Opendoor Technologies Inc. (NASDAQ:OPEN) Q4 2024 Earnings Conference Call February 27, 2025 5:00 PM ET Company Participants Kimberly Niehaus - Investor Relations Carrie Wheeler - Chief Executive Officer Selim Freiha - Chief Financial Officer Conference Call Participants Dae Lee - JPMorgan Ygal Arounian - Citigroup Nicholas Jones - JMP Securities Jeff Steiner - Deutsche Bank Nick McAndrew - Zelman & Associates Operator Good day and thank you for standing by. Welcome to the Opendoor Technologies Fourth Quarte ...

Core Insights - Opendoor Technologies reported mixed Q4 2024 results, exceeding revenue expectations but maintaining a net loss [2][6][8] Financial Performance - Revenue surged to $1.1 billion, surpassing the $982 million estimate, reflecting a 25.9% year-over-year increase from $870 million [2][3] - The company posted a diluted EPS of -$0.16, matching analyst expectations, with a year-over-year decline of 14.3% from -$0.14 [3] - Contribution profit reached $38 million, significantly above the guided range of $15 million to $25 million [6][7] - Adjusted EBITDA improved to -$49 million from -$69 million, indicating better cost control [3][7] - The net loss for the quarter widened to $113 million due to challenging market conditions [2][8] Business Overview - Opendoor employs a digital-first approach to real estate transactions, operating in 50 markets across the US [4] - The company focuses on technology integration and cost efficiency to enhance customer experience and capture market share [5] Market Conditions - The housing market remains challenging with elevated mortgage rates and low inventory levels affecting buyer affordability and transaction volumes [8] - Inventory management is critical, with 46% of homes staying on the market for over 120 days, up from 18% a year ago [9] - Despite headwinds, inventory increased from $1.775 billion to $2.159 billion, indicating the company's ability to maintain market presence [9] Future Outlook - For Q1 2025, Opendoor anticipates revenue between $1.0 billion and $1.075 billion, with contribution profit expected to range from $40 million to $50 million [10]

4Q24 Letter to Shareholders Shareholder Letter 4Q24 Opendoor Shareholders, A letter from our CEO At Opendoor, we are on a mission to transform the U.S. residential real estate industry. In 2024, we took decisive steps to simplify our business and sharpen our strategic focus to drive the Company towards sustainable, profitable growth. While home acquisitions grew in the first half of the year, macro signals indicated potential destabilization late in the second quarter. In response, we proactively raised spr ...

Financial Position - As of December 31, 2024, Opendoor Technologies Inc. had total outstanding balances on asset-backed debt of $1.9 billion, with 91% at a fixed rate and 9% at a floating rate[440]. - Total current assets decreased to $2.997 billion in 2024 from $3.445 billion in 2023[460]. - Total liabilities decreased to $2.413 billion in 2024 from $2.600 billion in 2023[460]. - The accumulated deficit increased to $3.725 billion in 2024 from $3.333 billion in 2023[460]. - The company reported a total shareholders' equity of $713 million as of December 31, 2024, down from $967 million in 2023[460]. - The total assets related to Variable Interest Entities (VIEs) decreased from $2,283 million as of December 31, 2023, to $2,236 million as of December 31, 2024[542]. - The Company's total liabilities related to VIEs decreased from $2,163 million as of December 31, 2023, to $1,948 million as of December 31, 2024[542]. - The Company had total borrowing capacity of $6.9 billion with respect to non-recourse asset-backed debt as of December 31, 2024[549]. - The committed borrowing capacity for non-recourse asset-backed debt was $2.2 billion, including $400 million for senior revolving credit facilities and $1.4 billion for senior term debt facilities[549]. Revenue and Profitability - Revenue for the year ended December 31, 2024, was $5,153 million, a decrease of 26.0% from $6,946 million in 2023[462]. - Gross profit for 2024 was $433 million, down from $487 million in 2023, reflecting a gross margin of 8.4%[462]. - Net loss for 2024 was $392 million, compared to a net loss of $275 million in 2023, representing a 42.5% increase in losses[465]. - The company reported a comprehensive loss of $391 million for 2024, compared to a comprehensive loss of $272 million in 2023[465]. - The loss before income taxes for the year ended December 31, 2024, was $391 million, compared to $274 million in 2023 and $1,351 million in 2022[615]. - The Company reported a net loss of $392 million for the year ended December 31, 2024, compared to a net loss of $275 million in 2023 and $1.353 billion in 2022[629]. - Basic and diluted net loss per share for 2024 was $(0.56), compared to $(0.42) in 2023 and $(2.16) in 2022[629]. Cash Flow and Liquidity - Cash flows from operating activities showed a net cash used of $595 million in 2024, a significant decline from a net cash provided of $2,344 million in 2023[472]. - The company had cash, cash equivalents, and restricted cash of $763 million at the end of 2024, down from $1,540 million at the end of 2023[473]. - Cash and cash equivalents totaled $679 million as of December 31, 2024, down from $1,069 million in 2023[536]. - The Company’s cash position included $60 million in cash and $611 million in money market funds as of December 31, 2024[536]. - As of December 31, 2024, the Company reported $671 million in cash and cash equivalents, down from $999 million in 2023[579]. Expenses - Total operating expenses decreased to $753 million in 2024 from $873 million in 2023, a reduction of 13.7%[462]. - Stock-based compensation expense was $114 million in 2024, a decrease from $126 million in 2023[472]. - The Company recorded total interest expense of $3 million on convertible senior notes for the year ended December 31, 2024, down from $5 million in 2023[569]. - Operating lease costs for the year ended December 31, 2024, were $8 million, down from $11 million in both 2023 and 2022[582]. - The company recorded a total lease termination cost of $3 million recognized in restructuring for early lease terminations in December 2024[582]. Inventory and Valuation - The company's real estate inventory, net, increased to $2.159 billion as of December 31, 2024, up from $1.775 billion in 2023[460]. - Real estate inventory is carried at the lower of cost or net realizable value, with valuation adjustments reviewed at least quarterly[490]. - The company recorded inventory valuation adjustments of $57 million, $65 million, and $737 million for the years ended December 31, 2024, 2023, and 2022, respectively[535]. - The company was under contract to purchase 1,705 homes for an aggregate purchase price of $589 million as of December 31, 2024[534]. Tax and NOLs - Total deferred tax assets as of December 31, 2024, were $859 million, with a valuation allowance of $795 million, resulting in net deferred tax assets of $64 million[619]. - The effective tax rate for the year ended December 31, 2024, was (0.2)%, compared to (0.5)% in 2023 and (0.4)% in 2022[616]. - The Company had a net operating loss of $633 million as of December 31, 2024, an increase from $541 million in 2023[619]. - The Company has $2.5 billion of U.S. federal NOLs and $659 million of state NOLs with an unlimited carryover period as of December 31, 2024[620]. - As of December 31, 2024, the Company had U.S. federal net operating loss (NOL) carryforwards of $2.6 billion and state NOL carryforwards of $2.0 billion, both beginning to expire in 2034 if not utilized[620]. Market and Economic Conditions - The company is exposed to inflationary pressures affecting costs of goods and services, including labor and materials for home repairs[441]. - The Federal Reserve's rate increases since 2022 have impacted mortgage interest rates, affecting the company's business environment[442]. - A one percentage point increase in applicable benchmark rates is estimated to increase annual interest expense by approximately $2 million as of December 31, 2024[440]. Shareholder and Equity Information - Weighted-average shares outstanding increased to 699,457,000 in 2024 from 657,111,000 in 2023, indicating a dilution effect on earnings per share[462]. - The Company has not paid any cash dividends on common stock to date and has no current plans to do so in the foreseeable future[590]. - The Company recognized stock-based compensation expense related to the Employee Stock Purchase Plan (ESPP) of $3 million in 2024, up from $2 million in both 2023 and 2022[603]. Other Notable Items - The Company recognized a $14 million gain in Other income (loss) – net due to the deconsolidation of Mainstay Labs Inc. on July 31, 2024[633]. - As of December 31, 2024, the retained interest in Mainstay was valued at $39 million, classified as a non-marketable equity security investment[633]. - The Company performed an ownership analysis and identified three previous ownership changes, but none resulted in material limitations on NOL carryforwards[621].

Exhibit 99.1 Opendoor Announces Fourth Quarter and Full Year 2024 Financial Results SAN FRANCISCO, California - February 27, 2025 - Opendoor Technologies Inc. (Nasdaq: OPEN), a leading e-commerce platform for residential real estate transactions, today reported financial results for its fourth quarter and year ended December 31, 2024. Opendoor's fourth quarter and year-end 2024 financial results and management commentary can be accessed through the Company's shareholder letter on the "Quarterly Reports" pag ...

Core Insights - Opendoor Technologies Inc. reported its financial results for Q4 and the full year of 2024, highlighting a focus on streamlining operations and optimizing cost structures to achieve long-term profitability despite ongoing housing market challenges [2][3]. Financial Performance - For the full year 2024, Opendoor generated revenue of $5.2 billion, a decrease of 26% compared to 2023, with 13,593 homes sold, down 27% year-over-year [8]. - The company reported a net loss of $392 million for the year, compared to a net loss of $275 million in 2023 [8]. - In Q4 2024, revenue was $1.1 billion, representing a 25% increase from Q4 2023 but a 21% decrease from Q3 2024 [8]. - The gross profit for the year was $433 million, down from $487 million in 2023, with a gross margin of 8.4% compared to 7.0% in the previous year [8]. Operational Metrics - Opendoor purchased 14,684 homes in 2024, an increase from 11,246 homes in 2023 [8]. - The company ended Q4 2024 with an inventory balance of $2.2 billion, representing 6,417 homes, which is a 22% increase compared to Q4 2023 [8]. - The contribution profit for Q4 2024 was $38 million, up from $30 million in Q4 2023, with a contribution margin of 3.5% [7][8]. Future Outlook - The company aims to enter 2025 as a more efficient business, focusing on sustained profitability and further monetizing its seller funnel [3]. - For Q1 2025, Opendoor provided revenue guidance of $1.0 billion to $1.075 billion and contribution profit guidance of $40 million to $50 million [13].

Core Viewpoint - Opendoor Technologies Inc. is set to report its fourth-quarter 2024 results on February 27, with expectations of revenue growth and a potential loss narrower than the previous year [1][5]. Group 1: Earnings Expectations - The Zacks Consensus Estimate for Opendoor's revenues in Q4 2024 is $965 million, reflecting a year-over-year increase of 10.9% [3]. - The consensus mark for the company's loss this quarter is 14 cents per share, compared to a loss of 15 cents per share in the same quarter last year [5]. Group 2: Operational Insights - The company is expected to see an improvement in its contribution margin due to higher resale clearance and a slight reduction in concessions and buyer broker commissions [4]. - Adjusted operating expenses are anticipated to decrease due to lower advertising spend and reductions in both fixed and variable expenses [4]. Group 3: Earnings Prediction Model - The current model does not predict a definitive earnings beat for Opendoor, with an Earnings ESP of 0.00% and a Zacks Rank of 3 [6][7].

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Opendoor Technologies Inc. due to higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Company Summary - The upcoming earnings report for Opendoor Technologies is expected to show a quarterly loss of $0.14 per share, reflecting a year-over-year change of +6.7%. Revenues are projected to be $964.95 million, up 10.9% from the previous year [3]. - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4]. - The Most Accurate Estimate for Opendoor is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +11.11%, suggesting a bullish outlook from analysts [10]. - Opendoor currently holds a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [11]. - Historically, Opendoor has beaten consensus EPS estimates in the last four quarters, with a notable surprise of +28.57% in the last reported quarter [12][13]. Industry Summary - In the Zacks Technology Services industry, Ivanhoe Electric is expected to report a loss of $0.24 per share, with a year-over-year change of +36.8%. Revenue is anticipated to be $0.75 million, down 55.1% from the previous year [17]. - Ivanhoe Electric's consensus EPS estimate has remained unchanged over the last 30 days, but it has an Earnings ESP of 4.17%, combined with a Zacks Rank of 2, indicating a likelihood of beating the consensus EPS estimate [18].

Core Concept - NETFLIX BITES Vegas is a new immersive dining experience that combines food and drinks inspired by popular Netflix shows, located at MGM Grand in Las Vegas [1][3][5] Group 1: Event and Experience - The opening event featured special guests from various Netflix shows, allowing attendees to sample dishes and drinks inspired by these series [1] - The experience aims to merge on-screen moments with real-life entertainment, offering a unique way for fans to engage with their favorite shows [3][5] Group 2: Menu Highlights - The menu includes a variety of dishes and drinks inspired by popular Netflix titles, such as Bridgerton, Squid Game, and Stranger Things, catering to diverse tastes [3][4] - Signature items include Bridgerton Regency Tea, Eleven's Feast, and a sushi ship inspired by ONE PIECE, showcasing creative twists on classic favorites [4] Group 3: Operational Details - NETFLIX BITES Vegas is open daily for breakfast, lunch, and dinner, with specific hours for each meal [5] - Reservations are available starting February 20, with walk-ins currently welcome [5] Group 4: Partnership and Promotions - Mastercard is the preferred payments partner, offering cardholders exclusive access to priority seating and special experiences [6] - Special cocktails reflecting the themes of Netflix shows and Mastercard's brand are also available [6] Group 5: Expansion and Success - This location builds on the success of NETFLIX BITES in Los Angeles, which was highly sought after, indicating strong demand for immersive dining experiences [7] - Netflix has engaged 7.5 million fans globally through various immersive experiences, achieving an average guest rating of 4.7 out of 5 [7]

Company Overview - Opendoor Technologies is a real estate technology company that provides digital services including an online marketplace, buying, and data analysis, but has struggled to prove its business model due to challenging market conditions [2][3] Market Conditions - The real estate market remains difficult, primarily due to high interest rates, which have hindered Opendoor's ability to demonstrate strong progress [1][2] - The median 30-year mortgage rate saw a slight decrease of 0.1 percentage points in December, and homes sold increased by 11.8% year over year, indicating potential for market improvement [6] Financial Performance - In the most recent quarter, Opendoor reported a 41% year-over-year revenue increase to $1.4 billion, selling 3,615 homes, which is a 35% increase year over year [4] - The company ended the quarter with an inventory of 6,288 homes valued at $2.1 billion, a 64% increase from the previous year, although these figures are still below 2022 levels [4] - Adjusted EBITDA and net loss were both negative but showed improvement compared to the prior year [5] Stock Performance - Opendoor's stock fell by 14% in January, reflecting a loss of market confidence, with the stock currently trading slightly above $1 [1][7] - The trailing-12-month price-to-sale ratio is notably low at 0.2, suggesting that the stock may be undervalued, but it carries significant risk for investors [7]