In a third quarter earnings report November 7, Opendoor Technologies Inc., an e-commerce platform for residential real estate transactions, reported that losses in the quarter ($78 million) were at least 14% less than the second quarter and 26% less than a year ago. But the San Francisco-based iBuyer also announced it had laid off 300 workers, or 17% of its total staff.
Opendoor bought 4,771 homes last quarter, up 78% from a year earlier and 38% more than the first quarter of this year. The company has already lost $201 million this year.
“Opendoor’s third quarter acquisition volumes, revenue, contribution profit and adjusted EBITDA all exceeded our guidance, notwithstanding persistent housing market headwinds,” said Carrie Wheeler, the company’s CEO. “In August, many anticipated that interest rate cuts would bring buyers and sellers back to the market. However, mortgage rates remain stubbornly high and the housing market continues to be challenged by high delistings, low clearance and strained affordability.
“We are focused on what we can control, operating our business as efficiently as possible and streamlining our cost structure while managing risk. The combination of the actions we took in the second half of this year will result in annualized savings of approximately $85 million as we enter 2025. With a simplified organization and ongoing enhancements in our core products, we are well-positioned to rescale the business as conditions improve.”
Q3 highlights
- Revenue of $1.4 billion, up 41% versus Q3 2023 and down 9% versus Q2 2024; with 3,615 total homes sold, up 35% versus Q3 2023 and down 11% versus Q2 2024
- Gross profit of $105 million versus $96 million in Q3 2023 and $129 million in Q2 2024; Gross Margin of 7.6% versus 9.8% in Q3 2023 and 8.5% in Q2 2024
- Net loss of $78 million versus $106 million in Q3 2023 and $92 million in Q2 2024
- Inventory balance of $2.1 billion, representing 6,288 homes, up 64% versus Q3 2023 and down 4% versus Q2 2024
- Ended the quarter with 1,006 homes under contract for purchase, down 39% versus Q3 2023 and down 44% versus Q2 2024
