Earnings call transcript Q4 2022

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Operator

Good day and thank you for standing by. Welcome to the Opendoor Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]

today’s being that advised be conference recorded. is Please hand over Vice to would of now speaker conference to like Wang, I your the today, Relations. Investor President Elise Please go ahead.

Elise Wang

Relations additional afternoon. release Please earnings shareholder note of at will Relations letter, section found call our and section in be and Details be can that on the you are available this corporate good results Thank the company’s simultaneously investor.opendoor.com. and website. on management which of commentary our website Investor of the webcast Investor our

regarding plans, Before you statements we condition, of contains within strategy to of Opendoor start, performance, the I business statements would future opportunity are objectives than meaning market financial financial but other that that forward-looking could be statements forward-looking, like anticipated remind fact the and All discussion deemed expansion, the operations. including, for historical following laws. statements federal securities and and management to, not limited statements

promises undue results to involve from statements that actual risks cause nor statements These discussed here. may those guarantees and forward-looking not neither reliance be differ on Such and are uncertainties them. placed should materially

filed of report that found year to Additional statements most be forward-looking actual after Factors XX, XXXX, in December Opendoor’s ended our on annual section report information XX-K. the by results differ recent Form periodic can XX-K Risk the that cause could from for updated as

required a your as obligation result on as questions, law. future Any forward-looking of based to no revise Opendoor statements and made except and or assumes otherwise, information, or new to them, are responses conference in reasonable as events including today current by this of management’s update call, whether expectations assumptions

the financial to non-GAAP references these company’s contains financial The are evaluate operational to investors useful discussion measures measures. measurements, believes financial to supplemental following performance. The certain company as non-GAAP

GAAP directly at a reconciliation the measures investor.opendoor.com. of see comparable of these each website financial please metric, most non-GAAP to For our

of Opendoor. Executive to the will Carrie call turn Wheeler, over now Officer Chief I

Carrie Wheeler

my Also our the of will speaking afternoon. looking is Officer; on not but Christy Schwartz, to Enterprise which with Fraser, Good me you Markets earnings to forward President Business. am with I path Capital our Financial as because because today Chief Dod Interim call and Opendoor the call and CEO, ahead, our of first stronger than clarity believe only as make before. today, it’s I

been While lost have not sight major cycle our has easy, vision. navigating never a housing of we

will at of are and We a residential enable managed sell tap building real that to the marketplace button. move buy, for estate consumers a

benefit energizing for and increasing Challenging I and moment. role. putting of center to are deeply the focus CEO customers value we we our this clear to decided building where towards. why and proposition focus front is to these at of need times urgency, the believe in take demanding It’s have what teamwork what that’s like also and me part I

anywhere Our about still because come value estate traditional offline proposition go and remains else. get in to NPS high earn convenience of able we cash spreads, Even of an are and and Customers XX% of home sellers they XX. XX% cannot offer process, to a over that is the moment and incredibly our that strong, the this certainty resellers they broken. create nearly us of of certain process convert totally real through

are stand today. We to consumers what alone we in offer able

U.S. runway the we significant a of in, we the box XX% almost of coverage are current all future today growth. and estate buy between our markets our real Given transactions for in have

ultimately core cash positive highly returning business As focused on free are making to and progress. for flow now, our we right stabilizing and we solid are

before behind loss QX the to as reset, homes we be cohort we two-thirds acquired sell or making the As we expect our and also sold will of contract year-end, market were housing in of it known shortly.

reset are the X% are sold. once since deliver they we are homes X% target with contribution to line expectations outperforming our margin track acquired and fully margins annual our The to in on have

we marketing lowered However, acquisition have our in lower spend. with our volumes spreads offers, coupled via higher

to given spreads market term continued in keep how near the housing high into relatively expect uncertainty the will We perform.

have from housing on Ultimately, level, and macro lower That so spreads reduced as into last continue acquisition we said, our see consistent will translate more we sign. we record stabilization of to expect would spreads we in indicators year’s do higher early volumes. the positive based market to

going net are housing adjusted XXXX, are this light some in we how meantime, the in structure the assuming market. business of cost year normalization returning of pacing expected our the income next, goal to profitability volumes the In and to manage with in

addition to further business, XXXX estate. key for the three building stabilizing in first-party residential are our we our on real areas marketplace to In towards managed progress aligning

First start demand sellers more matter more funnel Opendoor that with that simplicity Opendoor. an sellers the so our on is No Opendoor. This choose sellers home to macro we the year, backdrop, enable focused are to and certainty diversifying the value journey provides. offer

recent and a set way. The reach of partnership is scalable efficient increase in our one launch example our substantially key Zillow to

time. expanding list listening that MLS, on can the Opendoor product, retaining the an also certainty our of while are they of the certainty offer option We sellers which at take of gives any

includes inventory pricing, focus and greater platforms. efficiencies operations and our is velocity, foundational realize by competitiveness customer improvement Second increase pricing to business turns. the strengthening building our to shifting from capabilities offer continued to This and in scale operational for throughout

reduce invest platform and infrastructure We and will productivity refactoring tech in enhance also to fixed expenses. our

going are which disappointed full I we will than least don’t do these XXXX. be to of expect that. at all basis in year-end, realize from if of the better XXX after by we We margin points improvement impact initiatives

critical position our a years to to building share off-balance product offering that and market managed This finally, creating have be on- volumes exclusives, will And third-party enable of are mix sheet capital to we to gain will transaction a marketplace. efficient come. Opendoor for

focused effects an and market; individual are phases; We on we third, we scale to our and this product and playbook perfecting consumer will markets. will liquidity we scale first, second, the plan in network to all refine experience; three build in

for be Phase to go required X that’s selection year, liquidity in and Given a selected our we build and markets expect in investment we great highly X XXXX, deep for focused user approach meaning to will experience. this

While remain the launched near-term realigning our transactions XX% by goal have are to of significant in in those we long-term, our year end of where ambitions our we marketplace exclusive. the markets

As our are we about look ahead, energized we future.

strengthening that stabilize our goals we team, believe business we place to clear set will have sheet in for goals. balance plans long-term the in foundation and ensure short-term, and the realize the We while have we the the these

status buying that and broken is process is to no are a of position we that home have be the quo like current envisioned. other and convinced that category selling winner serve, we customer transform every always With and Opendoor the continue we a more to the in

discuss With that, financial to I highlights. will Christy the to our call over pass

Christy Schwartz

Carrie. Thanks,

to versus of resale results since taken changes prior housing to pace QX market significant to We our quarter during year midyear uncertainty. actions a due the beginning fourth Our market. clearance acquisition reduce billion rates reflect and time slower down $X.X decision navigate delivered in revenue, XX% of our

X,XXX in by the higher than our billion full However, XX% purchased homes versus fourth in This driven the which the down performance. was We we was quarter, XXXX. strong growth $XX.X year. year first XX% half revenue, with ended prior

XX,XXX down XXXX. we X% acquired For the homes, year, full versus

quarter, reflects quarter. to contribution typically was resale is that QX margin was in margin X.X% the X.X% which negative homes, the and longer profit seen in our our gross fourth cohort the mix dated the as softness well Our of as lower fourth weighted seasonal

expectations we proposition, and create homes stronger or is homes of in cohorts record of still the prior offered us book than years. cohorts to new value off This demonstrates spreads July despite a enables year last Our above on our which environment. well negative start of in HPA our acquisition a to attractive starting strength from performing

of we X.X%, margin Notwithstanding the target beginning compared annual the of X%. to challenges to quarter macro our year XXXX, in contribution margin faced was contribution full our X% second

expenses million Adjusted We EBITDA versus with million quarter, loss adjusted fourth $XXX both XXXX. $XX the adjusted with EBITDA XXXX million loss of adjusted in $XXX EBITDA million operating totaled $XXX of consistent was guidance. ended in and

our to Turning sheet. balance

of and end cash, As unrestricted equity $X.X $XXX in of homes. million of had $X we comprised the equivalents and our the total capital securities, billion in billion of marketable invested cash of year,

we asset-backed is addition, non-recourse which significantly had levels. inventory $XX facilities, billion in current in In excess of

our will XXXX. costs. capacity committed lower This restricted cash in expect reduce required we associated and that will our We interest levels

enter return by the of XXXX, capital goal mid-XXXX. with annualized positive are we to adjusted to approximately and upon we expect net business preserving billion retail on delivering strong to As revenue, income discipline, we cost which achieve operating $XX is highly our focused

three had than return our some share by years expect Assuming the to we for resuming the adjusted to footprint. be in to doubling normalization pace market we housing the able ago, of market this more market,

early are of back actions will were the to the dictate mentioned, record said, cautious reduce year. Fed’s the stance near-term continue we with Carrie That most half levels the operate see started for we we for to continuing in from to as last spreads the housing. We signs outlook have allowed a us stabilization, which housing some has turn in of to embedding of believe as

margin our and Consistent as of expect between OpEx, with $X.XX we million. loss new half we this book we trough EBITDA billion to margins in define expect in positive quarter QX second our increase $XXX we the to between be Adjusted $XXX guidance, the guidance, expected will levels adjusted adjusted of million. and before be is terms around delta $X.XX to to and million to returning billion year the as In $XXX be contribution contribution EBITDA our revenue inventory. first which between the of

important year XXXX an is Opendoor. for

that into year business lean more we resilient. the and operate strengths will to ensure agility efficiency across our We with the and exit and stronger core

We best also the invest capital initiatives our for on that focusing growth. position long-term wisely, will sustainable us

leader be company. market to Our remains a profitable goal generational and

I questions. for the call will now open

Operator

Securities. first from of question Nick you. with line the [Operator JMP Instructions] comes Thank Our Jones

Your now line is open.

Nick Jones

Thank If I for Great. ask you the two. could taking question.

When will is of about the improve year, And that in First, sounds like then it? we think I it the to negative right way still negative half be maybe the back margins. around kind just and about a full half, think follow-up. the unit have first then

Carrie Wheeler

to today. call Hey. voice return new will on The our over Christy. it I

accepted Chief has Just to capably by Christy’s Opendoor of Officer years. Accounting be our CFO with and very Interim background, way role. She’s for been six

over hand will I to Christy. you, So

Christy Schwartz

question. Hi, Nick. Happy take the to

of of return our results positive of and mix letter. we by the book now each into transparency We the expect and on book, new to book Right margins a old some reflecting margins second shareholder unit to our half added are XXXX. have

as be end to pulled we XX% We while through also preserving QX. our have in expect of focused expeditiously by and as possible, book selling or on the very old been contract margins

raise cohort, feel book offer soon QX about those inventory and good new margins. we As cycle we as through the really

through. The contribution X% and inventory once in X.X% delivered it in line margin new to of to target margin book fully with X% flow contribution perform QX we of our expect

So book. as we expect by we return positive as the the are such, to selling new unit half to back inventory mix of second to the margins

Nick Jones

then some And progress maybe you through should efficiencies, unpack those we look as maybe Thanks. just to up Great. XXXX? on we where the of show can see

Carrie Wheeler

variable show mean reduce It’s structure. initiatives improve cost, a it Yeah. to I really designed It show Carrie. efficiency, in I in margins, the SG&A OpEx increase really our in a little mean fixed I operating our of will business. of the will have but will line, also up host take up you. what CM across entirety our that, bit It’s Nick. it’s

So up show it the Board. across will

Nick Jones

both. Thank Great. you

Carrie Wheeler

Okay.

Operator

you. Thank

of question next the from Jay comes Our Wedbush. McCanless with line

now Your is open. line

Jay McCanless

the I structural Thanks you that bps, guess, and what of cost again, out, talk could for XXX questions. cost the were Could Hey. savings. one, XX% break reductions I guess by about from taking missed saying you I please? first you my efficiencies

Carrie Wheeler

here where points system happy frankly, more for the just today the lot go is we again. moment have volumes us, be in of in we a Yeah. It’s Carrie I lower am been off opportunity have basis to perfect efficient. We system, it a too. and a in to

build more and back velocity, now build durable building really for have want for and savings to the for been we business. years and long-term We into efficiency scale

saving Those just as going to I are Nick -- areas. across said to host of a come whole

show with SG&A, our operators, in our up OpEx will in contribution show our i.e., our line, in of variable you as ops, reduce show fixed the efficiency margin line, team, some market over direct some it it ops them of Some of spend. the also of will up just home in up the time unit lower

XXXX we The of Those will that’s don’t and next expect them, though basis course are through points show initiatives are impact to that realize year. going up we until after of XXX where the XXXX. full the

Jay McCanless

guess, And guess, or, it, homes bought that sub-X,XXX, slower facility quarters? capacity more I are expect to you question, that second what be a where taking number I is of next then, credit better X,XXX the at the X,XXX along quarter. should this especially facilities in that kind over if pace, the you something year now? is run for is And we Is Okay. call rate, this business going X,XXX down your four running to

Carrie Wheeler

in of will Dod Yeah. the acquisitions thinking about are over the the comment bit light pacing right talk and showing then take structure up. are about little we capital how of to I part volume. we now turn it’s it are question, how and things a I first where we where And of just through will in pacing to for terms

components first market second on The and what’s on that. mean on in One on all now. spread. volumes going is are question to two is of sellers side, the with And the know think we right the is the market part I I going sidelines. our what’s your

are Transactions year-on-year. XX% down

If new are now. the box, have listings to engage fewer buy our just means markets there XXXX ever and and that right are with they since our lowest in us been you look sellers for market across the

bid On means at you our lower know, and to conversion, into to for lower our led lower lower as offers end, high least spreads are high offers, we continuing contracts. spreads us offers,

and with fair we with continue new a we will and last as decrease just given levels the I do to fact record year that the the so expect come year to have late We seasonal But tailwinds since into little spreads our the also bit market housing is the is continue reality caution for going uncertain to at operate will we continue future. to market we the of and starting bit. housing and spreads fairly up a high a operate firm to to the foreseeable are remains

off out where pacing sellers in volumes. specifically offer expect as get year, volumes. between volume to the on in jumping through on suitable back break we a decreasing our move the have for lot us I a point We tends you, a business to since market home Come can to been lag pickup tell don’t we of a are do quarter. there’s see and back as and spreads last for to in contract we we second be

the seeing Seasonality increased goes pace about on back throughout shows a Seasonality the think about are that’s of to talk want half we tailwinds where thinking But do bit the about you not facilities? entire half. year, form right a you slower how spreads of sizing for now. we in up how Dod, little volumes are the we in the back year.

Dod Fraser

too. Happy Yeah.

the I think, $X.X at $XX highlight, of just were we and billion I mean, balances to in the have inventory capacity. billion end year

view of adequate than more of is are forward headed. sort that financing So where for the and we

to done taking have seven down be capacity that capacity is we something -- like have lenders is So and important I and the for the modulating utilized I that piece that’s years here. think that highlight other to and been so

in and capacity like think I are our we it’s something So account very with -- still for to any to we ample reducing upside have feel inventory. will comfortable

Jay McCanless

Okay. Great. questions. Thanks for taking my

Operator

you. Thank

of Our next the line Jason question from Oppenheimer. Helfstein comes with

is now open. line Your

Chad Larkin

on for Hey. is Chad Jason. Thanks. This

where markets launched. the your questions So exclusives that. XX Two on through marketplace of going you in XX% talked transactions about is

the just home total back be that’s of positive unit kind kind return or cohorts? is launched in percent any economics that, then Thank the the by the in First, you end improvement the you. will believe of half sense that the in new of do to And your year? what markets of you driving

Carrie Wheeler

Chad. Hey,

focus to for in the for is or local XP market. test and marketplace right now Our refine really

to We and program. are excited are are about into we far the seeing signal sellers excited we so seeing very the being opt

We have right listings are the now. of in market the about we X% share that trialing

So off start. to an encouraging

experience we two of so spread kind out and first, number on, want and own density the liquidity we before to that is perfecting will can step and do that that to we further. But to want we focus customer build really then market

I It number don’t a the acquire but the given XXXX. will hoping think, I right we a relatively, It’s of know by an be the by have end number the pace will be small the at year. target. now, -- we the markets number of into are of to and end actual year

vast has the off It’s margins we all the in do unrelated old out book new play the as as second said entirely for our margins to year. half. to book of that rest going the That what Christy and the sell becomes between mix contribution to how majority with that are to our of to our

Operator

you. Thank

next from Citi. line the question Arounian comes with Our of Ygal

now Your line is open.

Ygal Arounian

everyone. kind start afternoon, I Good and for stabilization see last macro to little Hey. you second of rates are a that bit see back we couple a the -- to and to talking again. impact just go to the go about want back weeks, of go up demand start just mortgage and in

So just and bringing spreads are are you your a wanted are on thinking bit. of forward as to get you spreads building down what a you into we your the move what and little macro sense

understand to the work are the our the market rest what house way through year? your of as Just want we expectations for

Dod Fraser

Yeah. Happy to answer.

is you right if look now. look, at So, where the market the

We to lows multi-decade the low are continuing very supply see continuing. really in market,

since listings New XXXX. the lowest are

So setup in more a for good pricing stable that’s XXXX.

risk typically to that how in four the it, perspective, call for, taking a keep I we own we from months. homes sort mind also are think important of price it’s housing

duration So we that’s are taking. of exposure the

shows back the And of home home look at have fun shareholder if in our a we appreciation. that letter price chart you month-over-month appreciation, price

XXs, was very in of strong almost half that year. year, and appreciation you at the of then you the home back the back all into look see you price If going the first half the moderates

we So this we where January, have the able to the of have year seen point been given leading indicators in is the spreads. strong those reduce

though, very through interest cautious continue, around rate the that to impact be point how consumer could volatility flow year, of back to your the We in on demand. to half and the

if will higher inflation the has case year, raise expecting. the people are increase combat of need base than is in that our Fed half especially to higher rates to to So back spread actually the

Ygal Arounian

it on of -- Got in is it. anywhere, year. expansion really maybe and back changed, we it changed, all And not normalized buy have of pull that hasn’t last in were box have purchasing strategy on homes in does purchasing holds definitely the it you a but Thanks. just things, of level and Can have back near-term until back are terms to the you get all markets, change, the I is -- market box of off buy we mode understanding you or those pulled not pulled the any is you risk mean, pace market? your at your back more overall

Dod Fraser

Yeah.

tackled I think the way dispersion. in spread is the through that we today this and past have

pricing changes that by so or well and a of So account sort markets risk you can pockets for by different within so by higher within spread risk. for really or play charging market the adjust point we even to account lever will code in specific and out zip both price or which otherwise by see markets, that’s terms as we as of that

Ygal Arounian

Okay.

Dod Fraser

spread adjusting to buybacks of based at customers those. specific the on on the for starting back coming not it’s So the be riskiness

Ygal Arounian

it. Got Thanks.

Operator

Thank you.

KeyBanc Patterson Justin of line the from Capital comes Markets. question next with Our

Your now open. line is

Justin Patterson

build channels back frame and talk Thank relationship. know how core to to the a Can other versus think the about you it’s just here, steps and moving secondary you about pace that Thank quality very exclusive but very we to to the you Zillow go expanding, really And question perhaps the you and think afternoon. then just Carrie, markets, in you get that funnel conversion new you early about the Great. that of the succeed on business? some start supply I markets to from with. helps the you. how relationship I lean could very, just into do those need on? talk just much about density good the of wanted with to

Carrie Wheeler

We the Justin. you repeating hearing you question, a bit of Hey, hard part mind Do a time your for little first up first had broke me. there that?

Justin Patterson

that. about Sorry

The you Phase first for question needed around exclusives the X build Can talk market of product. about the steps was that? density just to just and

Carrie Wheeler

system It’s really more from and we through aggregating our it’s had demand, the really aggregating bringing buyer supply XP there started which time. about over haven’t on business, about then but buyers into

early. launch. Zillow the as a it’s had side, said, On Day Valentine’s you We

So far, so good.

to offer front us a us, about over be prospects very that marketing expect where our it to will and We in more course us we for home in partnership, markets and sellers. for a lot going launch year. interesting for the accretive are enthusiastic and of think optimistic the the But channel to allow and more it’s of put just brand we our

Justin Patterson

you. Thank

Operator

Thank you.

the from Nagle Curtis comes question line with next of Our Bank America. of

Your open. now line is

Curtis Nagle

Great. wanted Carrie, on to for for I the Thanks focus spreads. just sec taking questions.

far case? be So albeit and if nice that heard margins you the that you spreads as if a sure further the so if does pulling little led like bit new potential contribution up volumes. am I it incorrectly, year, case, this but cohorts, we I go how the not into margins sounds might contribution was to that’s lower spreads, impact the a took back some

Carrie Wheeler

one, levels, spreads comment the new last late I been made and we have as at is, record since reducing they we think level we come pulling, peak reduced year spreads even into uncertainty, the when these record them were we we year. were

underpinning of tailwind; of have and what seasonal new listings, market of the you. seen reasons, in and we have made stabilizing Dod the the like is that comment where HPA supply earlier about dozens terms signs we two, prospects, that are Two housing

so while. to to do expect We continue for a

headwinds the the turn tailwinds every of seasonal second year. said, seasonal being year, half in That into

the like So half year. we look to raise there that is will some spreads of back again chance the in

Curtis Nagle

Okay.

Carrie Wheeler

we and to our continue a seeing I to I will we raise in it’s will dynamic are mean, We see, of that as are signal. we market the what to and so think get response beauty is we do -- the able more business this

Curtis Nagle

it. just guidance. the then And XQ Got Okay. a on follow-up

million For negative How into incorporated million, think that would margins the the $XXX GAAP we about that? EBITDA. gross $XXX should be

Christy Schwartz

generally that. on Curtis, margin. take don’t We gross guidance I provide will GAAP

on adjusted You And our look can old for of you and margin the into our can kind inventory you EBITDA OpEx. an to at margins, look -- also There’s the letter idea that by letter back of get two are seeing and helpful. in we contribution would the margins those of that can using book book gross book adjusted shareholder at shareholder new table and books. in new yeah, a the breakout of inventory book be old

Curtis Nagle

Okay. you. Thank Got it.

Operator

Ryan next [Operator of you. Thank Tomasello KBW. Our line from comes question with Instructions] the

line now open. Your is

Ryan Tomasello

everyone. detail you get income more $XX for implies in you of questions. contribution plan cetera. mix baking et bit there back revenue. guess running how Thanks math taking assuming baking at economics for you the or assuming adjusted unit on net maybe the billion significant that Can contribution Hi, provide for maybe OpEx, in either higher XP, assumptions margins, OpEx financing to side or of just profitability margins, you envelope the XP, a are to are What of X% some I altogether. efficiencies

moving there? Thanks. to just So trying understand pieces the

Carrie Wheeler

are Number highly bears income I net as quickly take Yeah. that on am mentioning, it our adjust business to Ryan. possible. one, to we focused profitability returning one, happy as

should a say, XXXX, back billion to of home environment. by, And there. annualized $XX is revenue normalized more we middle the of there the believe assuming get tipping number us get point one we assumption, For

and are were, just additional where today, less share we normal for at and back which a you go share, you back which good If than like-for-like and then look the like-for-like the housing at XXXX. is frankly, have market Xx think expansion in is where for to With billion combination about $XX of more markets. XXXX little adjusted a in even share gets terms in we back you a analog of we you bigger box buy new

the on topline. So that’s

awareness you channel, think you. deeper have by much to that don’t had what to have too number, hard greater XXXX, much I add than squint and to partnership in the get brand we on way, then,

And after be system mean, about still XP we X back that, think call to then as to X%. points of to But comments, normalized at going and throughout the business earlier to the in on my said turns a the turns, we margin least we side, would X.X contributing entire I turns XXX I basis year. are X% expect margin

I think get you positive. all that put to you together and ANI

lines It does of be have your for again, we a large a or example. XP mix of and i.e., is in so we our buyers asset-light -- for assumptions buyers business, product conservative not these embedded certainty, how listed lot And kind out to put that markers or into new capital-light number. of haven’t

billion we So feel good about the $XX marker.

Ryan Tomasello

of enough a XP the what past a Thanks. sheet how and spend while to you transitions drive still mix transactions. Okay. business, you intensive there a in be cohort business, you a are targeting about the the support thinking XP both cash assume I Great. there business capital adoption? And some move you capital you to the balance would with the to and here then marketing scaling of providing you large understand XP that Is for to once a consider requirements XP business quick the follow-up also flexibility would with trying enough level be are look will balance just XQ provides which minimum to to invest

Dod Fraser

to Happy answer that. Yeah.

financing to executing very quarter. do are in We our in substantially that facilities, have But our current unrestricted your is. we we have $X with plan our look, don’t point, today, in comfortable billion minimum the where are cash I the cash. think, requirements capital So, business $X.X first billion cash but we below those balance guide beyond

we comfortable So articulated, more are is very plan the have that in plans the are plan with are I think going $X after, finance to enough capital than the we that billion we against. we marketing

Operator

Thank you.

Our the Associates. of comes from with Zelman Ryan & question McKeveny next line

Your line open. is now

Ryan McKeveny

much. you very Thank Hi.

at all exclusives. three-part come I a Just will out I so it once. to to question, back have throw

an you you to mentioned XQ. to So sellers offer as the in exclusive in began that letter option

So, share you just sellers. initial reception any the from can firstly, on home thoughts

But of of the, can of I listing and piece about -- a go can cash value And talk compared XP can option about prop part with come the maybe back et ultimately, traditionally? sorry, you certainty would the frame offer, the prop Second home how of, exclusives? to generally, to you the question, you it’s then XP I model that why sellers last think question. to the more around and long value all just convenience the understand of proposition talk a cetera. seller the value we

X% last a Lastly, the X% the kind you to is third-party buyer. is a a home and transactions. specific fee, also seller, fee home would for possibly think of that of still is the expectation that list combination that I some seller service to Is pay fee fee but to charged the that or quarter, what mentioned service charge

Carrie Wheeler

will my best of that. do I to all remember

Let me start the top.

had So if on basis come started exclusive to really have in taking listings. as is was they home good buyers and Step Opendoor with inventory X and that. effect [ph] we an buy with our it windowing should owned success and That we the where

using need in model. we are XX% our the weeks sales to and we pursue to We have two XX% those was getting that homes, on exclusive had listing first inventory continue about to

which prop more was still to I limited are to scenario one at in for where surface going are not sellers. home offers your we window marketplace. enduring showing them. value a they prop have X, their is They then them the question time value looking what they around -- of by putting if multiple The than a it’s are are, the often in the they of Step to second think, part

then had our that network they choose One and can buyers them from the have institutional price can for bring to we can’t in in that have that option which and we from we the now not. relationships, take help and to other monetize otherwise have other network get and they offers to those we those to the or years our bring offers floor

they that’s if of to obviously the certain They also themselves. want have backup cash all our be offer, something

There’s still the to selling time. the less prop certainty burdensome, the process them. process traditional today. less vastly in That’s lot a it’s again value superior So to

fee suspect the some over charge them are seller that How the an over Today, that don’t know. buyer. and I time. with for we of with the As will shakes to time? out continue sharing X% take I we economics, a to we experiment

today. I am all come, to for commit that I So the to cash. think growing tie to are at a that’s There’s now. is little That, include economics unit example, services of but low right where any there, those doesn’t specific this is no things we of

Ryan McKeveny

believe that very fits That’s and comment what One broader great. with list additional on maybe have heard product into just can Carrie. that that much, talk certainty. question, of I I so is kind the the you Thank expand don’t about before, about equation? you how you

Carrie Wheeler

them not this Yeah. I we addressing to they products. expanding and want are mean sellers, indexing We high in current high that of still we uncertainty certainty move But spread because we environment. an the give that -- will to good we option spread make news XX% with list are that XX% are our the is there’s so we be convenience. still in environment, convert can sure

They time. retain price, home to still on market can cash our us. maximize that their market own can the they take at offer the with of certainty list any

XX% choose that with presented And so customers, when with seeing a are we of option. far, certainty about XX%,

that So in environment. we be driving are we over this product through more asset-light volumes time optimistic will that

Ryan McKeveny

Got very it. Thank much. you

Carrie Wheeler

welcome. are You

Operator

you. Thank

Wedbush. McCanless with comes Our Jay last question of from line the

open. Your line is now

Jay McCanless

my Hey. follow-up. taking Thanks for

into like -- it’s instead where look away us heavier, higher an are whether scenario? credit not just, mortgage go more out markets, go having even are go sellers you walk house if to know, be guess a on, that? carry bit Do on the of mortgage environment we up and doesn’t rates Carrie, market you through what plan mortgage to payments you get the don’t go go I reluctant walk the So here I to maybe things business in rates Do to see get actually does down, priced and Just down, rates much they I from more that up from don’t little listings, in so push wanted like what’s the of B as facilities. the down? if now.

Carrie Wheeler

still hopefully we cohorts I’d economics, Yeah. say what in attractive highest show level, we in pretty we high can have continue so. unit to we rates, the the have attractive been I couple environment even mean, think, volatility of Mortgage create mortgage and expect high this I do of at provided the last letter, rate rate, shareholder rates and to volatile in weeks.

adjust for We are reflecting spreads. in that we how

the that to will the we year. through of So course continue do

continue volumes time. for industry for to If suppressed they period that be and continue down persists long a be the to and are of

know cost losses that have so news value the compare that to lot it, preserve we structure, we book that are we with our this I imperative that think capital, manage good mind. is here mitigate and we going we we and and manage provide we our business of a in

not your cycle, if in of ahead to of question our that’s trough at I structure comments we will the look point light trough managing the it but we that, for if look will housing period XXXX, a So absolute cost harder the we to. the sort in of longer have are in today, take learn a of and

Jay McCanless

Great. follow-up. for taking Thanks the Okay.

Operator

would I for closing over Wheeler to like hand Carrie you. remarks. to now back conference the Thank

Carrie Wheeler

achieve are our us, been thank decisions to to everyone for to has and long-term joining both feel today. confident heard a financial I what objectives. the participating goals housing challenging hopefully with made from our have just And we you and enabling us to-date we environment customer want navigate

talking you thank and soon. again So forward to we look you to

Operator

concludes today’s Thank This call. you participating. conference for

may You now disconnect.

Opendoor (OPEN) 23 Feb 232022 Q4 Earnings call transcript