of Officers and Directors
|
15
|
Section 6.2:Advance of Expenses
|
15
|
Section 6.3:Non-Exclusivity of Rights
|
15
|
Section 6.4:Indemnification Contracts
|
15
|
Section 6.5:Right of Indemnitee to Bring Suit
|
15
|
Section 6.6: Nature of Rights
|
16
|
Section 6.7: Insurance
|
16
|
Article VII - NOTICES
|
16
|
Section 7.l:Notice
|
16
|
Section 7.2:Waiver of Notice
|
17
|
Article VIII - INTERESTED DIRECTORS
|
18
|
Section 8.1:Interested Directors
|
18
|
Section 8.2:Quorum
|
18
|
Article IX - MISCELLANEOUS
|
18
|
Section 9.1:Fiscal Year
|
18
|
Section 9.2:Seal
|
18
|
Section 9.3:Form of Records
|
18
|
Section 9.4:Reliance Upon Books and Records
|
19
|
Section 9.5:Certificate of Incorporation Governs
|
19
|
Section 9.6:Severability
|
19
|
Article X - AMENDMENT
|
19
|
Dated: August 2, 2017
|
|
|
|
|
/s/ Anthony Kappus
|
|
Anthony Kappus
|
|
Vice President, General Counsel and
|
|
Secretary
|