Opendoor Technologies Inc. Q4 FY2025 earnings call

Kasra Nejatian discussed Opendoor's 4-step plan to turn around the company. They are on track to drive Opendoor to adjusted net income positive by end of 2026. Since September, acquisition velocity increased by 300%. Grew DTC acquisition contracts by almost 700% and reduced days in possession by almost 25%. Cash Plus was 35% of total contracts last week vs 19% in last week of Q3. Christy Schwartz mentioned they delivered on goals of scaling acquisitions, improving unit economics and resale velocity, and building operating leverage. They increased acquisitions 46% from Q3, October 2025 acquisition contract cohort is over 50% sold through with highest contribution margins for an October cohort in company history. Fixed operating expenses down QoQ and YoY, trailing 12-month operations expense as % of revenue held steady.

In Q4 2025, Opendoor purchased 1,706 homes, a 46% increase from Q3. Revenue was $736 million, a 20% QoQ decline. GAAP gross profit was $57 million, GAAP gross margin 7.7%, up 50bps sequentially. Contribution profit was $7 million, contribution margin 1%. Ended the quarter with $962 million in unrestricted cash and $133 million in equity invested in homes. Purchased 2,867 homes with $925 million in net inventory. Nonrecourse asset-backed borrowing capacity was $7.2 billion.

For Q1 2026, expect approximately 6,000 quarterly home acquisitions, with acquisition trajectory more weighted to back half of year. Revenue expected to decrease ~10% QoQ. Contribution margin expected to exit Q1 with highest since Q2 2024. Adjusted EBITDA loss expected in low to mid-$30 million in Q1 2026. Goal is adjusted net income profitability by end of 2026 on 12-month go-forward basis.

Q: Where is Opendoor at currently compared to expectations and profitability and where would you like to be?

A: Kasra Nejatian said they're on track, on track to be adjusted net income positive by end of 2026.

Q: According to your accountability dashboard, acquisition contract volumes are running at or below the low end of your targets. Aside from seasonal factors, what are the primary macro or pricing drivers preventing a faster ramp?

A: Kasra Nejatian said they're choosing to invest in product over growth for now, like working on mortgage product and infrastructure instead of focusing on acquisition numbers.

Q: What are you guys using AI for internally and how should that change the customer experience?

A: Kasra Nejatian said AI is used in underwriting, analysts audit AI-prepared output instead of doing paperwork. Customers should expect fair and fast offers with fewer errors.

Q: How do we get to the point where sellers think I'm going to try Opendoor first before even considering going via a realtor?

A: Kasra Nejatian said it starts with being available, removing friction, and consistently delivering value.

Q: With the stock down significantly since your tenure began, how should investors assess progress? What key metrics best reflect operational improvement? What is the strategy to restore market confidence?

A: Kasra Nejatian said focus on building the business, the stock will follow. Key metrics include adjusted net income, contribution margin, etc.

Q: If home prices drop another 5% to 10% nationally, what happens to your margins and inventory risk? How prepared is Opendoor for that scenario?

A: Christy Schwartz said Opendoor 2.0 is built to move homes, has more tools, October cohort performed well during market price drop.

Q: There's some testing of a mortgage product with Lennar. Where is Opendoor in extending the services opportunity? What should our expectation for 2026 be for Opendoor to be able to attach more adjacent products to transactions?

A: Kasra Nejatian said they're launching mortgage product in beta, bullish on it, but underpromise and overdeliver.

Q: What has stood out to you so far about the quality and profitability of the homes you're buying since ramping up acquisitions? Any surprises as you pick up the pace and have those led to any changes in your approach? And looking ahead, what are the key factors or milestones you're watching most closely to gauge progress toward your current profitability and margin targets?

A: Christy Schwartz said October 2025 cohort performance was important, selection of higher quality homes improved operations, margin and velocity not a trade-off. Key factors include scale acquisitions, improving margin and resale velocity, building operating leverage.

Q: As a veteran, what is Opendoor doing to help the military community?

A: Unknown Executive said they launched Heroes Home Credit, $4,000 credit for active duty and veterans buying Opendoor homes, working on VA loans.

Q: Where do you expect to see Opendoor in 2 years?

A: Kasra Nejatian said expects to be delivering on what was said, Opendoor to be the default, AI infrastructure compounding, and homeownership to be more accessible.