After a lackluster first quarter marred by the coronavirus pandemic, Offerpad is back on track. The Arizona-based iBuyer’s revenue increased 32 percent year over year to $376.8 million, as it bounced back from a $7.4 million net loss in Q2 2020 to post a net income of $9.2 million in Q2 2021.
Offerpad’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) increased $16.8 million to $13.1 million. The fully diluted earnings per share rose to $0.31, making it the iBuyer’s first-ever profitable quarter.
Brian Bair | Credit: Offerpad
“Offerpad performed exceptionally well this quarter and posted our first quarterly profit,” Offerpad founder and CEO Brian Bair said in a prepared statement on Monday. “For consumers, the nearly $2 trillion U.S. residential real estate market remains fractured, time-consuming, stressful and expensive.”
“Consumers want and expect a fast, easy, and seamless online experience when buying and selling a home,” he added. “At Offerpad, we distinguish ourselves as an incredibly adaptable, customer-centric company that has proven our ability to grow and excel in all types of market conditions.”
Offerpad’s plans to go public through Zillow co-founder Spencer Rascoff’s special purpose acquisition company Supernova Partners (NYSE: SPNV), although delayed, is on track to close by the end of September. Supernova’s stock didn’t experience post-earnings pop, with its price per share closing at $9.95 on Monday — a one-cent decrease from the closing price of $9.96 on the previous Friday.
Once it goes public, Offerpad will have its own ticker on the New York Stock Exchange. In a previous Inman article, an Offerpad spokesperson explained the company decided to start issuing pre-IPO earnings reports since the company’s financial information can already be found in filings with the Securities and Exchange Commission (SEC).
In the second quarter, as Offerpad’s home sales increased 8 percent annually (1,166 to 1,259), the iBuyer put the pedal to the metal on the buy-side with a 340.2 percent increase in purchases (460 to 2,025). The contribution profit after interest per home sold grew from $1,400 to $31,500, which CFO Mike Burnett said is a result of Offerpad’s improved scalability.
Mike Burnett | Credit: LinkedIn
“We continued to prove our scalability and adaptability, acquiring a record 2,025 homes in the second quarter and completing our first 24-hour close on a home,” he said. “Our second-quarter results demonstrated Offerpad’s significant business momentum as we executed well on both our market penetration and expansion strategy, setting ourselves up for a strong second half of the year.”
As a result of its performance in Q2, Offerpad upgraded its Q3 and full-year revenue projections. During Q3, the iBuyer expects to take in between $460 million and $520 million with the adjusted EBITDA reaching a maximum of $15 million.
For the full year, Offerpad expects to sell upwards of 6,000 homes, a 40 percent increase from 2020. The company is expecting an equally robust increase in revenue, with the projected FY 2021 revenue hitting between $1.7 billion and $1.85 billion and gross profits expected to be $170 million to $180 million.
“To succeed in this industry, you need a combination of proprietary technology, home underwriting accuracy, and renovation excellence,” Bair added of the company’s performance. “Our unique expertise combining technology development and real estate transaction experience allows us to operate at the most efficient level in the market.”
“At Offerpad, we celebrate the wins, such as our performance this quarter, while also staying focused on keeping our business model adaptable,” Bair concluded. “For the balance of the year, we expect continued growth and high customer satisfaction levels as we further our mission to provide the best way to buy and sell a home.”
