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    Opendoor Technologies (OPEN)

    OPEN Q3 2024: Aims breakeven via 17% headcount cut & $35M savings

    Reported on Aug 15, 2025 (After Market Close)
    Pre-Earnings Price$1.87Last close (Nov 7, 2024)
    Post-Earnings Price$1.93Open (Nov 8, 2024)
    Price Change
    $0.06(+3.21%)
    • Cost Efficiency and Path to Profitability: Management is focused on reducing fixed costs through initiatives such as headcount reductions (approx. 17% of the workforce) and the separation of Mainstay ($35 million annual savings), setting the stage for an accelerated move toward adjusted net income breakeven.
    • Expansion into Asset-Light Businesses: The rollout and positive early performance of new asset-light products, including the nationwide list of Opendoor and evolving marketplace offerings, provide a diversified revenue stream with improved customer engagement and higher conversion rates, positioning the company for long-term growth.
    • Improved Selling Cost Dynamics: The transition from paying blanket buyer broker commissions to a model offering buyer concessions has already resulted in a reduction in direct selling costs (a drop from 2.8% to 2.4% of revenue), which signals potential margin improvements as the model scales.
    • Continued macro and housing market weakness: Questions in the Q&A highlighted concerns about the challenging housing environment—with ongoing macro headwinds, deteriorating market indicators, and softness in home sales potentially impeding production volumes and delaying breakeven progress.
    • Risks in evolving commission and cost structures: Management's shift from a blanket buyer broker commission to a concessions model, along with evidence of fluctuating direct selling costs, raises uncertainties about achieving sustainable cost compression without adversely impacting revenue margins.
    • Uncertainty around scaling asset-light products: While the asset-light offerings (like the list of Opendoor and marketplace initiatives) show promise, executives acknowledged these remain in early stages. Their limited traction to date introduces risk if they fail to sufficiently diversify and reduce capital intensity as anticipated.
    1. Path to Breakeven
      Q: What will it take to reach breakeven?
      A: Management is focused on achieving positive adjusted net income by aggressively reducing fixed costs through workforce cuts and the Mainstay separation, even though they did not provide specific numbers for the breakeven timeline.

    2. Selling Cost Compression
      Q: How are lower commissions affecting costs?
      A: They highlighted that shifting from blanket buyer broker commissions to tailored concessions helped drop selling costs from 2.8% to 2.4% quarter-over-quarter, though they caution it’s too early to confirm a long-term trend.

    3. Asset-Light Expansion
      Q: How critical are asset-light products?
      A: Management is optimistic about expanding asset-light offerings like the nationwide list with Opendoor and early marketplace initiatives, which they expect will reduce capital intensity and support growth when market conditions improve.

    4. Marketing Strategy
      Q: What is the impact of changing marketing spend?
      A: They are moderating marketing expenses this quarter while planning opportunistic investments in Q4, noting that higher brand awareness in mature markets drives increased trust and conversion.

    5. MLS Policy Impact
      Q: Do MLS changes affect the business?
      A: The leadership views evolving MLS rules and clear cooperation as aligned with their consumer-first approach, believing that such changes could positively evolve the market ecosystem.

    6. Seller Demographics
      Q: Are different seller types using list with Opendoor?
      A: They reported that the list with Opendoor product appeals broadly to a wide range of sellers seeking both a cash certainty and market-based price discovery, with no distinct demographic segmentation noted.

    Research analysts covering Opendoor Technologies.