Executive Summary

Q1 2025 revenue was $1.153B, above the high end of prior guidance ($1.0–$1.075B), with contribution margin at the high end (4.7%) and adjusted EBITDA loss better than guide at -$30M; GAAP gross margin was 8.6% and diluted EPS was -$0.12 .
Macro softness persisted (clearance rates down ~25% YoY, delistings up >30%), prompting Opendoor to proactively widen spreads to protect margins, while still improving conversion and lowering fixed OpEx ~$19M YoY in Q1 .
Management guided Q2 2025 revenue to $1.45–$1.525B, contribution profit to $65–$75M (4.5%–4.9%), and adjusted EBITDA to $10–$20M, with materially lower marketing spend and ~1,700 acquisitions, emphasizing margin and cash discipline .
Strategic updates include piloting an expanded agent partnership channel to drive asset-light revenue and higher conversion, with early positive signals; Marketplace is being evaluated given current housing volatility .

What Went Well and What Went Wrong

What Went Well
- Revenue beat vs guidance and contribution margin at high end, with adjusted EBITDA loss (-$30M) significantly improved YoY (-$50M in Q1’24); fixed OpEx down ~$19M YoY as part of disciplined cost execution .
- Acquisition volume rose 4% YoY to 3,609 despite higher spreads; conversion improvement attributed to pricing model enhancements (e.g., school district quality, active competition) .
- CEO quote: “We entered 2025 with a clear plan to drive toward profitability… our first-quarter results reflect disciplined execution” . CFO emphasized returning to positive quarterly adjusted EBITDA in Q2 for first time in 3 years at guidance midpoint .
What Went Wrong
- Macro headwinds worsened: buyer demand suppressed by ~7% mortgage rates, clearance rates down nearly 25%, delistings up over 30% YoY; management widened spreads, pressuring acquisitions .
- GAAP gross profit fell YoY to $99M (from $114M), and contribution profit eased to $54M (from $57M) given mix and slower market clearance; percentage of inventory >120 days rose to 27% from 15% YoY .
- Management flagged revenue pressure in 2H 2025 due to the planned acquisition slowdown in Q2/Q3 and elevated spreads, though still targeting YoY contribution margin improvements .

Financial Results

Metric	Q1 2024	Q4 2024	Q1 2025
Revenue ($USD Billions)	$1.181	$1.084	$1.153
Gross Profit ($USD Millions)	$114	$85	$99
Gross Margin (%)	9.7%	7.8%	8.6%
Net Loss ($USD Millions)	$(109)	$(113)	$(85)
Diluted EPS ($USD)	$(0.16)	$(0.16)	$(0.12)
Contribution Profit ($USD Millions)	$57	$38	$54
Contribution Margin (%)	4.8%	3.5%	4.7%
Adjusted EBITDA ($USD Millions)	$(50)	$(49)	$(30)
Adjusted Net Loss ($USD Millions)	$(80)	$(77)	$(63)
Homes Sold (Units)	3,078	2,822	2,946

KPIs and Operating Metrics

Metric	Q1 2024	Q4 2024	Q1 2025
Homes Purchased (Units)	3,458	2,951	3,609
Inventory (Units, Period-End)	5,706	6,417	7,080
Inventory ($USD Billions, Period-End)	$1.881	$2.159	$2.362
% Inventory >120 Days	15%	46%	27%
Contribution Profit per Home ($USD Thousands)	$19	$13	$18

Consensus vs Actual (S&P Global)

Metric	Q1 2025 Consensus	Q1 2025 Actual
Revenue ($USD Billions)	N/A*	$1.153
Diluted EPS ($USD)	N/A*	$(0.12)

*Values retrieved from S&P Global; consensus data unavailable at time of query.

Guidance Changes

Metric	Period	Previous Guidance	Current/Actual	Change
Revenue	Q1 2025	$1.0–$1.075B	$1.153B	Beat vs high end
Contribution Margin	Q1 2025	4.0%–4.7%	4.7%	At high end
Adjusted EBITDA	Q1 2025	$(50)M to $(40)M	$(30)M	Better than guide
Revenue	Q2 2025	—	$1.45–$1.525B	New
Contribution Profit / Margin	Q2 2025	—	$65–$75M / 4.5%–4.9%	New
Adjusted EBITDA	Q2 2025	—	$10–$20M	New
Stock-Based Compensation	Q2 2025	—	$13–$15M	New
Acquisitions	Q2 2025	—	~1,700	New
Marketing Spend	Q2 2025	—	“Materially reduce” vs Q1	New (qualitative)

Earnings Call Themes & Trends

Topic	Q3 2024 (Prior-2)	Q4 2024 (Prior-1)	Q1 2025 (Current)	Trend
Pricing discipline / spreads	Maintained elevated spreads into Q4; acquisition pace slowed to safeguard margins	Elevated spreads vs prior year; optimize for contribution profit; set spreads by seasonality	Proactively widened spreads monthly; mix to older homes pressures margin; newer cohorts strong early margins	Sustained discipline; margins protected at cost of volume
Marketing allocation by season	Reduced Q3 spend and into Q4; alignment with spreads	Focus spend in Q4/Q1; lower in Q2/Q3 per seasonality	Q2 spend “meaningfully lower” vs Q1; targeted campaigns (NFL Draft)	Structural pivot to efficiency
Conversion improvements	Enhanced models, re-engagement of seller base	Product flow enhancements drove conversion despite higher spreads	Added features (school quality, competition) to algorithms; agent assessments speeding offers	Ongoing data-driven gains
Agent partnerships / asset-light	N/A	Expanded “List with Opendoor,” Marketplace in 3 markets	Piloting early referral channel to vetted agents; asset-light revenue share; marketplace under evaluation	Platform expanding distribution
Macro / rates / tariffs	Mortgage rate volatility; delistings high; lowest sales since ’95 projected	Very slow start to 2025; clearance ~25% below last year	Mortgage ~7%; clearance -25%, delistings +30%; tariff uncertainty	Persistent headwinds
Cost structure / OpEx	Announced RIF, ~$50M annual savings; drive efficiency	Leaner org; GAAP OpEx down; adjusted OpEx $87M in Q4	Fixed OpEx down $19M YoY in Q1; Q2 OpEx guided lower (marketing, timing)	Discipline sustained

Management Commentary

CEO: “We entered 2025 with a clear plan to drive toward profitability… our first-quarter results reflect disciplined execution” .
On channel strategy: “We are sending Opendoor customer referrals to vetted agent partners… [this] will allow us to serve more sellers, monetize a greater portion of our funnel and leverage our platform to drive more asset-light business” .
CFO: “Adjusted EBITDA between $10 million and $20 million [in Q2]… marking a return to positive quarterly adjusted EBITDA for the first time in 3 years” .
On marketplace: “Currently today in Dallas, Charlotte, Raleigh… not a material contributor… we are going to evaluate the best path forward” .

Q&A Highlights

Acquisition cadence: Expect seasonality “barbell” with more in Q1/Q4 and fewer in Q2/Q3; ~1,700 acquisitions in Q2 given higher spreads and lower marketing .
Contribution margin mix: Q2 margin mid-4% guided; decline vs prior year driven by older inventory share; newer cohorts performing well early but mix limits uplift .
Inventory valuation and spreads: Valuation assumptions embedded in spreads; pricing lever used to manage risk across resale environment .
Agent partnership economics: Listing outcomes share commissions; cash offers reflect margin less referral fees; hypothesis is conversion lift outweighs fees .
OpEx breakdown: Majority of Q2 OpEx reduction from lower marketing and favorable inventory timing; fixed cost reductions less material sequentially .

Estimates Context

S&P Global consensus revenue and EPS for Q1 2025 were unavailable at query time; therefore, estimate comparisons cannot be made. Opendoor’s results beat its own prior guidance on revenue (above high end), contribution margin (at high end), and adjusted EBITDA loss (better than guide) .
Given Q2 guidance for positive adjusted EBITDA at the midpoint, estimate revisions may bias upward on profitability expectations and contribution margin trajectory, while top-line may be tempered by planned lower acquisitions and spreads (management signal) .
S&P Global disclaimer: Values retrieved from S&P Global; consensus data unavailable at time of query.*

Key Takeaways for Investors

Execution beat: Revenue and margin performance exceeded guidance in a tough macro, aided by pricing discipline and cost cuts; adjusted EBITDA (-$30M) improved significantly YoY .
Margin over volume: Spreads widened to preserve contribution margin; expect lower acquisitions and marketing in Q2, with management guiding to positive adjusted EBITDA .
Channel expansion: Agent partnership pilot is a notable strategic pivot to monetize Opendoor’s seller funnel with asset-light revenue streams; early signals positive .
Mix watch: Older inventory mix near-term pressures margins despite healthy performance of recent cohorts; monitor % >120-day inventory and resale pace .
Balance sheet/capital: Extended credit facilities and improved borrowing capacity support execution; inventory grew to $2.4B with $559M cash at Q1-end .
2H top-line risk: Management flags likely revenue pressure from Q2/Q3 acquisition slowdown; however, aims for YoY margin improvement via efficiency and spreads .
Trading lens: Near-term catalysts include Q2 positive adjusted EBITDA delivery and traction on agent partnerships; risks include macro (rates, tariffs) and demand softness .

Also reviewed related Q1 press releases: earnings date announcement (April 8, 2025) and May 19, 2025 convertible notes exchange into 2030 notes with ~$75.3M cash added, supporting liquidity and capital structure flexibility . A June 6, 2025 preliminary proxy proposed a reverse stock split (1-for-10 to 1-for-50 range) to preserve Nasdaq listing optionality .

Opendoor Technologies Inc. (OPEN)·Q1 2025 Earnings Summary