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Changed Risks for REDFIN CORP (RDFN)

Provisions in our organizational documents and under Delaware or Washington law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management

Conversion of our convertible senior notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock

If we fail to maintain an effective system of disclosure controls or internal control over financial reporting, we may not be able to produce timely and accurate financial statements

Events unrelated to our performance may cause the trading price of our common stock to be volatile, and if such volatility results in litigation, then we may be subject to increased costs

Risks Related to Our Indebtedness, Including Our Convertible Senior Notes

We may be unable to attract homebuyers and home sellers to our website and mobile application in a cost-effective manner

We rely on third-party licensed technology, and the inability to maintain these licenses or errors in the software we license could result in increased costs or reduced service levels

Expansion of our business to include non-brokerage services could fail to produce the desired results or harm our reputation

We are subject to costs associated with defending and resolving proceedings brought by government entities and claims brought by private parties

In addition to our existing convertible senior notes, we may still incur substantially more debt or take other actions which would intensify the risks discussed above

If we are unable to deliver a rewarding experience on mobile devices, whether through our mobile website or mobile application, we may be unable to attract and retain customers

We may be unable to maintain or improve our current technology offerings at a competitive level or develop new technology offerings that meet customer or agent expectations Our technology offerings may also contain undetected errors or vulnerabilities

Our decision to expand our service offerings into new markets may consume significant financial and other resources and may not achieve the desired results

We rely on business data to make decisions and drive our machine-learning technology, and errors or inaccuracies in such data may adversely affect our business decisions and the customer experience

The third-party networks and mobile infrastructure that we depend on may fail, and we may be unable to maintain and scale the technology underlying our offerings

Referring customers to our partner agents or other third parties may harm our business

Some of our potential losses may not be covered by insurance We may not be able to obtain or maintain adequate insurance coverage

We may be unable to obtain and provide comprehensive and accurate real estate listings quickly, or at all

Competition in each of our lines of business is intense, and if we cannot compete effectively, our business will be harmed

We depend on our senior management team to grow and operate our business, and if we are unable to hire, retain, manage, and motivate them, or if new members of our senior management team do not perform as we anticipate, our business may be harmed

We experience variability in our financial results and operating metrics on a quarterly and annual basis and, as a result, our historical performance may not be a meaningful indicator of future performance

We may be unable to secure intellectual property protection for all of our technology and methodologies or adequately enforce our intellectual property rights

You should carefully consider the risks described below, together with all other information in this Annual Report on Form 10-K, before investing in any of our securities The occurrence of any single risk or any combination of risks could materially and adversely affect our business, operating results, financial condition, liquidity, or competitive position, and consequently, the value of our securities The material adverse effects include, but are not limited to, not growing our revenue or market share at the pace that they have grown historically or at all, our revenue and market share fluctuating on a quarterly and annual basis, an extension of our history of losses and a failure to become profitable, not achieving the revenue and net income (loss) guidance that we provide, and harm to our reputation and brand

Our restated certificate of incorporation designates the Court of Chancery of the State of Delaware and the US federal district courts as the sole and exclusive forums for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees

The conditional conversion feature of our convertible senior notes, if triggered, may adversely affect our financial condition and operating results

Certain provisions in the indenture governing our convertible senior notes may delay or prevent an otherwise beneficial takeover attempt of us

If we fail to comply with the requirements governing the licensing of our brokerage, mortgage, and title businesses in the jurisdictions in which we operate, then our ability to operate those businesses in those jurisdictions may be revoked

The health of the US residential real estate industry and macroeconomic factors may significantly impact our business

We use open source software in some aspects of our technology and may fail to comply with the terms of one or more of these open source licenses

Our business model of employing lead agents subjects us to challenges not faced by our competitors

Debt with Conversion and Other Options

We are subject to a variety of federal, state and local laws, and our compliance with these laws, or the enforcement of our rights under these laws, may increase our expenses, require management's resources, or force us to change our business practices

Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)

Our website is hosted at a single facility, the failure of which could interrupt our website and mobile application

Our business is concentrated in certain geographic markets Disruptions in these markets or events that disproportionately affect those markets could harm our business Furthermore, our failure to adapt to any substantial shift in the relative percentage of residential housing transactions from those markets to other markets in the United States could adversely affect our financial performance

We intend to evaluate acquisitions or investments in third-party technologies and businesses, but we may not realize the anticipated benefits from, and may incur substantial costs related to, any acquisitions, mergers, joint ventures, or investments that we undertake

Servicing our debt, including our convertible senior notes, will require a significant amount of cash We may not have sufficient cash flow to make payments on our debt, and we may not have the ability to raise the funds necessary to settle conversions of our convertible senior notes or to repurchase our convertible senior notes upon a fundamental change, which could adversely affect our business, financial condition and results of operations

If we do not comply with the rules, terms of service, and policies of MLSs, our access to and use of listings data may be restricted or terminated

If securities or industry analysts do not publish research or publish unfavorable research about our business, or if our financial results do not compare favorably to analysts' or investors' expectations, our stock price or trading volume could decline