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A rough housing market took a toll on Opendoor in the final months of 2023, with new numbers showing that the company’s revenue fell significantly compared to one year earlier — though it still managed to trim losses.
In total, Opendoor earned $870 million in revenue during the fourth quarter, according to a newly published earnings report. That represents a 70 percent drop versus Q4 of 2022. However, the company also experienced a net loss of $91 million, which is an improvement over the loss of $399 million one year earlier.
The Q4 2023 loss was also an improvement over Q3, when Opendoor lost $106 million.
The number of homes Opendoor sold in the final months of 2023 echoes what happened to the firm’s revenue; in total, the company sold 2,364 properties, down 69 percent year over year. That was also down 12 percent compared to the previous quarter.
The company bought 3,683 homes in Q4, up 7 percent year over year and 17 percent quarter over quarter.
Carrie Wheeler | Opendoor CEO
In the report, CEO Carrie Wheeler said that 2023 “was about focus, execution, and progress,” and noted that the company’s Q4 numbers “exceeded the high end of our prior guidance ranges.”
“The progress we made in 2023, combined with the potential for a more normalized macro backdrop, positions us well to rescale our business in 2024,” Wheeler said in the report. “Opendoor stands alone as the largest digital platform for residential real estate transactions, and we will continue to invest in our products to be the catalyst for change in how consumers sell and buy homes.”
During a call with investors Thursday afternoon, Wheeler further touted the “health” of more recently acquired homes. And she added that “looking to 2024, we’re excited about our ability to reach and attract more sellers to our platform.”
In a call with Inman later Thursday, Wheeler added that the company has put in a significant amount of work on its cost structure and is now “ready to sustainably ramp the business.
“To be clear, she said, “we’re growing.”
In addition to fourth-quarter numbers, Thursday’s report also shows that for all of 2023, Opendoor earned $6.9 billion in revenue. That’s a dip of 55 percent compared to what the company earned in 2022. Opendoor lost $275 million in 2023, which is an improvement over the $1.4 billion loss it experienced in 2022.
The number of homes sold fell 52 percent year over year in 2023 to a total of 18,708.
Heading into Thursday’s earnings, shares in Opendoor were trading in the mid-to-low $3 range. They lost value over the course of Thursday and were also down nearly a dollar relative to the beginning of this year.
The company’s shares fluctuated in after-hours trading following the publication of Thursday’s earnings report but trended downward.
Credit: Google
Opendoor had a market cap of about $2.24 billion when markets closed Thursday.
Opendoor last reported earnings in November. At the time, the iBuyer revealed that it brought in $980 million in revenue between July and September of last year — down 71 percent compared to the same period in 2022.
In addition to providing numbers on revenue and home sales, Opendoor executives also discussed the company’s Exclusives marketplace during Thursday’s investor call. The company introduced Exclusives in late 2022, touting it as a way for buyers and sellers to connect while Opendoor plays the role of middleman. Since then, however, Exclusives has tended to get only passing mentions during earnings calls, and it remains limited to one market.
Referring to Exclusives, Wheeler said during Thursday’s call that 2023 was “a tough year for experimentation” thanks to record low inventory. However, she added that “long term, we’re committed to evolve the marketplace product.”
While speaking with Inman, Wheeler briefly weighed in on the recent spate of commission lawsuits, the most famous of which is Sitzer | Burnett. She pointed out that Opendoor doesn’t “derive any revenue of note from buyer-broker commissions,” meaning the company should be able to “thrive and improve the experience of buyers and sellers no matter how the real estate system” evolves in the coming years.
Wheeler also pointed to Opendoor’s efforts to increase partnerships with traditional agents, which lately resulted in a partnership with eXp Realty. Opendoor has not considered changing the way it pays agents who bring deals to the company in response to the Sitzer verdict, Wheeler added.
Thursday’s earnings report comes at a unique moment for the real estate industry. Thanks to high mortgage rates, home sales slowed in both 2022 and 2023. That in turn has hurt the bottom line of numerous companies, and earlier this week Anywhere also revealed it suffered a Q4 revenue dip.
A majority of publicly traded real estate companies that Inman covers have yet to report earnings for the fourth quarter.
However, the high rates of late 2023 have abated somewhat and are expected to improve further over the course of 2024 — prompting some analysts to suggest that this earnings season, Q4 numbers may matter less than commentary from company leaders on the market of 2024.
During Opendoor’s investor call Thursday afternoon, Wheeler revealed that the company is increasing its spending on marketing by 50 percent in the first quarter of this year and that it also expects “to see an increase in contract volume late in Q1.”
“We’re going to see good acquisition growth in the first quarter,” she said later during the call, meaning the company plans to buy more homes.
Wheeler also repeatedly described 2024 as a period of “scaling up” for Opendoor, and ultimately concluded Thursday’s call on an upbeat note.
“We’re excited,” she said, “about how we’re set up for 2024 and beyond.”
Update: This story was updated after publication with additional information from Opendoor’s earnings report, commentary from the company’s investor call and background information.
