Opendoor Q4 Loss Narrower Than Expected, Revenues Down Y/Y

Core Insights - Opendoor Technologies Inc. reported fourth-quarter 2025 results with adjusted earnings and revenues exceeding the Zacks Consensus Estimate, although the top line decreased year-over-year while the bottom line improved [1][4][9] Financial Performance - The company reported an adjusted loss per share of 7 cents, which was better than the consensus estimate of a loss of 8 cents, and an improvement from an adjusted loss of 11 cents in the same quarter last year [4] - Revenues for the quarter reached $736 million, surpassing the consensus mark of $596 million, despite a year-over-year decline of 32.1% [4] - Gross profit was $57 million, down from $85 million in the year-ago quarter, with a gross margin of 7.7%, a slight decrease from 7.8% [6] - Adjusted EBITDA loss narrowed to $43 million from a loss of $49 million reported in the previous year [6] - Cash and cash equivalents as of December 31, 2025, totaled $962 million, an increase from $671 million a year earlier [7] - Net cash from operations for 2025 was $1.05 billion, compared to $595 million used in operations the previous year [7] Operational Highlights - The company sold 1,978 homes in Q4 2025, down from 2,822 homes in the same quarter last year, while home purchases decreased to 1,706 homes from 2,951 homes [5] - Homes in inventory as of December 31, 2025, totaled 2,867 units, down from 6,417 units at the end of the previous year [5] - Newer acquisition cohorts are showing stronger contribution margins and faster sell-through compared to the previous year [3] Strategic Outlook - Opendoor is focused on executing its four-step plan aimed at achieving breakeven adjusted net income by the end of 2026, improving unit economics, increasing transaction velocity, and expanding product offerings [2] - For Q1 2026, the company expects revenues to decline by about 10% from the prior quarter but anticipates improving contribution margins [8] - An adjusted EBITDA loss is expected to be in the low to mid $30 million range for the upcoming quarter [10]