Carrie Wheeler, CEO, Opendoor.
Illustration by Lanette Behiry/Real Estate News

As revenue plummets, Opendoor aims for a turnaround in 2024 

During the company's Q3 earnings call, CEO Carrie Wheeler said she anticipates a quiet fourth quarter but an uptick in home acquisitions next year.

November 2, 2023
3 minutes

Leading iBuyer Opendoor posted another quarter of mixed results and forecasted lower revenue for the next quarter as high borrowing rates and affordability remain major hurdles to homeownership. 

While Opendoor reported nearly $1 billion in revenue in Q3, that figure represents a 50% drop from the previous quarter. They also ended the third quarter with a net loss of $106 million, putting the company back in the red after briefly returning to profitability in Q2. The iBuyer acquired more than 3,100 homes during the quarter — the largest number so far this year — but significantly fewer than the 8,380 homes purchased in Q3 2022.

During the company's earnings call with investors, CEO Carrie Wheeler commented on the recent Sitzer/Burnett verdict and what it could mean for Opendoor — particularly in reducing costs if buyer agent commissions were out of the equation. 

"To be very clear, Opendoor's core business does not derive revenue from the buyer broker commission," Wheeler explained. "On the contrary, the buyer broker commission is a cost that we pay when we resell our homes."

Key numbers

Revenue: $980 million, a decrease of 71% compared to the same quarter last year, and down 50% compared to the previous quarter. 

Cash and cash equivalents: $1.15 billion, up slightly from the $1.14 billion reported at the end of 2022. 

Gross profit: $96 million, down from $149 million in the previous quarter, but a big improvement from the company's $425 million loss a year ago. 

Net income/loss: Net loss of $106 million, which is down from the net gain of $23 million last quarter but considerably better than the $928 million net loss in Q3 2022. 

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): A loss of $49 million, which represents an improvement from a $168 million loss in Q2 and a $211 million loss from Q3 2022. 

Homes acquired: Opendoor purchased 3,136 homes in Q3 compared to 2,680 homes purchased the previous quarter and 8,380 homes purchased in Q3 2022. 

Homes sold: 2,687, a 68% decrease from the same quarter last year and down roughly 50% from the previous quarter. 

Inventory: 4,007 homes valued at $1.3 billion, which is down 78% from the same period last year but a 14% increase from the previous quarter. 

What Opendoor had to say

While Opendoor execs predict a relatively quiet fourth quarter with lower revenue, the company is gearing up for a more active year in 2024. Specifically, Opendoor hopes to "reaccelerate revenue," buy more homes and expand its partnership channels. 

"Our plans to increase acquisition volumes next year have not changed, and we continue to closely monitor leading indicators so that we can respond to shifts in the market," Wheeler said during today's call. "Acquisitions from our partnership channels increased 33% sequentially in Q3 and are up over 76% compared to Q1."

During the Q&A session, many investors asked about how the Sitzer/Burnett verdict could impact Opendoor's model and its value proposition. Wheeler noted that the company would most likely benefit from not paying buyer agent commissions.

"A buyer broker commission for us is a cost that we pay out as we resell our homes, so if that comes down — at worst, it's a neutral in terms of overall margin over time," Wheeler said. 

Notable moves

Opendoor announced its partnership with eXp last month and said its partnership with Zillow has expanded to 45 markets.

Additionally, the company announced today that Dana Hamilton, a former Sr. Managing Director at real estate investment firm Pretium Partners, has been appointed to Opendoor's Board of Directors. 

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