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Offerpad continued its path to recovery in the third quarter, with the Arizona-based iBuyer earning $234.2 million in revenue and slimming net losses to $20 million “despite a continued difficult macro environment” that tanked several major competitors including Zillow Offers, RedfinNow and Anywhere’s RealSure.
Offerpad’s performance was on the downslope compared to Q3 2022 when the company was still in the midst of a buying and selling boom. The company’s revenue declined 71 percent year over year from $821.7 million, while the Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) declined 79 percent to $64.3 million.
The company acquired 930 homes (-50 percent yoy) and sold 703 (-69 percent yoy), as it rightsized the company in the face of delisting on the New York Stock Exchange. Even with lower revenues and transaction activity, Offerpad slimmed net losses 75 percent to $20 million.
Brian Bair
Despite Offerpad’s struggles over the past several quarters, Offerpad Chairman and CEO Brian Bair said the company is on the right track, especially compared to its Q2 2023 performance.
“We are pleased that we met both top and bottom-line expectations in the third quarter, despite a continued difficult macro environment. We are particularly proud of our expanding contribution margin,” said in a written statement late Wednesday. “We have proven we can perform in a difficult market, and we have exciting opportunities ahead of us.”
On a quarterly basis, Offerpad is firing on all cylinders with home sales (+8 percent) and acquisitions (+11 percent), revenue (+2 percent), net losses (-11 percent) all improving from the second quarter. The company’s Adjusted EBITDA also improved 23 percent quarter over quarter, something Offerpad Chief Financial Officer Jawad Ahsan said is key to reaching Adjusted EBITDA profitability by 2024.
Jawad Ahsan
“The third quarter marked my first full quarter with Offerpad. I’m very impressed with the team and pleased with our progress,” Ahsan said in a prepared statement.“We have further refined our path to sustainable Adjusted EBITDA profitability in 2024 and beyond while optimizing three key priorities.”
“These include ensuring the business is on a path to become profitable and self-sustaining; future-proofing to mitigate against macro volatility; and, better aligning our marketing strategy with our customer behavior,” he added. “I look forward to sharing our progress over the coming quarters.”
Offerpad has been in recovery mode for much of 2023, with the company raising $90 million in February to stay operational. The same month, the iBuyer had a second round of layoffs in response to dwindling demand from buyers and sellers in an increasingly volatile market. The situation for Offerpad worsened in June, with the company executing a 1-for-15 reverse stock split to avoid being delisted from the New York Stock Exchange.
However, the iBuyer’s Q2 and Q3 performance has raised it from the depths of delistment. Offerpad’s stock was on the uptick Thursday morning (NYSE:OPAD), with the price per share at $8.68 — 4.45 percent above the previous day’s closing price of $8.31 and 55 percent above the company’s 52-week low of $5.63 per share.
The company’s market cap stands at $237.13 million.
