Financial Data and Key Metrics Changes - The company reported a revenue of $736 million in Q4, representing a 20% quarter-over-quarter decline, which was better than the anticipated 35% decline [29] - GAAP gross profit was $57 million in Q4, compared to $66 million in Q3, with a GAAP gross margin of 7.7%, up 50 basis points sequentially [30] - Adjusted EBITDA loss was $43 million, compared to $33 million in Q3, exceeding the favorable end of the guidance range [31] - The net loss for Q4 was $1.1 billion, including a $933 million non-cash loss from convertible note refinancing [31] Business Line Data and Key Metrics Changes - The company increased home acquisitions by 46% quarter-over-quarter, purchasing 1,706 homes in Q4 [29][33] - The October 2025 acquisition contract cohort achieved over 50% sold through or in resale contract, marking a 2x improvement in resale velocity compared to October 2024 [28][29] - The percentage of homes on the market for over 120 days decreased from 51% at the end of Q3 to 33% at the end of Q4, reflecting operational improvements [34] Market Data and Key Metrics Changes - The company reported that the October acquisition cohort is on track to be the most profitable October cohort in company history, with the lowest margin degradation relative to home price appreciation [8][9] - The company expanded its geographic coverage significantly, making its product available to nearly every homeowner in the lower 48 states [20] Company Strategy and Development Direction - The company aims to achieve adjusted net income profitability by the end of 2026, focusing on driving positive unit economics and increasing transaction velocity [2][28] - The strategy includes a shift from primarily building channels to transacting directly with buyers and sellers, reducing capital risk [3][5] - The company is committed to transparency and accountability, with a focus on operational improvements and product enhancements [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory, stating that the structural changes made under Opendoor 2.0 are working and will lead to profitability [10][41] - The CEO emphasized the importance of investing in product development before scaling growth, indicating a long-term focus on building a robust product [46][48] - Management acknowledged that while the current housing market is not the strongest, the company's performance indicates a durable shift in operations [9] Other Important Information - The company has made significant advancements in AI integration, improving operational efficiency and reducing manual tasks [13][50] - The leadership team has undergone substantial changes, with new executives in key positions, enhancing the company's capabilities [12] Q&A Session Summary Question: Where is Opendoor at currently compared to expectations and profitability? - Management stated that the company is on track and performing well against its four-step plan, with improvements in contribution margins [41] Question: What are the primary macro or pricing drivers preventing a faster ramp in acquisition contract volumes? - Management indicated that while they could hit the top end of acquisition goals, they are prioritizing product investment over immediate growth [44][46] Question: How does Opendoor plan to become the default option for home sellers? - Management emphasized the importance of building trust through a reliable product and removing friction in the selling process [59][61] Question: How should investors assess progress given the stock's decline? - Management advised focusing on the underlying business improvements rather than the stock price, asserting that the business is structurally improving [62][64] Question: What happens to margins and inventory risk if home prices drop another 5%-10%? - Management explained that Opendoor 2.0 is designed to move homes quickly, reducing holding risks, and that they have a broader toolkit for managing pricing and selection [66]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $736 million, representing a 20% quarter-over-quarter decline, which was better than the guidance of a 35% decline [29] - GAAP gross profit was $57 million in Q4, down from $66 million in Q3, with a GAAP gross margin of 7.7%, up 50 basis points sequentially [30] - Adjusted EBITDA loss was $43 million, compared to $33 million in Q3, exceeding the favorable end of the guidance range [31] - Net loss for Q4 was $1.1 billion, including a $933 million non-cash loss from convertible note refinancing [31] - The company ended the quarter with $962 million in unrestricted cash and $133 million of equity invested in homes [31] Business Line Data and Key Metrics Changes - Acquisitions increased by 46% quarter-over-quarter, with 1,706 homes purchased in Q4 [29][33] - The October 2025 acquisition contract cohort achieved over 50% sold through or in resale contract, marking a 2x improvement in resale velocity compared to October 2024 [28][29] - The percentage of homes on the market for over 120 days decreased from 51% at the end of Q3 to 33% at the end of Q4, reflecting operational improvements [34] Market Data and Key Metrics Changes - The company has expanded its market coverage significantly, now available to nearly every homeowner in the lower 48 states [20] - The operational changes have led to a structural shift in how the company operates, moving from a prop desk to a market maker [9] Company Strategy and Development Direction - The company aims to achieve adjusted net income profitability by the end of 2026 on a 12-month go-forward basis, focusing on generating cash and avoiding the need to raise equity [2][41] - The strategy includes improving unit economics, increasing acquisition velocity, and allowing buyers and sellers to transact directly with each other [3][5] - The company is committed to transparency and accountability, with a focus on delivering results against its laid-out plan [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational changes made under Opendoor 2.0, stating that the October cohort is on track to be the most profitable in company history [8][9] - The company is positioned to navigate potential market declines, emphasizing a focus on moving homes quickly rather than holding them [66] - Management highlighted the importance of building a product that earns customer trust, which is essential for becoming the default option for home sellers [59] Other Important Information - The company has made significant advancements in AI integration, improving operational efficiency and reducing costs [13][51] - The leadership team has undergone substantial changes, with new executives in key positions, enhancing the company's capabilities [12] Q&A Session Summary Question: Where is Opendoor at currently compared to expectations and profitability? - Management stated they are on track with their four-step plan and expect to exit Q1 with the highest contribution margin since Q2 2024 [41] Question: What are the primary macro or pricing drivers preventing a faster ramp? - Management indicated that they are focused on investing in product development rather than immediate growth, which may affect acquisition volumes [44][45] Question: How does Opendoor plan to become the default option for home sellers? - Management emphasized the need to build trust through a reliable and efficient product, aiming to delight customers and remove friction from the selling process [59][60] Question: How should investors assess progress given the stock's decline? - Management advised focusing on the underlying business improvements rather than the stock price, asserting that building a valuable product will ultimately reflect in the stock price [62][63]

Core Insights - The company is experiencing significant growth in both loans and deposits, with expansion efforts contributing positively to earnings expected in 2026 [1][2][29] - The average consumer deposits represent 46% of the total deposit base, with a year-over-year growth of 3.7% [1][3] - The company has opened its 200th location, indicating a strong commitment to expansion in key markets [3][11] Expansion and Growth - Since late 2018, the company has increased its financial centers by over 50%, generating $2.76 billion in deposits and $2.003 billion in loans [2][11] - The expansion has led to a year-over-year increase of $521 million in loans and $544 million in deposits, representing growth rates of 35.25% [2] - New commercial relationships from expansion regions accounted for 24% of all new commercial relationships [11] Financial Performance - In Q2 2025, the company reported earnings of $155.3 million, or $2.39 per share, compared to $143.8 million, or $2.21 per share, in the same quarter last year [4] - Average deposits in Q2 were $41.8 billion, a 3.1% increase from the previous year, while average loans grew to $21.1 billion, a 7.2% increase [3][4] - The net interest margin improved to 3.67%, up seven basis points from the previous quarter, driven by a shift to higher-yielding loans and securities [12][14] Loan and Deposit Trends - The consumer real estate loan portfolio grew by $600 million year-over-year, achieving a growth rate of 22% [5] - Average loan balances in the commercial sector increased by $817 million, or 4.9% year-over-year [6] - The company added nearly $2 billion in new loan commitments in Q2, a 56% increase from Q1 [7] Credit Quality and Risk Management - Overall credit quality remains strong, with nonperforming assets declining to $64 million from $85 million at year-end [8] - Net charge-offs for Q2 were $11.2 million, compared to $9.7 million in the previous quarter [8][9] - Total problem loans increased to $989 million, primarily related to multifamily loans, with expectations for resolutions in 2025 [9] Future Outlook - The company expects net interest income growth for the full year to be in the range of 6% to 7%, with an anticipated improvement in net interest margin of about 12 to 15 basis points [18] - Full-year average loan growth is projected to be in the mid to high single digits, while average deposits are expected to increase by 2% to 3% [19] - The effective tax rate for the full year remains unchanged at 16% to 17% [20]

Financial Data and Key Metrics Changes - In Q2 2025, Cullen/Frost earned $155.3 million or $2.39 per share, compared to $143.8 million or $2.21 per share in the same quarter last year, representing a year-over-year increase of 8.5% in earnings per share [5] - Return on average assets was 1.22% and return on average common equity was 15.64%, compared to 1.18% and 17.08% in the same quarter last year [5] - Average deposits increased to $41.8 billion, up 3.1% from $40.5 billion in Q2 2024, while average loans grew to $21.1 billion, a 7.2% increase from $19.7 billion [6] Business Line Data and Key Metrics Changes - Consumer deposits grew by 3.7% year-over-year, with checking household growth at an industry-leading rate of 5.4% [9][10] - The commercial business saw average loan balances increase by $817 million or 4.9% year-over-year, with commercial real estate (CRE) balances growing by 6.8% and energy balances increasing by 22% [11] - The consumer real estate loan portfolio grew by $600 million year-over-year, representing a 22% growth rate [10] Market Data and Key Metrics Changes - Expansion efforts contributed to 37% of total loan growth and 44% of total deposit growth year-over-year [15] - The expansion now represents 9.6% of company loans and 6.6% of company deposits [9] - New commercial relationships increased by 9% over the first quarter, with 1,060 new relationships recorded in Q2 [12] Company Strategy and Development Direction - The company continues to focus on organic growth through expansion in Texas, having opened its 200th location [6][7] - Management emphasizes a durable and scalable growth strategy, with plans to continue identifying new locations for expansion [9] - The company is not currently interested in pursuing M&A opportunities, preferring to focus on organic growth and customer service [86][87] Management's Comments on Operating Environment and Future Outlook - Management expects net interest income growth for the full year to fall in the range of 6%-7%, with net interest margin improvement of about 12-15 basis points [22][23] - The company anticipates that the rate of growth in expenses will decrease over time as investments in technology and expansion begin to pay off [43] - Management is optimistic about the economic outlook and expects to see benefits from expansion efforts in 2026 [41][45] Other Important Information - The net unrealized loss on the available-for-sale portfolio at the end of the quarter was $1.42 billion, slightly up from $1.4 billion in the previous quarter [18] - Non-interest income is expected to grow in the range of 3.5%-4.5%, an increase from prior guidance [23] Q&A Session Summary Question: What are the current trends in loan pricing and competition? - Management noted that competition has increased, particularly in commercial real estate, leading to price compression [30][31] Question: How is the company approaching capital growth and utilization? - The focus remains on building capital, with a priority on protecting dividends, and no immediate plans for stock repurchase [32][34] Question: When can shareholders expect to see benefits from recent investments? - Management expects accretion from expansion efforts to begin in 2026, with a gradual increase over time [41][45] Question: What is the outlook for deposit growth? - Management is optimistic about deposit growth in the second half of the year, with expectations for non-interest-bearing deposits to stabilize [49][50] Question: How does the company view M&A opportunities? - The company is not interested in pursuing M&A, focusing instead on organic growth strategies [86][87]

Financial Data and Key Metrics Changes - In Q2 2025, Cullen Frost earned $155.3 million or $2.39 per share, compared to $143.8 million or $2.21 per share in Q2 2024, representing a year-over-year increase of 8.8% in earnings per share [4] - Return on average assets was 1.22% and return on average common equity was 15.64%, compared to 1.18% and 17.08% in the same quarter last year [4] - Average deposits increased by 3.1% to $41.8 billion from $40.5 billion year-over-year, while average loans grew by 7.2% to $21.1 billion from $19.7 billion [5] Business Line Data and Key Metrics Changes - Consumer deposits grew by 3.7% year-over-year, with checking household growth at an industry-leading rate of 5.4% [7][8] - The consumer real estate loan portfolio increased by $600 million year-over-year, achieving a growth rate of 22% [8] - Average loan balances in the commercial business grew by 4.9% year-over-year, with notable increases in commercial real estate (CRE) balances by 6.8% and energy balances by 22% [9] Market Data and Key Metrics Changes - Expansion efforts contributed to 37% of total loan growth and 44% of total deposit growth year-over-year [13] - The expansion now represents 9.6% of company loans and 6.6% of company deposits [7] - The company recorded 1,060 new commercial relationships in Q2, marking a 9% increase over Q1 [10] Company Strategy and Development Direction - The company continues to focus on organic growth through expansion in Texas, having opened its 200th location [5][6] - Management emphasizes a durable and scalable strategy, with plans to continue identifying new locations to enhance customer value [6] - The company is not currently interested in pursuing M&A, preferring to focus on organic growth and customer service [80][82] Management's Comments on Operating Environment and Future Outlook - Management expects net interest income growth for the full year to be in the range of 6%-7%, despite anticipated Fed rate cuts [19] - The company anticipates that the rate of growth in expenses will decrease over time as investments in technology and expansion begin to pay off [41] - Management is optimistic about the economic outlook and believes that the legacy part of the business will benefit from an improving economy [43] Other Important Information - Non-performing assets decreased to $64 million from $85 million at year-end, indicating improved credit quality [11] - The net unrealized loss on the available-for-sale portfolio was $1.42 billion, slightly up from $1.4 billion in the previous quarter [15] - The company expects to maintain a stable effective tax rate of 16%-17% for the full year 2025 [20] Q&A Session Summary Question: What are the current trends in loan pricing and competition? - Management noted increased competition in commercial real estate, leading to price compression, but emphasized the importance of maintaining a strong balance sheet and protecting the portfolio [28][29] Question: How is the company approaching capital growth and utilization? - The focus remains on building capital, with a priority on protecting dividends. There are no immediate plans for stock repurchase [30][32] Question: When can shareholders expect to see benefits from recent investments? - Management expects accretion from expansion efforts to begin in 2026, with a gradual increase over time rather than a one-time boost [40] Question: What is the outlook for deposit growth and competition? - Management is optimistic about deposit growth returning to seasonal trends, with expectations for commercial customers to build up their DDA balances in the latter half of the year [47][48] Question: How does the company view M&A activity in the current market? - The company is not interested in pursuing M&A, preferring to focus on organic growth strategies that have proven effective [80][82]