Offerpad Announces Third-Quarter Record Revenue and Gross Profit; Company Raises Full-Year 2021 Outlook
Offerpad Solutions Inc. (NYSE: OPAD) reported remarkable financial growth for Q3 2021, with revenue increasing by 190% to $540.3 million and gross profit rising 169% to $53.1 million. The company sold a record 1,673 homes, up 123% year-over-year, and achieved a customer satisfaction rating of 94%. Offerpad expanded into four new markets and introduced a customer rewards program. Despite reporting a net loss of $15.3 million, Offerpad raised its full-year outlook for homes sold and revenue, signaling strong momentum going into 2022.
- Revenue growth of 190% to $540.3 million.
- Gross profit increased by 169% to $53.1 million.
- Sold a record 1,673 homes, up 123% year-over-year.
- Customer satisfaction rating of 94%.
- Expansion into four new markets.
- Launched customer rewards program enhancing customer engagement.
- Adjusted EBITDA at $6.1 million, compared to negative $0.8 million in Q3 2020.
- Raised full-year outlook for homes sold to 5,800 - 6,000.
- Net loss increased to $15.3 million, up from $2.9 million.
Expands to four new markets; grows home sales
Third Quarter 2021 Highlights – compared with the prior-year third quarter:
-
Revenue increased
190% to$540.3 million -
Gross profit increased
169% to$53.1 million - Sold a record 1,673 homes, up from 749 homes
-
Over
99% of inventory owned less than 180 days
Offerpad is increasing its penetration in existing markets, expanding into new markets and adding new services to its full-service Solutions Center mix, providing more customers with individualized solutions. We also added to our mix of ancillary services in certain markets to include a customer rewards program. (Graphic: Business Wire)
“We are proud that our first quarter as a public company has highlighted key outcomes of our strategy: high customer satisfaction, operational efficiency and strong revenue growth, all supporting our path to sustained long-term profitability,” said
Offerpad is increasing its penetration in existing markets, expanding into new markets and adding new services to its full-service Solutions Center mix, providing more customers with individualized solutions. We also added to our mix of ancillary services in certain markets to include a customer rewards program. Offerpad Bundle Rewards allows customers to receive multiple discounts when both buying and selling a home with Offerpad and by obtaining a home loan through Offerpad Home Loans. Since launching in the third quarter, customers in 10 out of our 21 markets have utilized this program. By bundling services, customers save money, and we increase our engagement with those customers.
Highlights for this quarter include a customer satisfaction rating of
_______________ |
1 Survey of approximately 2,500 customers who sold their home to Offerpad. |
Q3 Financial Highlights
|
Q3 2021 |
Q3 2020 |
Percentage Change |
Homes acquired |
2,753 |
769 |
|
Homes sold |
1,673 |
749 |
|
Revenue |
|
|
|
Gross profit |
|
|
|
Net loss (reported)2 |
|
|
( |
Adjusted Net loss |
|
|
|
Adjusted EBITDA |
|
|
N.A. |
Contribution profit after interest per home sold |
|
|
|
2 Includes |
|||
“With a record number of homes sales driving record revenue of
Additional information regarding Offerpad’s third quarter 2021 financial results and management commentary can be found by accessing the Company’s Quarterly Letter to Shareholders on the Offerpad investor relations website.
Full Year 2021 Outlook
Based on the favorable results in the first three quarters of the year, Offerpad is raising its full year outlook for 2021 as follows:
|
New 2021 Outlook |
Prior 2021 Outlook |
Change |
Homes Sold |
5,800 - 6,000 |
5,612 - 6,000 |
Midpoint up ~100 |
Revenue |
|
|
Midpoint up |
Gross Profit |
|
|
Midpoint up |
Adjusted EBITDA |
|
|
Midpoint up |
Conference Call and Webcast Details
Offerpad Chairman and CEO
About Offerpad
Offerpad’s mission is to provide your best way to buy and sell a home. Period. We use technology-enabled solutions to remake the home selling and buying experience by offering customers the convenience, control and certainty to solve their housing needs. We combine our fundamental real estate expertise with our data-driven digital “Solutions Center” platform to give users a holistic, customer-centric experience, enabling them to efficiently sell and buy their homes online with streamlined access to other services including mortgage, listing, and buyer representation services. Visit Offerpad.com for more information.
Forward-Looking Statements
Certain statements in this press release may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Offerpad’s future financial or operating performance. For example, statements regarding Offerpad’s financial outlook for full year 2021 and anticipated growth in the industry in which Offerpad operates are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “pro forma,” “may,” “should,” “could,” “might,” “plan,” “possible,” “project,” “strive,” “budget,” “forecast,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “potential” or “continue,” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that may impact such forward-looking statements include, but are not limited to, Offerpad’s ability to respond to general economic conditions; the health of the
Condensed Consolidated Statements of Operations (in thousands, except per share data, unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenue |
|
$ |
540,287 |
|
|
$ |
186,365 |
|
|
$ |
1,202,906 |
|
|
$ |
841,027 |
|
Cost of revenue |
|
|
487,165 |
|
|
|
166,600 |
|
|
|
1,065,383 |
|
|
|
778,503 |
|
Gross profit |
|
|
53,122 |
|
|
|
19,765 |
|
|
|
137,523 |
|
|
|
62,524 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales, marketing and operating |
|
|
38,727 |
|
|
|
16,072 |
|
|
|
95,398 |
|
|
|
59,048 |
|
General and administrative |
|
|
8,160 |
|
|
|
3,981 |
|
|
|
18,031 |
|
|
|
12,204 |
|
Technology and development |
|
|
2,777 |
|
|
|
1,633 |
|
|
|
7,663 |
|
|
|
5,454 |
|
Total operating expenses |
|
|
49,664 |
|
|
|
21,686 |
|
|
|
121,092 |
|
|
|
76,706 |
|
Income (loss) from operations |
|
|
3,458 |
|
|
|
(1,921 |
) |
|
|
16,431 |
|
|
|
(14,182 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in fair value of warrant liabilities |
|
|
(13,185 |
) |
|
|
— |
|
|
|
(13,185 |
) |
|
|
— |
|
Interest expense |
|
|
(5,495 |
) |
|
|
(1,312 |
) |
|
|
(9,670 |
) |
|
|
(8,404 |
) |
Other income, net |
|
|
— |
|
|
|
289 |
|
|
|
248 |
|
|
|
787 |
|
Total other expense |
|
|
(18,680 |
) |
|
|
(1,023 |
) |
|
|
(22,607 |
) |
|
|
(7,617 |
) |
Loss before income taxes |
|
|
(15,222 |
) |
|
|
(2,944 |
) |
|
|
(6,176 |
) |
|
|
(21,799 |
) |
Income tax expense |
|
|
(81 |
) |
|
|
— |
|
|
|
(170 |
) |
|
|
— |
|
Net loss |
|
$ |
(15,303 |
) |
|
$ |
(2,944 |
) |
|
$ |
(6,346 |
) |
|
$ |
(21,799 |
) |
Net loss per share, basic |
|
$ |
(0.13 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.38 |
) |
Net loss per share, diluted |
|
$ |
(0.13 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.38 |
) |
Weighted average common shares outstanding, basic |
|
|
115,985 |
|
|
|
57,865 |
|
|
|
78,191 |
|
|
|
57,865 |
|
Weighted average common shares outstanding, diluted |
|
|
115,985 |
|
|
|
57,865 |
|
|
|
78,191 |
|
|
|
57,865 |
|
Condensed Consolidated Balance Sheets (in thousands, except par value per share, unaudited) |
||||||||||
|
|
|
|
|
|
|
||||
|
|
|
|
2021 |
|
2020 |
||||
ASSETS |
|
|
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
|
|
||
Cash and cash equivalents |
|
|
|
$ |
116,634 |
|
|
$ |
43,938 |
|
Restricted cash |
|
|
|
|
20,024 |
|
|
|
6,804 |
|
Accounts receivable |
|
|
|
|
10,038 |
|
|
|
2,309 |
|
Inventory |
|
|
|
|
902,062 |
|
|
|
171,359 |
|
Prepaid expenses and other current assets |
|
|
|
|
10,453 |
|
|
|
2,880 |
|
Total current assets |
|
|
|
|
1,059,211 |
|
|
|
227,290 |
|
Property and equipment, net |
|
|
|
|
9,556 |
|
|
|
8,231 |
|
Other non-current assets |
|
|
|
|
193 |
|
|
|
352 |
|
TOTAL ASSETS |
|
(1) |
|
$ |
1,068,960 |
|
|
$ |
235,873 |
|
LIABILITIES, TEMPORARY EQUITY, AND STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
|
|
||
Accounts payable |
|
|
|
$ |
6,126 |
|
|
$ |
2,149 |
|
Accrued liabilities |
|
|
|
|
28,354 |
|
|
|
11,181 |
|
Secured credit facilities and notes payable |
|
|
|
|
509,833 |
|
|
|
50,143 |
|
Secured credit facilities and notes payable, net - related party |
|
|
|
|
241,208 |
|
|
|
126,825 |
|
Total current liabilities |
|
|
|
|
785,521 |
|
|
|
190,298 |
|
Secured credit facilities and notes payable, net of current portion |
|
|
|
|
— |
|
|
|
4,710 |
|
Warrant liabilities |
|
|
|
|
39,711 |
|
|
|
— |
|
Total liabilities |
|
(2) |
|
|
825,232 |
|
|
|
195,008 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
||
Temporary equity: |
|
|
|
|
|
|
|
|
||
Series A convertible preferred stock, zero and 21,011 shares authorized, respectively; zero and 20,907 shares issued and outstanding, respectively; liquidation preference of |
|
|
|
|
— |
|
|
|
14,921 |
|
Series A-1 convertible preferred stock, zero and 10,905 shares authorized, issued and outstanding, respectively; liquidation preference of |
|
|
|
|
— |
|
|
|
7,470 |
|
Series A-2 convertible preferred stock, zero and 8,322 shares authorized, issued and outstanding, respectively; liquidation preference of |
|
|
|
|
— |
|
|
|
7,463 |
|
Series B convertible preferred stock, zero and 58,390 shares authorized, issued and outstanding, respectively; liquidation preference of |
|
|
|
|
— |
|
|
|
49,845 |
|
Series C convertible preferred stock, zero and 56,716 shares authorized, respectively; zero and 39,985 shares issued and outstanding, respectively; liquidation preference of |
|
|
|
|
— |
|
|
|
104,424 |
|
Total temporary equity |
|
|
|
|
— |
|
|
|
184,123 |
|
Stockholders’ equity (deficit): |
|
|
|
|
|
|
|
|
||
Class A common stock, |
|
|
|
|
22 |
|
|
|
— |
|
Class B common stock, |
|
|
|
|
2 |
|
|
|
— |
|
Additional paid in capital |
|
|
|
|
388,566 |
|
|
|
5,908 |
|
Accumulated deficit |
|
|
|
|
(144,862 |
) |
|
|
(138,516 |
) |
|
|
|
|
|
— |
|
|
|
(10,650 |
) |
Total stockholders’ equity (deficit) |
|
|
|
|
243,728 |
|
|
|
(143,258 |
) |
TOTAL LIABILITIES, TEMPORARY EQUITY, AND STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
$ |
1,068,960 |
|
|
$ |
235,873 |
|
| _______________ | ||||||||||
(1) Our consolidated assets as of |
||||||||||
(2) Our consolidated liabilities as of |
||||||||||
Condensed Consolidated Statements of Cash Flows (in thousands, unaudited) |
||||||||
|
|
Nine Months Ended |
||||||
|
|
|
||||||
|
|
2021 |
|
2020 |
||||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(6,346 |
) |
|
$ |
(21,799 |
) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
||
Depreciation |
|
|
433 |
|
|
|
308 |
|
Gain on sale of equipment |
|
|
(246 |
) |
|
|
— |
|
Amortization of debt financing costs |
|
|
454 |
|
|
|
304 |
|
Impairment of inventory |
|
|
1,342 |
|
|
|
2,971 |
|
Stock-based compensation |
|
|
2,316 |
|
|
|
875 |
|
Change in fair value of warrant liabilities |
|
|
13,185 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(7,717 |
) |
|
|
(1,472 |
) |
Inventory |
|
|
(721,979 |
) |
|
|
214,080 |
|
Prepaid expenses and other assets |
|
|
(7,174 |
) |
|
|
(555 |
) |
Accounts payable |
|
|
3,857 |
|
|
|
439 |
|
Accrued liabilities |
|
|
17,063 |
|
|
|
685 |
|
Net cash (used in) provided by operating activities |
|
|
(704,812 |
) |
|
|
195,836 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(13,609 |
) |
|
|
(67 |
) |
Proceeds from sales of property and equipment |
|
|
2,032 |
|
|
|
— |
|
Net cash used in investing activities |
|
|
(11,577 |
) |
|
|
(67 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from Business Combination |
|
|
284,011 |
|
|
|
— |
|
Issuance cost of common stock |
|
|
(51,249 |
) |
|
|
— |
|
Borrowings from credit facilities and notes payable |
|
|
1,702,702 |
|
|
|
556,627 |
|
Repayments of credit facilities and notes payable |
|
|
(1,130,563 |
) |
|
|
(772,021 |
) |
Payment of debt financing costs |
|
|
(3,229 |
) |
|
|
(598 |
) |
Proceeds from issuance of Class C preferred stock, net |
|
|
— |
|
|
|
29,823 |
|
Proceeds from exercise of stock options |
|
|
633 |
|
|
|
— |
|
Net cash provided by (used in) financing activities |
|
|
802,305 |
|
|
|
(186,169 |
) |
Net change in cash, cash equivalents and restricted cash |
|
|
85,916 |
|
|
|
9,600 |
|
Cash, cash equivalents and restricted cash, beginning of period |
|
|
50,742 |
|
|
|
29,883 |
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
136,658 |
|
|
$ |
39,483 |
|
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
116,634 |
|
|
$ |
35,948 |
|
Restricted cash |
|
|
20,024 |
|
|
|
3,535 |
|
Total cash, cash equivalents and restricted cash |
|
$ |
136,658 |
|
|
$ |
39,483 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Cash payments for interest |
|
$ |
9,630 |
|
|
$ |
11,890 |
|
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
||
Transfer of property and equipment, net to inventory |
|
$ |
10,065 |
|
|
$ |
— |
|
Acquisition of warrant liabilities |
|
$ |
26,525 |
|
|
$ |
— |
|
Conversion of preferred stock to common stock |
|
$ |
184,123 |
|
|
$ |
— |
|
Conversion of treasury stock |
|
$ |
10,650 |
|
|
$ |
— |
|
Non-GAAP Financial Measures
In addition to Offerpad’s results of operations above, Offerpad’s management utilizes certain financial measures that are not required by, or presented in accordance with,
Offerpad may calculate or present its non-GAAP financial measures differently than other companies who report measures with similar titles and, as a result, the non-GAAP financial measures Offerpad reports may not be comparable with those of companies in its industry or in other industries. Offerpad has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted net income (loss) within this press release because Offerpad is unable to calculate certain reconciling items without making unreasonable efforts. These items, which include, but are not limited to, stock-based compensation with respect to future grants and forfeitures, could materially affect the computation of forward-looking net income (loss), are inherently uncertain and depend on various factors, some of which are outside of Offerpad’s control.
Adjusted gross profit, contribution profit, and contribution profit after interest (and related margins)
Offerpad believes that adjusted gross profit, contribution profit, and contribution profit after interest are useful financial measures for investors as they are used by management in evaluating unit level economics and operating performance across its markets. Each of these measures is intended to present the economics related to homes sold during a given period. Offerpad does so by including revenue generated from homes sold (and ancillary services) in the period and only the expenses that are directly attributable to such home sales, even if such expenses were recognized in prior periods, and excluding expenses related to homes that remain in inventory as of the end of the period presented. Contribution profit provides investors a measure to assess Offerpad’s ability to generate returns on homes sold during a reporting period after considering home acquisition costs, renovation and repair costs, and adjusting for holding costs and selling costs. Contribution profit after interest further impacts gross profit by including interest costs (including senior and mezzanine secured credit facilities) attributable to homes sold during a reporting period. Offerpad believes these measures facilitate meaningful period over period comparisons and illustrate our ability to generate returns on assets sold after considering the costs directly related to the assets sold in a presented period. Adjusted gross profit, contribution profit and contribution profit after interest (and related margins) are supplemental measures of Offerpad’s operating performance and have limitations as analytical tools. For example, these measures include costs that were recorded in prior periods under GAAP and exclude, in connection with homes held in inventory at the end of the period, costs required to be recorded under GAAP in the same period. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of Offerpad’s results as reported under GAAP. Offerpad includes a reconciliation of these measures to the most directly comparable GAAP financial measure, which is gross profit.
Adjusted gross profit / margin
Offerpad calculates adjusted gross profit as gross profit under GAAP adjusted for (1) net inventory impairment plus (2) interest expense associated with homes sold in the presented period and recorded in cost of revenue. Net inventory impairment is calculated by adding back the inventory impairment charges recorded during the period on homes that remain in inventory at period end and subtracting the inventory impairment charges recorded in prior periods on homes sold in the current period. Offerpad defines adjusted gross margin as adjusted gross profit as a percentage of revenue. Offerpad views this metric as an important measure of business performance, as it captures gross margin performance isolated to homes sold in a given period and provides comparability across reporting periods. Adjusted gross profit helps management assess performance across the key phases of processing a home (acquisitions, renovations, and resale) for a specific resale cohort.
Contribution profit / margin
Offerpad calculates contribution profit as adjusted gross profit, minus (1) direct selling costs incurred on homes sold during the presented period, minus (2) holding costs incurred in the current period on homes sold during the period recorded in sales, marketing, and operating, minus (3) holding costs incurred in prior periods on homes sold in the current period recorded in sales, marketing, and operating, plus (4) other income which historically is primarily comprised of net income to us from the investment related to Offerpad’s Home Loans operations. The composition of Offerpad’s holding costs is described in the footnotes to the reconciliation table below. Offerpad defines contribution margin as contribution profit as a percentage of revenue.
Offerpad views this metric as an important measure of business performance as it captures the unit level performance isolated to homes sold in a given period and provides comparability across reporting periods. Contribution profit helps management assess inflows and outflow directly associated with a specific resale cohort.
Contribution profit / margin after interest
Offerpad defines contribution profit after interest as contribution profit, minus (1) interest expense associated with homes sold in the presented period and recorded in cost of revenue, minus (2) interest expense associated with homes sold in the presented period, recorded in costs of sales, and previously excluded from adjusted gross profit, and minus (3) interest expense under Offerpad’s senior and mezzanine secured credit facilities incurred on homes sold during the period. This includes interest expense recorded in prior periods in which the sale occurred.
Offerpad’s senior and mezzanine secured credit facilities are secured by its homes in inventory and drawdowns are made on a per-home basis at the time of purchase and are required to be repaid at the time the homes are sold. Offerpad defines contribution margin after interest as contribution profit after interest as a percentage of revenue.
Offerpad views this metric as an important measure of business performance. Contribution profit after interest helps management assess contribution margin performance, per above, when fully burdened with costs of financing.
The following table presents a reconciliation of Offerpad’s adjusted gross profit, contribution profit and contribution profit after interest to its gross profit, which is the most directly comparable GAAP measure, for the periods indicated:
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in thousands, except percentages and homes sold, unaudited) |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Gross profit (GAAP) |
|
$ |
53,122 |
|
|
$ |
19,765 |
|
|
$ |
137,523 |
|
|
$ |
62,524 |
|
Gross margin |
|
|
9.8 |
% |
|
|
10.6 |
% |
|
|
11.4 |
% |
|
|
7.4 |
% |
Homes sold |
|
|
1,673 |
|
|
|
749 |
|
|
|
3,950 |
|
|
|
3,432 |
|
Gross profit per home sold |
|
|
31.8 |
|
|
|
26.4 |
|
|
|
34.8 |
|
|
|
18.2 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Inventory impairment - current period (1) |
|
|
676 |
|
|
|
28 |
|
|
|
713 |
|
|
|
61 |
|
Inventory impairment - prior period (2) |
|
|
(152 |
) |
|
|
(398 |
) |
|
|
(142 |
) |
|
|
(842 |
) |
Interest expense capitalized (3) |
|
|
1,410 |
|
|
|
426 |
|
|
|
2,783 |
|
|
|
2,565 |
|
Adjusted gross profit |
|
|
55,056 |
|
|
|
19,821 |
|
|
|
140,877 |
|
|
|
64,308 |
|
Adjusted gross margin |
|
|
10.2 |
% |
|
|
10.6 |
% |
|
|
11.7 |
% |
|
|
7.6 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Direct selling costs (4) |
|
|
(11,350 |
) |
|
|
(5,599 |
) |
|
|
(28,172 |
) |
|
|
(24,897 |
) |
Holding costs on sales - current period (5)(6) |
|
|
(910 |
) |
|
|
(489 |
) |
|
|
(2,365 |
) |
|
|
(3,827 |
) |
Holding costs on sales - prior period (5)(7) |
|
|
(295 |
) |
|
|
(424 |
) |
|
|
(214 |
) |
|
|
(1,392 |
) |
Other income (8) |
|
|
— |
|
|
|
289 |
|
|
|
248 |
|
|
|
787 |
|
Contribution profit |
|
|
42,501 |
|
|
|
13,598 |
|
|
|
110,374 |
|
|
|
34,979 |
|
Contribution margin |
|
|
7.9 |
% |
|
|
7.3 |
% |
|
|
9.2 |
% |
|
|
4.2 |
% |
Homes sold |
|
|
1,673 |
|
|
|
749 |
|
|
|
3,950 |
|
|
|
3,432 |
|
Contribution profit per home sold |
|
|
25.4 |
|
|
|
18.2 |
|
|
|
27.9 |
|
|
|
10.2 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense capitalized (3) |
|
|
(1,410 |
) |
|
|
(426 |
) |
|
|
(2,783 |
) |
|
|
(2,565 |
) |
Interest expense on homes sold - current period (9) |
|
|
(2,381 |
) |
|
|
(742 |
) |
|
|
(5,904 |
) |
|
|
(7,250 |
) |
Interest expense on homes sold - prior period (10) |
|
|
(697 |
) |
|
|
(899 |
) |
|
|
(468 |
) |
|
|
(4,167 |
) |
Contribution profit after interest |
|
|
38,013 |
|
|
|
11,531 |
|
|
|
101,219 |
|
|
|
20,997 |
|
Contribution margin after interest |
|
|
7.0 |
% |
|
|
6.2 |
% |
|
|
8.4 |
% |
|
|
2.5 |
% |
Homes sold |
|
|
1,673 |
|
|
|
749 |
|
|
|
3,950 |
|
|
|
3,432 |
|
Contribution profit after interest per home sold |
|
|
22.7 |
|
|
|
15.4 |
|
|
|
25.6 |
|
|
|
6.1 |
|
(1) |
Inventory impairment – current period is the inventory valuation adjustments recorded during the period presented associated with homes that remain in inventory at period end |
|
(2) |
Inventory impairment – prior period is the inventory valuation adjustments recorded in prior periods associated with homes that sold in the period presented. |
|
(3) |
Interest expense capitalized represents all interest related costs, including senior and mezzanine secured credit facilities, incurred on homes sold in the period presented that were capitalized and expensed in cost of sales at the time of sale |
|
(4) |
Direct selling costs represents selling costs incurred related to homes sold in the period presented. This primarily includes broker commissions and title and escrow closing fees. |
|
(5) |
Holding costs primarily include property taxes, insurance, utilities, homeowners association dues, cleaning and maintenance costs. |
|
(6) |
Represents holding costs incurred on homes sold in the period presented and expensed to Sales, marketing, and operating on the Condensed Consolidated Statements of Operations |
|
(7) |
Represents holding costs incurred in prior periods on homes sold in the period presented and expensed to Sales, marketing, and operating on the Condensed Consolidated Statements of Operations. |
|
(8) |
Other income in 2020 primarily consists of net income to Offerpad from our historical investment in Offerpad Home Loans. In 2021, other income was earned from the sale of certain fixed assets. |
|
(9) |
Represents both senior and mezzanine interest expense incurred on homes sold in the period presented and expensed to interest expense on the Condensed Consolidated Statements of Operations. |
|
(10) |
Represents both senior and mezzanine secured credit facilities interest expense incurred in prior periods on homes sold in the period presented and expensed to Interest expense on the Condensed Consolidated Statements of Operations. |
Adjusted Net (Loss) Income and Adjusted EBITDA
We also present Adjusted Net (Loss) Income and Adjusted EBITDA, which are non-GAAP financial measures, which our management team uses to assess our underlying financial performance. We believe these measures provide insight into period over period performance, adjusted for non-recurring or non-cash items.
We calculate Adjusted Net (Loss) Income as GAAP net income (loss) adjusted for the change in fair value of warrant liabilities. We define Adjusted Net (Loss) Income Margin as Adjusted Net (Loss) Income as a percentage of revenue.
We calculate Adjusted EBITDA as Adjusted Net (Loss) Income adjusted for interest expense, amortization of capitalized interest, taxes, depreciation and amortization and stock-based compensation expense. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue.
Adjusted Net (Loss) Income and Adjusted EBITDA are supplemental to our operating performance measures calculated in accordance with GAAP and have important limitations. For example, Adjusted Net (Loss) Income and Adjusted EBITDA exclude the impact of certain costs required to be recorded under GAAP and could differ substantially from similarly titled measures presented by other companies in our industry or companies in other industries. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.
The following table presents a reconciliation of our Adjusted Net (Loss) Income and Adjusted EBITDA to our GAAP net income (loss), which is the most directly comparable GAAP measure, for the periods indicated:
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in thousands, except percentages, unaudited) |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Net loss (GAAP) |
|
$ |
(15,303 |
) |
|
$ |
(2,944 |
) |
|
$ |
(6,346 |
) |
|
$ |
(21,799 |
) |
Change in fair value of warrant liabilities |
|
|
13,185 |
|
|
|
— |
|
|
|
13,185 |
|
|
|
— |
|
Adjusted net (loss) income |
|
|
(2,118 |
) |
|
|
(2,944 |
) |
|
|
6,839 |
|
|
|
(21,799 |
) |
Adjusted net (loss) income margin |
|
|
(0.4 |
)% |
|
|
(1.6 |
)% |
|
|
0.6 |
% |
|
|
(2.6 |
)% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
5,495 |
|
|
|
1,312 |
|
|
|
9,670 |
|
|
|
8,404 |
|
Amortization of capitalized interest (1) |
|
|
1,410 |
|
|
|
426 |
|
|
|
2,783 |
|
|
|
2,565 |
|
Income tax expense |
|
|
81 |
|
|
|
— |
|
|
|
170 |
|
|
|
— |
|
Depreciation and amortization |
|
|
156 |
|
|
|
104 |
|
|
|
433 |
|
|
|
308 |
|
Amortization of stock-based compensation |
|
|
1,053 |
|
|
|
337 |
|
|
|
2,316 |
|
|
|
875 |
|
Adjusted EBITDA |
|
|
6,077 |
|
|
|
(765 |
) |
|
|
22,211 |
|
|
|
(9,647 |
) |
Adjusted EBITDA margin |
|
|
1.1 |
% |
|
|
(0.4 |
)% |
|
|
1.8 |
% |
|
|
(1.1 |
)% |
(1) |
Amortization of capitalized interest represents all interest related costs, including senior and mezzanine interest related costs, incurred on homes sold in the period presented that were capitalized and expensed in cost of sales at the time of sale. |
#OPAD_IR
View source version on businesswire.com: https://www.businesswire.com/news/home/20211110006327/en/
Investors
Investors@offerpad.com
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Media
480-220-0021
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Source: Offerpad
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