Opendoor Technologies Inc. Q3 FY2025 earnings call

• Kaz Nejatian discussed refounding Opendoor as Opendoor 2.0, emphasizing being a software company leveraging AI, ditching risk-averse practices, and focusing on building products to make homeownership easier. Launched over a dozen new products/features like AI home scoping, automated title/escrow, Opendoor Key app, etc. • Christy Schwartz talked about the capital setup, ending the quarter with $962 million in unrestricted cash, $1.1 billion in net inventory, and $7.6 billion in nonrecourse asset-backed borrowing capacity. Focused on three objectives: scale high-quality acquisitions, improve unit economics and resale velocity, build operating leverage.

In the third quarter, Opendoor purchased 1,169 homes. Revenue was $915 million. GAAP gross profit was $66 million (7.2% margin) compared to $105 million and 11.1% in Q3 2024. Contribution profit was $20 million (2.2% margin) vs. $52 million and 3.8% in Q3 2024. Net loss was $90 million vs. $78 million in Q3 2024, with adjusted net loss at $61 million vs. $70 million in the prior year period.

• Target to reach adjusted net income profitability by end of 2026 on a forward 12-month basis. • Q4 2025 acquisitions expected to increase by at least 35% from Q3. • Q4 revenue expected higher than Q2 outlook but down ~35% q-o-q due to low inventory. • Contribution margin expected to improve but Q4 below Q3 as legacy inventory is replaced. • Adjusted operating expenses for 12 months ending June 2026 expected $255M-$265M, a ~20% decrease from prior year. • Q4 2025 adjusted EBITDA loss in high $40M to mid-$50M.

• Forward-looking statements involve risks and uncertainties that may cause actual results to differ. • Capital structure risks earlier with convertible notes, though steps taken to clean up capital structure.

Q: What's going on with tokenization?

A: Kasra Nejatian said asset tokenization is active, allows faster transactions and broader homeownership, with work ongoing and will share more when launched.

Q: What's the current headcount?

A: As of morning, 1,100 people working at Opendoor.

Q: When will we see dramatic change in profitability?

A: Kasra Nejatian said next year; Christy added focus on rescaling acquisitions and margin improvement.

Q: Strategy to fight short-selling pressures?

A: Kasra Nejatian said focus on execution, improving unit economics week over week, and proving wrong through numbers.

Q: How can AI be an accelerant to growth?

A: AI reduces OpEx per home, optimizes funnels, helps with user valuation explanation, and streamlines closing processes.