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A rough real estate market appears to have taken a toll on Opendoor this year, with the iBuyer experiencing a revenue dip and a rise in losses in the first quarter — though there were still some positive signs of hope.
In total, the company brought in $1.2 billion in revenue between January and March, according to a newly published earnings report. That’s down 62 percent compared to the same period in 2023. Net losses also mounted, with the company burning through $109 million in the quarter — up from $101 million in Q1 of 2023.
The falling numbers were driven by fewer transactions, with the report showing that Opendoor sold 3,078 homes in the first three months of 2024. That’s down 63 percent year over year.
The numbers reflect a punishing real estate market, with high rates leaving many consumers reluctant to either buy or sell homes.
However, Thursday’s report wasn’t all bad news for Opendoor. Though revenue was down year over year, the Q1 numbers were actually up 36 percent compared to revenue in the final three months of 2023.
In a similar vein, the total number of homes sold in Q1 was 30 percent higher than in Q4 2023. Such numbers suggest that while Opendoor still faces marketplace headwinds, it could be reaching a turning point.
Perhaps even more notably, the number of homes Opendoor purchased also spiked 98 percent year over year in the first quarter to 3,458 — though that number is down 6 percent from the final three months of 2023. In total, the company had an inventory of 5,706 homes at the end of the quarter.
Carrie Wheeler | Opendoor CEO
In the report, CEO Carrie Wheeler celebrated the results, saying that “our product continues to resonate with customers, as we more than doubled our market share year-over-year.”
“We entered the second quarter with strong momentum, and we are meaningfully ramping acquisitions in 2024,” Wheeler continued. “Led by our operating principles of focus, execution and results, we remain on track to durably rescale the business in 2024 while delivering Contribution Margin within our target annual range.”
The company’s shareholder letter added that market share also increased in Q1 relative to Q4 2023.
During a call with investors Thursday afternoon, Wheeler added that the company plans to increase home acquisitions each quarter in 2024.
Wheeler spoke to Inman later Thursday evening, noting that the big takeaways from the quarter are “double the acquisitions, double the market share” and “a massive win vs where we were a year ago.” She added that Opendoor has made “massive progress on regrowing the business.”
Opendoor stock inched higher Thursday in the lead up to the company’s earnings report, with shares trading for around $2 as markets closed. However, that is less than half of what shares were fetching at the beginning of 2024.
Shares fluctuated, but trended higher, in after-hours trading Thursday following the earnings report’s publication.
Credit: Google
The iBuyer had a market cap of about 1.4 billion as of Thursday afternoon.
Opendoor previously reported earnings in February. At that time, the company revealed that it brought in $870 million in revenue during the fourth quarter of 2023. That was a year-over-year dip of 70 percent. Despite the lower revenue, however, the company improved its net loss from $399 million in Q4 of 2022 to $91 million in the final three months of last year.
While speaking with Inman Thursday, Wheeler noted that among other things, the company is focused on increasing brand awareness, top-of-funnel expansion and growing partnership channels.
“With spreads coming down, we can afford to invest marketing dollars in a more efficient way,” she added. “Spreads” refers to a metric the company uses to calculate the profit it makes on the homes it renovates and sells.
Asked about mortgage rates, Wheeler said the company is taking a “market-neutral outcome; we’re not embedding luck into our planning.”
Aside from financial numbers, Wheeler spoke out in Thursday’s report about the National Association of Realtors’ recent commission lawsuit settlement. If approved, the settlement would see NAR pay $418 million and make various policy changes. For her part, Wheeler framed the situation in the report as potentially beneficial to Opendoor, which she described as “shaping the future of real estate.”
During her investor call, Wheeler also described the NAR settlement as “positive” and said that over the long term, it should “drive lower transaction costs.”
“We think this is net positive for consumers,” Wheeler said. “Anything that’s good for consumers is good for Opendoor.”
She also said it could result in “more transactions as commissions decrease.”
Speaking to Inman, Wheeler said she doesn’t envision a future in which buyers’ agents largely disappear. She went on to say that Opendoor’s priority is transparency and more consumer choice, which could increase in a post-settlement world.
“The proposed NAR settlement underscores a growing consumer preference for an alternative approach to the traditional home selling and buying process — one that gives them more control,” Wheeler added in the report. “As the largest digital platform for residential real estate transactions, Opendoor was built for this moment, and we remain steadfast in our mission to power life’s progress, one move at a time.”
Update: This story was updated after publication with additional details from Opendoor’s earnings report and with commentary from the company’s investor call.
