Offerpad Solutions (OPAD) - 2024 Q3 - Quarterly Report

Financial Performance - Revenue for Q3 2024 was $208.1 million, a decrease of 11.2$234.2 million in Q3 2023[7] - Gross profit for Q3 2024 was $17.1 million, down 28.5$24.0 million in Q3 2023[7] - Net loss for Q3 2024 was $13.5 million, compared to a net loss of$20.0 million in Q3 2023, representing a 32.8% improvement[7] - Operating expenses for Q3 2024 were $26.1 million, down 40.1$43.5 million in Q3 2023[7] - Net loss for the third quarter of 2024 was $44.834 million, a decrease from a net loss of$101.777 million in the same period of 2023[11] - Revenue decreased by $26.2 million, or 11.2$208.1 million for the three months ended September 30, 2024, compared to $234.2 million for the same period in 2023[94] - Net loss for the three months ended September 30, 2024, was$13.5 million, a decrease of 32.3% from a net loss of $20.0 million in the same period in 2023[94] - Revenue for the nine months ended September 30, 2024, was$744.5 million, a decrease of 30.7% from $1,073.9 million in the same period in 2023[102] - The company recorded a net loss of$44.8 million for the nine months ended September 30, 2024, a decrease of 55.9% from a net loss of $101.8 million in the same period in 2023[102] Assets and Liabilities - Total current assets decreased to$323.0 million as of September 30, 2024, from $371.6 million at the end of 2023, a decline of 13.1$273.8 million as of September 30, 2024, from $277.9 million at the end of 2023, a reduction of 1.5$442.7 million as of September 30, 2024, compared to $397.9 million at the end of 2023[6] - Cash and cash equivalents decreased to$48.5 million as of September 30, 2024, from $76.0 million at the end of 2023, a decline of 36.0$64.713 million, a decrease from $115.217 million at the end of September 2023[11] - As of September 30, 2024, total assets related to variable interest entities (VIEs) were$268.7 million, down from $288.7 million as of December 31, 2023[56] - The company reported total liabilities of$253.6 million related to VIEs as of September 30, 2024, compared to $261.0 million at the end of 2023[56] Inventory and Sales - Real estate inventory was valued at$256.5 million as of September 30, 2024, down from $276.5 million at the end of 2023, a decrease of 7.2$27,900 compared to $34,100 in the prior year[91] - The total number of homes sold in the nine months ended September 30, 2024, was 2,204, compared to 2,962 in the same period of 2023[91] - The average resale home price decreased from$360,000 in the nine months ended September 30, 2023, to $334,000 in the same period in 2024[103] - The average real estate inventory holding period of homes sold has remained consistent at around 110 days during 2024[85] - Homes listed for sale increased to 169,433 as of September 30, 2024, compared to 148,648 on December 31, 2023[20] Expenses and Costs - Cash payments for interest for the nine months ended September 30, 2024, were$19.204 million, down from $23.406 million in the same period of 2023[11] - Sales, marketing, and operating expenses decreased by$39.1 million, or 39.6%, to $59.5 million for the nine months ended September 30, 2024, primarily due to a decrease in advertising expenses[106] - General and administrative expenses decreased by$10.6 million, or 25.6%, to $30.7 million for the nine months ended September 30, 2024, due to reduced fees and lower employee headcount[107] - Interest expense increased by$0.7 million, or 16.1%, to $5.1 million for the three months ended September 30, 2024, compared to$4.4 million in 2023[99] - Interest expense increased by $0.9 million, or 6.5$14.6 million for the nine months ended September 30, 2024, primarily due to a rise in weighted average variable interest rates[109] Financing and Credit Facilities - The company had a total borrowing capacity of $1,007.0 million under its senior secured and mezzanine secured credit facilities, with$482.2 million committed as of September 30, 2024[28] - The Company had four mezzanine secured credit facilities with a total outstanding amount of $41.328 million as of September 30, 2024, with a weighted average interest rate of 13.82$90.0 million from the sale of pre-funded warrants in January 2023, resulting in the issuance of 10.7 million shares upon exercise[43] - No cash dividends have been paid on common stock to date, and there are no current plans to pay cash dividends for the foreseeable future[45] - The company granted 916,000 Restricted Stock Units (RSUs) during the nine months ended September 30, 2024, with 901,000 RSUs outstanding as of that date[49] Legal and Compliance - A class action lawsuit was filed against the company on August 26, 2024, alleging breach of fiduciary duties related to a merger, with proceedings temporarily stayed as of September 19, 2024[69] - The company has a senior secured credit facility with a related party, with an outstanding amount of $13,330 thousand as of September 30, 2024, compared to$6,289 thousand as of December 31, 2023[61] Market and Operational Insights - The company operates in over 1,800 cities and towns across 26 metropolitan markets in 17 states as of September 30, 2024[12] - The company captured roughly 0.5% market share of real estate transactions across its 25 active markets as of December 31, 2023[75] - The average thirty-year fixed mortgage rate peaked in the mid-7% range in April 2024 before decreasing to close to 6% at the end of September 2024[72] - The company has recently reduced its home acquisition pace to optimize real estate inventory levels[72]