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Name | Symbol | Market | Type |
---|---|---|---|
Offerpad Solutions Inc (PK) | USOTC:OPADW | OTCMarkets | Equity Warrant |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.0034 | -48.57% | 0.0036 | 0.0068 | 0.0138 | 0.0036 | 0.0036 | 0.0036 | 633 | 18:06:54 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
|
||||
(Address of Principal Executive Offices) | (Zip Code) |
Registrant’s Telephone Number, Including Area Code:
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 | ||
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 May 6, 2024, Offerpad Solutions Inc. issued a press release announcing its financial results for the three months ended March 31, 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 |
Exhibit Description | |
99.1 | Press Release of Offerpad Solutions Inc. dated May 6, 2024 | |
99.2 | Offerpad Solutions Inc. Shareholder Letter dated May 6, 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: May 6, 2024 | By: | /s/ Benjamin A. Aronovitch | ||||
Benjamin A. Aronovitch Chief Legal Officer and Secretary |
Exhibit 99.1
Offerpad Reports First Quarter 2024 Results
Q1 2024 revenue of $285 million at the high end of guidance, up sequentially for third
consecutive quarter with gross profit up 210% annually
Record-breaking quarter for Offerpad Renovate
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 March 31, 2024.
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, Offerpads 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 78% in the quarter; increasing our buy box; growing our partner ecosystem; and achieving adjusted EBITDA profitability.
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 from 32.3% the prior year |
| Increased asset light platform services, representing 43% of unit transactions in the quarter, versus 34% the prior year |
| Record quarter for Renovate, with closed renovation projects growing 78% versus the prior year, generating more than $5M in revenue |
| Continued progress on Offerpads Agent Partnership Program, growing acquisitions from that channel more than 50% versus the prior quarter |
Renovate completed approximately 400 projects, generating over $5 million in revenue, setting us on a trajectory for significant annual revenue growth compared to 2023, continued Bair. Were building a roster of diverse customers, and I couldnt be more excited about what the future holds.
Q1 2024 Financial Results (quarter over quarter)
Q1 2024 | Q4 2023 | Percentage Change | ||||
Homes acquired |
806 | 678 | 19% | |||
Homes sold |
847 | 712 | 19% | |||
Revenue |
$285.4M | $240.5M | 19% | |||
Gross profit |
$22.6M | $16.7M | 35% | |||
Net loss |
($17.5M) | ($15.4M) | (13%) | |||
Adjusted EBITDA |
($7.1M) | ($7.0M) | (1%) | |||
Diluted Net Loss per Share |
($0.64) | ($0.57) | (12%) | |||
Gross profit per home sold |
$26,700 | $23,400 | 14% | |||
Contribution profit (loss) after interest per home sold |
$11,900 | $10,200 | 16% | |||
Cash and cash equivalents |
$68.6M | $76.0M | (10%) |
Q1 2024 Financial Results (year over year)
Q1 2024 | Q1 2023 | Percentage Change | ||||
Homes acquired |
806 | 364 | 121% | |||
Homes sold |
847 | 1,609 | (47%) | |||
Revenue |
$285.4M | $609.6M | (53%) | |||
Gross profit |
$22.6M | $7.3M | 210% | |||
Net loss |
($17.5M) | ($59.4M) | 71% | |||
Adjusted EBITDA |
($7.1M) | ($44.8M) | 84% | |||
Diluted Net Loss per Share |
($0.64) | ($2.51) | 75% | |||
Gross profit per home sold |
$26,700 | $4,500 | 489% | |||
Contribution profit (loss) after interest per home sold |
$11,900 | ($46,900) | n.a. | |||
Cash and cash equivalents |
$68.6M | $107.7M | (36%) |
Additional information regarding Offerpads first quarter 2024 financial results and management commentary can be found by accessing the Companys 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 |
$250M $ 300M | |
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 Offerpads 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
Offerpads 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
Contacts
Investors
Investors@offerpad.com
Media
Press@offerpad.com
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 Offerpads future financial or operating performance. For example, statements regarding Offerpads 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, Offerpads ability to respond to general economic conditions; the health of the U.S. residential real estate industry; Offerpads ability to grow market share in its existing markets or any new markets it may enter; Offerpads ability to manage its growth and its costs structure effectively; Offerpads ability to accurately value and manage real estate inventory, maintain an adequate and desirable supply of real estate inventory, and manage renovations; Offerpads ability to successfully launch new product and service
offerings, and to manage, develop and refine its technology platform; Offerpads ability to maintain and enhance its products and brand, and to attract customers; Offerpads ability to achieve and maintain profitability in the future; the success of strategic relationships with third parties; and Offerpads failure to meet the New York Stock Exchanges continued listing standards. These and other important factors discussed under the caption Risk Factors in Offerpads 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 Offerpads 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 March 31, |
||||||||
(in thousands, except per share data) (Unaudited) | 2024 | 2023 | ||||||
Revenue |
$ | 285,358 | $ | 609,579 | ||||
Cost of revenue |
262,763 | 602,294 | ||||||
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|
|
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Gross profit |
22,595 | 7,285 | ||||||
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Operating expenses: |
||||||||
Sales, marketing and operating |
22,452 | 42,351 | ||||||
General and administrative |
11,955 | 14,479 | ||||||
Technology and development |
1,773 | 2,241 | ||||||
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|
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Total operating expenses |
36,180 | 59,071 | ||||||
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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 | ||||||
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|
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Total other expense |
(3,807 | ) | (7,539 | ) | ||||
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Loss before income taxes |
(17,392 | ) | (59,325 | ) | ||||
Income tax expense |
(123 | ) | (122 | ) | ||||
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|
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Net loss |
$ | (17,515 | ) | $ | (59,447 | ) | ||
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Net loss per share, basic |
$ | (0.64 | ) | $ | (2.51 | ) | ||
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Net loss per share, diluted |
$ | (0.64 | ) | $ | (2.51 | ) | ||
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Weighted average common shares outstanding, basic |
27,339 | 23,661 | ||||||
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Weighted average common shares outstanding, diluted |
27,339 | 23,661 | ||||||
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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 | ||||||
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Total current assets |
353,340 | 371,605 | ||||||
Property and equipment, net |
4,679 | 4,517 | ||||||
Other non-current assets |
11,707 | 3,572 | ||||||
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TOTAL ASSETS |
$ | 369,726 | $ | 379,694 | ||||
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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 debtrelated party |
24,522 | 30,092 | ||||||
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Total current liabilities |
272,149 | 276,029 | ||||||
Warrant liabilities |
127 | 471 | ||||||
Other long-term liabilities |
9,349 | 1,418 | ||||||
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Total liabilities |
281,625 | 277,918 | ||||||
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Commitments and contingencies |
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Stockholders equity: |
||||||||
Class A common stock, $0.0001 par value; 2,000,000 shares authorized; 27,300 and 27,233 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively |
3 | 3 | ||||||
Additional paid in capital |
503,500 | 499,660 | ||||||
Accumulated deficit |
(415,402 | ) | (397,887 | ) | ||||
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Total stockholders equity |
88,101 | 101,776 | ||||||
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TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |
$ | 369,726 | $ | 379,694 | ||||
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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 | ) | ||||
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Net cash provided by operating activities |
2,386 | 426,443 | ||||||
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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 | ) | |||||
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Net cash used in investing activities |
(323 | ) | (1,287 | ) | ||||
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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 | ) | |||||
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Net cash used in by financing activities |
(3,464 | ) | (422,508 | ) | ||||
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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 | ||||||
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Cash, cash equivalents and restricted cash, end of period |
$ | 78,533 | $ | 142,947 | ||||
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Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet: |
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Cash and cash equivalents |
$ | 68,550 | $ | 107,733 | ||||
Restricted cash |
9,983 | 35,214 | ||||||
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Total cash, cash equivalents and restricted cash |
$ | 78,533 | $ | 142,947 | ||||
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Supplemental disclosure of cash flow information: |
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Cash payments for interest |
$ | 6,427 | $ | 11,064 |
Non-GAAP Financial Measures
In addition to Offerpads 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 Offerpads 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 Offerpads 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 Offerpads control.
Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins)
To provide investors with additional information regarding Offerpads 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 Offerpads 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 Offerpads 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 Offerpads 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 Offerpads 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 Offerpads 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 Offerpads 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 Offerpads 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. Offerpads 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 Offerpads Adjusted Gross (Loss) Profit, Contribution (Loss) Profit and Contribution (Loss) Profit After Interest to Offerpads 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 Offerpads 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 and homes sold, unaudited) | March 31, 2024 |
December 31, 2023 |
March 31, 2023 |
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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 | |||||||||
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Adjusted gross profit (loss) |
$ | 24,242 | $ | 17,508 | $ | (32,268 | ) | |||||
Adjusted gross margin |
8.5 | % | 7.3 | % | (5.3 | %) | ||||||
Adjustments: |
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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 | |||||||||
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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: |
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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 | ) | ||||||
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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 Offerpads 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 Offerpads 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 Offerpads industry or companies in other industries. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of Offerpads results as reported under GAAP.
The following table presents a reconciliation of Offerpads 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, unaudited) | March 31, 2024 |
December 31, 2023 |
March 31, 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. |
Exhibit 99.2
Exhibit 99.2Letter to shareholdersQ1 2024
A FEW THOUGHTS FROM BRIANDear Shareholders,The first quarter of 2024 was strong, with $285 million in revenue and 847 homes soldboth metrics at the high end of our guidance. Adjusted EBITDA was in line with expectations, reaffirming our confidence in reaching sustainable adjusted EBITDA profitability during 2024. Both gross margin and contribution margins improved within the quarter, driven by the growth of our asset-light businesses and despite a volatile interest rate environment. While the macroeconomic landscape remains uncertain, the first quarter was characterized by increasing stability and we believe this trend will continue through 2024.Our success in the first quarter is due to the strong execution of our team, who have been instrumental in expanding the scalability of our platform across four distinct services. These include: â Offerpad Renovate , which allows B2B partners the opportunity to tap into our renovation technology, cost management, logistics, and ground game within the Offerpad platform. â Offerpad Direc which enables B2B partners to integrate with our top-of-funnel strategies, conversion efficiencies, and in-house closing teams. This program allows us to help more homeowners and reach more customers, while also providing them with the benefit of receiving an optimized offer for their home. â Our Agent Partnership Program which serves as our listing and referral platform, with the goal to discover the optimal solution for every customer. â Finally, our cash offer stands as the foundation of our services.To give an example of the growth in these services, in Q1, Renovate projects grew by 78% year-over-year and represented 11% of our overall contribution profit after interest. We completed approximately 400 renovation projects, generating over $5 million in revenue, setting us on a trajectory for significant annual revenue growth compared to 2023.Combined, our asset-light platform servicesincluding Renovatecontinued to scale, collectively accounting for 43% of total transactions in the quarter. These services have been instrumental in extending our geographical reach into new markets and reshaping our product mix with higher contribution margins.As we look ahead, we anticipate continued improvement in profitability in the second quarter, supported by our focus on operating leverage and expanding contribution margins. We are committed to strategically investing in, and growing, our asset-light services while continuing to expand upon our cash offer foundation.As always, I am grateful to our world-class Offerpad team for their hard work and dedication to our mission of taking the friction out of real estate. We are excited about the opportunities that lie ahead and remain committed to building long-term shareholder value.Thank you for your continued support.Sincerely,Brian Bair Chairman & CEOQ1 2024 2
TOTAL REVENUE ($M) & HOMES ACQUIRED$700$610$600 4,700$500 3,700$400 2,700$285$300$230 $234 $240 1,700$200840 930 806 700$100 678 364 $0 (300)Q123 Q223 Q323 Q423 Q124RETURNS PER HOME SOLDGross Profit per Home Sold Contribution Profit After Interest per Home Sold$40K $30K $20K $10K $0K-$10K-$20K-$30K-$40K-$50K-$60KQ123 Q223 Q323 Q423 Q124
NET INCOME (LOSS), ADJ. NET INCOME (LOSS) & ADJ. EBITDA ($M)Net Income (Loss) Adj. Net Income (Loss) Adj. EBITDAQ123 Q223 Q323 Q423 Q124($7.0) ($7.1)($13.3)($17.3)($15.4)($17.5)($20.0) ($15.3)($22.3) ($20.1) ($17.9)($22.8)($44.8)($59.4)($59.1)Q1 24 TOTAL CONTRIBUTION MARGIN AFTER INTEREST PER HOME SOLD$30k $(3k)$(11k)$16k$4k $12k $8kTotal Contribution Net Sales Holding Selling Contribution Other Contribution Margin After Proceeds Costs Costs Margin Services Margin After Interest InterestSee Appendix for a reconciliation to the most directly comparable GAAP measure and additional information Q1 2024 4
Traction in RenovationsSince 2015, Offerpads 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 IMPACTSINCE INCEPTION Q1 2024~35k $22kRenovations completed Average cost of renovations completed+$600m 24 daysInvested into improving properties Average time for renovation completionOur expertise in renovations speaks for itself.Over time, investor clients weve 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 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 â THIRD PARTY RENOVATION SERVICES Q1 2024 HIGHLIGHTS398 18Total projects completed Markets with projects completed$5.1m 1.9Total revenue Average days in renovation per $1k spent$13kAverage revenue per project
Q2 2024 OutlookHOMES SOLD REVENUE ADJ. EBITDA1750-875 $250m- Approx. $300m Breakeven
Forward-Looking StatementsCertain 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 Offerpads future financial or operating performance. For example, statements regarding Offerpads financial outlook, including homes sold and Adjusted EBITDA, for the second quarter 2024, and expectations regarding 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, Offerpads ability to respond to general economic conditions; the health of the U.S. residential real estate industry; Offerpads ability to grow market share in its existing markets or any new markets it may enter; Offerpads ability to manage its growth and its costs structure effectively; Offerpads ability to accurately value and manage real estate inventory, maintain an adequate and desirable supply of real estate inventory, and manage renovations; Offerpads ability to successfully launch new product and service offerings, and to manage, develop and refine its technology platform; Offerpads ability to maintain and enhance its products and brand, and to attract customers; Offerpads ability to achieve and maintain profitability in the future; the success of strategic relationships with third parties; and Offerpads failure to meet the New York Stock Exchanges continued listing standards. These and other important factors discussed under the caption Risk Factors in Offerpads 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 Offerpads 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.
APPENDIXOFFERPAD SOLUTIONS INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSThree 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
APPENDIXOFFERPAD SOLUTIONS INC.CONDENSED CONSOLIDATED BALANCE SHEETSAs ofMarch 31, (in thousands, except par value per share) (Unaudited) December 31, 2023 2024ASSETSCurrent 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 $ 379,694LIABILITIES AND STOCKHOLDERS EQUITYCurrent 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 debtrelated 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 contingenciesStockholders equity:Class A common stock, $0.0001 par value; 2,000,000 shares authorized; 27,300 and 27,233 shares issued and outstanding as of March 31, 2024 3 3 and December 31, 2023, respectivelyAdditional paid in capital 503,500 499,660Accumulated deficit (415,402) (397,887)Total stockholders equity 88,101 101,776TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 369,726 $ 379,694
APPENDIXOFFERPAD SOLUTIONS INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSThree 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 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
APPENDIXNon-GAAP Financial MeasuresIn addition to Offerpads 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 Offerpads 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 Offerpads 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 Offerpads control.Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins)To provide investors with additional information regarding Offerpads 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 Offerpads 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 Offerpads 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 Offerpads 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 Offerpads 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 Offerpads 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 / MarginOfferpad 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 / MarginOfferpad 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 Offerpads 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 InterestOfferpad 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 Offerpads 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. Offerpads 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 Offerpads Adjusted Gross (Loss) Profit, Contribution (Loss) Profit and Contribution (Loss) Profit After Interest to Offerpads 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 Offerpads 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 March December 31, September 30, June March and homes sold, unaudited) 31, 2024 2023 2023 30, 2023 31, 2023Gross profit $ 22,595 $ 16,692 $ 23,973 $ 22,231 $ 7,285Gross margin 7.9% 6.9% 10.2% 9.7% 1.2%Homes sold 847 712 703 650 1,609 Gross profit per home sold 26.7 23.4 34.1 34.2 4.5Adjustments:Inventory valuation adjustmentcurrent 623 565 918 169 7,285 periodInventory valuation adjustment(645) (713) (318) (13,679) (51,515) prior periodInterest expense capitalized 1,669 964 235 1,358 4,677 Adjusted gross profit (loss) $ 24,242 $ 17,508 $24,808 $ 10,079 $ (32,268)Adjusted gross margin 8.5% 7.3% 10.6% 4.4% -5.3% Adjustments:Direct selling costs (6,969) (5,829) (5,593) (5,743) (18,061)Holding costs on salescurrent period (887) (742) (453) (269) (1,248)Holding costs on salesprior period (483) (285) (72) (567) (1,886)Other income, net 754 1,065 3,837 965 282 Contribution profit (loss) $ 16,657 $ 11,717 $ 22,527 $ 4,465 $ (53,181)Contribution margin 5.8% 4.9% 9.6% 1.9% -8.7%Homes sold 847 712 703 650 1,609 Contribution profit (loss) 19.7 16.5 32.0 6.9 (33.1) per home soldAdjustments:Interest expense capitalized (1,669) (964) (235) (1,358) (4,677)Interest expense on homes soldcurrent (2,521) (2,041) (2,622) (1,292) (5,498) periodInterest expense on homes sold (2,426) (1,466) (553) (3,708) (12,032) prior period Contribution profit (loss) after interest $ 10,041 $ 7,246 $ 19,117 $ (1,893) $ (75,388)Contribution margin after interest 3.5% 3.0% 8.2% -0.8% -12.4%Homes sold 847 712 703 650 1,609 Contribution profit (loss) 11.9 10.2 27.2 (2.9) (46.9) after interest per home sold
Adjusted Net (Loss) Income and Adjusted EBITDAOfferpad also presents Adjusted Net Income (Loss) and Adjusted EBITDA, which are non-GAAP financial measures, which the management team uses to assess Offerpads 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 Offerpads 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 Offerpads industry or companies in other industries. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of Offerpads results as reported under GAAP.The following table presents a reconciliation of Offerpads 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, March December September June March unaudited) 31, 2024 31, 2023 30, 2023 30, 2023 31, 2023Net loss (GAAP) $ (17,515) $ (15,441) $ (19,986) $ (22,344) $ (59,447)Change in fair value of warrant (344) 109 (131) (435) 389 liabilitiesAdjusted net loss $ (17,859) $ (15,332) $ (20,117) $ (22,779) $ (59,058)Adjusted net loss margin (6.3%) (6.4%) (8.6%) (9.9%) (9.7%)Adjustments:Interest expense 4,905 5,154 4,406 1,867 7,432 Amortization of capitalized interest 1,669 964 235 1,358 4,677 (1)Income tax (benefit) expense 123 (8) 6 43 122 Depreciation and amortization 166 172 175 178 202 Amortization of stock-based 3,867 2,000 2,017 2,055 1,843 compensationAdjusted EBITDA (7,129) (7,050) (13,277) (17,278) (44,782)Adjusted EBITDA margin (2.5%) (2.9%) (5.7%) (7.5%) (7.3%)
Q1 2024 LETTER TO SHAREHOLDERSinvestor.offerpad.com
Document and Entity Information |
May 06, 2024 |
---|---|
Cover [Abstract] | |
Amendment Flag | false |
Entity Central Index Key | 0001825024 |
Document Type | 8-K |
Document Period End Date | May 06, 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 |
1 Year Offerpad Solutions (PK) Chart |
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