Offerpad Slashes Net losses in Q1 Results, New CFO Finally Appointed

Arizona-based iBuyer Offerpad has released its Q1 2024 financial results, with heavy losses still dominating the narrative for the business.

Highlights include:

• Revenues of $285.4 million represent a decline of more than 50% year-on-year, down from $609.6 million in Q1 2023.
• Net losses were slashed by 71%, to $17.5 million (was $59.4 million in Q1 2023)
• Adjusted EBITDA loss was $7.1 million, down 84% YoY ($44.8 million in Q1 2023)
• Gross profit per home sold rose to $26,500, a significant increase of 489% YoY (was $4,500 per home in Q1 2023)
• Record quarter for Renovate, with closed renovation projects growing 78% versus the prior year, generating more than $5M in revenue
• Time to Cash for homes sold in the quarter of 113 days, down from 185 the prior year
• Q2 outlook estimates an adjusted EBITDA of approximately breakeven.

Heavy losses continue to dominate the headlines for Offerpad, but the scale of reduction in those losses will bring some relief to the company as it begins to ramp up its homebuying activity. Quarter-on-quarter (from Q4 2023) performance showed relatively stable and solid growth across metrics including revenue, gross profit, and gross profit per home sold—however, this came at the expense of slightly wider net losses (13%).

The company's share price has tanked this month—down from $7.27 on 1 May 2024 to $4.90 at the time of writing—with consistent (and sharp) falls since 14 May.

Brian Bair, chairman and CEO at Offerpad, said:

"The first quarter of 2024 continued the positive trajectory we experienced exiting 2023. While the macro is still volatile, the first quarter was one of increasing stability and we believe this trend will continue through 2024.

"We are making steady progress against our key strategic imperatives. We are focused on expanding our asset light platform services, particularly Renovate, which grew 78% in the quarter; increasing our buy box; growing our partner ecosystem; and achieving adjusted EBITDA profitability."

Offerpad has also appointed a new CFO to guide the firm through what appears to be a difficult situation. Finance veteran Peter Knag has been brought in, effective 5 June 2024, to replace Jawad Ahsan—who lasted just five months on the job before leaving by mutual consent in December 2023.

The hard numbers remain ugly for Offerpad, no doubt about it, but soft factors and smoother operational efficiencies are at the very least showing some stability to the model. However, profitability still seems quite a way away...