Opendoor Technologies Inc. (OPEN)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 revenue was $1.084B (+25% YoY; -21% QoQ) and Opendoor exceeded the high end of its Q4 guidance across acquisitions, revenue, contribution margin, and adjusted EBITDA; Contribution Profit was $38M (3.5% margin) and Adjusted EBITDA was $(49)M .
• Management flagged a “particularly slow start” to 2025: clearance rates pacing ~25% below last year; active listings up ~20% YoY; delistings up >30% to decade highs—prompting increased spreads in January to preserve unit economics .
• Q1 2025 guidance: revenue $1.0B–$1.075B, Contribution Profit $40M–$50M (4.0%–4.7% margin), Adjusted EBITDA $(50)M–$(40)M), and SBC $13M–$15M; strategy shifts include aligning marketing with seasonality (focus Q4/Q1, reduce Q2/Q3) and re-engaging high-intent sellers to drive conversion .
• Financing position strengthened: early 2025 renewals of multiple facilities at same/better credit spreads; $6.9B non-recourse capacity and $1.1B capital at year-end support execution despite macro pressure .

What Went Well and What Went Wrong

What Went Well

• Exceeded the high end of Q4 guidance in acquisitions, revenue, contribution margin, and adjusted EBITDA; sold 2,822 homes, revenue $1.084B, Contribution Profit $38M, Adjusted EBITDA $(49)M .
• Improved unit economics YoY: contribution margin 3.5% (3.4% in 4Q23), Adjusted Net Loss narrowed to $(77)M from $(97)M, with pricing model enhancements driving conversion at like-for-like spreads .
• Strengthened capital stack: renewed 3 revolving and 1 term facility; extended mezzanine facilities through at least 2027, signaling partner confidence and providing flexibility .

Management quotes:

• “We exceeded the high end of our outlook for acquisitions, revenue, contribution margin and adjusted EBITDA.”
• “We implemented improvements to our pricing models… to better differentiate spreads across price points… expand conversion.”
• “We successfully renewed three revolving credit facilities and one term debt facility at consistent or improved credit spreads.”

What Went Wrong

• Macro deterioration: clearance rates ~25% below last year, visits to new listings down ~20%, delistings up >30%; management increased spreads in January, dampening acquisitions .
• Older inventory mix: 46% of homes >120 days on market at year-end, pressuring contribution margins; Q1 margin guide below full-year 5%–7% target (4.0%–4.7%) .
• GAAP losses remain: Q4 Net Loss $(113)M, EPS $(0.16); full-year Net Loss $(392)M amid elevated interest expense and lower starting inventory entering 2024 .

Financial Results

KPIs

Notes:

• Contribution Profit/Margin and Adjusted EBITDA/Net Loss are non-GAAP; reconciliations provided in the exhibits .

Guidance Changes

Context: Management also indicated Q2 2025 acquisitions likely to decline sequentially due to marketing seasonality and elevated spreads in the current macro .

Earnings Call Themes & Trends

Management Commentary

• “Given the continued depressed housing backdrop and a particularly slow start to the spring selling season, we began increasing spreads in January to manage risk.”
• “Over 70% of our 2024 acquisitions came from sellers who declined their first offer, but later accepted a refresh one… we’re strengthening our reengagement strategy.”
• “We exceeded the high end of our outlook for acquisitions, revenue, contribution margin and adjusted EBITDA.”
• “We will focus our marketing efforts during periods when our spreads tend to be lower… acquire more homes in Q4 and Q1, positioning us to sell those homes in the spring and summer selling seasons.”
• “We successfully renewed three revolving credit facilities and one term debt facility at consistent or improved credit spreads… mezzanine facilities were extended through at least 2027.”

Q&A Highlights

• Cost efficiency and scale: 2024 actions expected to deliver ~$85M cost savings; right-sized fixed costs to support higher growth without scaling fixed base; continuing pursuit of efficiencies in 2025 .
• Marketplace and Listing products: High take rates and clearance in Marketplace pilots; List with Opendoor nationwide and accretive to NPS/conversion; focus on capital-light monetization of high-intent seller funnel .
• Inventory age and margins: 46% >120-day DOM driven by slower acquisitions and slowed price drops in Q4; Q1 margin pressure (~1pt from spring cohorts), expected to ease in Q2; targeting 5%–7% annual contribution margin despite quarterly variability .
• OpEx trajectory: Q1 OpEx guided ~$90M (slightly up vs Q4 due to higher inventory), expected to decline over the balance of 2025 as cost savings roll through and marketing is seasonally aligned .
• Capital structure: >90% of ~$8B available borrowing capacity extended through at least 2026; $1.1B capital at YE; ongoing evaluation of converts (maturing Aug 2026) with no specific future capital transactions disclosed .

Estimates Context

• S&P Global Wall Street consensus data for Q4 2024 (Revenue, EPS, EBITDA, target price, recommendation) was unavailable due to daily request limits. As a result, comparison to consensus estimates cannot be provided at this time. Values would be retrieved from S&P Global if accessible.*

Key Takeaways for Investors

• Guidance and execution beat: Q4 results exceeded guidance on revenue, contribution margin, and Adjusted EBITDA, indicating improved operational control amid a weak housing backdrop .
• Macro still a headwind: Management is proactively raising spreads and rebalancing marketing to seasonality as clearance rates and delistings deteriorate; expect near-term volume/margin variability .
• Conversion and monetization: Pricing model improvements and seller re-engagement strategies underpin conversion at given spreads; capital-light List/Marketplace expansion offer incremental revenue and reduced macro sensitivity .
• Watch inventory age and mix: Elevated >120-day DOM (46%) and spring 2024 cohorts add ~1pt margin pressure in Q1; management expects improvement into Q2 as newer cohorts sell .
• Balance sheet flexibility: Renewed/extended facilities and sizeable non-recourse capacity support continued operations and inventory financing through macro volatility .
• 2025 focus: Optimize for Contribution Profit dollars, cost discipline, and meaningful reduction in Adjusted Net Loss vs 2024; quarterly margins will vary, but annual target remains 5%–7% .
• Trading implications: Near-term narrative hinges on Q1 execution versus guide, evidence of conversion gains at raised spreads, and progress reducing OpEx—positive surprises on contribution margin and seller-product monetization would be stock catalysts; conversely, worsening clearance/delistings or persistently elevated DOM could pressure sentiment .

Notes on non-GAAP: Adjusted Gross Profit, Contribution Profit/Margin, Adjusted Net Loss, Adjusted EBITDA/Margin, and Adjusted Operating Expenses are non-GAAP measures with reconciliations provided in the company’s filings and exhibits **[1801169_0001801169-25-000016_exhibit9924q24opendoorsh.htm:11]** **[1801169_0001801169-25-000016_exhibit9924q24opendoorsh.htm:12]** **[1801169_0001801169-25-000016_exhibit9924q24opendoorsh.htm:13]** **[1801169_0001801169-25-000016_exhibit9924q24opendoorsh.htm:14]** **[1801169_0001801169-25-000016_exhibit9924q24opendoorsh.htm:19]** **[1801169_0001801169-25-000016_exhibit9924q24opendoorsh.htm:20]** **[1801169_0001801169-25-000016_exhibit9924q24opendoorsh.htm:21]** **[1801169_b93bbfdd602740f38f60e7b4909fc1b0_11]** **[1801169_b93bbfdd602740f38f60e7b4909fc1b0_12]** **[1801169_b93bbfdd602740f38f60e7b4909fc1b0_13]** **[1801169_b93bbfdd602740f38f60e7b4909fc1b0_14]** **[1801169_b93bbfdd602740f38f60e7b4909fc1b0_15]**.

Sources: Q4 2024 8-K, press release, earnings call, and exhibits .