Offerpad Reports Third Quarter 2022 Results
November 02 2022 - 04:10PM
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Q3 year-over-year revenue increased 52% to $821.7 million
Offerpad Solutions Inc. (NYSE: OPAD), a leading tech-enabled platform for residential real estate, today released financial results for the third quarter ended September 30, 2022.
Third Quarter 2022 Financial Results – compared with the prior-year third quarter:
Revenue was $821.7 million compared to $540.3 million
Gross Profit was $2.2 million* compared to $53.1 million
Net Loss was $80.0 million* compared to $15.3 million
Adjusted EBITDA was negative $64.3 million* compared to positive $6.1 million
* Reported amounts include an inventory impairment charge of $27.5 million.
“Offerpad’s core strategy of providing a comprehensive suite of real estate solutions is more important than ever given the recent market volatility. Because of our diverse product offerings, including our asset-light listing service, Offerpad has continued to offer customers more certainty and control throughout this market transition,” said Brian Bair, Chairman and CEO of Offerpad. “Our Flex listing and buying service increased from 7% of our transactions in the second quarter of 2020 to 29% of our transactions in the third quarter of 2022, highlighting the diversity of Offerpad’s business and the continued value we provide to customers.”
Bair noted, “Despite the current market volatility, I firmly believe technology-enabled solutions that simplify the home ownership experience will define the future of real estate.”
Offerpad recently expanded its suite of services with a new custom renovations product called “My Way.” With buyers stretching to afford a new home, extra cash to update their home is often hard to come by. Trying to renovate while living in the home adds even more stress. With “My Way,” homeowners can select paint, flooring, countertops and appliances from a list of options. The updates will be completed before they move in. Even better, the cost of upgrades can be rolled into the mortgage. This new offering is currently being tested on select homes in Phoenix.
Operational Highlights for the Third Quarter 2022:
Achieved an average time from home acquisition to sale of 97 days, below its 100-day target;
Earned a 93 percent customer satisfaction rating1; and
Grew listing and buyer closings by 100% year over year.
Q3 2022 Financial Results
Q3 2022
Q3 2021
Percentage Change
Homes acquired
1,847
2,753
(33)%
Homes sold
2,280
1,673
36%
Revenue
$821.7M
$540.3M
52%
Gross profit2
$2.2M
$53.1M
(96)%
Net loss (reported) 2, 3
($80.0)M
($15.3)M
(423)%
Adjusted net loss 2
($82.0)M
($2.1)M
(3,768)%
Adjusted EBITDA2
($64.3)M
$6.1M
n.a.
Contribution (loss) profit after interest per home sold
($4,500)
$22,700
n.a.
Cash and cash equivalents
$196.8M
$116.6M
69%
2 Includes $27.5 million charge in Q3 2022 for inventory impairments.
3 Includes $2.0 million non-cash credit in Q3 2022 and a $13.2 million non-cash charge in Q3 2021 to mark to market the Warrant Liability.
“We continue to navigate through this period of market dislocation by appropriately managing down our inventory levels and strategically acquiring homes that reflect current conditions,” said Mike Burnett, CFO of Offerpad. “We are already seeing homes acquired later in the year performing better than those acquired prior to the market dislocation.”
Additional information regarding Offerpad’s third quarter 2022 financial results and management commentary can be found by accessing the Company’s Quarterly Letter to Shareholders on the Offerpad investor relations website.
Fourth Quarter 2022 Outlook
“Over the next two quarters, we are focused on selling the remaining homes acquired before market conditions deteriorated. Homes that we have acquired more recently are performing well and are expected to drive improving margins and profitability in 2023,” said Bair.
____________________
1 Based on survey of nearly 3,200 customers who sold their home to Offerpad through Q3 2022.
Offerpad is providing its fourth quarter outlook for 2022 as follows:
Q4 2022 Outlook
Homes Sold
1,425 – 1,850
Revenue
$500M – $650M
Adjusted EBITDA4
($60)M – ($40)M
4 See Non-GAAP financial measures below for an explanation of why a reconciliation of this guidance cannot be provided.
Conference Call and Webcast Details
Offerpad Chairman and CEO Brian Bair and CFO Mike Burnett will host a conference call and accompanying webcast on November 2, 2022, at 5 p.m. ET. The webcast can be accessed on Offerpad’s Investor Relations website. Participants can register here to receive a personalized dial in number and PIN. Access to a replay of the webcast will be available from the same website address shortly after the live webcast concludes.
About Offerpad
Offerpad’s mission is to deliver the best home buying and selling experience so you can spend less time ‘real estat-ing’ and more time living. From cash offers and flexible listing options to mortgages and buyer services, Offerpad has been helping homeowners since 2015. We pair our local expertise in residential real estate with proprietary technology to put you in control of the process and help find the right solution that fits your needs. Visit Offerpad.com for more information.
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Forward-Looking Statements
Certain statements in this press release may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Offerpad’s future financial or operating performance. For example, statements regarding Offerpad’s financial outlook for the fourth quarter 2022, expectations regarding profitability and anticipated growth in the industry in which Offerpad operates are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “pro forma,” “may,” “should,” “could,” “might,” “plan,” “possible,” “project,” “strive,” “budget,” “forecast,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “potential” or “continue,” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that may impact such forward-looking statements include, but are not limited to, Offerpad’s ability to respond to general economic conditions; the health of the U.S. residential real estate industry; Offerpad’s ability to grow market share in its existing markets or any new markets it may enter; the impact of the COVID-19 pandemic; Offerpad’s ability to manage it
