Opendoor TechnologiesOPEN

The company brought in $0.88 billion in revenue last quarter, which was lower than the $0.91 billion analysts expected. It also reported a loss of $0.17 per share, more than double the $0.07 loss that was anticipated. The stock fell about 9 percent today as the market reacted to these results.

Despite the misses, management pointed to signs of a turnaround. The company bought 77 percent more homes than it did in the previous three months, showing it is trying to grow its inventory again. It also improved its contribution margin, which is the profit left on each home sale after paying for things like repairs and selling costs. Management expects to reach a key profitability milestone by the end of 2026, but for now, the business is still spending more cash than it brings in.

See the full quarter, and how our tracked metrics did

Source: 8-K filing

Key highlights

• Home acquisitions jumping: The company purchased 4,378 homes this quarter, which is a 77% increase from the previous three months and shows the business is starting to buy more inventory again. This growth is important because Opendoor needs to scale up the number of houses it flips to cover its fixed costs and reach profitability.
• Inventory health improving: Only 9% of the homes Opendoor owns have been on the market for more than 120 days, a significant improvement from 51% in the same period last year. This faster pace of sales reduces the risk that the company will be stuck with houses it has to sell at a loss if the market turns.
• Marketing efficiency gains: Opendoor secured 6,908 purchase contracts while spending just $5 million on marketing, compared to $81 million in marketing spend the last time it hit similar contract volumes in 2022. This shift suggests the company is finding cheaper ways to find customers through better products and word of mouth rather than just buying ads.
• Mortgage business gaining traction: Over half of the company's scheduled home sales in Colorado are being financed with an Opendoor mortgage, a service where the company lends money to its buyers. Adding these extra services helps Opendoor make more money from every house it sells without needing to find a new customer.
• Stronger growth outlook ahead: Management expects revenue to grow at least 20% compared to last year in the next quarter, while contribution margins, which measure the profit left from a home sale after direct costs, should stay between 4% and 4.5%. This forecast indicates the company believes it can keep growing its sales volume while maintaining its profit targets.

Our take: A very encouraging quarter that shows the business model is finally stabilizing. The massive 77% jump in home purchases, combined with disciplined spending on marketing, proves Opendoor can grow without burning excessive cash. This significantly strengthens the case that the company can reach sustainable profitability by the end of 2026.