Offerpad Solutions (US:OPAD)2025-11-03 22:09Financial Performance - Revenue for Q3 2025 was $132.681 million, a decrease of 36.2% compared to $208.067 million in Q3 2024[20] - Gross profit for Q3 2025 was $9.336 million, down 45.6% from $17.140 million in Q3 2024[20] - Net loss for Q3 2025 was $11.604 million, compared to a net loss of $13.537 million in Q3 2024, representing a 6.9% improvement[20] - Operating expenses for Q3 2025 totaled $16.078 million, a decrease of 38.3% compared to $26.065 million in Q3 2024[20] - The company reported a loss from operations of $6.742 million in Q3 2025, an improvement from a loss of $8.925 million in Q3 2024[20] - The net loss for the nine months ended September 30, 2025, was $37.564 million, compared to a net loss of $44.834 million for the same period in 2024, representing a 16.4% improvement[29] - Total revenue for Q3 2025 was $132.681 million, a decrease of 36.3% compared to $208.067 million in Q3 2024[158] - Gross profit for Q3 2025 was $9.336 million, down 45.6% from $17.140 million in Q3 2024[158] - Total operating expenses in Q3 2025 were $16.078 million, a decrease of 38.3% compared to $26.065 million in Q3 2024[158] - Loss from operations for Q3 2025 was $6.742 million, compared to a loss of $8.925 million in Q3 2024[158] - Loss before income taxes for Q3 2025 was $11.224 million, a slight improvement from a loss of $13.513 million in Q3 2024[158] - Cash Offer revenue for Q3 2025 was $122.783 million, down 39.5% from $202.840 million in Q3 2024[158] - Total cost of revenue for Q3 2025 was $123.345 million, a decrease of 35.4% from $190.927 million in Q3 2024[158] - Other income for Q3 2025 was $151 thousand, compared to $512 thousand in Q3 2024[158] Assets and Liabilities - Total current assets decreased to $205.606 million as of September 30, 2025, down 30.0% from $294.212 million as of December 31, 2024[15] - Total liabilities decreased to $183.609 million as of September 30, 2025, down 30.8% from $265.400 million as of December 31, 2024[15] - Cash and cash equivalents were $30.959 million as of September 30, 2025, a decrease of 28.3% from $43.018 million as of December 31, 2024[15] - Homes listed for sale as of September 30, 2025, amounted to $100.441 million, compared to $135.937 million as of December 31, 2024, showing a decline of 26.0%[51] - The total real estate inventory as of September 30, 2025, was $162.367 million, down from $214.174 million as of December 31, 2024, indicating a reduction of 24.2%[51] - Total cash, cash equivalents, and restricted cash at the end of the period on September 30, 2025, was $33.644 million, down from $58.426 million at the end of September 30, 2024, reflecting a decrease of 42.4%[29] - As of September 30, 2025, the company had total assets of $165.3 million and total liabilities of $143.6 million[125] Stock and Equity - The weighted average common shares outstanding increased to 31.281 million in Q3 2025 from 27.439 million in Q3 2024[20] - The company issued common stock from the July 2025 Offering, netting $3.757 million, contributing to the increase in stockholders' equity[26] - The Company has authorized capital stock of 2.1 billion shares, including 2 billion shares of Class A common stock[96] - During the three months ended September 30, 2025, the company sold 4,295,542 shares of Class A common stock for gross proceeds of $21.7 million, with remaining availability under the Sale Agreement of $78.3 million[104] - As of September 30, 2025, the company had 34,928,124 shares of Class A common stock outstanding[106] - The company issued 2,857,143 shares of Class A common stock and warrants in July 2025 for gross proceeds of $6 million, with the shares priced at $2.10 each[99] - The 2025 Warrants have an exercise price of $2.30 per share and will expire on January 26, 2030[100] Debt and Financing - Borrowings from secured credit facilities and other debt for the nine months ended September 30, 2025, totaled $360.641 million, compared to $628.105 million in 2024, indicating a decrease of 42.6%[29] - The carrying value of the Company's total credit facilities and other debt decreased to $156,801,000 as of September 30, 2025, from $237,239,000 as of December 31, 2024, representing a reduction of 33.9%[64] - The Company has five senior secured credit facilities, with a total committed borrowing capacity of $50,539,000 and uncommitted capacity of $599,461,000 as of September 30, 2025[69] - A new 18-month loan agreement was entered into in October 2025, providing for a $15.0 million senior secured credit facility[71] - As of September 30, 2025, the Company had a total borrowing capacity of $142 million under mezzanine secured credit facilities, with an outstanding amount of $11.8 million[74] - The weighted average interest rate for the Company's mezzanine secured credit facilities was 13.00% for related party facilities and 11.58% for mezzanine financial institution facilities[74] - The Company entered into a $15 million revolving credit facility in July 2025, with outstanding borrowings of $14.6 million as of September 30, 2025, accruing interest at 8.50% per annum[82] - Interest paid for borrowings under related party credit facilities was $1.0 million for the three months ended September 30, 2025, and $3.8 million for the nine months ended September 30, 2025[138] Operational Highlights - The company operates in over 1,900 cities and towns across 27 metropolitan markets in 18 states as of September 30, 2025, highlighting its extensive market presence[33] - The company launched HomePro, a new asset-light platform, in the second quarter of 2025, included in the Other segment reporting[154] - The Company incurred advertising expenses of $1.6 million during the three months ended September 30, 2025, compared to $2.2 million in the same period of 2024, indicating a decrease of 27.3%[60] - Compensation for immediate family members of Brian Bair totaled $224,000 for the three months ended September 30, 2025, compared to $263,000 in the same period of 2024[140] Tax and Compliance - The company recorded an effective tax rate expense of 3.4% for the three months ended September 30, 2025, compared to 0.2% for the same period in 2024[130] - The company has a full valuation allowance against its net deferred tax assets, which will be evaluated for realizability in future periods[131] - The Company was in compliance with all covenants for its credit facilities as of September 30, 2025, with no events of default occurring[80] - The company obtained temporary waivers of certain covenants under related party credit facilities during the nine months ended September 30, 2025[137] Market Risk and Events - The company reported no material changes to its exposure to market risk since December 31, 2024[287] - There were no subsequent events requiring recognition in the financial statements as of the reporting date[160]