Offerpad Reports First Quarter 2024 Results
Offerpad reported impressive first quarter 2024 results with revenue of $285 million, exceeding guidance, and gross profit up 210% annually. The company saw significant improvement in key metrics, with net loss down 71% from the prior year. Renovate, the company's asset light platform service, grew by 78% in the quarter. Offerpad also made progress in expanding its partner ecosystem and achieving adjusted EBITDA profitability. The company provided a positive outlook for the second quarter of 2024.
Revenue of $285 million for Q1 2024, exceeding guidance
Gross profit up 210% annually
Net loss improved by 71% from the prior year
Renovate, the asset light platform service, grew by 78% in the quarter
Progress in expanding partner ecosystem and achieving adjusted EBITDA profitability
Positive outlook for Q2 2024
- None.
Insights
The reported 210% annual increase in gross profit and the improvement in net loss by 71% year over year for Offerpad signals an impressive turnaround in operational efficiency. Despite a significant decline in revenue by 53% compared to the same quarter last year, the company has managed to increase gross profit margins significantly; this suggests a strategic shift towards more profitable transactions or cost reductions. However, with homes sold decreasing by 47% year over year, it's important to assess whether this is a temporary market condition or a sign of reduced market share.
The increase in the contribution profit per home sold and a lower time to cash for homes indicates improved operational efficiency and a healthier cash flow situation. However, the company's cash reserves decreased by 10% quarter over quarter, potentially implying ongoing cash burn, which warrants monitoring. Offerpad's outlook for Q2 suggests an attempt to reach adjusted EBITDA breakeven, which would be a significant milestone if achieved. The focus on the asset-light platform services like Renovate, which grew by 78%, may be an effort to diversify and stabilize revenue streams.
The residential real estate industry is witnessing a shift towards tech-enabled platforms that can offer scalability and cost efficiencies. Offerpad's emphasis on its asset-light model and Renovate service aligns with this trend and positions the company to potentially capitalize on a still-recovering housing market. The notable growth in the Agent Partnership Program suggests that Offerpad is successfully leveraging partnerships to drive acquisitions, which could enhance its market reach and presence.
However, the decrease in homes sold raises questions about the demand trajectory and competitive landscape. Retail investors should monitor whether the shift in strategy leads to sustained profitability and how the company navigates a volatile macroeconomic environment, including interest rate changes and housing market dynamics.
Offerpad's strategic pivot towards an asset-light platform, including the expansion of its Renovate and Agent Partnership programs, may be a response to the ongoing need for differentiation in the crowded iBuying space. The company's decrease in inventory held for 180+ days to 8.5% from 32.3% indicates a more rapid turn-over of properties, which could be a competitive advantage in a market where inventory management is critical.
It is also essential to consider the broader industry's state and how macroeconomic factors like potential housing market slowdowns or rising interest rates could impact Offerpad. Investors would be wise to look for continued improvements in profitability metrics and how well the company can scale its newer services while managing expenditures.
Q1 2024 revenue of
Record-breaking quarter for Offerpad Renovate
“The first quarter of 2024 continued the positive trajectory we experienced exiting 2023. While the macro is still volatile, the first quarter was one of increasing stability and we believe this trend will continue through 2024,” said Brian Bair, Offerpad’s chairman and chief executive officer. “We are making steady progress against our key strategic imperatives. We are focused on expanding our asset light platform services, particularly Renovate, which grew
Highlights include:
-
Improved Net Loss
71% from the prior year and delivered sequential improvement in key metrics of Homes Sold, Revenue, and Adjusted EBITDA - Time to Cash for homes sold in the quarter of 113 days, down from 185 the prior year
-
Inventory owned 180+ days ended the quarter at
8.5% down from32.3% the prior year -
Increased asset light platform services, representing
43% of unit transactions in the quarter, versus34% the prior year -
Record quarter for Renovate, with closed renovation projects growing
78% versus the prior year, generating more than$5M -
Continued progress on Offerpad’s Agent Partnership Program, growing acquisitions from that channel more than
50% versus the prior quarter
“Renovate completed approximately 400 projects, generating over
Q1 2024 Financial Results (quarter over quarter)
|
Q1 2024 |
Q4 2023 |
Percentage Change |
Homes acquired |
806 |
678 |
|
Homes sold |
847 |
712 |
|
Revenue |
|
|
|
Gross profit |
|
|
|
Net loss |
( |
( |
( |
Adjusted EBITDA |
( |
( |
( |
Diluted Net Loss per Share |
( |
( |
( |
Gross profit per home sold |
|
|
|
Contribution profit (loss) after interest per home sold |
|
|
|
Cash and cash equivalents |
|
|
( |
Q1 2024 Financial Results (year over year)
|
Q1 2024 |
Q1 2023 |
Percentage Change |
Homes acquired |
806 |
364 |
|
Homes sold |
847 |
1,609 |
( |
Revenue |
|
|
( |
Gross profit |
|
|
|
Net loss |
( |
( |
|
Adjusted EBITDA |
( |
( |
|
Diluted Net Loss per Share |
( |
( |
|
Gross profit per home sold |
|
|
|
Contribution profit (loss) after interest per home sold |
|
( |
n.a. |
Cash and cash equivalents |
|
|
( |
Additional information regarding Offerpad’s first quarter 2024 financial results and management commentary can be found by accessing the Company’s Quarterly Letter to Shareholders on the Offerpad investor relations website.
Second Quarter 2024 Outlook
Offerpad is providing its second quarter outlook for 2024 as follows:
|
Q2 2024 Outlook |
Homes Sold |
750 – 875 |
Revenue |
|
Adjusted EBITDA1 |
Approx. breakeven |
1 See Non-GAAP financial measures below for an explanation of why a reconciliation of this guidance cannot be provided. |
|
Conference Call and Webcast Details
Brian Bair, Chairman and CEO, and James Grout, Interim Principal Financial Officer, will host a conference call and accompanying webcast on May 6, 2024, at 4:30 p.m. ET. The webcast can be accessed on Offerpad’s Investor Relations website. Those interested can register here. Access to a replay of the webcast will be available from the same website address shortly after the live webcast concludes.
About Offerpad
Offerpad’s mission is to deliver the best home buying and selling experience. From cash offers and flexible listing options to mortgages and buyer services, Offerpad has been helping homeowners since 2015. We pair our local expertise in residential real estate with proprietary technology to put you in control of the process and help find the right solution that fits your needs. Visit Offerpad.com for more information.
#OPAD_IR
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, including homes sold, revenue and Adjusted EBITDA, for the second quarter 2024, and expectations regarding market conditions, strategic imperatives and profitability, including the timing of reaching sustainable positive Adjusted EBITDA, 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
OFFERPAD SOLUTIONS INC. Condensed Consolidated Statements of Operations |
||||||||
|
|
Three Months Ended March 31, |
||||||
(in thousands, except per share data) (Unaudited) |
|
2024 |
|
2023 |
||||
Revenue |
|
$ |
285,358 |
|
|
$ |
609,579 |
|
Cost of revenue |
|
|
262,763 |
|
|
|
602,294 |
|
Gross profit |
|
|
22,595 |
|
|
|
7,285 |
|
Operating expenses: |
|
|
|
|
||||
Sales, marketing and operating |
|
|
22,452 |
|
|
|
42,351 |
|
General and administrative |
|
|
11,955 |
|
|
|
14,479 |
|
Technology and development |
|
|
1,773 |
|
|
|
2,241 |
|
Total operating expenses |
|
|
36,180 |
|
|
|
59,071 |
|
Loss from operations |
|
|
(13,585 |
) |
|
|
(51,786 |
) |
Other income (expense): |
|
|
|
|
||||
Change in fair value of warrant liabilities |
|
|
344 |
|
|
|
(389 |
) |
Interest expense |
|
|
(4,905 |
) |
|
|
(7,432 |
) |
Other income, net |
|
|
754 |
|
|
|
282 |
|
Total other expense |
|
|
(3,807 |
) |
|
|
(7,539 |
) |
Loss before income taxes |
|
|
(17,392 |
) |
|
|
(59,325 |
) |
Income tax expense |
|
|
(123 |
) |
|
|
(122 |
) |
Net loss |
|
$ |
(17,515 |
) |
|
$ |
(59,447 |
) |
Net loss per share, basic |
|
$ |
(0.64 |
) |
|
$ |
(2.51 |
) |
Net loss per share, diluted |
|
$ |
(0.64 |
) |
|
$ |
(2.51 |
) |
Weighted average common shares outstanding, basic |
|
|
27,339 |
|
|
|
23,661 |
|
Weighted average common shares outstanding, diluted |
|
|
27,339 |
|
|
|
23,661 |
|
OFFERPAD SOLUTIONS INC. Condensed Consolidated Balance Sheets |
||||||||
|
|
As of |
||||||
(in thousands, except par value per share) (Unaudited) |
|
March 31, 2024 |
|
December 31, 2023 |
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
68,550 |
|
|
$ |
75,967 |
|
Restricted cash |
|
|
9,983 |
|
|
|
3,967 |
|
Accounts receivable |
|
|
4,347 |
|
|
|
9,935 |
|
Real estate inventory |
|
|
266,107 |
|
|
|
276,500 |
|
Prepaid expenses and other current assets |
|
|
4,353 |
|
|
|
5,236 |
|
Total current assets |
|
|
353,340 |
|
|
|
371,605 |
|
Property and equipment, net |
|
|
4,679 |
|
|
|
4,517 |
|
Other non-current assets |
|
|
11,707 |
|
|
|
3,572 |
|
TOTAL ASSETS |
|
$ |
369,726 |
|
|
$ |
379,694 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
4,378 |
|
|
$ |
4,946 |
|
Accrued and other current liabilities |
|
|
13,166 |
|
|
|
13,859 |
|
Secured credit facilities and other debt, net |
|
|
230,083 |
|
|
|
227,132 |
|
Secured credit facilities and other debt - related party |
|
|
24,522 |
|
|
|
30,092 |
|
Total current liabilities |
|
|
272,149 |
|
|
|
276,029 |
|
Warrant liabilities |
|
|
127 |
|
|
|
471 |
|
Other long-term liabilities |
|
|
9,349 |
|
|
|
1,418 |
|
Total liabilities |
|
|
281,625 |
|
|
|
277,918 |
|
Commitments and contingencies |
|
|
|
|
||||
Stockholders’ equity: |
|
|
|
|
||||
Class A common stock, |
|
|
3 |
|
|
|
3 |
|
Additional paid in capital |
|
|
503,500 |
|
|
|
499,660 |
|
Accumulated deficit |
|
|
(415,402 |
) |
|
|
(397,887 |
) |
Total stockholders’ equity |
|
|
88,101 |
|
|
|
101,776 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
369,726 |
|
|
$ |
379,694 |
|
OFFERPAD SOLUTIONS INC. Condensed Consolidated Statements of Cash Flows |
||||||||
|
|
Three Months Ended March 31, |
||||||
($ in thousands) (Unaudited) |
|
2024 |
|
2023 |
||||
Cash flows from operating activities: |
|
|
|
|
||||
Net loss |
|
$ |
(17,515 |
) |
|
$ |
(59,447 |
) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
||||
Depreciation |
|
|
166 |
|
|
|
202 |
|
Amortization of debt financing costs |
|
|
818 |
|
|
|
894 |
|
Real estate inventory valuation adjustment |
|
|
624 |
|
|
|
7,285 |
|
Stock-based compensation |
|
|
3,867 |
|
|
|
1,843 |
|
Change in fair value of warrant liabilities |
|
|
(344 |
) |
|
|
389 |
|
Change in fair value of derivative instruments |
|
|
— |
|
|
|
568 |
|
Gain on disposal of property and equipment |
|
|
(5 |
) |
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
Accounts receivable |
|
|
5,588 |
|
|
|
(54 |
) |
Real estate inventory |
|
|
9,769 |
|
|
|
484,761 |
|
Prepaid expenses and other assets |
|
|
670 |
|
|
|
(1,710 |
) |
Accounts payable |
|
|
(568 |
) |
|
|
(228 |
) |
Accrued and other liabilities |
|
|
(684 |
) |
|
|
(8,060 |
) |
Net cash provided by operating activities |
|
|
2,386 |
|
|
|
426,443 |
|
Cash flows from investing activities: |
|
|
|
|
||||
Purchases of property and equipment |
|
|
(353 |
) |
|
|
(75 |
) |
Proceeds from sale of property and equipment |
|
|
30 |
|
|
|
— |
|
Purchases of derivative instruments |
|
|
— |
|
|
|
(1,212 |
) |
Net cash used in investing activities |
|
|
(323 |
) |
|
|
(1,287 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Borrowings from credit facilities and other debt |
|
|
242,142 |
|
|
|
186,391 |
|
Repayments of credit facilities and other debt |
|
|
(245,579 |
) |
|
|
(700,635 |
) |
Payment of debt financing costs |
|
|
— |
|
|
|
(23 |
) |
Proceeds from exercise of stock options |
|
|
16 |
|
|
|
49 |
|
Payments for taxes related to stock-based awards |
|
|
(43 |
) |
|
|
(48 |
) |
Borrowings from warehouse lending facility |
|
|
— |
|
|
|
8,188 |
|
Repayments of warehouse lending facility |
|
|
— |
|
|
|
(5,657 |
) |
Proceeds from issuance of pre-funded warrants |
|
|
— |
|
|
|
90,000 |
|
Proceeds from exercise of pre-funded warrants |
|
|
— |
|
|
|
11 |
|
Issuance cost of pre-funded warrants |
|
|
— |
|
|
|
(784 |
) |
Net cash used in by financing activities |
|
|
(3,464 |
) |
|
|
(422,508 |
) |
Net change in cash, cash equivalents and restricted cash |
|
|
(1,401 |
) |
|
|
2,648 |
|
Cash, cash equivalents and restricted cash, beginning of period |
|
|
79,934 |
|
|
|
140,299 |
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
78,533 |
|
|
$ |
142,947 |
|
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
68,550 |
|
|
$ |
107,733 |
|
Restricted cash |
|
|
9,983 |
|
|
|
35,214 |
|
Total cash, cash equivalents and restricted cash |
|
$ |
78,533 |
|
|
$ |
142,947 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
||||
Cash payments for interest |
|
$ |
6,427 |
|
|
$ |
11,064 |
|
Non-GAAP Financial Measures
In addition to Offerpad’s results of operations above, Offerpad reports 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 Offerpad’s 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)
To provide investors with additional information regarding Offerpad’s margins, Offerpad has included Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins), which are non-GAAP financial measures. 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 Offerpad’s 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 real estate 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 Offerpad’s 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 real estate 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 real estate inventory valuation adjustment plus (2) interest expense associated with homes sold in the presented period and recorded in cost of revenue. Net real estate inventory valuation adjustment is calculated by adding back the real estate inventory valuation adjustment charges recorded during the period on homes that remain in real estate inventory at period end and subtracting the real estate inventory valuation adjustment 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, net which is primarily comprised of interest income earned on our cash and cash equivalents and fair value adjustments of derivative financial instruments. 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 their homes in real estate 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 tables present a reconciliation of Offerpad’s Adjusted Gross (Loss) Profit, Contribution (Loss) Profit and Contribution (Loss) Profit After Interest to Offerpad’s Gross (Loss) Profit, which is the most directly comparable GAAP measure, and Contribution (Loss) Profit Per Home Sold and Contribution (Loss) Profit After Interest Per Home Sold to Offerpad’s Gross (Loss) Profit Per Home Sold, which is the most directly comparable GAAP measure, for the periods indicated:
|
Three Months Ended |
|||||||||||
|
March 31, |
December 31, |
March 31, |
|||||||||
(in thousands, except percentages and homes sold, unaudited) |
2024 |
2023 |
2023 |
|||||||||
Gross profit (GAAP) |
$ |
22,595 |
|
$ |
16,692 |
|
$ |
7,285 |
|
|||
Gross margin |
|
7.9 |
% |
|
6.9 |
% |
|
1.2 |
% |
|||
Homes sold |
|
847 |
|
|
712 |
|
|
1,609 |
|
|||
Gross profit per home sold |
$ |
26.7 |
|
$ |
23.4 |
|
$ |
4.5 |
|
|||
Adjustments: |
|
|
|
|||||||||
Real estate inventory valuation adjustment - current period (1) |
|
623 |
|
|
565 |
|
|
7,285 |
|
|||
Real estate inventory valuation adjustment - prior period (2) |
|
(645 |
) |
|
(713 |
) |
|
(51,515 |
) |
|||
Interest expense capitalized (3) |
|
1,669 |
|
|
964 |
|
|
4,677 |
|
|||
Adjusted gross profit (loss) |
$ |
24,242 |
|
$ |
17,508 |
|
$ |
(32,268 |
) |
|||
Adjusted gross margin |
|
8.5 |
% |
|
7.3 |
% |
|
(5.3 |
%) |
|||
Adjustments: |
|
|
|
|||||||||
Direct selling costs (4) |
|
(6,969 |
) |
|
(5,829 |
) |
|
(18,061 |
) |
|||
Holding costs on sales - current period (5)(6) |
|
(887 |
) |
|
(742 |
) |
|
(1,248 |
) |
|||
Holding costs on sales - prior period (5)(7) |
|
(483 |
) |
|
(285 |
) |
|
(1,886 |
) |
|||
Other income, net (8) |
|
754 |
|
|
1,065 |
|
|
282 |
|
|||
Contribution profit (loss) |
$ |
16,657 |
|
$ |
11,717 |
|
$ |
(53,181 |
) |
|||
Contribution margin |
|
5.8 |
% |
|
4.9 |
% |
|
(8.7 |
%) |
|||
Homes sold |
|
847 |
|
|
712 |
|
|
1,609 |
|
|||
Contribution profit (loss) per home sold |
$ |
19.7 |
|
$ |
16.5 |
|
$ |
(33.1 |
) |
|||
Adjustments: |
|
|
|
|||||||||
Interest expense capitalized (3) |
|
(1,669 |
) |
|
(964 |
) |
|
(4,677 |
) |
|||
Interest expense on homes sold - current period (9) |
|
(2,521 |
) |
|
(2,041 |
) |
|
(5,498 |
) |
|||
Interest expense on homes sold - prior period (10) |
|
(2,426 |
) |
|
(1,466 |
) |
|
(12,032 |
) |
|||
Contribution profit (loss) after interest |
$ |
10,041 |
|
$ |
7,246 |
|
$ |
(75,388 |
) |
|||
Contribution margin after interest |
|
3.5 |
% |
|
3.0 |
% |
|
(12.4 |
%) |
|||
Homes sold |
|
847 |
|
|
712 |
|
|
1,609 |
|
|||
Contribution profit (loss) after interest per home sold |
$ |
11.9 |
|
$ |
10.2 |
|
$ |
(46.9 |
) |
|||
(1) |
Real estate inventory valuation adjustment – current period is the real estate inventory valuation adjustments recorded during the period presented associated with homes that remain in real estate inventory at period end. |
|
(2) |
Real estate inventory valuation adjustment – prior period is the real estate 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 insurance, utilities, homeowners association dues, property taxes, 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, net principally represents interest income earned on our cash and cash equivalents and fair value adjustments of derivative financial instruments. |
|
(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 Income (Loss) and Adjusted EBITDA
Offerpad also presents Adjusted Net Income (Loss) and Adjusted EBITDA, which are non-GAAP financial measures, which the management team uses to assess Offerpad’s underlying financial performance. Offerpad believes these measures provide insight into period over period performance, adjusted for non-recurring or non-cash items.
Offerpad calculates Adjusted Net Income (Loss) as GAAP Net Income (Loss) adjusted for the change in fair value of warrant liabilities. Offerpad defines Adjusted Net Income (Loss) Margin as Adjusted Net Income (Loss) as a percentage of revenue.
Offerpad calculates Adjusted EBITDA as Adjusted Net Income (Loss) adjusted for interest expense, amortization of capitalized interest, taxes, depreciation and amortization and stock-based compensation expense. Offerpad defines Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue.
Adjusted Net Income (Loss) and Adjusted EBITDA are supplemental to Offerpad’s operating performance measures calculated in accordance with GAAP and have important limitations. For example, Adjusted Net Income (Loss) 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 Offerpad’s industry or companies in other industries. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of Offerpad’s results as reported under GAAP.
The following table presents a reconciliation of Offerpad’s Adjusted Net Income (Loss) and Adjusted EBITDA to their GAAP Net Income (Loss), which is the most directly comparable GAAP measure, for the periods indicated:
|
Three Months Ended |
|||||||||||
|
March 31, |
December 31, |
March 31, |
|||||||||
(in thousands, except percentages, unaudited) |
2024 |
2023 |
2023 |
|||||||||
Net loss (GAAP) |
$ |
(17,515 |
) |
$ |
(15,441 |
) |
$ |
(59,447 |
) |
|||
Change in fair value of warrant liabilities |
|
(344 |
) |
|
109 |
|
|
389 |
|
|||
Adjusted net loss |
$ |
(17,859 |
) |
$ |
(15,332 |
) |
$ |
(59,058 |
) |
|||
Adjusted net loss margin |
|
(6.3 |
%) |
|
(6.4 |
%) |
|
(9.7 |
%) |
|||
Adjustments: |
|
|
|
|||||||||
Interest expense |
|
4,905 |
|
|
5,154 |
|
|
7,432 |
|
|||
Amortization of capitalized interest (1) |
|
1,669 |
|
|
964 |
|
|
4,677 |
|
|||
Income tax expense (benefit) |
|
123 |
|
|
(8 |
) |
|
122 |
|
|||
Depreciation and amortization |
|
166 |
|
|
172 |
|
|
202 |
|
|||
Amortization of stock-based compensation |
|
3,867 |
|
|
2,000 |
|
|
1,843 |
|
|||
Adjusted EBITDA |
$ |
(7,129 |
) |
$ |
(7,050 |
) |
$ |
(44,782 |
) |
|||
Adjusted EBITDA margin |
|
(2.5 |
%) |
|
(2.9 |
%) |
|
(7.3 |
%) |
|||
(1) |
Amortization of capitalized interest represents all interest related costs, including senior and mezzanine secured 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. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240506538383/en/
Investors
Investors@offerpad.com
Media
Press@offerpad.com
Source: Offerpad
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