Offerpad slows losses after selling off 'legacy' inventory
The company managed to cut losses by half in Q1, and CEO Brian Bair said Offerpad has a "realistic and achievable plan" to meet its goals.
With the company under threat of delisting by the New York Stock Exchange, Offerpad appears to have stopped the bleeding in the first quarter, reporting losses of nearly $60 million — half the amount it reported the previous quarter.
And, in an attempt to reassure investors, Offerpad promised that it had shed the vast majority of the inventory weighing the company down, vowing a positive EBITDA by Q4.
"Going forward, we have a realistic and achievable plan to hit our operational and financial goals," Offerpad Chairman and CEO Brian Bair said in an earnings call.
"Our progress in Q1 was supported by improving conditions and sentiment across many of our markets," he added. "In most markets, we're no longer seeing significant price cuts on listed homes, particularly more affordable homes, and multiple offers are reappearing in certain areas."
Bair also said the company looks to buy about 500 homes each month through a combination of direct cash offers and its Flex program that lets sellers first try to sell on the open market. "Our pricing model does not require home price appreciation to succeed," he insisted, citing instead the rapid changes in home prices as the company's biggest challenge.
Revenue: $609.6 million, down 55% from Q1 2022.
Cash and cash equivalents: $107.7 million, down 46% from Q1 2022, but up 11% from the most recent quarter.
GAAP net loss: $59.4 million, compared with a $121.1 million loss in the previous quarter and a profit of $35.3 million in Q1 2022.
EBITDA (earnings before interest, taxes, depreciation and amortization): Adjusted loss of $44.8 million, down from a $50.4 million gain in the same quarter of 2022, but up from last quarter's $103.7 million loss.
Transactions: The company acquired 364 homes in Q1, down from 539 acquired in the first quarter of last year. It sold 1,609 homes, down from 1,865 a year ago.
What Offerpad had to say
"We are pleased to see the expected sequential improvement in our quarterly results materialize," said Bair, pointing to improvements in net losses and adjusted EBITDA. "Acquisition volume has also steadily increased each month in 2023, with homes acquired after the market shift showing positive performance," he added.
Looking to the future, Bair said Offerpad is "now focused entirely on our go-forward plans to simplify residential real estate and build an extensive suite of solutions."
Offerpad laid off an unspecified number of employees in February, and the company says it is now "rightsized" to reflect current volumes.