OPAD - Earnings call transcript Q2 2022

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Operator

Good afternoon. And welcome to the Offerpad Second Quarter 2022 Earnings Call. My name is Sam, and I will be your moderator today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. [Operator Instructions] I'll now turn the call over to Stefanie Layton, Vice President of Investor Relations and ESG at Offerpad. Stefanie?

Stefanie Layton

afternoon, Call. to good Quarter Solutions And Earnings XXXX you. everyone. Offerpad Welcome Second Thank

and Executive me Chairman Michael Our Chief Burnett Financial and are Officer, Chief here with today. Officer, Brian Bair,

will During the the Securities Reform Litigation forward-looking as of defined Private XXXX. make Act call in statements management today,

non-GAAP U.S. significantly filings company's risks, not and statements other our These discussed call uncertainties, law, Offerpad’s comparable Securities new Forward-looking available The to or now differ financial factors inherently with business certain over items Please GAAP release information, exclude earnings reconciliations as expectations. on financial measures relating applicable future whether or of are I'll measures. and quarter uncertain earnings a non-GAAP otherwise. management's call, are the as of to On today's described intend alter and our financial Brian. in refer the the could in metrics to Except the result by turn release measures Commission. events website. from to update the management Exchange tables statements, to the first events, under heading will non-GAAP forward-looking measures. to required of does the Offerpad the Offerpad's certain in refer

Brian Bair

days. of of projects maintained below of than in an $X.X quarter first appreciate Thanks, the sale results timing completed we than XXXX. half million home we markets. average XX net of financial remainder did Highlights from average We I'll renovation in cover We income. revenue share Stefanie. year. fix homes trends, half the new expectations. all quarter nearly to us filled XXXX joining XXXX focus third an of XXXX days, the year acquisition We Michael XXX I Hey the second of for some includes our and more timeline everyone. for today. you and during everyone with generated company first our and XXXX highlights, will the our billion more $XX market

increasing More validates level quarter to in ever awareness interest value an we our cash high. also all-time provide solutions. The increasing interest the around an second our for before. website Express Requests hit customer the We offer our than services and continue also visited of customers. see people to during the

we year-over-year. For adjusts. our and an first FLEX as progress XXX% half different FLEX increasingly XXXX. also great provides listing we quarter-over-quarter be the important did of all The innovative and made Express a more advantages sellers' a either cash In we the only year real-estate market of the transactions offer would XX% listing agreements and We revenue service, choice expected more provides increased solution started not service streams that alone, during customers their FLEX for on preferences, our based or in market. between buyer diversified experience our with yet company listing the and

ancillary service quarter. the grew offerings second Our in also

loan prepared customers quarter states over Our loans volume one. with increasing more reached home in more XX%

becoming easier provide it a owners. app a In experts communication, app for product Offerpad borrowers, completely and officers, a the new is will a and powerful solution. Offerpad's experience. growth app addition, solution unites loans finish. from Enhancing all, loan another new to experience deliver home Loan self home one-stop to making mortgage service home portal and shop to to Offerpad's our mobile have start Home streamlined towards buying step this Utilizing consumer The digital

home, using Arizona. existing "I home our a buying service. second example key the Our sold our mortgage Offerpad a using by Rachel from This for learnt home Realtor why quarter, continue Offerpad posted a her discounts resonate remains nervous again." packages. have shared. their satisfaction make indicator in much. buying definitely we to new that She home, buying so pre-existing Lender," bundling services I comes that will was I great easier. Rachel Austin, with loans customers. selling is do home and my customers I and way XX% to A highly received Rachel and suggest bundled so do first "I their we either because what

real-estate we Turning market, to broader here. have the is been expecting softening

Over with markets to get the this learnt owned real-estate, very I when inventory. and especially it's important last XX proactive decisive have years in be adjusts quickly,

it for today sell currently in were underwritten own You today's inventory market Keep April are want just March with homes back in under new to closing homes different underwritten we climate. completely and replace quickly current your mind, and and most inventory that conditions.

to change. wait on we're business some change the added markets we how consumer home For on rate X.X months seen homes that top a increased are through from rates historic potentially market supply to to lows to cost alone, of no supply. walk being a greatest proactively adjusting market it the depreciation June the and X% over low when comparable market, The a challenges is months of of homes. the rates high attitude rates sort just going the mortgage price increased of increased and of mile, days. we example, X.X than I'm home seeing XX to it through January sidelines and the are nationally But In mortgage points seeing hits the now four the then underwrote affordability within today talk then in basis at to unique from most. for In several X in in and had more things point. increased Normal to in other rapidly impacted quickly home conditions. to that the dynamics general, interest price the has same buyers Housing the depreciation rates phase market we're XX settle.

set Phoenix, markets. a softening Austin, including For example, Georgia, the of showing our is with diversification how markets Denver, The our The the Southeast during Las faster and six the Carolina, are towards in geographic business. in positively risk transition currently demand. good Vegas our and the mitigates over active North in cycles. move market established Florida have Midwest between and resiliency example years, and intentionally we buyer have Southwest visible been This today last diversely of

extensive execute ability cycles. real-estate through different another experience team's our Our point to market to is strength

Our years. regional general of of have an have average our managers XX and average manager years XX general local experience of real-estate an

then market in underwriting with the hot for conditions. this So a how use? for time the price do market markets home us are. but market we can each a price we price model allowed happen so without swift Because in take in larger the overall in We sell cushion inventory saw having this and home had has after different our revised have cushion to been interim buybacks real we put built adjust, our leverage our putting long, We as this expertise some various of poll several deceleration a depreciation we inventory. sophisticated that's slowed. our purchased conducting market-by-market a on To we or so reviews change cap to

customers their past. type time time reduce We closing market listing XX-day are each service available prioritizing to the We length closing higher we're our had they acquisitions for to and closely of medium homes. offering select point customers in to reducing FLEX with date, the the price

risks holding important Our on inventory for and an estimated among One expense increased with wider our acquisition renovations. we that our items. had additional the they made increased teams active increased have other by service account incorporating other interest adjusting underwriting our times, spread said market, assumptions to fee is for adjustment

inventory certain extended This ourselves to home upgrade properties of team homes on increased and times. and look increases the our inviting available sell limit first. to to want. the from, lead home has When to amount buyers choose Our contingent homes have we are helps want multiple ensure feel

compared renovation the of an will to per an days renovations times can over our strength. increasingly with second $XX,XXX average holding quarter. exposure in during renovation in inventory. half in The time operation of of quarter the to days mitigate XXXX and And XX reducing our important improved near-term by investment of extended important to and quarter, first will our year. completed sophistication team Moving risk the unique. to it cash renovations In home. average the the extended XX is aged The The projects, efficiency effectiveness second our second the be be duration

stronger their the As measures what I We buyers' fluctuate. and we have we proactive with are managing this market weeks way largest one days above, consumers short-term is watching come buyers we a or real-estate mentioned was home closely well to the home will flushing of country's fluid know and days. When XXX than always, But be inventory traditional of expect can XX%. to XX similar certainties a of less we Because no opportunities sell over temporary takes more-and-more owned X%, we market great it as in less into will June believe and below months Offerpad. and a as stabilizes over XXX as sellers believe believe results our target Offerpad market. will is with no than over control, inventory the

Looking delivering that are well-equipped value. forward, goals I've customers deliver sustainable Mike. to helps complete confidence shareholder over that to on we note, pointing call turn On and the I'll our in our long-term

Michael Burnett

the Brian. results, second points XXXX third valid Thanks, key for and Today, financial provide outlook cover few our a review will I quarter an quarter.

expansions in average quarter, quarter compared a QX increase second XXX% our first market average sales year. homes the to strong higher performance. our from to increased With on existing XX% markets sold $X.X off a QX the As second year-over-year year-over-year volumes approximately growth of in penetrations new the Brian price. of prior mentioned, $XXX,XXX and $XXX,XXX half in of results market increase billion. price the and an increased We capped by with driven the to approximately XXXX XX% within sales XXX% Revenue

seasonal net loss million, acquisition million reported home was amounts typical XX, impairment second second a charge detail June in Our the we margin, million $XX I XXXX X.X% quarter own XXXX XX And adjusted active discuss momentarily. homes adjusted second We of of of quarter of $XX.X inventory $X markets. million EBITDA net $XX.X consistent in will and first as of or $XX.X across of which Each gross million. more the these with profit quarter include gross of increase. income

extent as well that current that the charge years cover we million for experienced in $X.XX carrying an and in the on slowdown market. over value the our range back that to of have of of inventory some recorded $XX,XXX of carrying $X.X expected do in end last we home to and end impairment. the Austin, inventory from in this earnings At a determine combination expected not rates including marking-to-market our would basis GAAP this $X.XX was below at come would in this three value, housing but when per demand charges June a robust assessment, in have EBITDA Phoenix, generally been share benefit adjusted rise proceeds $XX.X loss higher and depreciation Fully of from the which have as every a million. the the to each mortgage market charge inventory Denver, at the total per from share sales result evaluate when in based on impairment, the Coming price inventory. each the Quarterly of that proceeds. the recoverable period of performed we residential $XX warrant adjustment X% $X.XX diluted the includes period. or a As charge, and rapid and such valuation home values million for the metrics discussion To

the While in conditions. making inventory were and assumptions, to market acquisitions underwrite quarter adjustments price different in we underwritten homes spreads the incorporate under new sales wider are already to then lower very

given we information the current As quarter. value charge million available of recorded the our then assessment such, and the $XX calculated best in in with

conditions couple our of sales to after next to absorb lean quarter the and normalized the margin increase revenue homes our to price on the for depreciation price we acquire market, of input returns. convenience, XX% been contribution line the the of inventory past valued QX increase growth over environment, consistent on that past with In back of the of years, cost in increased our we our margin the more or we have X% our between market in-market the attributes periods acquired are to contribution we up over term. combination discussion even current home X% the been have top was demonstrate valuation quarters variables after under for depreciation we and eight few of in the the expect generating the asset that returns. expectation end. we perspective process and need Over scale the at results, of of teams, and interest that an quarters. has not cost rates to to X% higher experienced over $XX,XXX we operating levels came with reseller replaces remain buyers' previous acquiring the models continue certainty In more don’t longer return in XX.X% margin more control as By home sellers, and to to interest real-estate or to of to From the ability able and homes efficiency prices the so leverage have like increased organization. by through underwriting and highly perspective, across to annual to adjusting the Returning

basis year-over-year cost revenue. operating improved For X% to the marketing and quarter, of XXX sales points

XX increase The year-over-year. cost improved points X.X% of QX to cost period year in which basis prior points cost not began year-over-year company XX do include the public basis development a in company of technology G&A revenue. our G&A for combination. slight public had a Our XXXX

just closely assess to addition several our In performance. the other I addressed, financial to are we key points there data monitor metrics

with to to in We cash expect slightly seasonally the to or have previously metric our be flow average And eighth our improved time we we our that which the goal In above days. XX would XXX stronger cash to [sober] QX. In that that with full second XX consecutive at This cash into a keep quarter quarter, time days XXX conditions, time down market, mid-XXs. shared days that our at mark. marks dropped days. has to saw higher from was is

Another inventory important over metric aged is days. our XXX

less we our aged well As market X% this This of strong position inventory changing of a conditions. Brian under enter being mentioned, were below period we June XX as as is of than XX%. target

to maturity to a do capital to focus In market, aged positive company key $XXX will the in expect Inventory the half added of our With of the now have facilities the be our 'XX. $X.X million In and across levels. expanded $XX From debt June facilities. from turnover of of softening the exceptionally make one of under continue perspective, XXXX. we our also extended date capacity eight we one current the capacity June, and inventories of increased year. increase of rent our we credit facilities mezzanine capacity of inventory with million maturity July, to billion borrowing continue structure low June over second structures. we the the to to financing different by We a access

balance cash $XXX June our Lastly, XX was at million.

We are and our shifts. of company operations as market changing real-estate customers needs our the to proactively the reflect adjusting our

of e lower couple as selling the Over to produce the process that to expect of next through market we quarters change the due homes margins conditions. in inventory work

we recurring track our environment. we markets, believe inventory with an at in expect reflective of and strong well-positioned. request volume We established that to rebuild more With homes record values acquired continued are

homes, $XXX third revenue $XXX expect between million to million. between the we XXXX of for XXXX and sell and generating quarter, Specifically

We the and $XX conditions down and also reflect will variability negative expect million. between in trend EBITDA the will in market negative $XX short-term million adjusted

bit Our than this conditions. ranges are given guidance our the current quarter a lighter norm market

ability growth competitive an market, the a pieces for manage and our an business sheet As support our inventory, years, while. a aged Offerpad solid remain of chain position. large entered renovations diversification through Fundamentally, in same we of all with minimal expertise addressable the seven improved focussed inventory, term low built we differentiation this at attractive supply The differentiation technology geographic the the scale transition period. our up model, constraints from and level of balance a and past our model, to investment

to confident to call Brian value the are our the in shareholders. and ability remarks. We short-term customers I'll our our adjust in and deliver back turn some concluding long-term for to to now

Brian Bair

Providing point guidance Mike. Thanks, cycle the real-estate business. turning difficult a at is of

have rates to roughly year, of the half Over the nearly first X% from mortgage X%. increased X%

assumed that down period an obviously like $XXXX Moves $XXXX $XXX,XXX XX% XX% over rare payment mortgage buyers point-of-view. home short or payment, increase. over to create moves a at time from for are issues just of that just and plus from For under the affordability

move fact, reassess they can afford. mortgage what inefficient in pause rates, the buyers to that's With interest an likely

declines. price renewing our home and the There'll While prudent is structural be that in there price markets of believe the is we will supplies, the short-term underwrite be Lowering shortage most price market dependent. likely have QX extent the and charge still the a housing impairment home medium-term significant most in home behind decline may our guidance. QX see in enjoyed depreciation expectation

buyers the and takes then now impact over we market more Offerpad, seller home, a sellers market, opportunity to earnings sellers to transaction the expect our We control year owners we by is saw Offerpad. to adjustments expect there At price We both near-term, mortgage improve. from our success buyers' a over in markets. giving an the coming shifts will market, great the past in heavy home as sellers' the believe sell been certainty when their it margins

our market settles, in improving proposition strategy expect the guidance As QX. and to we produce margins

the XXXX? As Offerpad QX the an to normal answers operator likely in session. levels volume begin should and the now to upward over return questions rate call I'll to turn starting

Operator

Instructions]. [Operator you. Thank

Lee We take Morgan. question will your with first J.P now from is our line line Dae Dae, the of open.

Dae Lee

the for taking ask I'll Okay. two. questions. Thanks

QX guys from the good that. it in Brian just talked then the volatility you sounds for one, preferred short-term a sustaining think I first about that mentioned the So starting in have and and XQ

the and seeing this times confidence any in more you now? are stability So short-term you gives right is what of that

Brian Bair

Yes.

market you markets barely seeing more impacted market some know now it's much we're others. And hi So, Right than Dae. specific.

and buyer the goes of short-term definitely bit. affordability buyer the on here'll hands How a quick for more what was into buyers demands, the it happened so, little be different. demand And

adjusting been as has now doing We're more We that just up we're bit But is been we're starting about like starting rates bit mentioned. things a that which back-and-forth for wider a Mortgage it's have points our are certain. to to I'm little building I helpful. demand of little right buyer one see as that a other fluctuating in some pick example definitely talking little price spreads bit. see

And like get weeks, specifics. depending we're and very varied watching so, on it's it we market add we're closely

Dae Lee

is then, one And second for Mike. maybe this it. got Okay, one you,

I there how inventory think And to should we the current XXXX that in talked around environment think and now. you being guys or relative about from about you homes you about and the way there in April versus the the March environment back bought of that at think that right about homes talked is any in to guys rest call?

Michael Burnett

Dae. Thanks, Yes.

On right little we've at homes the end got over got we you're inventory, a of the XXXX June.

period If we lower little a us. recall, for seasonally you acquisition of is QX were an bit

So we inventory building were throughout QX.

a were a is decent some you we impairment, there on about those of doing conditions of you take impacted. when we look were portfolio, tended will. were to When So the if they earlier stratification at And there work through most entire the we that greater acquisitions the a being normalized the there. assess market XXXX homes were be under change earlier going

on. months on end the see think June you'll doing tend time at here the we've next like I over we So something couple slow work and But I this here. of down think changed through adapting quarters things demand that as that here the through and as out Brian mentioned same really the we’ve course the in getting and criteria the normal go those the underwriting at moved of as to it's us we've been

So outlook. current that's our

Dae Lee

Yes, I understand. you. Thank

Operator

question next Ryan, from The with comes Ryan is Tomasello your KBW. Dae. of you, open. the line line Thank

Ryan Tomasello

within performance has at inventory in provide taking everyone. larger even into heading Hi, questions. your in XX% some how quarter your color taking over lessons seen what's the you data Phoenix particular you by trended for share I some XQ to I take margins from markets, more volatile on specs. decelerate gross particularly what Thanks having to-date through have slowdown, second you And looking HPA for perhaps recent of the if that period into an the Can back example, the likely from and be management are peaks. half guess, to

Michael Burnett

on the that take first I'll Yes. part Ryan, margins. gross of the just

quarter, the As you started down. would to expect they throughout trend

seeing we than even continued have longer so, been you I good environments, And that would frankly we very expected. HPA tell returns had had

As we've you now for nine for quite months, away for higher we've preparing six, We've been that. been now. know, market been normalizing about seeing the some time from that talking the environment HPA

And to it some down those is really margins we of did start come So again, dependent through. market-by-market. see

sign pointed that mentioned earlier. good also well. another the operations have Phoenix within year has Southeast been we’ve and Midwest But stability market some Austin in pretty opened as up as the Our out there Denver dramatic of a seeing that within portfolio. The movement has past you is is we been held pretty

then So this bottom to get up out and the some are down impairment homes we taking in the as fourth we we're into to that and of QX, margin we've the expect and that to the quarter accretive begin obviously and from those put as come bring back balance to to charge we more would quarter. the again. third able got But work

Brian Bair

for and price always and it's issues. the what been. rapidly from inventory prices been the Phoenix market know happening have on seeing I at you're affordability us market home quickly home obviously how you Phoenix heading lot the and super strong But appreciation of the in And and spot are a

feeling really of you the volatile, do, really just a can now, we lot for as what And understand that what a like learning. so, in see Obviously as are slowing a prices Phoenix. market as get can there's And and market hitting quickly. is have there bad underwriting we're long you are question if well. that opportunity inventory differently temporarily Right consistent. to market A back declined as we still inconsistent us. And actually we're and it's good not it's much really your acquisition we market

want a in that slow market a be demand markets, markets so, focus acquisitions on able Might opportunity there. still like decent Midwest And buyer much the to you and of there's some like like will you. the or that and your there's there of that to help Florida markets

Ryan Tomasello

Thanks can quarter, expecting you contribution for and of margins. that the for additional third contemplating that’s margin regarding you reasonable and margins into model. the guidance, ranges Those end how see is think to year? the are that. cadence about, impairments I bottoming that of And And the to improving thing guess

Brian Bair

Yes, right.

in expecting of In QX, expectation terms see for to our we're not impairments currently that again. in magnitude

a the end take with that this look of you guidance our $XX which If at QX and -- quarter impairment us. million charge for up you

margin. through There portfolios prices on some but that on the the got on will make You can come homes we've the we through we've obviously we're see those. bit. selling profit the the of it's that impaired of Those type a pulled still breakeven P&L a in That's at other through is evaluation selling back some those. prices result to homes essentially reduced going a

no QX is those that we're QX And associated that homes with lower increased we've mixed there two are the underwritten -- then, and in margins there with through so, spreads. at acquiring And those the and come norm. impairment over turning but than

contribution So looking forward out gross margins give guidance. we really margin don’t

looking I EBITDA there. we're leave see that So really we'll tend QX ranges for being at, just we QX think from what to and the at have

Michael Burnett

Denver's, we your with the inventory, some that inventory, inventory. decision and can One tried X%, the want really dropped there. Ryan. We we XX%. to is some want want we there inventory thing a those dump where that don’t to of price the of real-estate point majority Phoenix, add the impairments we of that have the Austin's those that earlier, to best smart Hey, came get the X%, We markets make move I'll the more quickly. can and make But to set from

move to want those healthy a properties we to drop on through those. take So

we and wouldn’t the exercise as move with inventory future. have so real-estate So point some issues it quickly possible of whole decision, making best the get is through the and have now aggressive wouldn’t of as in the to

Ryan Tomasello

they And XXXX fourth -- you're just a we margin and to homes and the breakeven a expecting impairment clarify, could when quarter about the in the in those third gross to quarter? related about on homes sell

Michael Burnett

yes. correct, That's

Ryan Tomasello

Okay. Thanks for that.

Operator

Thank Jason, open. question of you, Ryan. the comes with your The line Weaver line is Point LLC. from Compass Jason next

Jason Weaver

good Hi, Thanks for evening. questions. taking my

Given number you any users, Express conversion transitioning record a where rates market within growth existing we into of and of were around your or average give offer comments buyers' the last request and context then on as markets, monthly sort and also your the versus can it's year.

Brian Bair

part Express that, the of So the the question. service first

Sorry, question I the can you repeat said?

Jason Weaver

offer in convergent Express Does rate? request

Brian Bair

market to a seen we're more not we What could as Yes. is uncertain buy want homes and as transitioned, surprise lot which we've the about, as want we now these a many make sure is of just markets in we and there's certainty the market.

more-and-more have home Offerpad. the to coming the more traditional people are So as issue and way sellers market slows and selling the

we Offerpad we seeing more-and-more for to saw when start we're of market that And second strong end rapidly. that towards the you experience start market as to continue the their see was and first. our starts the change sellers very especially quarter conversion in see at So quarter, slow to as people today the second

Jason Weaver

give And on up. you. buybacks changes more or thank Okay, the some Can of to environment making that just homes the follow criteria? versus macro XQ a colour acquisition you overall around your guide is sold? much are you the How

Brian Bair

been buyer seeing markets pull which driven greatest at increase a driven and the due been rapid the home and mortgage we've has challenging I'd where has listed. primarily of is to really by we're markets backdrop the it’s a appreciation affordability really seen price some issues which the by in have impact demand say of macro rates. strong in back in lot again what the of the speed because And environment the with we that very it's

get demand positions, our homes buyer back, come it on got trying good we've market. how really that good footing strong does to So it's quickly strong on the

rates you understand trying buyers going where are see think and right go. in little going to there just and wait have paused mortgage and that a think to where mode are prices I go home now, out to are bit they

Michael Burnett

if recently, they mortgage a were, they yesterday they've And rates how just volatile way you see above the were, increased and time for five rates Yes. XX the below think long in five you'll first were within mortgage track hours. I time

buyers tracking day. normal the so, not every mortgage rates And

things like that's so, things that those the are volatility and are of where lot a And happening.

again and to and is, more especially those are forward where the is settle moving able affected a in real-estate markets. so, there there of inventory then settle wait markets acquisitions And that's best some opportunity decision just bit for being and in a that then to is the is of to lot slowdown things being

Jason Weaver

you. Thank

Michael Burnett

Thanks.

Operator

Thank you, Jones Nick? JMP The Securities. of from next the question Jason. with line comes Nick

Nick Jones

I potentially have about kind Thanks the more market enter dynamics Other perhaps clarity. kind either dynamics are market. markets for taking guess, further that, thinking is in the can. better or you one, of you're as resilient and dynamic more where And the can in questions. that can not ahead by unfolds? more of varying you give or aggressively Two you if you you're how I or any change about guess, talked aggressively expansion I there

Brian Bair

question. a it's great Yes,

markets you affordability the markets the amount West the and you is as look if you that charts. seeing. the markets things haven’t mentioned, West And of affordability in decreases some the or markets much been stronger South The affordability definite. we've tracking at that but look in affordability look off is of price West those by markets Midwest we're at in you're impacted at So really Coast the of if in the the

this eye to the a and that And retail expanding market mortgage markets, into that's and providers time medium for high then so, a sixes the in an long rapidly. slowed more reached we have fives at slowed so so we or definitely what Because you on rates as home and look as combination price high affordability. the that and have XXX,XXX obviously

markets. definitely very new exploring is here looking is that So as around it's hot something topic becoming a affordability at where

Michael Burnett

things too. And Nick, add would I other of a couple there

And establish ourselves the in online. don’t California in year take footprint have XXXX this markets. out expansion forward. out But has really If going a to there that positioned and coming us to benefit well the you to for been at early grew now. into we're moving right landmark through you good as a markets those move have very we're cycle about as Those us We be it. our we big in into presence that's intentional our for look year work to proven those moving it

has other The markets Because been on us. lot with risk the that and to time discussions eye is Midwest slowdown very at combination of markets build-out a going focused satellite strong to HPA And we for management. we it's doing an market for time. we really had -- environment long about how were of a some

perspective there they those for but prudent during from cost be really this and moves particular more are affordable to us our And this move. some markets markets. during So we are satellite are leverage can that us markets much to close to markets some to for cycle year get all smaller showing efficient a that management are our generally teams into more of hub

Nick Jones

acquiring And a Got it. on large I guess a sense. makes question capacity. And that then, pretty homes,

kind your is kind capacity this on this So actually you XQ reflective and is of economists I term, kind use are a bit your a longer of your can being this of or a scenario guide by there rates lot bit commentary of of of kind Or guess, where reflective, longer buy that back change of to feeds of back kind little just XXXX. pressure? expecting a through pulled algorithm think the kind term? I little is

of just where faster can sure given make any call to them for of if can a kind buy So kind to not there's a up of for of I'm you challenging makes through, ultimately, that the question up kind we'll kind more scenario environment capacity? sense. impairments. But purchases you make miss grow borrowing

Brian Bair

focused a buying it's is Yes you the we're make with product misses better and now wider that answer inventory on up great the to And want as how And market is the opportunity spreads, buy what now. and exactly more is And you question. to that's absolutely. or you when either it's changes right of consistent. some have there to

think from it's overnight, maybe that's real markets things sellers the so biggest not. but a I it of to interesting, that misunderstandings estate And is of buyers the one about that one goes

the the opportunity a market of probably foggy top, a from it a given very hardest I ever exactly when in the question history that's what a I've we're good at I to gets actually and in And now. anything cycle there's in downturn the be so place where And be, And always place a me. doesn't sellers at buyers the market happens Offerpad have is been transition that else than than answer asked think the to more The more before. buyer be downturn. the right bother is downturn, in when is to transitions to that's period buyers’ it

closely. watching where And so that's we're

great And more patient as used a it we market sellers estate there “a two I the been markets, tell you over the consistency on is see a are And soon been will that say of thing also as balanced so, opportunity market we're last as their as the home. one market, months not In seeing our as is sellers and takes market” to they be. normal real years. what six have to sell hasn't in

when so liquidity. or have sitting two, for They're their access on very And they're the don't home month a to sellers are impatient.

doesn't the they're find and cycle. But said make closely. And, to decisions we're these I take through I for and why close the as it's so that's estate most excited. long to And really their where that can we come of the They keep that's people best be mentioning watching And there. get and want to we it smart on opportunity real like now, us right at. schedule. really where But -- obviously,

Operator

next of The Markets. Nick. Capital comes the Ages you, question with line Justin from Thank Berenberg

Justin?

Justin Ages

question. the taking for thanks Hi,

us you kind and given we those the how first information product, services highlight gave give and you about can of the The think on around of going there products one, should the in any that forward? is kind new attach rates ancillary

Brian Bair

But a if is flex Justin tell you given good I get rates. our a has you, don't will question, product. know we're what if what attach can I been nice about having

As conservative what we buying. a Buy now right widened, temporarily, Box, our got more we're about have and little

fantastic, product a they use our that XX buy and to And the all products with far their our been with really more flex have has uncertainty, XX as as to awesome we've home had which having more us. flex management, days, the can can As because list sellers with of product last product. especially having home, people risk instead we that has over a are been using

seeing there. I think we Mike. about So talking yet, we're But increased volume conversion don't are

Michael Burnett

we're that of mortgage can a for that through out obviously, we're has It's a specifically. We're similarly growth again, now. there's because that. level, like portfolio has what both to quarter-over-quarter these continue and consistent we particular again further quarter-to-quarter mortgage And inception. and soon but starting opportunities not will is growing building has products just we're the throughout No, more of lesser for ancillary been again part up of our area. us, some having count material bit that in since seeing more But been there we not FLEX time enable say some product other just move as

Brian Bair

our center, education one opportunity to if pay. which being home us now And help challenges guys the and as mentioned their right cash a one bundling I we're “[indiscernible] them just house, more think find from using that you have we buyer” seeing at being our stop of a service of to mortgages, now using probably transition right that's listing the is centers And use will sell solution been and of before, service. then experts or looking of people our important positive not solution able solution is their the really one have is of to more next

especially has that volume, more been, been that's So and lately. has more something that getting been

Justin Ages

given the the Is renovations of kind renovation average of appealing to you're higher homes more per make All number rising that the to comments, right, that's project kind pick helpful. Thanks. that or And adjusting given maybe to going reflected of then your strategy of be the side, up? switching gears [indiscernible]. days standouts, seeing in to costs the

Brian Bair

just highlight want supply. that the And want the there's somebody’s But is and the lack I else to market people nicest right mentioned to of homes of had to that your have the inventory, Yes, put a home house ability to whistles bells What to haven't know in as going couple in our homes. be still to is and now last because years just to be bit all how you we comments. buy. more you with have what little key. we renovation the upgrade on the in

upgrades as our and are renovation bit been is could to years with The that'll we in sure our mean guys stainless a add renovation the you the it demand costs your with issues a time these on think shouldn't lot couple Now we that I as one make and picks our days of times. shouldn't we're up, back few it most renovation. a have supply some goes different our at with didn't they've buyer shout of rooftops in add the of and choosing that from throwing know, adversity, there. the people to question want before we strength affect that. thing The maybe add job. Granite, done through maybe for teams, It'll throwing a really more obviously, but the I as or things appliances of in maybe add phenomenal will else, our, But last more everything are but of cabinets some I little the doing one important

the a homes. for geared little now so sophistication having bit putting And and a do ready renovation we and there to They're them little have more with it. these

Justin Ages

Thanks appreciate for the All color. questions. right, the taking I

Brian Bair

Thanks.

Operator

Mike Thank question Goldman from open. Sachs. The you, line with is Mike, your Ng next Justin. is

Mike Ng

two. for you have I Thank just afternoon. question. the good Hey,

to should certain was how I come line the talk support commit and cash has I Mike, a or just market talk you're I little advance more think into funding just you the the funding, that bit your very you of terms facilities about Is about if relates anything Have inventory we you acquisitions third to the you in that about and slowing like any much. purchases have little real second, about anything it quarter? know, was could Thank in then Brian, as more the estate XQ? how you're rates of to down? those there you markets. volatility changed that? facilities? wondering could exiting First, balances thinking a wondering mentioned And bit

Michael Burnett

questions. Right, thanks. Good Mike.

So sales acquisitions in range. would I anticipate versus tell you and of about in in our sales, probably I in same acquisitions what being terms QX the expectations is on would

So market. me, pardon we each are temporarily in or month here to bit reengage to month slowing as in terms go of we the accurately finding week acquisition week, pace, just can where we a

pretty and therefore, So for think be I QX, inventory right demand looking given characteristics the levels to going as we you're sales, acquisitions QX. similar pretty And to see exit probably comparable. of now levels

speeding to in up based that. improve been there. requirements certain instances, bit. or to the from lines. good standpoint of the over And a each shape, effects And two and is disruptive terms some are no to -- or those us back pretty year of we've facilities putting causes financing we've been of those got haven't duration any of And in this and you're or relationships far, down regular these been, haven't backdrop, we terms them. cash effects, anything place, really and new We with facilities the basis. that. the provisions on Ironically, seen the be in keep year constant is facilities, in renewal of even like We've seen we slowing any like anything a excellent in shorter detrimental these through test borrowing that In reductions through as when maintain lender really and We've things active calls some contact them what detrimental little or able of our base. processes, times gone with them that. pretty the and existing along with seen we've we've There past kind

Brian Bair

Mike to will estate just just York had you on I would of very competence I decisions. think real vendors because the tell that, obviously, you, And we're going us with lives dinner add they have to I best one think New but in Mike not I make in ago. our the world, in credit each tell And one that long facility and

decisions are And sometimes there. the investors, for our best the also for but decisions company hard decisions real the estate that out best to make the

our And and lenders we're so right through inventory. our lot going competition, make I a moving to that decisions of the think have

Mike Ng

and That's your excellent to Brian hear. Thanks Mike. thoughts. for

Michael Burnett

Thank you.

Brian Bair

Thanks.

Operator

Mike. you, Thank

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

Jay McCanless

Hey guys, questions. my thanks for taking

on what when one inventory, and first is the price now, you're jumped is guess inventory right late. I that right about median comments below you But at I I people The price, your the of in in kind had that now? the think market, you you're if medium are of seeing doing showing frame box the you what could buy

Michael Burnett

of So things couple there. [indiscernible] a

seeing sellers just of and markets the within we're volatility, markets years. I where more are is seeing you're more XX%, equity importantly, and in have what that have XX% some had these So their what appreciated this when two happens in homes, mentioned seeing these you're inventory more

different So they cycles, equity the lot big have was than a a or were maybe when they home. homes in making had so was adjustment their other XX,XXX deal a and $XX,XXX it in XX,XXX price their in actually equity of because

pretty been Some equity have doing quickly. [$XXX,XXX, in sellers that they've of their $XXX,XXX] home these

in weren't and inventories so being they sell inconsistency coming the they're aggressive to So sellers where you're pricing hitting want from prices, don't is as chase reduce having there to but and the I the bottom there's more more a pricing. first

top we is way like do would to where for the we now consistent. are. the watch market to get that more want a was comps out we of when in more write just underwrote the The what underwrite So accelerated, we that

for price of would we now. exactly appreciation. take higher the comps It's So opposite and the justify some home

Now to inventory the move where mid you is to put going you're to to market want low and you there quickly. go out want

active watching inventory of inventory pending I've really what active is watching is best key so doing where you're long And said is the you're inventory. metric you're more estate. a than time for And real unsold and

really closely And active inventory so that we're and it accordingly. pricing watching

Jay McCanless

to on thinking mean, and you term a take reason that for the for pushing be less XQ addressed for EBITDA going guys already quarter? little guess margin little if I apologies are is bit guidance I'm you've EBITDA wanting then harder, please, assuming, negative to each is And you're and Okay. I'm assuming I this, but the a the

Brian Bair

Yes, some at important We've than that - of those that are. the of some of I XX% buyers reduced our just mean, missed you where especially of the kind It's markets the call part declined quicker points. some prices markets the price X% want these to have it's prices and in first reduced really about we're the that list finding the to what because and selling much good have decision, adjustments, price information trying to than to And distinctive buyers with others to do, of has out some we best we been we're find made out we've and real reduce now. can And just make positive. inventory we different [indiscernible] in see get blow is we of the that to a much, activity sell that's the what estate taking. approach we're XX doing want been which those inventory the to days We we've and whatever starting how to more the there working.

Jay McCanless

Okay, that's Appreciate it. you. Thank great.

Brian Bair

you. Thank

Operator

Jay. you, Thank

waiting at further no this have We questions time.

the XXXX concludes for second Offerpad participation. you earnings call. your that all quarter Thank So

disconnect now lines. your may You

Offerpad Solutions (OPAD) 4 Aug 222022 Q2 Earnings call transcript