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Offerpad Solutions Inc. (OPAD)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $160.7M and gross margin 6.5%, landing within guidance; adjusted EBITDA improved 32% sequentially to -$7.8M as cost actions flowed through .
  • Versus Wall Street: revenue ($166.7M*) and EPS (-$0.53*) missed; EBITDA (-$8.8M*) also missed on a GAAP basis as interest costs remained elevated (company reports adjusted EBITDA separately) .
  • Asset-light “Renovate” delivered a record $5.3M revenue on 209 projects; inventory aging improved (13% >180 days vs 22% at YE), supporting margin recovery into Q2 .
  • Q2 2025 outlook: homes sold 500–550, revenue $160M–$190M, and adjusted EBITDA “sequential improvement,” framing a potential near-term inflection if acquisition volumes scale prudently .
  • Watch catalysts: ongoing cost reductions (April actions), Auction.com partnership and HomePro rollout for conversion uplift, plus NYSE continued listing notice (April 10) elevating balance sheet/liquidity focus .

What Went Well and What Went Wrong

What Went Well

  • Record performance in Renovate: $5.3M revenue in Q1, +29% sequential, with 209 projects; management: “Renovate…a key driver of growth going forward” .
  • Cost discipline: total operating expenses fell to $22.0M (-39% YoY), driving a 32% sequential improvement in adjusted EBITDA to -$7.8M; CFO: “significant changes…expected to drive further operating expense reductions throughout 2025” .
  • Inventory quality improved: 671 homes at quarter-end with only 13% >180 days and not under contract (vs 22% at YE), expected to support higher margins in Q2 .

What Went Wrong

  • Top-line and volume pressure: revenue -8% QoQ and -44% YoY; homes sold -9% QoQ and -46% YoY, reflecting prior acquisition cuts and weak transaction volumes .
  • Unit economics compressed: contribution profit after interest per home fell to $0.5k (from $5.5k in Q4 and $11.9k YoY), as interest burden and tail inventory weighed; CFO guided improvement in Q2 cohorts but declined to specify targets .
  • Liquidity down and listing risk: cash & equivalents declined to $30.8M; the company received an NYSE notice for non-compliance with continued listing standards, intensifying focus on capital markets alternatives and potential restructuring plans if no new capital is raised .

Financial Results

Sequential comparison

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD)$208.1M $174.3M $160.7M
Gross Margin %8.2% 6.1% 6.5%
Gross Profit ($USD)$17.1M $10.6M $10.5M
Net Loss ($USD)$(13.5)M $(17.3)M $(15.1)M
Diluted EPS ($)$(0.49) $(0.63) $(0.55)
Adjusted EBITDA ($USD)$(6.2)M $(11.5)M $(7.8)M
Homes Sold615 503 460
Homes Acquired422 384 454
Gross Profit per Home ($)$27.9k $21.1k $22.8k
Contribution Profit After Interest per Home ($)$12.4k $5.5k $0.5k
Cash & Equivalents ($USD)$48.5M $43.0M $30.8M

Year-over-year (Q1)

MetricQ1 2024Q1 2025
Homes Sold847 460
Revenue ($USD)$285.4M $160.7M
Gross Profit ($USD)$22.6M $10.5M
Gross Margin %7.9% 6.5%
Net Loss ($USD)$(17.5)M $(15.1)M
Diluted EPS ($)$(0.64) $(0.55)
Adjusted EBITDA ($USD)$(7.1)M $(7.8)M
Gross Profit per Home ($)$26.7k $22.8k
Contribution Profit After Interest per Home ($)$11.9k $0.5k
Cash & Equivalents ($USD)$68.6M $30.8M

Actual vs Wall Street consensus (Q1 2025)

MetricConsensusActual
Revenue ($USD)$166.7M*$160.7M
Primary EPS ($)$(0.53)*$(0.55)
EBITDA ($USD, GAAP)$(8.8)M*$(11.3)M*

Values retrieved from S&P Global.
Note: Company reports adjusted EBITDA of $(7.8)M; S&P Global EBITDA reflects a GAAP-derived measure .

KPIs and operating metrics

KPIQ4 2024Q1 2025
Renovate projects closed187 209
Renovate revenue ($USD)>$4.0M $5.3M
Homes in inventory (end of period)677 671
% inventory >180 days & not under contract22% 13%
Agent Partnership acquisitions (% of total)~45% 42%
Average time to cash (days)142 165
Offer requests QoQ—+33% QoQ

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Homes SoldQ1 2025450–500 460 Met within range
Revenue ($USD)Q1 2025$150M–$170M $160.7M Met at midpoint
Adjusted EBITDAQ1 2025Slightly Better $(7.8)M; 32% QoQ improvement Improved as guided
Homes SoldQ2 2025N/A500–550 New guidance
Revenue ($USD)Q2 2025N/A$160M–$190M New guidance
Adjusted EBITDAQ2 2025N/ASequential Improvement Directional

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Technology and offer process (Citrus Value; faster inspections; PriceLock)Rollout of instant offer ranges and inspection scheduling with conversion uplift; continued enhancements Emphasis on in-home seller engagement; “thousands of living room appointments”; expanding to agent partners Improving execution and conversion
Asset-light services (Renovate, Direct Plus, Agent Partnerships)Asset-light became 30%+ of contribution after interest; Renovate ~$4M Q3 and ~$4M Q4; APP scaled Renovate record $5.3M; ~40% of contribution after interest from asset-light; Auction.com partnership to expand reach Scaling; margin support
Macro/seasonality and tariffsAnticipated rate stabilization into 2025; NAR changes impact; storms modest disruption Elevated mortgage rates, affordability headwinds, rising inventory; early tariff uncertainty noted (no immediate Renovate margin impact) Mixed macro; cautious stance
Inventory quality and time-to-cashHealthy inventory; 10.9% tail in Q3; time-to-cash up to 142 days in Q4 13% tail; time-to-cash 165 days with expected sequential improvement in Q2 cohorts Improving mix expected
Capital markets & liquidityExploring capital raises; liquidity ~$85M including inventory at YE Active discussions; contingency restructuring plan if no new capital; NYSE non-compliance notice Heightened focus
Regulatory/legal (commissions, listing)NAR settlement impact; commission dynamics evolving Commission environment stabilizing; NYSE compliance plan in progress Stabilizing commissions; listing risk

Management Commentary

  • CEO: “In Q1, we delivered balanced results in line with expectations, led by increasing Cash Offer volume and growing contribution margin from our asset-light services…positioned to accelerate as transaction volume normalizes.”
  • CEO on Renovate and partnerships: “We delivered a record quarter…$5.3 million in revenue…Offerpad Renovate will become a preferred provider…with auction.com.”
  • CFO: “At the end of the first quarter, we held 671 homes in inventory with only 13% aged over 180 days…expected to support higher margins in Q2.”
  • CFO on costs and capital: “We implemented significant changes in April…active discussions [on capital markets]…developing plans for restructuring alternatives…to enhance preservation of cash” .

Q&A Highlights

  • Acquisition ramp and seasonality: Management expects increased volumes through 2025, using a disciplined buy box; 1,000 homes per quarter remains a “North Star” contingent on macro and operational mix .
  • Contribution margin trajectory: Expect improvement toward levels seen in early 2024 as tail declines and more recent cohorts drive margins; no specific CM guidance provided .
  • Tariffs and Renovate margins: No notable impact yet; Renovate margins maintained in the 20–30% range as the business scales .
  • Capital strategy and contingency: Company is pursuing capital markets options, but is preparing restructuring and cost actions if new capital does not materialize .
  • Risk management: Selective acquisitions in resilient submarkets amid rising inventory and affordability constraints; leveraging renovation to improve home desirability .

Estimates Context

  • Q1 2025 revenue and EPS missed consensus: $160.7M actual vs $166.7M*, and -$0.55 actual vs -$0.53*; GAAP EBITDA also weaker: -$11.3M* actual vs -$8.8M* consensus .
  • With Q2 guidance at $160M–$190M and 500–550 homes, near-term estimate revisions will likely hinge on acquisition pace, inventory aging, and asset-light contribution scaling; management guided sequential adjusted EBITDA improvement .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Asset-light services are now a meaningful profit driver; the Auction.com partnership and HomePro rollout can sustain mix-shift benefits even in low transaction environments .
  • Sequential adjusted EBITDA improvement and better inventory aging support a Q2 margin recovery narrative, but interest burden and contribution per home after interest remain the swing factors .
  • Top-line remains constrained by prior acquisition cuts and affordability headwinds; scaling to ~1,000 acquisitions/quarter is pivotal to breakeven trajectories, per management .
  • Liquidity and listing status are front-of-mind; NYSE non-compliance notice and capital market discussions introduce path-dependent outcomes (raise vs deeper cost actions), a key risk for equity holders .
  • Technology/process upgrades (Citrus Value, faster inspections, in-home engagement) are improving conversion; expect continued operational leverage as April cost actions flow through .
  • Near-term trading: stock likely sensitive to evidence of Q2 margin improvement, asset-light growth updates, and any capital structure news; focus on unit economics per cohort and inventory tail reduction .
  • Medium-term: A balanced platform (cash offer + services) and disciplined buy box could position OPAD to benefit from any normalization in transaction volumes while maintaining a lean cost base .