For iBuyer Opendoor, “progress” in its third quarter earnings report came in the form of announcing a loss of “only” $106 million, unquestionably better than the nearly $1 billion lost in Q3 2022. It was a reversal of fortune from the company’s second quarter, when it showed a $23 million profit. But even while bringing in $980 million in revenue between July and September, it represented a 71% decline compared to the same period last year.
Opendoor CEO Carrie Wheeler explained the numbers as best she could.
“Our third quarter results were in line or ahead of our prior guidance driven by our continued focus on delivering operational excellence through pricing improvements, cost savings and risk management,” she said. “The third quarter also marked our return to positive contribution margin. These results demonstrate our continued strong execution and marketshare gains in what remains an uncertain U.S. housing market. With an improved cost structure, strong balance sheet and scaled customer acquisition channels, we believe we have laid the foundation to emerge from this cycle more resilient and well-positioned for continued share gains and long-term profitability.
“As the market-leading platform that is leveraging technology to transform and simplify the way people buy and sell their home, we have a significant opportunity ahead of us and remain steadfast in our mission to power life’s progress, one move at a time.”
Opendoor stock shot up 16% to $2.20 at close of business Thursday.
Key highlights from Q3 include:
- Sold 2,687 homes, which generated $980 million of revenue, compared to a guidance range of $950 million to $1 billion.
- Purchased 3,136 homes, an increase of 17% quarter-over-quarter and consistent with the expectations shared starting in May 2023. The company was able to increase acquisitions sequentially despite average new listings being down 8% within its buybox in its markets.
- Returned to positive Contribution Profit in the third quarter of $43 million or 4.4% Contribution Margin, ahead of an implied margin guidance range of 3.2% to 4%.
- Acquisitions from partnership channels increased 33% sequentially in Q3 2023 and are up over 76% compared to Q1 2023. An exclusive partnership with Zillow is now live in 45 markets. In early October, Opendoor announced a partnership with eXp Realty, the largest independent real estate company in the world.
- During 2023, the company increased the percentage of homes in its markets that fall in its buybox from 48% to 57%, covering over $600 billion in annual transaction volume.
