Shares of Opendoor Technologies Inc. fell 4.5% to $5.08 on Friday after the online real estate firm reported a first-quarter net loss of $173 million, significantly wider than the $85 million loss in the same period last year. The deeper loss overshadowed a revenue beat, as the company posted $720 million in revenue, exceeding the $664.5 million consensus estimate.
Operational Highlights
Opendoor doubled its acquisition contracts to over 5,000 during the quarter, marking the highest level since 2022, while homes purchased climbed 45% from the prior quarter. However, the number of homes sold fell to 1,921, down from 2,946 a year ago. The company also made progress in reducing stale inventory, with only 10% of listed homes sitting on the market for more than 120 days, down sharply from 33% in the previous quarter.
Cost Pressures
The wider loss was driven by a notable jump in general and administrative expenses, which rose by $104 million. This increase was largely due to a $100 million surge in market-condition restricted stock units—equity compensation tied to share-price performance—and a $5 million cash make-whole award for the CEO. The GAAP loss per share landed at 18 cents, deeper than the 10-cent loss analysts had expected.
Market Context
The results come amid a sluggish housing market. March existing-home sales dropped 3.6% to a 3.98 million annual rate, according to the National Association of Realtors. “March home sales remained sluggish and below last year’s pace,” said Chief Economist Lawrence Yun. Despite the challenging environment, Opendoor’s contribution margin—a non-GAAP metric tracking returns after selling and holding costs—has posted steady monthly gains since September.
Outlook
Looking ahead, Opendoor forecast second-quarter revenue to rise approximately 25% over the first quarter, with adjusted EBITDA expected to land near breakeven. The company’s CEO, Kaz Nejatian, described the quarter as a shift away from the previous approach, stating, “Better acquisitions, faster turns, stronger margins. The machine is working.”
Strategic Partnerships
Opendoor is leveraging partnerships with Zillow Group and Redfin, allowing sellers to access Opendoor offers directly from those platforms. This strategy provides an additional channel to drive acquisitions and expand market reach.
Liquidity and Risks
As of March 31, Opendoor reported $999 million in cash and equivalents, plus $68 million in restricted cash, with outstanding asset-backed debt of $1.1 billion. The company also noted $6.0 billion in undrawn capacity, of which $332 million is committed. However, risks remain considerable, as Opendoor has posted losses every quarter since its inception, with only two exceptions, and its capital-intensive business model depends on favorable inventory financing conditions.
