Opendoor Q4 2020 Earnings Report
Key Takeaways
Opendoor Technologies Inc. reported strong Q4 2020 results, exceeding prior forecasts with a focus on digitizing the real estate transaction. The company saw increasing business momentum, healthy margins, and plans to double its footprint to 42 markets. They also became publicly-traded and completed a follow-on public equity offering, increasing cash and marketable securities.
Became publicly-traded via a merger on December 18, 2020, raising net proceeds of $970 million.
Completed an underwritten follow-on public equity offering of $860 million of net proceeds in February 2021, with $1,460 million in cash and marketable securities at the end of Q4 2020.
Tripled inventory balance from Q3 2020 to $466 million and 1,827 homes at year end.
Generated 15.4% Gross Profit margins and 12.6% Contribution Profit margins in the fourth quarter of 2020.
Opendoor
Opendoor
Forward Guidance
For the first quarter of 2021, Opendoor expects total revenue between $600 million and $625 million, representing 146% sequential growth over Q4 2020. Adjusted EBITDA is expected to be between $(33) million and $(28) million, with Adjusted EBITDA margins of (5)% at the midpoint.
Positive Outlook
- Expected return to sequential revenue growth across existing markets.
- Strong and increasing demand for Opendoor’s service.
- Accelerating pace of home acquisitions.
- Plans to launch six new markets in Q1.
- Revenue is expected to be between $600 million and $625 million.
Challenges Ahead
- Adjusted EBITDA is expected to be between $(33) million and $(28) million.
- Adjusted EBITDA margins of (5)% are expected.
- Uncertainty regarding inventory impairment.
- Uncertainty regarding stock-based compensation with respect to future grants and forfeitures.
- These items, which could materially affect the computation of forward-looking GAAP net income (loss), are inherently uncertain and depend on various factors, some of which are outside of the Company’s control.