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Shares in iBuyer Offerpad slipped to a new all-time low in after-hours trading Monday after the company reported that it continues to trim its losses but expects further declines in revenue and homes sold.
Offerpad’s $13.8 million second-quarter net loss was a 21 percent improvement from the first quarter, when the company was $17.5 million in the red, and a 38 percent reduction from its $22.3 million net loss in Q1 2023.
But revenue during the spring homebuying season was also down 12 percent from Q1, to $251.1 million, as home sales declined by 12 percent, to 742.
Offerpad said it expects Q3 revenue to continue to decline, to between $185 million and $225 million, and that home sales will drop to between 550 and 650.
Offerpad executives have been working to pivot from a sellers to a buyers market by shrinking the company’s “buy box” — narrowing the scope of the homes that it evaluates for purchase, and adjusting the input variables in its underwriting model to be more conservative.
“Our disciplined and patient approach within our buy box has proven successful in this evolving market,” Offerpad CEO Brian Bair said on a call with investment analysts. “Our short-term strategy focuses on proactively adapting to changing real estate conditions by purchasing fewer properties and concentrating on higher margin opportunities. This approach positions us well for the anticipated shift to a buyer’s market.”
The strategy is showing up in gross margins, which at 8.7 percent were up 80 basis points from Q2, with gross profit per home sold up 10 percent to $29,500.
In a separate announcement, Offerpad announced the launch of a new online portal for agents and teams, Powered By Offerpad, aimed at growing the company’s Agent Partner Program. About one-third of all Q2 real estate acquisitions came through the Agent Partner Program, Offerpad said.
Offerpad also touted the performance of its renovation service, with new customers including Fannie Mae and Freddie Mac helping boost closed renovation projects 306 percent from a year ago and generating $4.9 million in revenue.
The Chandler, Arizona-based company ended the quarter with $56.9 million in cash and cash equivalents, down 51 percent from a year ago and 17 percent from Q1.
Shares in Offerpad, which over the last 12 months have traded for as much as $13.36 and as little as $3.79, were changing hands for as little as $3.64 in after-hours trading Monday. If Offerpad shares don’t bounce back when markets open Tuesday, they’ll be at a new all-time low after adjusting for last year’s reverse split.
Offerpad went public in 2021 with a valuation of $2.7 billion through a merger with the Spencer Rascoff-led special purpose acquisitions company (SPAC) Supernova Partners Acquisition Company, Inc.
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