U.S. iBuyer Opendoor Q1 2024: Expectations Exceeded, but Revenues Down and Net Losses Widen

May 6, 2024
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One of the United States' last remaining iBuyers, Opendoor Technologies (Opendoor) has released its Q1 results for the 2024 financial year, citing its resilience and some promising growth metrics.

Highlights include:

  • Revenues year-on-year dropped by 62% from Q1 2023, to $1.18 billion
  • Net losses also widened, by 7.9% to $109 million
  • However, revenues exceeded expectations by 8.8%
  • Projected EBITDA losses for Q2 2024 have been adjusted, now forecasting a contribution profit of $75M-$85M
  • Acquisition volumes nearly doubled Year-on-Year

Despite some flattening, losses and revenue drops continue to be a problem for Opendoor, anticipating a tough year despite an optimistic view on the industry-changing NAR settlement due to go live this July. EBITDA losses are expected to be at least $25M in Q2, and the firm also expects the market to slow in Q3 with lower acquisitions.

Carrie Wheeler, Chief Executive, commented on an investor relations call:

"First quarter revenue, contribution profit, and adjusted EBITDA results all [came in] ahead of our expectations. Further, we remain on track to meaningfully wrap acquisitions year-on-year each quarter in 2024 and deliver contribution margin within our target range of 5% to 7%.

"Notably this marks the seventh consecutive quarter that our new book of homes has generated contribution margin within or above our annual target margin range, demonstrating the health of our unit economics across seasons and market environments."

Wheeler also reserved some time to comment on how the NAR settlement will (or won't) impact Opendoor.

"We believe this settlement represents an important positive change for our industry by giving consumers more transparency and choice on how they transact in the housing market.

"Our business model does not rely on earning revenue from commissions paid to buyer's agents rather those commissions are cost to us today which we pay when we resell our homes.

"Over the long term, we believe the settlement will drive lower transaction costs and if commissions do decline, Opendoor may be able to pass these cost savings back to consumers.

"We also believe this settlement could result in more transactions as commissions decrease which may encourage more consumers to transact directly including through the Opendoor’s platform instead of listing on the MLS.

Opendoor has embarked on ambitious partnerships with the likes of eXp Realty and Zillow to push transactions, with Wheeler commenting:

"At the end of February our, eXp Realty partnership went live enabling eXp Realty's agents to easily request an Opendoor cash offer for their clients and qualifying properties."

Opendoor was on the receiving end of a scathing judgement by the Federal Trade Commission in April, whereby $62 million of Opendoor revenues will be reimbursed to 55,000 home sellers who were "cheated" by Opendoor:

"Opendoor cheated home sellers by tricking them into thinking that they could make more money selling their home to Opendoor than on the open market using the traditional sales process while saving them money on costs."

May 6, 2024
Harvey is an experienced property journalist and copywriter. He has written about the property industry since 2015, starting at The Property Franchise Group in the UK, before moving to Spain to work for Spotahome. He has blogged for the private rented sector, ghostwritten for UK property experts and written case studies for franchise owners around the UK. Harvey joined Online Marketplaces as a News Editor in 2022.

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