Opendoor(OPEN) - 2024 Q1 - Quarterly Report

Revenue and Sales Performance - Revenue for Q1 2024 was $1,181 million, a decrease of 62$3,120 million in Q1 2023[126] - The company sold 3,078 homes in Q1 2024, a 63% decrease from 8,274 homes sold in Q1 2023[180] - Homes sold in Q1 2024 totaled 3,078, a decline of 63% from 8,274 homes sold in Q1 2023[126] - Homes purchased increased to 3,458 in Q1 2024, up from 1,747 in Q1 2023, marking a growth of 98%[126] Profitability and Margins - Gross profit for Q1 2024 was $114 million, down from$170 million in Q1 2023, resulting in a gross margin of 9.7% compared to 5.4% in the previous year[126] - Contribution profit for Q1 2024 was $57 million, a significant improvement from a loss of$241 million in Q1 2023[126] - Adjusted EBITDA for Q1 2024 was a loss of $50 million, compared to a loss of$341 million in Q1 2023, reflecting an 85% improvement[126] - Adjusted Net Loss for Q1 2024 was $80 million, significantly improved from a loss of$409 million in Q1 2023[161] Operating Expenses and Cost Management - Total operating expenses decreased by 32% to $201 million in Q1 2024 from$294 million in Q1 2023[178] - Sales, marketing, and operations expenses decreased by $75 million, or 40$19 million, or 29%, for the three months ended March 31, 2024, compared to the same period in 2023[186] - Interest expense decreased by 50% to $37 million in Q1 2024 from$74 million in Q1 2023[178] Inventory and Market Operations - The number of markets operated in remained at 50 as of March 31, 2024, down from 53 at the end of 2023[126] - The company entered 2024 with 5,326 homes in inventory, a 58% decrease from 12,788 homes at the start of 2023[182] - The percentage of homes "on the market" for more than 120 days decreased to 15% in Q1 2024 from 59% in Q1 2023[126] Financial Position and Debt - Cash and cash equivalents as of March 31, 2024, totaled $953 million, with a decline of$78 million compared to December 31, 2023[193] - Total outstanding balances on asset-backed debt were $2.1 billion as of March 31, 2024[194] - The company had undrawn borrowing capacity of$6.0 billion under non-recourse asset-backed debt facilities as of March 31, 2024[194] - The company reported a net cash used in operating activities of $(178) million for the three months ended March 31, 2024, compared to$2.2 billion for the same period in 2023[221] Future Outlook and Strategic Initiatives - The company expects transaction volumes to gradually increase as mortgage rates decline and demographic factors contribute to home turnover[131] - Opendoor is expanding its partnerships with major online real estate platforms, including Zillow and eXp Realty, to enhance brand awareness and customer acquisition[133] - The company plans to evaluate opportunities to expand financing sources to diversify its capital structure[174] Economic and Market Conditions - Ongoing inflationary pressures have impacted the cost of goods and services, including labor and materials for home repairs[233] - The company is attempting to offset inflation impacts through pricing and operational models, but significant inflationary pressure could harm its financial condition[233] - The Federal Reserve has implemented several increases to the federal funds rate since 2022, affecting mortgage interest rates and the company's business[234]