Financial Data and Key Metrics Changes - In Q1, the company met the midpoint of its revenue guidance with total revenue of $161 million, reflecting an 8% decline quarter over quarter [17] - The net loss for the quarter was $15.1 million, a 14% improvement compared to the same period in 2024 [17] - Adjusted EBITDA loss for the first quarter was $7.8 million, a sequential improvement of 32% [19] Business Line Data and Key Metrics Changes - The Renovate business generated a record revenue of $5.3 million in Q1, with an annualized run rate of approximately $20 million, marking the highest quarterly total since its launch [6] - The cash offer business remains a key revenue driver, while asset-light services, including Renovate, Direct Plus, and the agent partnership program, contributed over 40% of contribution profit after interest [16][17] Market Data and Key Metrics Changes - Offer requests rose by 33% quarter over quarter, indicating increased consumer interest [9] - The average time to cash for homes sold in Q1 was 165 days, consistent with expectations following acquisition adjustments [17] Company Strategy and Development Direction - The company is focusing on enhancing the customer experience through technology and operational improvements, aiming for positive adjusted EBITDA and sustainable long-term growth [6][13] - A new partnership with Auction.com was announced, positioning Renovate as a preferred provider of renovation services [6] - The company is prioritizing diversification through high-margin revenue streams and disciplined resource management [6][14] Management's Comments on Operating Environment and Future Outlook - Management noted that the housing market is facing sustained macroeconomic pressures, including elevated mortgage rates and affordability challenges, impacting transaction volumes [7][8] - The company anticipates sequential improvements in time to cash and revenue in Q2, with guidance of $160 million to $190 million [20] Other Important Information - The company has made significant progress in reducing annual operating expenses by approximately $115 million over the past 24 months [19] - As of the end of Q1, unrestricted cash totaled $31 million, with total liquidity exceeding $60 million [19] Q&A Session Summary Question: Acquisition pace of homes and seasonal patterns - Management expects increased acquisition volumes in Q2, with a target of 1,000 homes per quarter as a North Star for profitability [27][46] Question: Stability of the current market environment - Management acknowledged market volatility but noted increased opportunities for acquisitions in select areas [33][41] Question: Financial impact of changes made in April - Management indicated that further details on cost reductions would be provided in the next quarter, with ongoing efforts to improve operational efficiency [32][34] Question: Supply-demand dynamics in key markets - Management observed rising inventory levels and emphasized a selective approach to acquisitions based on market conditions [40][41] Question: Contribution margin targets with increased acquisition volume - Management expects contribution margins to improve as more recent purchases are integrated into the portfolio [37]

PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company reported an improved net loss for the quarter ended March 31, 2025, despite a decrease in total assets and a shift to negative operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$274.5 million** as of March 31, 2025, from **$313.1 million** at year-end 2024, primarily due to lower cash and real estate inventory, alongside reduced liabilities and stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $30,826 | $43,018 | | Real estate inventory | $210,847 | $214,174 | | **Total Assets** | **$274,478** | **$313,053** | | Secured credit facilities and other debt, net | $210,967 | $237,239 | | **Total Liabilities** | **$240,260** | **$265,400** | | **Total Stockholders' Equity** | **$34,218** | **$47,653** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Revenue for Q1 2025 decreased by **43.7%** to **$160.7 million**, leading to lower gross profit, but the net loss improved to **$15.1 million** due to significantly reduced operating expenses Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $160,698 | $285,358 | | Gross Profit | $10,507 | $22,595 | | Loss from Operations | ($11,537) | ($13,585) | | Net Loss | ($15,057) | ($17,515) | | Net Loss Per Share, basic & diluted | ($0.55) | ($0.64) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$10.2 million** in Q1 2025, a reversal from the prior year, with increased cash used in financing activities leading to a **$37.9 million** decrease in total cash Q1 2025 vs Q1 2024 Cash Flows (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($10,176) | $2,386 | | Net cash used in investing activities | ($994) | ($323) | | Net cash used in financing activities | ($26,773) | ($3,464) | | **Net change in cash, cash equivalents and restricted cash** | **($37,943)** | **($1,401)** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, including a **$1.7 million** real estate inventory adjustment, segment reporting with 'Cash Offer' as the primary segment, and **$1.01 billion** in total borrowing capacity - The company recorded a real estate inventory valuation adjustment of **$1.7 million** in Q1 2025, compared to **$0.6 million** in Q1 2024[39](index=39&type=chunk) - As of March 31, 2025, the company was under contract to purchase **245 homes** for an aggregate price of **$71.1 million**[119](index=119&type=chunk) - The company's operations are divided into four operating segments, with 'Cash Offer' being the only reportable segment. The 'Other' category includes B2B Renovate, Direct+ institutional buyer program, and the Agent Partnership Program[126](index=126&type=chunk)[129](index=129&type=chunk) Segment Revenue and Gross Profit (in thousands) | Segment | Revenue Q1 2025 | Revenue Q1 2024 | Gross Profit Q1 2025 | Gross Profit Q1 2024 | | :--- | :--- | :--- | :--- | :--- | | Cash Offer | $153,833 | $277,845 | $8,098 | $20,195 | | Other | $6,865 | $7,513 | $2,409 | $2,400 | | **Total** | **$160,698** | **$285,358** | **$10,507** | **$22,595** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **43.7%** revenue decline to reduced home sales amid challenging real estate conditions, with an improved net loss driven by significant operating expense reductions, while addressing NYSE non-compliance [Current Economic Conditions and Health of the U.S. Residential Real Estate Industry](index=26&type=section&id=Current%20Economic%20Conditions%20and%20Health%20of%20the%20U.S.%20Residential%20Real%20Estate%20Industry) Challenging real estate market conditions, including high mortgage rates, impacted Q1 2025 performance, leading the company to reduce home acquisitions and focus on cost reductions, while facing NYSE non-compliance - The average thirty-year fixed mortgage rate remained between the **mid-6% and 7% range** in Q1 2025, negatively impacting housing affordability and consumer demand[140](index=140&type=chunk) - The company sold **460 homes** in Q1 2025, generating **$160.7 million** in revenue and **$10.5 million** in gross profit[141](index=141&type=chunk) - On April 10, 2025, Offerpad received a non-compliance notice from the NYSE regarding its market capitalization and stockholders' equity. The company intends to submit a plan to regain compliance within the **18-month cure period**[144](index=144&type=chunk)[145](index=145&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Q1 2025 revenue decreased **43.7%** year-over-year due to fewer homes sold, while gross profit margin declined, but significant **39.1%** reductions in operating expenses led to a smaller loss from operations Q1 2025 vs Q1 2024 Results of Operations (in thousands) | Line Item | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $160,698 | $285,358 | ($124,660) | (43.7)% | | Gross profit | $10,507 | $22,595 | ($12,088) | (53.5)% | | Total operating expenses | $22,044 | $36,180 | ($14,136) | (39.1)% | | Loss from operations | ($11,537) | ($13,585) | $2,048 | (15.1)% | | Net loss | ($15,057) | ($17,515) | $2,458 | (14.0)% | - The decrease in revenue was primarily due to selling **460 homes** in Q1 2025 compared to **847** in Q1 2024, a **45.7%** decrease[187](index=187&type=chunk) - The decrease in gross profit margin was primarily due to an increase in the real estate inventory valuation adjustment to **$1.7 million** from **$0.6 million** in the prior year period[190](index=190&type=chunk) [Non-GAAP Financial Measures](index=32&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes non-GAAP measures like Contribution Profit and Adjusted EBITDA, with Q1 2025 Contribution Profit at **$6.1 million** and Adjusted EBITDA showing a **$7.8 million** loss Reconciliation of Gross Profit to Contribution Profit After Interest (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross profit (GAAP) | $10,507 | $22,595 | | Adjusted gross profit | $11,461 | $24,242 | | Contribution profit | $6,144 | $16,657 | | **Contribution profit after interest** | **$222** | **$10,041** | Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss (GAAP) | ($15,057) | ($17,515) | | Adjusted net loss | ($14,800) | ($17,859) | | **Adjusted EBITDA** | **($7,831)** | **($7,129)** | [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company had **$30.8 million** in cash and **$1.01 billion** in total borrowing capacity, but acknowledges the need for additional financing due to market uncertainty - As of March 31, 2025, cash and cash equivalents were **$30.8 million**[206](index=206&type=chunk) - The company has a total borrowing capacity of **$1.01 billion** under its credit facilities, with **$813.6 million** undrawn. Of the undrawn amount, **$49.1 million** is committed and **$764.5 million** is uncommitted[206](index=206&type=chunk) - The company is seeking additional financing due to uncertain market conditions and acknowledges that volatility in credit markets may adversely affect its ability to obtain it[208](index=208&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to the company's market risk exposure since the end of fiscal year 2024, with further details available in the 2024 Annual Report on Form 10-K - There have been no material changes to the company's exposure to market risk since December 31, 2024[232](index=232&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at the reasonable assurance level[234](index=234&type=chunk) - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[235](index=235&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, including a class action lawsuit related to the 2021 merger where Offerpad-related defendants were dismissed without prejudice in February 2025 - The company is not currently a party to any legal proceedings that would have a material adverse effect on its financial condition[237](index=237&type=chunk) - In a class action lawsuit related to the 2021 merger, the Offerpad Defendants were dismissed from the complaint without prejudice on February 24, 2025[123](index=123&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the filing of its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No material changes to the Company's risk factors have occurred since the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[240](index=240&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no sales of unregistered equity securities and no repurchases of its Class A common stock during the three months ended March 31, 2025 - There were no sales of unregistered equity securities in the quarter[241](index=241&type=chunk) - The company did not repurchase any of its Class A common stock during the quarter[242](index=242&type=chunk) [Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable [Other Information](index=36&type=section&id=Item%205.%20Other%20Information) The company reports no other material information, including no adoption or termination of Rule 10b5-1 trading arrangements by directors or officers during the quarter - During the three months ended March 31, 2025, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement[245](index=245&type=chunk) [Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate documents, an employment agreement, and certifications by the CEO and CFO

Financial Data and Key Metrics Changes - In Q1 2025, the company reported revenue of $161 million, which was in line with guidance, but represented an 8% decline quarter over quarter [16] - The net loss for the quarter was $15.1 million, showing a 14% improvement compared to the same period in 2024 [16] - Adjusted EBITDA loss for Q1 was $7.8 million, a sequential improvement of 32% [18] Business Line Data and Key Metrics Changes - The Renovate business generated a record revenue of $5.3 million in Q1, with an annualized run rate of approximately $20 million, marking the highest quarterly total since its launch [6] - The company sold 460 homes in Q1, a 9% decrease from the previous quarter, primarily due to a strategic reduction in acquisition pace [16] - Over 40% of contribution profit after interest came from asset-light services, indicating a growing importance of these services to overall profitability [16][50] Market Data and Key Metrics Changes - Offer requests rose by 33% quarter over quarter, indicating increased consumer interest despite market challenges [8] - The housing market is experiencing elevated mortgage rates and affordability challenges, leading to transaction volumes near historic lows [7] - Active inventory is increasing in most markets, with specific areas like Phoenix having over 25,000 active listings, highlighting a supply-demand imbalance [39] Company Strategy and Development Direction - The company is focusing on diversifying revenue streams through high-margin services and streamlining operations to achieve positive adjusted EBITDA [6][14] - A new partnership with Auction.com aims to enhance the Renovate business by providing renovation services to buyers on their platform [6] - The company is committed to maintaining a disciplined approach to acquisitions while selectively ramping up volumes in stronger market segments [15][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged sustained macroeconomic pressures affecting the housing market, including high borrowing costs and limited affordable inventory [7] - The company expects sequential improvements in time to cash and revenue as it moves through 2025, with a focus on increasing acquisition activity and maintaining disciplined cost management [19] - Management remains cautiously optimistic about capital market opportunities and is preparing restructuring plans in case new capital is not secured [19] Other Important Information - The company welcomed Donna Corley to its Board of Directors, bringing extensive housing finance experience [12] - The company has reduced annual operating expenses by approximately $115 million over the past 24 months, with ongoing efforts to identify further cost reductions [18] Q&A Session Summary Question: Acquisition pace of homes and seasonal patterns - Management expects increased acquisition volumes in Q2, with a target of 1,000 homes per quarter as a North Star for profitability [26][32] Question: Stability of the current market environment - Management indicated that while there is still volatility, they are seeing more opportunities to buy homes at acceptable risk metrics [32][34] Question: Contribution margin targets with increased acquisition volume - Management expects contribution margins to improve as they move into Q2, but did not provide specific guidance on percentages [36] Question: Supply-demand dynamics in key markets - Management noted an increase in active inventory and emphasized the need for selective purchasing in areas with strong transaction activity [39][40] Question: Impact of tariffs on renovation margins - Management reported no significant impact from tariffs on renovation margins at this time, maintaining a margin range of 20% to 30% [65]

Financial Performance - Offerpad reported Q1 2025 revenue of $160.7 million, a decrease of 8% from Q4 2024 and a 44% decline year-over-year from $285.4 million[5][6]. - The net loss for Q1 2025 improved to $15.1 million, a 13% reduction from the previous quarter and a 14% improvement compared to Q1 2024[4][6]. - Adjusted EBITDA for Q1 2025 was a loss of $7.8 million, showing a 32% improvement from the prior quarter[4][5]. - Offerpad's net loss for the three months ended March 31, 2025, was $15,057,000, resulting in a net loss margin of 9.4%[37]. - Adjusted EBITDA for the same period was $(7,831,000), with an adjusted EBITDA margin of (4.9%) [37]. - Offerpad's adjusted net loss for the three months ended March 31, 2025, was $14,800,000, with an adjusted net loss margin of 9.2%[37]. Profitability Metrics - Gross profit per home sold increased to $22,800, an 8% improvement from the previous quarter but a 14% decline year-over-year[5][6]. - Offerpad reported a GAAP gross profit of $10,507,000 for the three months ended March 31, 2025, with a gross margin of 6.5%[29]. - Adjusted gross profit for the same period was $11,461,000, resulting in an adjusted gross margin of 7.1%[29]. - Contribution profit for the period was $6,144,000, yielding a contribution margin of 3.8%[29]. - Contribution profit after interest was $222,000, with a contribution margin after interest of 0.1%[29]. - The contribution profit after interest per home sold dropped significantly to $500, a 91% decline from $5,500 in the previous quarter[5][6]. Operational Highlights - Total operating expenses decreased to $22.0 million, down 39% from $36.2 million in the prior year[4][6]. - Homes acquired in Q1 2025 totaled 454, an 18% increase from 384 in Q4 2024, but a 44% decrease from 806 in Q1 2024[5][6]. - Renovate closed 209 projects in Q1 2025, generating record revenue of $5.3 million, up 29% sequentially[1][4]. - The company sold 460 homes during the three months ended March 31, 2025, with a gross profit per home sold of $22,800[29]. Cash Position - Cash and cash equivalents at the end of Q1 2025 were $30.8 million, a 28% decrease from $43.0 million at the end of Q4 2024[5][6]. Future Outlook - Offerpad's second quarter 2025 outlook projects homes sold between 500 to 550 and revenue between $160 million to $190 million[7].

Revenue Generation - Offerpad's Cash Offer solution generated over 97% of consolidated revenue for the years ended December 31, 2024, 2023, and 2022[21] - The company has transacted on homes representing approximately $11.6 billion of aggregate revenue since its founding in 2015 through December 31, 2024[22] - Offerpad's asset-light platform offerings generated higher margins compared to the Cash Offer service, which accounts for the majority of revenue[21] Customer Satisfaction - Offerpad achieved a 91% Customer Satisfaction Rating and a net promoter score of 67% based on a survey of over 650 customers in 2024[22] Market Operations - Offerpad operates in over 1,800 cities and towns across 26 metropolitan markets in 17 states[22] - The company operates in 26 markets, with median home prices sold at approximately $325,000 in 2024 and $340,000 in 2023[52] - The U.S. residential real estate market is highly fragmented, with over 100,000 brokerages, and the company primarily competes with local brokerages and traditional sales methods[64] Business Development - The B2B Renovate business services are in early stages but are expected to become a more significant component of Offerpad's business over time[32] - The company plans to invest in developing ancillary products and services, including energy efficiency solutions and smart home technology, to strengthen unit economics[37] - The company plans to expand its B2B Renovate services, which have been increasingly utilized by companies and homeowners[59] - The company intends to introduce additional transaction services, including home warranty and insurance, as part of its product expansion strategy[62] Partnerships and Programs - The Direct+ institutional buyer program aims to help homeowners sell their homes while expanding customer reach[33] - The agent partnership program has been enhanced to allow partner agents to list acquired homes prepared for resale and access sellers in defined zones[35] - The integration with Realtor.com launched in Q2 2024 is expected to expand Offerpad's reach and diversify lead sources[36] Operational Efficiency - The average holding period for homes sold decreased from 138 days in 2016 to 97 days in Q4 2023, reflecting improved operational efficiency[47] - The average holding period increased to 142 days in Q4 2024 due to a reduction in home acquisition pace amid rising mortgage interest rates, which approached 7%[48] Financial Overview - As of December 31, 2024, Offerpad had outstanding borrowings of $185.2 million on senior secured credit facilities and $31.2 million on mezzanine secured credit facilities[397] - A one percentage point increase in the Secured Overnight Financing Rate (SOFR) would have increased annual interest expense by $2.4 million for the year ended December 31, 2024[397] - Offerpad's exposure to interest rate changes is primarily associated with SOFR, impacting its variable rate debt arrangements[396] Regulatory Compliance - The company is subject to various federal, state, and local regulations, including those governing real estate and mortgage industries[74] - Offerpad operates under stringent compliance audits by regulatory bodies such as the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC)[75] Employee and Workplace Culture - As of December 31, 2024, the company employed approximately 200 people, with no employees represented by a labor union[66] - Offerpad's employees are eligible for a broad range of company-paid benefits, including medical, dental, and vision insurance[69] - The company emphasizes a strong workplace culture and values, focusing on customer experience and operational efficiency[67] Intellectual Property - Offerpad's registered IP portfolio includes nine registered U.S. trademarks and three foreign registered trademarks as of December 31, 2024[72] Seasonal Trends - The residential real estate market is seasonal, with the highest transaction volume typically occurring in spring and summer[79] Company Formation - Offerpad Solutions Inc. was formed on September 1, 2021, through a business combination with Supernova Partners Acquisition Company, Inc.[80]

Financial Data and Key Metrics Changes - In Q4 2024, total revenue was $174 million, a 28% decline year-over-year, with homes sold decreasing by 29% [23][24] - For the full year, revenue totaled $919 million, reflecting a 30% decrease from 2023, while the net loss was $62 million, a 47% improvement compared to the previous year [24][28] - Gross margin for Q4 was 6.1%, with a full-year gross margin of 7.9%, representing a 47% improvement from the prior year [26][28] - Adjusted EBITDA loss for Q4 was $11.5 million, a sequential improvement of $5.3 million, while the full-year adjusted EBITDA loss was $29.2 million, a 65% improvement over 2023 [28][29] Business Line Data and Key Metrics Changes - The asset-light services, including the B2B renovate business and agent partnership program, contributed over 33% of total contribution profit after interest in 2024 [22] - The renovate business generated $18 million in revenue for the full year, up 49% year-over-year, with average revenue per renovation increasing from $11,000 to over $22,000 [17][22] Market Data and Key Metrics Changes - The residential resale volumes are down almost 40% from pandemic highs, impacting overall market conditions [7] - The company is expanding its buy box criteria to capture increased market activity, focusing on acquiring homes in the $250,000 to $700,000 price range [11][37] Company Strategy and Development Direction - The company is focused on diversifying revenue beyond its core cash offer business to create stability across market cycles [10] - Strategic efforts include optimizing operations, managing resources effectively, and enhancing product delivery through technology [9][13] - The company aims to ramp up acquisitions to 1,000 homes per quarter while maintaining a high-quality inventory portfolio [12][45] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about a slight increase in transaction volumes as the spring selling season begins, despite current market challenges [65] - The company anticipates first-quarter revenue to be in the range of $150 million to $170 million, with 450 to 500 homes sold [29][30] Other Important Information - The company ended Q4 with 677 homes in inventory, with 22% owned for over 180 days and not under contract for resale [21] - Unrestricted cash totaled $43 million at the end of the quarter, with total liquidity exceeding $85 million [28] Q&A Session Summary Question: Can you provide more detail on how you're adjusting the buy box and the systems in place? - The company is moving up in price range to capture buyers transitioning between homes, expanding the buy box from $200,000-$500,000 to $250,000-$700,000 [36][37] Question: How should we think about the ramp to 1,000 acquisitions per month? - The target remains 1,000 acquisitions, but the company will not reach that in Q1 or Q2, with expectations to ramp up sequentially throughout the year [43][45] Question: How much is the 1,000 acquisition target dependent on the pending capital raise? - The company has a path forward regardless of capital raise outcomes, maintaining strong relationships with asset-backed partners [50][52] Question: What is the biggest factor driving home acquisition strategy? - The company is focusing on acquiring homes that can be renovated and sold quickly, avoiding high HOA properties and townhomes due to affordability issues [66][68] Question: Can you clarify the adjusted EBITDA guidance for Q1? - Adjusted EBITDA is expected to improve sequentially across the year, with specific guidance for Q1 provided [70][72]

Financial Performance - Offerpad Solutions Inc. reported a quarterly loss of $0.63 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.53, and compared to a loss of $0.57 per share a year ago, indicating a decline in performance [1] - The company posted revenues of $174.27 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.26%, and down from $240.46 million in the same quarter last year [2] - Over the last four quarters, Offerpad Solutions has not surpassed consensus EPS estimates, and has topped consensus revenue estimates only twice [2] Stock Performance - Offerpad Solutions shares have declined approximately 21.4% since the beginning of the year, contrasting with the S&P 500's gain of 2.2% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.49 on revenues of $244.35 million, and for the current fiscal year, it is -$1.38 on revenues of $1.29 billion [7] Industry Outlook - The Real Estate - Operations industry, to which Offerpad Solutions belongs, is currently ranked in the bottom 15% of over 250 Zacks industries, which may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the company's stock performance may be influenced by changes in earnings expectations [5][6]

Q4 2024 UPDATE INVESTOR PRESENTATION NYSE : OPAD 1 Disclaimer Forward-Looking Statements Certain statements in this Presentation may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Offerpad Solutions Inc.'s (the "Company") plans, strategies, business prospects, market opportunity and future financial or operating performance. Statements using words such as "may," "should," "co ...

Financial Performance - In FY 2024, Offerpad reported a net loss improvement of 47%, or $55 million, compared to the prior year[1]. - Revenue for FY 2024 was $918.8 million, a decrease of 30% from $1.314 billion in FY 2023[7]. - Total operating expenses decreased by 32% to $118.2 million in FY 2024, down from $174.6 million in FY 2023[4]. - Net loss for the year ended December 31, 2024, was $62,159, a significant improvement from a net loss of $117,218 in 2023, representing a 47% reduction[19]. - Net cash provided by operating activities decreased to $20,833 in 2024 from $261,632 in 2023, indicating a decline of approximately 92%[19]. - The company reported a significant reduction in debt repayments, totaling $829,461 in 2024, down from $1,286,795 in 2023, reflecting a decrease of approximately 36%[19]. - Offerpad reported a GAAP net loss of $17,325,000 for the three months ended December 31, 2024, compared to a net loss of $15,441,000 for the same period in 2023[40]. - The adjusted net loss for the same period was $17,216,000, with an adjusted net loss margin of 9.9%[40]. - Offerpad's adjusted net loss for the year ended December 31, 2024, was $62,399,000, an improvement from $117,286,000 in 2023[40]. Profitability Metrics - Gross profit per home sold increased by 40% to $26,700 in FY 2024, up from $19,100 in FY 2023[7]. - The contribution profit after interest per home sold was $11,500 in FY 2024, compared to a loss of $13,900 in FY 2023[7]. - Gross profit for the year ended December 31, 2024, was $72,195, slightly up from $70,181 in 2023, resulting in a gross margin increase to 7.9% from 5.3%[33]. - Adjusted gross profit for the year was $80,126, compared to $20,127 in 2023, showing a substantial increase[33]. - Contribution profit for the year was $53,739, a significant recovery from a loss of $14,472 in 2023[33]. - Contribution profit after interest for 2024 was $31,123, compared to a loss of $50,919 in 2023, indicating a strong turnaround[33]. - Adjusted EBITDA for the three months ended December 31, 2024, was $(11,483,000), reflecting an adjusted EBITDA margin of (6.6%) compared to (2.9%) in the same period of 2023[40]. - The company’s adjusted EBITDA for the year ended December 31, 2024, was $(29,222,000), showing a significant reduction from $(82,387,000) in 2023[40]. Operational Metrics - Homes acquired in FY 2024 totaled 2,443, a decrease of 13% from 2,812 homes acquired in FY 2023[7]. - Homes sold in 2024 totaled 2,707, down from 3,674 in 2023, reflecting a decrease of about 26%[33]. - For Q4 2024, revenue was $174.3 million, down 28% from $240.5 million in Q4 2023[6]. - The time to cash (TTC) improved by 18% year over year, coming in at 116 days[4]. - Offerpad's first quarter 2025 outlook projects homes sold between 450 to 500 and revenue between $150 million to $170 million[9]. Cash and Liquidity - Cash and cash equivalents as of December 31, 2024, were $43.0 million, a decrease of 43% from $76.0 million in the prior year[7]. - Cash, cash equivalents, and restricted cash at the end of the period were $73,626, down from $79,934 at the beginning of the period[19]. - Cash payments for interest remained relatively stable at $24,464 in 2024, compared to $24,730 in 2023[19]. Other Financial Information - Interest expense for the three months ended December 31, 2024, was $4,084,000, down from $5,154,000 in the same period of 2023[40]. - The company experienced a decrease in net loss margin from 8.9% in 2023 to 6.8% in 2024[40]. - Amortization of stock-based compensation for the year ended December 31, 2024, was $8,080,000, compared to $7,915,000 in 2023[40]. - The change in fair value of warrant liabilities was $109,000 for the three months ended December 31, 2024[40]. - Holding costs incurred on homes sold included insurance, utilities, and property taxes, impacting overall financial performance[39].

Financial Data and Key Metrics - Revenue for Q3 2024 was at the top of guidance, driven by a mix of products including cash offers, B2B Renovate, Direct Plus, and the Agent Partnership Program [6] - Gross margin was 8.2%, with gross profit at $17.1 million, down 29% YoY and 22% QoQ [36] - Adjusted EBITDA loss improved by 53% YoY to $6.2 million, with a slight decrease of $1.8 million QoQ, including a one-time restructuring cost of $700,000 [39] - The company ended Q3 with $49 million in unrestricted cash and over $90 million in total liquidity [40] Business Line Performance - Asset-light services now make up 30% of total contribution margin after interest, with continued expansion of the Agent Partnership Program and technology enhancements [9] - Offerpad Renovate completed 227 projects in Q3, generating over $4 million in revenue, bringing the 2024 total to $14 million, surpassing the 2023 total of $12 million [24] - The Agent Partnership Program's Pro tier grew quarterly requests and acquisitions to 26% and 33% of total, respectively [22] - Direct Plus partners showed increased buying activity, signaling early signs of market recovery [16] Market Performance - The company expects a 15% to 20% increase in resale market transaction volume in 2025, reaching 4.3 million to 4.5 million transactions [16] - Markets in Texas, Atlanta, and the Carolinas have shown resilience, despite the impact of hurricanes in Florida and the Carolinas [65] - The company anticipates a busier spring selling season in 2025, driven by rate relief, easing inflation, and pent-up demand [15] Strategic Direction and Industry Competition - The company is focused on diversifying revenue, adjusting the buy box, and managing acquisition pace to address market uncertainty [11] - Offerpad is strategically expanding its buy box and raising acquisition volume, targeting a return to a run rate of approximately 1,000 acquisitions per quarter by Q1 2025 [19] - The company has introduced significant improvements to the customer journey, including providing an estimated offer range within minutes and scheduling inspections instantly [20] Management Commentary on Operating Environment and Future Outlook - Management remains optimistic about the market transition expected in the coming quarters, with a shift anticipated as the Fed enters a rate-cutting cycle [14] - The company expects mortgage rate volatility to continue through Q4 2024, stabilizing in 2025 [15] - Offerpad is focused on achieving positive EBITDA and cash flow in any real estate environment, with a strong emphasis on cost efficiency and operational improvements [31][38] Other Important Information - The impact of Hurricane Helene and Milton on East Coast markets was minimal, with no material damage to the portfolio [17] - Customer satisfaction remained strong, with a 91% satisfaction score and steady monthly request volume [18] - The company has achieved significant cost reductions, with annual operating expenses lowered by nearly $70 million in 2023 and an additional $45 million in savings expected in 2024 [38] Q&A Session Summary Question: Assumptions for 2025 Outlook - The company expects pent-up demand from buyers and sellers, with mortgage rates stabilizing in 2025 after volatility in 2024 [46][47] - Offerpad anticipates a modest increase in transaction volumes to 4.2 million to 4.4 million in 2025, driven by a loosening of the spring selling season [49] Question: Path to Profitability - The company is focused on cost reductions and increasing acquisition volumes to achieve adjusted EBITDA profitability and positive free cash flow [51][52] - Offerpad targets a return to 1,000 acquisitions per quarter, which, combined with cost efficiencies, is expected to drive profitability [52] Question: Impact of NAR Settlement on Commissions - The NAR settlement has led to some reduction in commissions, with early signs of a 50 basis point decrease on the buy side [61] - Offerpad has maintained original underwritten commissions but will continue to monitor the impact of the settlement [62] Question: Market Resiliency - Markets in Texas, Atlanta, and the Carolinas have shown resilience, while areas with the highest home price appreciation have taken longer to stabilize [65][66] Question: Adjusting to Moderating Home Price Appreciation - The company remains focused on margins rather than volume, targeting specific types of properties that are expected to perform well [69] Question: Capital Raising Strategy - Offerpad is focused on cost reductions and increasing acquisition volumes before considering capital markets opportunities for further growth [72]