Offerpad Solutions Reports 11.2% Revenue Decline, Improved Profitability in Q3 2024

Offerpad Solutions Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, reflecting significant changes in revenue, profitability, and strategic operations compared to the previous fiscal period.

For Q3 2024, Offerpad generated revenue of $208.1 million, a decrease of 11.2% from $234.3 million in Q3 2023. The number of homes sold also declined, with 615 homes sold in Q3 2024 compared to 703 in the same period last year. The average resale home price increased slightly from $327,000 to $335,000. For the nine months ended September 30, 2024, total revenue was $744.5 million, down 30.7% from $1.1 billion in the same period in 2023.

Despite the decline in revenue, Offerpad reported a gross profit of $17.1 million for Q3 2024, down from $24.0 million in Q3 2023. However, gross profit for the nine months increased to $61.6 million, up 15.2% from $53.5 million in the prior year. The gross profit margin for Q3 2024 was 8.2%, down from 10.2% in Q3 2023, while the nine-month gross margin improved to 8.3% from 5.0%.

Operating expenses saw a significant reduction, with total operating expenses for Q3 2024 at $26.1 million, down 40.1% from $43.5 million in Q3 2023. This reduction contributed to a loss from operations of $(8.9) million for Q3 2024, an improvement from $(19.5) million in Q3 2023. The net loss for Q3 2024 was $(13.5) million, compared to $(20.0) million in the same period last year, marking a 32.3% improvement.

For the nine months ended September 30, 2024, the net loss was $(44.8) million, a significant improvement from $(101.8) million in the same period in 2023. The company’s net cash used in operating activities was $(12.4) million, a stark contrast to the $277.0 million provided in the same period last year, primarily due to a strategic reduction in real estate inventory.

Strategically, Offerpad has reduced its home acquisition pace to balance inventory levels amid challenging market conditions characterized by elevated mortgage rates and inflation. The company has also expanded its market presence to 26 markets and enhanced its agent partnership program, allowing agents to request cash offers on behalf of clients.

As of September 30, 2024, Offerpad reported total assets of $338.5 million, down from $379.7 million at the end of 2023, with total stockholders’ equity decreasing to $64.7 million from $101.8 million. The company continues to rely on secured credit facilities for financing, with a total borrowing capacity of $1.0 billion, of which $482.2 million was committed.