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Opendoor’s Q3 2023 revenue stands at $980 million, a decrease of 71% YoY and 50% QoQ.
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The company sold 2,687 homes, down 68% YoY and 50% QoQ.
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Net loss for the quarter was $106 million, compared to a net loss of $928 million in Q3 2022.
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Adjusted EBITDA was negative $49 million, an improvement from negative $211 million in Q3 2022.
On November 2, 2023, Opendoor Technologies Inc (NASDAQ:OPEN) released its Q3 2023 earnings report. Despite a challenging U.S. housing market, the company’s results were in line or ahead of prior guidance. The company’s return to positive contribution margin and improved cost structure, coupled with a strong balance sheet, indicate resilience in a volatile market.
Financial Highlights
Opendoor’s Q3 2023 revenue was $980 million, down 71% compared to Q3 2022 and down 50% from Q2 2023. The company sold a total of 2,687 homes, a decrease of 68% YoY and 50% QoQ. The gross profit for the quarter was $96 million, compared to a loss of $425 million in Q3 2022. The gross margin stood at 9.8%, a significant improvement from -12.6% in Q3 2022.
The company reported a net loss of $106 million for the quarter, compared to a net loss of $928 million in Q3 2022. The adjusted net loss was $75 million, an improvement from a loss of $328 million in Q3 2022. The contribution profit was $43 million, compared to a loss of $22 million in Q3 2022, marking a return to positive contribution margin. The adjusted EBITDA was negative $49 million, an improvement from negative $211 million in Q3 2022.
Company’s Outlook
For Q4 2023, Opendoor provided a revenue guidance of $800 million to $850 million. The company expects a contribution profit of $15 million to $25 million and an adjusted EBITDA of negative $105 million to negative $95 million.
CEO’s Commentary
CEO Carrie Wheeler commented on the results,
Our third quarter results were in-line or ahead of our prior guidance driven by our continued focus on delivering operational excellence through pricing improvements, cost savings, and risk management. The third quarter also marked our return to positive contribution margin. These results demonstrate our continued strong execution and market share gains in what remains an uncertain U.S. housing market. With an improved cost structure, strong balance sheet, and scaled customer acquisition channels, we believe we have laid the foundation to emerge from this cycle more resilient and well-positioned for continued share gains and long-term profitability.”
Conclusion
Despite a challenging housing market, Opendoor Technologies Inc (NASDAQ:OPEN) has shown resilience with its Q3 2023 earnings. The company’s return to positive contribution margin, improved cost structure, and strong balance sheet are positive indicators for potential investors. However, the significant decrease in revenue and home sales compared to previous periods highlights the challenges the company faces in the current market conditions.
Explore the complete 8-K earnings release (here) from Opendoor Technologies Inc for further details.
This article first appeared on GuruFocus.
