Real estate technology company Opendoor was unable to report much positive news in its Q1 2023 earnings report May 4. New CEO Carrie Wheeler said the iBuying brokerage’s vision “is to build the most trusted e-commerce platform for residential real estate. We have dedicated the last nine years to delivering on this vision, and we stand alone in giving customers the ability to move with simplicity and certainty.”
The numbers spoke differently. In the first quarter of this year, revenue of $3.1 billion was down 39% versus last year’s first three months, with 8,274 total homes sold, representing a 35% drop over the same time period in 2022. Net income was a loss of $101 million versus +$28 million in Q1 2022.
Things were certainly better than late last year, when Opendoor lost $399 million in the fourth quarter.
Wheeler tried turning the past negatives into a future positive, saying that “our Q1 results demonstrate our progress in navigating the housing market transition against an uncertain macro backdrop. We exceeded our sell-through expectations for our longest-held homes and continued to build a new book of inventory with strong margin performance. We also took further actions to right-size our cost structure. As we look ahead, we are focused on attracting more sellers, including via the expansion of our partnership channels and product diversification, and driving operational excellence to improve our long-term profitability.”
Other reported results for the quarter included:
- Gross profit of $170 million, which reflects an inventory valuation adjustment on homes remaining in inventory at quarter end of $23 million; Gross Margin of 5.4% versus 10.4% in Q1 2022
- Adjusted Net (Loss) income of $409 million versus $99 million in Q1 2022
- Contribution (Loss) Profit of $241 million versus $332 million in Q1 2022; Contribution Margin of 7.7% versus 6.4% in Q1 2022
- Adjusted EBITDA of $341 million versus $176 million in Q1 2022; Adjusted EBITDA Margin of 10.9% versus 3.4% in Q1 2022
- Inventory balance of $2.1 billion, representing 6,261 homes, down 55% versus Q1 2022
- Purchased 1,747 homes, down 81% versus Q1 2022
- Ended the quarter with 1,137 homes under contract for purchase, down 86% versus Q1 2022
