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The numbers continue to move in the right direction for struggling iBuyer Offerpad, which trimmed losses and boosted the number of homes acquired during the second quarter after selling off nearly all of the older homes in its inventory.
Offerpad reported a $22.3 million Q2 net loss Wednesday, down 62 percent from the previous quarter and a five-fold reduction from the $121.1 million loss the company reported during the last three months of 2022.
Much of the improvement was due to a 13.5 percent gross profit margin on sales of homes Offerpad acquired after September 1, 2022. Less than 2 percent of Offerpad’s inventory was over 180 days old, allowing the iBuyer to boost Q2 acquisitions by 131 percent, to 840 homes.
Offerpad expects to see adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) by year-end, Chairman and CEO Brian Bair said.
Brian Bair
“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,” Bair said in a statement. “The favorable quarter-over-quarter trends we saw during the first half of this year support our expectation to achieve positive adjusted EBITDA by year-end.”
Source: Offerpad regulatory filings.
At $230.1 million, Offerpad’s revenue was also down 62 percent from the first quarter and 79 percent from a year ago, to the lowest level since Q4 2020, as the number of homes sold continued on a downward trajectory. Offerpad sold just 650 homes during the second quarter, down 60 percent from Q1 and 77 percent from a year ago.
Offerpad boosts home acquisitions by 131%
Source: Offerpad regulatory filings.
Offerpad expects to sell between 600 and 700 homes during Q3, generating $200 million to $240 million in revenue. But the Chandler, Arizona-based iBuyer still expects to rack up an adjusted EBITDA loss of $9 million to $17 million in Q3.
Shares in Offerpad, which have traded for as little as $5.62 and as much as $34.88 in the last year, fell 2 percent in light trading Wednesday morning following the earnings announcement.
Offerpad executed a 1-for-15 reverse stock split in June to avoid being delisted from the New York Stock Exchange. The company’s price per share has climbed by about 50 percent since then.
Valued at $2.7 billion when the company went public in a September 2021 SPAC merger with Spencer Rascoff-led Supernova Partners Acquisition Company Inc., Offerpad’s market capitalization is closer to $320 million today.
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