Opendoor Technologies, Inc. Q1 FY2025 earnings call

• Opendoor remains focused on reinventing residential real estate, operating in a challenging macroeconomic environment.
• Progress in Q1 reflected strong execution with acquisition volumes, revenue, contribution profit, and adjusted EBITDA showing improvement.
• Expanding go-to-market by leveraging agent partnerships, piloting experiences in select markets where agents refer customers to Opendoor for cash offers or listings.
• Core priorities include maintaining pricing discipline, improving conversion through enhanced pricing models and channel expansion, aligning marketing investment with seasonal dynamics, and driving operational efficiency with lower fixed operating expenses.

In the first quarter, Opendoor generated $1.2 billion in revenue, representing 2,946 homes sold. Acquisitions totaled 3,609 homes, up 4% year-over-year. Contribution profit was $54 million, with a contribution margin of 4.7%. Adjusted EBITDA loss was $30 million, down from $50 million in the first quarter of 2024. The balance sheet ended the quarter with 7,080 homes, $2.4 billion in net inventory, $1 billion in total capital, and $7.9 billion in non-recourse asset-backed borrowing capacity.

• Q2 2025 revenue expected to be between $1.45 and $1.525 billion.
• Contribution profit expected between $65 million and $75 million (4.5% to 4.9% margin).
• Adjusted EBITDA expected between $10 million and $20 million, a $20 million year-over-year improvement at the midpoint.
• Adjusted operating expenses approximately $55 million, non-cash stock-based compensation expense between $13 and $15 million (over 50% y-o-y decline).
• Expect resales to outpace acquisitions in Q2, reducing inventory balance and positively impacting operating expenses.
• Acquisition outlook for Q2 is ~1,700 homes, influenced by higher spread levels and lower marketing spend.
• Revenue expected to decline in H2 2025, but focus on year-over-year margin improvements through operating efficiencies and wider spreads.

• Macroeconomic uncertainty, shifting economic policies, and evolving tariff landscape impacting housing market.
• Persistently high mortgage rates suppressing buyer demand and causing sellers to pull out of contracts.
• Difficulty in predicting buyer/seller reactions and market conditions, making it challenging to forecast performance accurately.

Q: Selim, on slowing down acquisition growth to about 1,700 in 2Q, is that the right level and about rebalancing inventory? And on contribution margins of newer homes with higher spreads?

A: Selim said acquisition pace follows seasonal pattern (Q1/Q4 higher, Q2/Q3 lower). Contribution margin in Q2 expected to be 4.7% at midpoint, driven by older inventory with lower margins making up larger share due to slower new home acquisitions, but newer cohorts performing well early on resale.

Q: Ygal Arounian asked about valuation of older inventory and softness in housing market.

A: Selim said homes acquired earlier have higher margins, newer ones start at higher absolute contribution margins but decay, valuation factored into outlook and spreads.

Q: Ygal Arounian followed up on agent partnerships, if lists with Opendoor and Marketplace continue.

A: Carrie Wheeler said new partnership is a go-to-market strategy, lists with Opendoor is an end-of-funnel referral, agent partnership is a channel strategy, with direct-to-consumer and agent-assisted customers both being served.

Q: Unidentified Analyst asked about further cost savings opportunities.

A: Selim said focused on optimizing cost structure, already had $19M fixed cost reduction in Q1, more efficiency opportunities ahead.

Q: Ryan Tomasello asked about OpEx reduction breakdown and agent partnership economics.

A: Selim said majority of OpEx reduction is from lower marketing spend due to seasonality and spread, timing adjustments from inventory changes. Carrie Wheeler said agent partnership aims for better conversion and asset-light revenue, with incremental conversion benefits likely outweighing referral fees.

Q: Benjamin Black asked about signals for broader agent partnership rollout and scaling.

A: Carrie Wheeler said they have the infrastructure built (brand, marketing engine, high-intent sellers, transaction platform), looking for conversion signals (incremental to cash offer or listing) to drive broader rollout.