Discontinued Operations

9 Months Ended

Sep. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

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, 2023		December 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

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,
	2023		2022		2023		2022
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,
	2023		2022		2023		2022
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,
	2023		2022
Amortization of debt discount and debt issuance costs	$	—	$	461
Stock-based compensation	234		4,710
Depreciation and amortization	89		1,780
Capital expenditures	—		1,213
Cash paid for interest	—		5,731

Charges specifically relating to the wind-down of our properties segment were as follows:

Cost type	Financial statement line item	Nine Months Ended September 30, 2023		Cumulative amount recognized
Employee termination costs	Restructuring and reorganization	$	539	$	8,587
Asset write-offs	Restructuring and reorganization	—		493
Other	Restructuring and reorganization	(465)		(890)
Acceleration of debt issuance costs	Interest 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.