Proposed Transaction with Rocket Companies—On March 9, 2025 we entered into an Agreement and Plan of Merger (the "Merger Agreement") with Rocket Companies, Inc. ("Rocket"), and Neptune Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Rocket ("Merger Sub"). The Merger Agreement provides for the merger of Merger Sub with and into us, with us continuing as the surviving corporation and as a direct wholly owned subsidiary of Rocket (the "Merger").

Under the terms of the Merger Agreement, all of our issued and outstanding shares of common stock, par value $0.001 per share will be converted into the right to receive 0.7926 shares of Rocket's Class A common stock, par value $0.00001 per share (the "Rocket Stock") and the cash payable in lieu of fractional shares, without interest and subject to any applicable withholding taxes.

The Merger Agreement contains customary representations, warranties, and covenants. The consummation of the Merger is conditioned on the receipt of the approval of our stockholders, as well as the satisfaction of other customary closing conditions, including domestic and foreign regulatory approvals and performance in all material respects by each party of its obligations under the Merger Agreement. Consummation of the Merger is not subject to a financing condition. The Merger is anticipated to close in the second or third quarter of 2025, subject to our receipt of required regulatory approvals and other customary closing conditions. However, we cannot predict with certainty whether or when all of the required closing conditions will be satisfied or if the Merger will close, if at all. Upon the consummation of the Merger, we will cease to be a publicly traded company and our common stock will be delisted from the Nasdaq Global Select Market.

The Merger Agreement contains certain customary termination rights for us and Rocket, including if the Merger is not consummated by December 9, 2025. If the Merger Agreement is terminated under certain specified circumstances, including (i) a termination by us to enter into an alternative acquisition agreement constituting a Superior Proposal (as defined in the Merger Agreement), (ii) a termination by Rocket following a change or withdrawal of our board of directors' recommendation of the Merger to our stockholders, or (iii) a termination by Rocket as a result of a material breach of our non-solicitation obligations under the Merger Agreement, then we will be obligated to pay to Rocket a termination fee of approximately $65,534 in cash.

Other than transaction expenses associated with the proposed Merger of $8,100 recorded in general and administrative expense in the accompanying condensed consolidated statements of operations for the quarter ended March 31, 2025, the terms of the Merger Agreement did not impact our condensed consolidated financial statements.

Zillow Partnership—On February 6, 2025, we entered into a Content License Agreement and Partnership Agreement with Zillow, Inc. ("Zillow"). Under the Content License Agreement, Zillow will become the exclusive provider of multifamily rental property listings with more than 25 units ("Rental Listings") on our websites, including Redfin.com, Rent.com, and ApartmentGuide.com. The Content License Agreement has an initial five-year term beginning on the date Zillow's Rental Listings first become viewable on Zillow and Redfin websites, with automatic renewal options for two additional two-year terms unless terminated with twelve months' notice prior to the end of the current term.

Under the Content License Agreement, we will allow Zillow to display their properties on our websites. Zillow will send us their property content through a data feed. When visitors to our websites show interest in Zillow provided property content, we will send these potential customer leads to Zillow through an application programming interface. We have agreed to meet certain minimum thresholds for delivering these leads. Zillow will pay us for each valid potential customer we send them. The payment rates will vary depending on the type of property. Zillow has guaranteed us a minimum payment of $75,000 for our lead generation services for the first twelve months after the official transition date, which is July 31, 2025.

Under the Partnership Agreement, in February 2025, we also received an upfront payment of $100,000 from Zillow, which is separate from the lead-generated revenue we will receive for leads delivered under the Content License Agreement.

In connection with this agreement, we plan to restructure our rentals segment between February and July 2025, primarily through the elimination of certain employee roles within or supporting the rentals segment, which is expected to impact approximately 450 employees. We recorded $18,874 in restructuring and reorganization expense in our consolidated statement of comprehensive loss primarily related to employee costs, impairment of property and equipment, and write-offs of customer accounts receivable in the three months ended March 31, 2025. We expect between $3,000 and $4,000 of additional restructuring costs to be recognized and paid in the second quarter of 2025. The details of the restructuring costs were as follows:

Zillow Partnership Revenue Recognition—We determined that the Content License Agreement and Partnership Agreement should be combined and accounted for as a single contract under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers. The combined contract contains a single performance obligation composed of interdependent and interconnected obligations to provide content license and lead generation services to Zillow.

The transaction price includes two variable components. The $100,000 upfront payment received under the Partnership Agreement is recognized as deferred revenue initially and will be recognized on a straight-line basis over the five-year initial contract term, which approximates the pattern of satisfaction of our performance obligation. We do not believe it is probable that a significant reversal in the amount of the upfront payment and its related revenue recognized will occur. The variable consideration related to the per-lead fees will be recognized over time based on the actual number of leads generated. We believe the minimum payment guarantee is intended to act as a protective measure only based on our historical traffic and website performance. As such, we do not consider it to represent a substantive minimum nor have any impact on revenue recognition patterns.

Zillow Partnership Contract Fulfillment Costs—The customer relationships acquired as part of our 2021 acquisition of Rent., which were previously recorded in intangible assets, net in our consolidated balance sheets and that are being used to satisfy and fulfill the Partnership Agreement, have been recharacterized as costs to fulfill a contract under ASC 340-40, Other Assets and Deferred Costs. These costs relate directly to the contract, generate resources that will be used in satisfying performance obligations in the future, and are expected to be recovered through the upfront payment and per-lead fees.

These contract fulfillment costs are being amortized over time on a straight-line basis over the initial five-year contract term, which is the period over which the asset is expected to provide economic benefit. We assess these assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

We amortized the customer relationships, recorded in intangible assets, net in our consolidated balance sheets, through the date of the Partnership Agreement with Zillow. Upon the commencement of the Partnership Agreement with Zillow and receipt of the $100,000 upfront payment, we recharacterized the related customer relationships to a contract asset and recorded deferred revenue. For the three months ended March 31, 2025, contract asset amortization is recorded within cost of revenue, and we recognized a portion of the revenue of the upfront payment that was deferred and it is recorded within revenue in our consolidated statements of comprehensive loss. The initial recognition of deferred revenue, contract asset, and recharacterization of our customer relationships related to the Zillow Partnership were as follows:


Description	Financial Statement Line Item	Period Ended December 31, 2024		Initial recognition and recharacterization of intangible assets, contract assets, and deferred revenue		Period Ended March 31, 2025
Contract assets
Contract fulfillment costs	Other current assets	N/A		$	9,876	$	9,876
Contract fulfillment costs	Contract asset, noncurrent	N/A		39,502		37,857
Customer relationships	Intangible assets, net	50,313		(49,378)		—
Total		$	50,313	$	—	$	47,733
Deferred revenue ($100,000 receipt of cash)
Deferred revenue	Accrued and other liabilities	N/A		$	20,000	$	20,000
Deferred revenue	Deferred revenue, noncurrent	N/A		80,000		77,321
Total				$	100,000	$	97,321

The financial information as of December 31, 2024 that is included in this quarterly report is derived from the audited consolidated financial statements and notes for the year ended December 31, 2024 included in Item 8 in our annual report for the year ended December 31, 2024. Such financial information should be read in conjunction with the notes 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 March 31, 2025, our statements of comprehensive loss, and statements of changes in mezzanine equity and stockholders’ (deficit) equity for the three months ended March 31, 2025 and 2024, as well as our statements of cash flows for the three months ended March 31, 2025 and 2024. The results for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any interim period or for any other future year.

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.

Recently Adopted Accounting Pronouncements—In September 2023, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance under ASU 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures. The ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We adopted this guidance for the year ended December 31, 2024 and the adoption did not have a material impact on our financial statement disclosures. See Note 2 for further details.

Recently Issued Accounting Pronouncements—In December 2023, the FASB issued authoritative guidance under ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures. The ASU enhances annual income tax disclosures to address investor requests for more information about the tax risks and opportunities present in an entity’s worldwide operations. The two primary enhancements disaggregate existing income tax disclosures related to the effective tax rate reconciliation and income taxes paid. The amendments in this ASU are effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the potential impact of the guidance on our financial statement disclosures.