Form 8-K - Current report

false 0001825024 0001825024 2024-11-04 2024-11-04

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 04, 2024

 

 

Offerpad Solutions Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

 

Delaware		001-39641		85-2800538
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

2150 E. Germann Road Suite 1
Chandler, Arizona		85286
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: [phone]

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A common stock, $0.0001 par value per share		OPAD		The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

---

Item 2.02

Results of Operations and Financial Condition.

On November 4, 2024, Offerpad Solutions Inc. issued a press release announcing its financial results for the three and nine months ended September 30, 2024 and a Shareholder Letter. A copy of the press release and the Shareholder Letter are furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K.

The information in this Item 2.02, including the information contained in Exhibit 99.1 and Exhibit 99.2 of this Current Report on Form 8-K, is furnished herewith and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit Number		Exhibit Description
99.1		Press Release of Offerpad Solutions Inc. dated November 4, 2024
99.2		Offerpad Solutions Inc. Shareholder Letter dated November 4, 2024
104		Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

 

---

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

				Offerpad Solutions Inc.
Date: November 4, 2024		By:		/s/ Peter Knag
				Peter Knag Chief Financial Officer

Exhibit 99.1

 

Offerpad Reports Third Quarter 2024 Results

Net Loss & Adj EBITDA Improve 32% and 53% Versus Prior Year

CHANDLER, Ariz.—(BUSINESS WIRE)— Offerpad Solutions Inc. (“Offerpad”) (NYSE: OPAD), a leading tech-enabled platform for residential real estate, today released financial results for the three months ended September 30, 2024.

“During the third quarter, we delivered revenue at the high end of our guidance. We’ve expanded our asset-light services, strengthened partnerships, and optimized our organization,” said Brian Bair, Offerpad’s CEO. “This positions Offerpad well as we return to normalized acquisition levels in our cash offer business with a streamlined cost structure.”

Highlights include:

 

•

Improved net loss and adjusted EBITDA 32% and 53%, respectively, from the prior year

 

•

Gross profit per home sold of $27.9k

 

•

Contribution profit after interest per home sold of $12.4k, with 30% via asset light services

 

•

Total operating expenses for the quarter decreased to $26.1M from $43.5M the prior year, a $17.4M or 40% improvement

 

•

Time to Cash for homes sold in the quarter of 110 days, up from 106 the prior quarter

 

•

Renovate closed projects of 227 up 43% versus the prior year, generating $4.0M in revenue

 

•

Acquisitions from Offerpad’s Agent Partnership Program grew to 33% of total

 

•

Fine-tuned customer engagement process through new technology implementation improving initial estimated offer delivery goal from 24 hours to a matter of minutes

“We are proud of the cost control maintained during this period of market dislocation, focusing steadily on profitability and building a resilient, sustainable business for any real estate environment,” said Peter Knag, Offerpad’s CFO. “As we enter the final quarter of 2024, we’re observing shifts in the market that open up opportunities for disciplined growth.”

---

Q3 2024 Financial Results (quarter over quarter)

 

		Q3 2024		Q2 2024		Percentage Change
Homes acquired		422		831		(49%)
Homes sold		615		742		(17%)
Revenue		$208.1M		$251.1M		(17%)
Gross profit		$17.1M		$21.9M		(22%)
Net loss		($13.5M)		($13.8M)		(2%)
Adjusted EBITDA		($6.2M)		($4.4M)		(40%)
Diluted Net Loss per Share		($0.49)		($0.50)		2%
Gross profit per home sold		$27,900		$29,500		(5%)
Contribution profit after interest per home sold		$12,400		$14,500		(14%)
Cash and cash equivalents		$48.5M		$56.9M		(15%)

Q3 2024 Financial Results (year over year)

 

		Q3 2024		Q3 2023		Percentage Change
Homes acquired		422		930		(55%)
Homes sold		615		703		(13%)
Revenue		$208.1M		$234.2M		(11%)
Gross profit		$17.1M		$24.0M		(29%)
Net loss		($13.5M)		($20.0M)		32%
Adjusted EBITDA		($6.2M)		($13.3M)		53%
Diluted Net Loss per Share		($0.49)		($0.73)		33%
Gross profit per home sold		$27,900		$34,100		(18%)
Contribution profit (loss) after interest per home sold		$12,400		$27,200		(54%)
Cash and cash equivalents		$48.5M		$106.0M		(54%)

Additional information regarding Offerpad’s third 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.

Fourth Quarter 2024 Outlook

Offerpad is providing its fourth quarter outlook for 2024 as follows:

 

		Q4 2024 Outlook
Homes Sold		480 to 540
Revenue		$160M to $185M
Adjusted EBITDA1		Slightly lower

 

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 Peter Knag, CFO, will host a conference call and accompanying webcast on November 4, 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, dedicated to simplifying the process of buying and selling homes, is a publicly traded company committed to providing comprehensive solutions that removes the friction from real estate. Our advanced real estate platform offers a range of services, from consumer cash offers to B2B renovation solutions and industry partnership programs, all tailored to meet the unique needs of our clients. Since 2015, we’ve leveraged local expertise in residential real estate alongside proprietary technology to guide homeowners at every step. Learn more at www.offerpad.com.

#OPAD_IR

Contacts

Investors

[e-mail]

Media

[e-mail]

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 fourth quarter 2024, anticipated return to more normalized acquisition and inventory levels; and expectations regarding market conditions, strategic imperatives and profitability 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 U.S. residential real estate industry; Offerpad’s ability to grow market share in its existing markets or any new markets it may enter; Offerpad’s ability to manage its growth and its costs structure effectively; Offerpad’s ability to accurately value and manage real estate inventory, maintain an adequate and desirable supply of real estate

---

inventory, and manage renovations; Offerpad’s ability to successfully launch new product and service offerings, and to manage, develop and refine its technology platform; Offerpad’s ability to maintain and enhance its products and brand, and to attract customers; Offerpad’s ability to achieve and maintain profitability in the future; and the success of strategic relationships with third parties. These and other important factors discussed under the caption “Risk Factors” in Offerpad’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission on February 27, 2024, and Offerpad’s other reports filed with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Offerpad and its management, are inherently uncertain. Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Offerpad undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

---

OFFERPAD SOLUTIONS INC.

Condensed Consolidated Statements of Operations

 

		Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands, except per share data) (Unaudited)		2024				2023				2024				2023
Revenue		$	208,067			$	234,228			$	744,547			$	1,073,954
Cost of revenue			190,927				210,255				682,941				1,020,465
Gross profit			17,140				23,973				61,606				53,489
Operating expenses:
Sales, marketing and operating			16,864				27,235				59,546				98,626
General and administrative			8,254				14,124				30,747				41,316
Technology and development			947				2,156				3,684				6,709
Total operating expenses			26,065				43,515				93,977				146,651
Loss from operations			(8,925	)			(19,542	)			(32,371	)			(93,162	)
Other income (expense):
Change in fair value of warrant liabilities			14				131				349				177
Interest expense			(5,114	)			(4,406	)			(14,600	)			(13,705	)
Other income, net			512				3,837				1,881				5,084
Total other expense			(4,588	)			(438	)			(12,370	)			(8,444	)
Loss before income taxes			(13,513	)			(19,980	)			(44,741	)			(101,606	)
Income tax expense			(24	)			(6	)			(93	)			(171	)
Net loss		$	(13,537	)		$	(19,986	)		$	(44,834	)		$	(101,777	)
Net loss per share, basic		$	(0.49	)		$	(0.73	)		$	(1.64	)		$	(3.90	)
Net loss per share, diluted		$	(0.49	)		$	(0.73	)		$	(1.64	)		$	(3.90	)
Weighted average common shares outstanding, basic			27,439				27,276				27,388				26,079
Weighted average common shares outstanding, diluted			27,439				27,276				27,388				26,079

---

OFFERPAD SOLUTIONS INC.

Condensed Consolidated Balance Sheets

 

(in thousands, except par value per share) (Unaudited)		September 30, 2024				December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents		$	48,504			$	75,967
Restricted cash			9,922				3,967
Accounts receivable			5,589				9,935
Real estate inventory			256,472				276,500
Prepaid expenses and other current assets			2,553				5,236
Total current assets			323,040				371,605
Property and equipment, net			5,190				4,517
Other non-current assets			10,258				3,572
TOTAL ASSETS		$	338,488			$	379,694
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	2,564			$	4,946
Accrued and other current liabilities			10,090				13,859
Secured credit facilities and other debt, net			216,439				227,132
Secured credit facilities and other debt - related party			34,406				30,092
Total current liabilities			263,499				276,029
Warrant liabilities			122				471
Other long-term liabilities			10,154				1,418
Total liabilities			273,775				277,918
Commitments and contingencies
Stockholders’ equity:
Class A common stock, $0.0001 par value; 2,000,000 shares authorized; 27,361 and 27,233 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively			3				3
Additional paid in capital			507,431				499,660
Accumulated deficit			(442,721	)			(397,887	)
Total stockholders’ equity			64,713				101,776
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	338,488			$	379,694

---

OFFERPAD SOLUTIONS INC.

Condensed Consolidated Statements of Cash Flows

 

		Nine Months Ended September 30,
($ in thousands) (Unaudited)		2024				2023
Cash flows from operating activities:
Net loss		$	(44,834	)		$	(101,777	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation			464				556
Amortization of debt financing costs			1,466				3,080
Real estate inventory valuation adjustment			2,016				8,372
Stock-based compensation			7,831				5,915
Change in fair value of warrant liabilities			(349	)			(177	)
Change in fair value of derivative instruments			—				(1,994	)
Loss on disposal of property and equipment			62				30
Changes in operating assets and liabilities:
Accounts receivable			4,346				(1,524	)
Real estate inventory			18,012				366,728
Prepaid expenses and other assets			3,920				3,541
Accounts payable			(2,382	)			1,712
Accrued and other liabilities			(2,956	)			(7,507	)
Net cash (used in) provided by operating activities			(12,404	)			276,955
Cash flows from investing activities:
Purchases of property and equipment			(1,245	)			(90	)
Proceeds from sale of property and equipment			46				—
Purchases of derivative instruments			—				(2,569	)
Proceeds from sale of derivative instruments			—				2,981
Net cash (used in) provided by investing activities			(1,199	)			322
Cash flows from financing activities:
Borrowings from credit facilities and other debt			628,105				687,715
Repayments of credit facilities and other debt			(635,877	)			(1,080,821	)
Payment of debt financing costs			(73	)			(264	)
Proceeds from exercise of stock options			17				53
Payments for taxes related to stock-based awards			(77	)			(78	)
Borrowings from warehouse lending facility			—				21,951
Repayments of warehouse lending facility			—				(21,951	)
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 financing activities			(7,905	)			(304,168	)
Net change in cash, cash equivalents and restricted cash			(21,508	)			(26,891	)
Cash, cash equivalents and restricted cash, beginning of period			79,934				140,299
Cash, cash equivalents and restricted cash, end of period		$	58,426			$	113,408
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet:
Cash and cash equivalents		$	48,504			$	105,999
Restricted cash			9,922				7,409
Total cash, cash equivalents and restricted cash		$	58,426			$	113,408
Supplemental disclosure of cash flow information:
Cash payments for interest		$	19,204			$	23,406

---

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, U.S. generally accepted accounting principles (“GAAP”). These measures have limitations as analytical tools when assessing Offerpad’s operating performance and should not be considered in isolation or as a substitute for GAAP measures, including gross profit and net income.

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												Nine Months Ended
(in thousands, except percentages and homes sold, unaudited)		September 30, 2024				June 30, 2024				September 30, 2023				September 30, 2024				September 30, 2023
Gross profit (GAAP)		$	17,140			$	21,871			$	23,973			$	61,606			$	53,489
Gross margin			8.2	%			8.7	%			10.2	%			8.3	%			5.0	%
Homes sold			615				742				703				2,204				2,962
Gross profit per home sold		$	27.9			$	29.5			$	34.1			$	28.0			$	18.1
Adjustments:
Real estate inventory valuation adjustment - current period (1)			848				544				918				1,060				985
Real estate inventory valuation adjustment - prior period (2)			(535	)			(540	)			(318	)			(765	)			(58,125	)
Interest expense capitalized (3)			1,367				1,420				235				4,456				6,270
Adjusted gross profit		$	18,820			$	23,295			$	24,808			$	66,357			$	2,619
Adjusted gross margin			9.0	%			9.3	%			10.6	%			8.9	%			0.2	%
Adjustments:
Direct selling costs (4)			(5,767	)			(6,461	)			(5,593	)			(19,197	)			(29,396	)
Holding costs on sales - current period (5)(6)			(693	)			(622	)			(453	)			(2,892	)			(2,328	)
Holding costs on sales - prior period (5)(7)			(341	)			(443	)			(72	)			(577	)			(2,166	)
Other income, net (8)			512				615				3,837				1,881				5,084
Contribution profit (loss)		$	12,531			$	16,384			$	22,527			$	45,572			$	(26,187	)
Contribution margin			6.0	%			6.5	%			9.6	%			6.1	%			(2.4	%)
Homes sold			615				742				703				2,204				2,962
Contribution profit (loss) per home sold		$	20.4			$	22.1			$	32.0			$	20.7			$	(8.8	)
Adjustments:
Interest expense capitalized (3)			(1,367	)			(1,420	)			(235	)			(4,456	)			(6,270	)
Interest expense on homes sold - current period (9)			(1,865	)			(2,103	)			(2,622	)			(9,787	)			(11,782	)
Interest expense on homes sold - prior period (10)			(1,687	)			(2,133	)			(554	)			(2,948	)			(13,924	)
Contribution profit (loss) after interest		$	7,612			$	10,728			$	(19,116	)		$	28,381			$	(58,163	)
Contribution margin after interest			3.7	%			4.3	%			8.2	%			3.8	%			(5.4	%)
Homes sold			615				742				703				2,204				2,962
Contribution profit (loss) after interest per home sold		$	12.4			$	14.5			$	27.2			$	12.9			$	(19.6	)

 

(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												Nine Months Ended
(in thousands, except percentages, unaudited)		September 30, 2024				June 30, 2024				September 30, 2023				September 30, 2024				September 30, 2023
Net loss (GAAP)		$	(13,537	)		$	(13,782	)		$	(19,986	)		$	(44,834	)		$	(101,777	)
Net loss margin			(6.5	%)			(5.5	%)			(8.5	%)			(6.0	%)			(9.5	%)
Change in fair value of warrant liabilities			(14	)			9				(131	)			(349	)			(177	)
Adjusted net loss		$	(13,551	)		$	(13,773	)		$	(20,117	)		$	(45,183	)		$	(101,954	)
Adjusted net loss margin			(6.5	%)			(5.5	%)			(8.6	%)			(6.1	%)			(9.5	%)
Adjustments:
Interest expense			5,114				4,581				4,406				14,600				13,705
Amortization of capitalized interest (1)			1,367				1,420				235				4,456				6,270
Income tax (benefit) expense			24				(54	)			6				93				171
Depreciation and amortization			150				148				175				464				556
Amortization of stock-based compensation			715				3,249				2,017				7,831				5,915
Adjusted EBITDA		$	(6,181	)		$	(4,429	)		$	(13,278	)		$	(17,739	)		$	(75,337	)
Adjusted EBITDA margin			(3.0	%)			(1.8	%)			(5.7	%)			(2.4	%)			(7.0	%)

 

(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.

Exhibit 99.2

 

Letter to shareholders Q3 2024

---

A FEW THOUGHTS FROM BRIAN Dear Shareholders, For more than two years, we have focused on returning to positive earnings and cash flow while adapting to unprecedented market conditions. We diversified our revenue among four lines of business, adjusted our buy-box, and reorganized our cost structure to thrive in any real estate environment. Reducing acquisitions prudently has left us with quality inventory entering the end of the year. Diversifying our revenue through other platform offerings has led to a higher margin mix of services. Our cost-out initiatives and strategic reorganization have brought us closer to profitability. In the third quarter, we delivered revenue at the top end of our guidance driven by a healthy mix of our products, including our Cash Offer, B2B Renovate business, Direct+ institutional buyer program, and Agent Partnership Program. Despite significant macro and market headwinds, we remained focused on our mission to simplify real estate and provide solutions for consumers and partners, while making strides in building a long-term profitable business. Highlights for the quarter include growing asset light contribution margin to over 30%, expanding our Agent Partnership Program, enhancing our technology, and optimizing operations. We implemented an enhanced customer journey to engage deeper with more customers earlier in the process. Customers now can expect an estimated offer range within minutes, allowing them to schedule their inspection instantly. This shift reduces multiple touch points, giving customers even more control over timing and decision-making. Powered by advanced pricing technology, known as Offerpad’s Citrus Value, and extensive internal data gathered from hundreds of thousands of offers, this improvement reflects our confidence in our pricing model, analytics, and real estate expertise. Progress in our Agent Partnership Program continues to exceed expectations. Our revamped Agent Partner Program has shown impressive results, with agent offer requests expanding to over 25% of total and acquisitions to over 30%. Offerpad Renovate continues to be an excellent complementary business line, generating significant revenue and expanding our client base. Year-to-date we are at $14 million of revenue for Renovate, surpassing the $12 million we achieved in last year’s inaugural year. We’re observing shifts in the market that open up new opportunities. Early signs of rate relief, easing inflation, a stable labor market, and improving consumer confidence are expected to bring buyers and sellers back to the marketplace, and we’re ready to meet our customers when they’re prepared to transact. Thank you for your continued support and confidence in Offerpad. We’re proud of our team’s ability to innovate and navigate short-term challenges while staying focused on long-term success. We look forward to building continued value for our shareholders. Sincerely, Brian Bair Chairman & CEO

---

TOTAL REVENUE ($M) & HOMES ACQUIRED RETURNS PER HOME SOLD Gross Profit per Home Sold Contribution Profit After Interest per Home Sold Q3 2024 2

---

NET INCOME (LOSS), ADJ. NET INCOME (LOSS) & ADJ. EBITDA ($M) Q3 ‘24 TOTAL CONTRIBUTION MARGIN AFTER INTEREST PER HOME SOLD Q3 2024 3

---

Traction in Renovations Since 2015, Offerpad’s core business model has been buying, renovating, and selling homes. Delivering efficient and quality renovations has always been a significant contributor to the performance of our portfolio of properties. We are very proud of our commitment to excellence when it comes to our renovations, considering we utilize in-house talent and vetted external specialists to increase quality and control. OFFERPAD-OWNED PORTFOLIO RENOVATION IMPACT SINCE INCEPTION Q3 2024 ~37k Renovations completed $23k Average cost of renovations completed +$630m Invested into improving properties 29 days Average time for renovation completion Our expertise in renovations speaks for itself. Over time, investor clients we’ve sold homes to requested we renovate homes they owned, knowing we deliver efficient and quality renovations. To meet that need, we built Offerpad Renovate™, a sophisticated renovation operation that leverages our existing teams and technology, such as Reno Captain, to offer stand-alone renovation services to clients who need renovations done at scale. This new business allows us to expand our market opportunities outside of just buying and selling homes. 2023 was our flagship year, and we are already building some exciting momentum. OFFERPAD RENOVATE THIRD PARTY RENOVATION SERVICES Q3 2024 HIGHLIGHTS 227 Total projects completed 21 Markets with projects completed $4.0m Total revenue 1.9 Average days in renovation per $1k spent $17.7k Average revenue per project

---

Q4 2024 Outlook HOMES SOLD 480 to 540 REVENUE $160m to $185m ADJ. EBITDA1 Slightly lower 1. See Non-GAAP financial measures in Appendix for an explanation of why a reconciliation of this guidance cannot be provided. Q3 2024 5

---

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 and Adjusted EBITDA, for the fourth quarter 2024, and expectations regarding profitability, including the timing of reaching sustainable positive Adjusted EBITDA and cash flow, 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 U.S. residential real estate industry; Offerpad’s ability to grow market share in its existing markets or any new markets it may enter; Offerpad’s ability to manage its growth and its costs structure effectively; Offerpad’s ability to accurately value and manage real estate inventory, maintain an adequate and desirable supply of real estate inventory, and manage renovations; Offerpad’s ability to successfully launch new product and service offerings, and to manage, develop and refine its technology platform; Offerpad’s ability to maintain and enhance its products and brand, and to attract customers; Offerpad’s ability to achieve and maintain profitability in the future; and the success of strategic relationships with third parties. These and other important factors discussed under the caption “Risk Factors” in Offerpad’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission on February 27, 2024, and Offerpad’s other reports filed with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Offerpad and its management, are inherently uncertain. Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Offerpad undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

---

OFFERPAD SOLUTIONS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share data) (Unaudited) 2024 2023 2024 2023 Revenue $ 208,067 $ 234,228 $ 744,547 $ 1,073,954 Cost of revenue 190,927 210,255 682,941 1,020,465 Gross profit 17,140 23,973 61,606 53,489 Operating expenses: Sales, marketing and operating 16,864 27,235 59,546 98,626 General and administrative 8,254 14,124 30,747 41,316 Technology and development 947 2,156 3,684 6,709 Total operating expenses 26,065 43,515 93,977 146,651 Loss from operations (8,925) (19,542) (32,371) (93,162) Other income (expense): Change in fair value of warrant liabilities 14 131 349 177 Interest expense (5,114) (4,406) (14,600) (13,705) Other income, net 512 3,837 1,881 5,084 Total other expense (4,588) (438) (12,370) (8,444) Loss before income taxes (13,513) (19,980) (44,741) (101,606) Income tax expense (24) (6) (93) (171) Net loss $ (13,537) $ (19,986) $ (44,834) $ (101,777) Net loss per share, basic $ (0.49) $ (0.73) $ (1.64) $ (3.90) Net loss per share, diluted $ (0.49) $ (0.73) $ (1.64) $ (3.90) Weighted average common shares outstanding, basic 27,439 27,276 27,388 26,079 Weighted average common shares outstanding, 27,439 27,276 27,388 26,079 diluted

---

OFFERPAD SOLUTIONS INC. CONDENSED CONSOLIDATED BALANCE SHEETS As of (in thousands, except par value per share) (Unaudited) September 30, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 48,504 $ 75,967 Restricted cash 9,922 3,967 Accounts receivable 5,589 9,935 Real estate inventory 256,472 276,500 Prepaid expenses and other current assets 2,553 5,236 Total current assets 323,040 371,605 Property and equipment, net 5,190 4,517 Other non-current assets 10,258 3,572 TOTAL ASSETS $ 338,488 $ 379,694 LIABILITIES AND TO STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 2,564 $ 4,946 Accrued and other current liabilities 10,090 13,859 Secured credit facilities and other debt, net 216,439 227,132 Secured credit facilities and other debt—related party 34,406 30,092 Total current liabilities 263,499 276,029 Warrant liabilities 122 471 Other long-term liabilities 10,154 1,418 Total liabilities 273,775 277,918 Commitments and contingencies Stockholders’ equity: Class A common stock, $0.0001 par value; 2,000,000 shares authorized; 27,361 and 27,233 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively 3 3 Additional paid in capital 507,431 499,660
Accumulated deficit (442,721) (397,887) Total stockholders’ equity 64,713 101,776 TOTAL LIABILITIES AND TO STOCKHOLDERS’ EQUITY $ 338,488 $ 379,694

 

---

 

APPENDIX OFFERPAD SOLUTIONS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended September 30, ($ in thousands) (Unaudited)20242023 Cash flows from operating activities: Net loss$(44,834) $(101,777) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation464556 Amortization of debt financing costs1,4663,080 Real estate inventory valuation adjustment2,0168,372 Stock-based compensation7,8315,915 Change in fair value of warrant liabilities(349)(177) Change in fair value of derivative instruments—(1,994) Loss on disposal of property and equipment6230 Changes in operating assets and liabilities: Accounts receivable4,346(1,524) Real estate inventory18,012366,728 Prepaid expenses and other assets3,9203,541 Accounts payable(2,382)1,712 Accrued and other liabilities(2,956)(7,507) Net cash (used in) provided by operating activities(12,404)276,955 Cash flows from investing activities: Purchases of property and equipment(1,245)(90) Proceeds from sale of property and equipment46— Purchases of derivative instruments—(2,569) Proceeds from sale of derivative instruments—2,981 Net cash (used in) provided by investing activities(1,199)322 Cash flows from financing activities: Borrowings from credit facilities and other debt628,105687,715 Repayments of credit facilities and other debt(635,877)(1,080,821) Payment of debt financing costs(73)(264) Proceeds from exercise of stock options1753 Payments for taxes related to stock-based awards(77)(78) Borrowings from warehouse lending facility—21,951 Repayments of warehouse lending facility—(21,951) 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 financing activities(7,905)(304,168) Net change in cash, cash equivalents and restricted cash(21,508)(26,891) Cash, cash equivalents and restricted cash, beginning of period79,934140,299 Cash, cash equivalents and restricted cash, end of period$58,426113,408 Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet: Cash and cash equivalents$48,504105,999 Restricted cash9,9227,409 Total cash, cash equivalents and restricted cash$58,426113,408 Supplemental disclosure of cash flow information: Cash payments for interest$19,20423,406 Q3 20249

---

APPENDIX 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, U. . generally accepted accounting principles (“G ”). These measures have limitations as analytical tools when assessing Offerpad’s operating performance and should not be considered in isolation or as a substitute for GAAP measures, including gross profit and net income. 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 ofthe 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. Q3 2024 10

---

APPENDIX 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. Q3 2024 11

 

---

 

APPENDIX 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 (in thousands, except percentages September June March December 31, September 30, and homes sold, unaudited) 30, 2024 30, 2024 31, 2024 2023 2023 Gross profit $ 17,140 $ 21,871 $ 22,595 $ 16,692 $ 23,973 Gross margin 8.2% 8.7% 7.9% 6.9% 10.2% Homes sold 615 742 847 712 703 Gross profit per home sold 27.9 29.5 26.7 23.4 34.1 Adjustments: Inventory valuation adjustment – 848 544 623 565 918 current period Inventory valuation adjustment— (535) (540) (645) (713) (318) prior period Interest expense capitalized 1,367 1,420 1,669 964 235 Adjusted gross profit $ 18,820 $ 23,295 $ 24,242 $ 17,508 $24,808 Adjusted gross margin 9.0% 9.3% 8.5% 7.3% 10.6% Adjustments: Direct selling costs (5,767) (6,461) (6,969) (5,829) (5,593) Holding costs on sales—current period (693) (622) (887) (742) (453) Holding costs on sales—prior period (341) (443) (483) (285) (72) Other income, net 512 615 754 1,065 3,837 Contribution profit $ 12,531 $ 16,384 $ 16,657 $ 11,717 $ 22,527 Contribution margin 6.0% 6.5% 5.8% 4.9% 9.6% Homes sold 615 742 847 712 703 Contribution profit per home sold 20.4 22.1 19.7 16.5 32.0 Adjustments: Interest expense capitalized (1,367) (1,420) (1,669) (964) (235) Interest expense on homes sold – (1,865) (2,103) (2,521) (2,041) (2,622) current period Interest expense on homes sold – (1,687) (2,133) (2,426) (1,466) (554) prior period Contribution profit after interest $ 7,612 $ 10,728 $ 10,041 $ 7,246 $ 19,116 Contribution margin after interest 3.7% 4.3% 3.5% 3.0% 8.2% Homes sold 615 742 847 712 703 Contribution profit (loss) 12.4 14.5 11.9 10.2 27.2 after interest per home sold Q3 2024 12

---

APPENDIX Adjusted Net (Loss) Income 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 (in thousands, except percentages, September June March December September unaudited) 30, 2024 30, 2024 31, 2024 31, 2023 30, 2023 Net loss (GAAP) $ (13,537) $ (13,782) $ (17,515) $ (15,441) $ (19,986) Net loss margin (6.5%) (5.5%) (6.1%) (6.4%) (8.5%) Change in fair value of warrant (14) 9 (344) 109 (131) liabilities Adjusted net loss $ (13,551) $ (13,773) $ (17,859) $ (15,332) $ (20,117) Adjusted net loss margin (6.5%) (5.5%) (6.3%) (6.4%) (8.6%) Adjustments: Interest expense 5,114 4,581 4,905 5,154 4,406 Amortization of capitalized 1,367 1,420 1,669 964 235 interest(1) Income tax (benefit) expense 24 (54) 123 (8) 6 Depreciation and amortization 150 148 166 172 175 Amortization of stock-based 715 3,249 3,867 2,000 2,017 compensation Adjusted EBITDA (6,181) (4,429) (7,129) (7,050) (13,278) Adjusted EBITDA margin (3.0%) (1.8%) (2.5%) (2.9%) (5.7%) 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. Q3 2024 13

---

Q3 2024 LETTER TO SHAREHOLDERS investor.offerpad.com

Document and Entity Information	Nov. 04, 2024
Cover [Abstract]
Amendment Flag	false
Entity Central Index Key	0001825024
Document Type	8-K
Document Period End Date	Nov. 04, 2024
Entity Registrant Name	Offerpad Solutions Inc.
Entity Incorporation State Country Code	DE
Entity File Number	001-39641
Entity Tax Identification Number	85-2800538
Entity Address, Address Line One	2150 E. Germann Road
Entity Address, Address Line Two	Suite 1
Entity Address, City or Town	Chandler
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85286
City Area Code	(844)
Local Phone Number	388-4539
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Security 12b Title	Class A common stock, $0.0001 par value per share
Trading Symbol	OPAD
Security Exchange Name	NYSE
Entity Emerging Growth Company	false

---