Normally, a $20 million quarterly net loss wouldn’t be grist for positive spin, but Offerpad spun it that way, citing trimmed losses and a greater number of homes acquired in the second quarter as progress after selling most of the older homes in its inventory.
In its latest earnings report on August 2, the iBuyer reported a $22.3 million Q2 2023 net loss, down 62% from Q1’s loss of $59.4 million and a major reduction from the $121.1 million loss the company reported during the last three months of 2022.
“We exceeded our financial expectations across the board,” said Brian Bair, chairman and CEO of Offerpad. “Our outperformance in the second quarter reflects the improvements we have made to our business processes and our elevated focus on profitability through margin expansion and cost discipline. Our agile business model makes integrating improvements and adapting to changing market conditions part of our everyday culture.
“The combination of completing the sale of our legacy inventory and the high-quality homes currently on our balance sheet provides a strong foundation for performance going forward. The favorable quarter-over-quarter trends we saw during the first half of this year support our expectation to achieve positive (results) by year-end.”
The year has been a rocky one for Offerpad, as in June, the company aimed to rally investors with a new reverse stock split on its Class A and Class B common stock.
The company implemented a 1-for-15 reverse split to avoid delisting from the New York Stock Exchange. According to a company statement at the time, the move automatically reclassified every 15 shares of outstanding common stock into one new share.
At day’s end, shares of Offerpad Solutions Inc. (OPAD) fell about 3% to $11.43.
Q2 2023 results compared with the prior quarter:
- Revenue was $230.1 million compared to $609.6 million.
- Gross profit increased over 200% to $22.2 million from $7.3 million.
- Net loss improved to $22.3 million from $59.4 million.
- Adjusted EBITDA improved to $17.3 million from $44.8 million.
- Diluted loss per share improved to $0.82 from $2.51.
Q2 highlights include:
- Reported the highest gross margin since Q3 2021 at 9.7%.
- Achieved gross margin per home sold on homes acquired after Sept. 1, 2022 of 13.5%.
- Achieved contribution margin after interest per home sold on homes acquired after Sept. 1, 2022 of 9.5%.
- Reduced inventory aged over 180 days to less than 2%.
- Increased home acquisition volume from 364 homes in Q1 to 840 homes in Q2.