Earnings call transcript Q2 2023

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Operator

Good afternoon. Thank you for attending the Offerpad Second Quarter 2023 Earnings Call. My name is Bethany, and I'll be the moderator for today's call. [Operator Instructions].

I'll now turn the call over to Stefanie Layton, Senior 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 Finance, Chairman Ahsan; here Our Chief me and Officer, Chief with Senior Jawad Financial Vice President, today. James are Officer, Grout, Brian Bair;

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

our U.S. Forward-looking management's Exchange law, other to in Except alter refer uncertainties required and with expectations. factors business inherently to Offerpad a filings future the as does whether or information, result statements, Securities and company's update events Commission. could and events by or of new uncertain, are not applicable Please statements differ intend from forward-looking the relating significantly otherwise. as the risks, described to

to of call, heading non-GAAP to non-GAAP exclude quarter website. earnings management These metrics in refer the Offerpad's of reconciliations items the the earnings release the GAAP under are today's second release The measures. Offerpad will certain on measures. available financial discussed in our measures financial measures tables comparable financial certain non-GAAP On

the call turn Brian. to now I'll over

Brian Bair

Thanks, market QX updates. trends operational joining everyone, appreciate Today, highlights, I'll and I Stefanie. us. Hey, cover you

new is for and our drive their extensive in to I helping and XX Financial value in, we as various at software excellence. record and Offerpad significant accomplished served CFO Ahsan, CFO expertise in Before a I GE, growth improving health strength years Jawad to Axon as at profitable and career. believe spent add will roles serving dig including introduce an Jawad businesses. enterprise operational Officer. his by highly our experience regarded would with like Chief CFO He previously

senior part excited have to team. We as of are our Jawad leadership

quarter second to financial Turning board. results. We across our the expectations beat our

This elevated on business and made adjusted profitability. and the our improvements reflects quarter our of second revenue top focus guidance processes sold have to exceeded all our end outperformance EBITDA ranges. the homes Our we

margin per lifetime Other highlights September X our X% XX,XXX target and sold interest after on at reporting margin renovations. for is XXXX, X, X.X% homes our after X.X%, above since highest the gross X% home to quarter include of range surpassing quarter contribution which XXXX achieving acquired

quarter not last by We transaction is volume, on We positive were market our produce residential to that in adjusted did our a plan. depressed second XXXX emphasized ability EBITDA plan quarter. what year-end We period to to exactly confident in the execute dependent that prepared we perform through is of and remain acceleration. our

second resilience. economy the continue the stabilizing and rates to as to the prices support low reaching supply market into of move half year, sellers in continues we many resale markets. outnumber housing show As Despite buyers mortgage X%,

elevated the for mortgage volume potential are challenge rates to lower homeowners. However, affordability adding the transaction also the to and contributing many

reflects acquisition remainder the XXXX that expectation market year. continue our forecasted conditions of Our current will volume throughout the

acquisition our to environment. quarter X volume increased have our Given present increase by quarter pace this from our ability X, to in demonstrated we XXX%

our markets strength On to more service years a over of The plays in home value. is adding ever. age is operations than the our average renovation homes XX buying our and This old. important side, of

a Our is advantage. differentiator ability competitive and key to renovate

meet continuous key supporting been of driver our this to has culture Our improvement year. a ability goals our

homes. to customer-facing example, advances underwriting in app we and our with ability made in leverage forward-looking tech data an As enhancements recently our

applications. experience mobile in seamless and to transaction commitment providing made online evident enhancements estate customers Our for to real is significant a the our our

meaningful information closing. deliver features upgraded to full them sellers, incorporated We've and that visibility to from granting relevant request

messaging sign providing with the members, dedicated and control transparency our to direct ability tutorials, documents and New include for further and Offerpad video customers. features notifications, will seller's seller the push upload team

for Offerpad. costs changes can these expect we Additionally, boost and reduce help efficiency overall

pursuing facilitates properties intelligent risk to systems real the We've critical key experienced exposure better to combining reduce competitive decisions our homes market be time, we Upgrading by are likely this making intelligence on local forward-looking low-performing The artificial to our our make professionals the that success. integrated properties. trends. can desirable volume. not same to our to new more and increase growth, also human data data-driven offers incorporate to is tools We to but best believe estate remain possible. use and is predict goal acquisition data At

become very home While us potential the intelligence. the of about valuable machine tremendous with has insights, power the on added I'm the buy. note artificial every we excited learning of to Since smarter technology, helping harness beginning,

like with potential the the are possibilities now communicate are and underwrite sell operations. way And we home amazing our the customers, there company's likely vision, AI. and the for NLP rapid find From a AI, computer advancements homes, about with our and with price across incorporating and I'm of AI enthusiastic possibilities endless. thoughtfully

unlock we that propel can integration, us forward. the strategic innovations With incredible right

operational update want front, provide to on an the Coming our exciting I program. Sell FLEX back to

program pet As the retaining can offer accept the offer as cash the open agent instant test backup. a while reminder, cash our with They market a even more flexibility. gives or customers an offer

Given year, FLEX market shift last paused in the Sell. major we conditions

in relaunch in However, this we to I'm thrilled X. all markets announce quarter program to plan Offerpad

being beginning, a solutions center for comprehensive vision has everyone. very around From real the our evolved estate

reach estate serving to of our to and the extends buyers across sellers, home agents the addition and In partners nation. business-to-business needs real

we new investors program to build onboard sellers Direct Our connects that partners. continues with investor Plus as

to expand and non-Offerpad Our impact multifamily single renovating continues homes. by renovation team its

more and closing with customers our and offer programs. home Homebuilders partnership resources the To further the to agent homebuilder XXX our provides a committing with their contingency cash solution pursue and select alliance date. around current homebuilder flexibility as center real removes a the program brands, strengthen With our Offerpad home. estate benefit on homebuilder are current hurdle expand goals, we to even

valuable solution home requests. generation while for Additionally, referral agent fee their also simple a a offer desirable be upon a for a receives win Offerpad has program channel agent all. agent This our lead partnership XXX,XXX sellers over successful close, for is generating initiated to proven offering, a

even goals confidence offerings us real success Simply and strong, offer. surpassing instill journey estate cash In More their our and second XX% with over have raised more the are product the customer our our strategy. greater conclusion, our start customers led XXXX in put, first by us achievement quarter in of consistently of satisfaction.

opportunity a are ability proven in we scale With again. seize even continuous once to improvement, a commitment prepared and macro to challenging the well to environment

evolve what change we out that's the even doing. increased add real efficient value we way they customers. our our products, are and As set to estate more processes and exactly become We forever, and to transacts

call the turn over to now Jawad. I'll

Jawad Ahsan

make to group very transition one and Thanks, of excited Offerpad I'd to Mike this building Brian. also with I'm at for and work a for smooth be finance helping incredibly acknowledge individuals. world-class team. a my talented like

quarter. I'm results also excited strong to this financial share our

momentum and XXXX our things in top is that to results. particular Our highlight. in accelerate expectation throughout are reflected There that bottom-line X will I wanted

leading of trending indicators direction. First, right model business the the in are our key

Second, reaching profitability. third, substantial our we've progress strengthen. made balance And towards to sheet continues

positive than previously our homes less below I'd indicators. X%, like to trends to days stated the greater XXX our start We've by reduced in well than our down aged inventory of of leading target key XX%. highlighting

in month-over-month of grew Homes quarter. the acquisition Our

XX-day our in cash XXX days XXX holding QX. to at improvement a QX to period reflected days or Time sequential compared in

to below XXX-day month was In cash XX days, target. the of time solidly our fact, June, for

to expect this volatility. XXX-day trend which market We will average our and down to times holding remain target likely exposure QX, continue holding below and to our costs year in our lowers reduces

XXXX the per homes our after XXXX. contribution contribution improvement in unit And in acquired second This seeing on inventory. finally, is opposed quarter, of important saw measure homes time as acquired to In strengthening September we prior economics homes performance home of of margin this an September marked of or our a margins after to we're X.X% frame. the of those cohort speaks and to for of the acquired the for $XX,XXX or

Moving the end revenue, of our generated million by We XX%. guidance of range to P&L. the exceeding $XXX top

which driven second an we the price This on average market. transaction average median demand The Our each end highest range at XXX of in $XXX,XXX. our selling is acquiring homes quarter revenue of where strongest by focus of of guidance result the at intentional selling the exceeded the in was sale our top homes, price also the see volume. is the near lower

The improvement XX% in increase million $XX.X QX, EBITDA second XX% $XX.X our a EBITDA adjusted adjusted quarter. over reflects quarter negative million for the loss This reflects the million negative in net quarter-over-quarter. in and a the first $XX.X improved to compared quarter to

cohort sales. acquired The improvement in reductions. primarily on sequential more gross XXX%, in by lower profit homes profit and over significant a increases was increased due margins recently EBITDA legacy cost adjusted disciplined of and number to improved Gross driven quarterly

and margin Our both acquired and consistent quarter-over-quarter margins margins from gross our performance sold X.X% of inventory expectation X.X% the acquired in with to gross year would September prior of inventory recent XXXX last the upward in is QX that margin is contribution year-over-year This XXXX, in the gross and as trend positive X, is reflects margin the X.X% and periods QX our last this recognized. a improvement year. gross

we to of quarter in Year-over-year, to previously decreased management. our operating and disciplined the total other headcount margins expenses commitment our operating At operating level, to $XX from announced year. cost have the fifth reduction consecutive are XX% the cost well demonstrating QX the costs QX half of positioned is second This $XX On reductions, measures. million million decreased improving realize general expense side, in current due in reductions XX%. cost to rigorous

the XXX by first more $XXX a end which XXX inventory of reflects in end $XXX homes Inventory in increase homes up acquired inventory QX the the million increased the quarter, was acquired in at from From QX. at cash from increase second to our in quarter. first million $XXX million to inventory expectations than driven was increased million end perspective, at we QX. double and at quarter. the unrestricted we homes to homes exceeded in of balance This This sheet in of XXX end an the of the the our the balance XXX $XXX from QX,

with aforementioned Our highlights the reduction to over inventory less build, days of than X%, inventory in aged XXX current quality our inventory. coupled the

$XXX million. XX June was debt Our balance

interest the and spread for advance successfully date largest the including maturity rate while favorable and second XXXX, rates. our maintaining June terms conditions, facility quarter, extended to we our During credit

have provide structure. to continue of lending debt our roster a a We to that strong partners foundation capital blue-chip

of quarter-over-quarter cash second inventory contribution after second Looking forward margin the to increases as QX interest. year, reflect to expect to acquisitions, half we improvement in and time well in the the as

to QX. net improvement adjusted that EBITDA also We of sequential in trend for and continue expect loss gross margin, QX the began

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

$X negative meeting significant and which million of $XX negative us EBITDA bringing between year. represents improvement, be achieving closer to another million, our of to this fourth EBITDA adjusted in expect the expectation adjusted also We sequential quarter positive

half this conditions. rigorous Our adapting market team's results the reflection and of this year first are to a in economic commitment changing of to

Our areas revenue we on updates streams will more share cash to coming offering, continue the our months. are diversify and beyond to excited these in

business front of us. resilient and is never capitalize it positioned better than tremendous Our to been never today has in on more the has been opportunity

team I Offerpad this help transacts, more value. real and forever change estate joined efficient more the making way driving it to

with continue today, Given a and the this sharing We we mission. pressing to volatility, more there progress ambiguity buyers can't wait our and facing sellers for been for never our moment, has and built perhaps were time you. uncertainty home

with that, question-and-answer over begin the the the And to to session. turn operator I'll call

Operator

question from Morgan. comes of the with Lee Dae JP first line Our Instructions] [Operator

Dae Lee

I have Great. X.

I acquisition per due So is XXX XQ to step of up perspective. compare or month-over-month. per it first, acquisition about that fees? contribution year for month But to was today and stable still you revised last those your you curious, to home or accelerate come right gross when from about? year. up after secondarily, you a fees that margin improve from home relative on and number year, unit margins, margins economics month, think next to And a And XXX should expect as acquisition home should your home stay September I talked margins the it the understand we

James Grout

overall. pace Dave. Thanks, our James. is On first acquisition This your question around

So our that's to or thing me, home XXX to we continuing mentioned, as versus been the kind other business. improvement one improvement what of month, So is important. -- with focused levers volume mind those only month-over-month, of on always those out here returns per month what That homes, product that's maximizing on and We're is keep in month. for one profitability, mix volume there to shift target cost-saving the have seeing of like on expectation overall right? there, excuse seeing that also the we're return is that work on important per Brian be XXX acquisition is we'll over path lines but and our efforts that the

there are making spreads performing. And of look that then been margin we're the contribution we've to going in how that to that we that so while improving of were sure the been and and been thing buying been we've were as largest terms you underwriting releasing the should time -- your have we've some at the QX more right And the second new QX, or conservatism underwriting proceed conditions performance certain that over forward, that all is I comfortable really in frame. there, homes question quarters, how think past markets, when and of cohort important and X margin there

that look from and will see of now cohorts you on stuff, and gross less forward. legacy returns for QX margin when into those contribution the forward going you'll you to but drag start QX, see the So normalize those margin

So more line down for come in should see margin. start our new expectations contribution our long-term to we cohorts those with

Operator

from question with line comes Jones Nick JMP Our of the next Securities.

Nick Jones

Great.

received and we guess, can stable, last, receiving of any the of how there Some kind The one, iBuyer get environment. and little solution is what in or and I the prices guess, have how like being with an solution market how kind first kind and in value is the an and Is kind -- of buyer on supply, pretty iBuying provide being things the clarity maybe you questions buyers over Offerpad does the today? on in solutions? marketplace having XX around the how this homeowners I come of touch months changed they're of iBuyer sellers

Brian Bair

in been It's the note, Brian. of in we years. request to important couple last it's volume to the all similar Nick, what We're Yes. saw very has year. consistent seeing uptick

Cash limited offers, to that next it is allows are one supply their A than under of the time ever. Number them But certainty in frame. us I offer. control. important because customers contingencies their would to say, home cash more in are the of lot for a there reason without also, coming buy

supply. saw the seeing the really home market so low before and And now saw similar price to supply, what appreciation, we when increased we're we lack of

if seller able a So that to that finds we're home close a they home. to their want, schedule they on potential sure make can get that

that's we're seeing. So what

of have gone. and other the more thing, like more more out the buyers well.little that's our mean we X so right on and cash our And a as products think in solutions there we're now only of obviously, at add there's we more before. seeing viable as buyers even and And really that, than more our of makes it then opportunity is cash of I noise buying volume, -- lot -- the I

Nick Jones

on then as service. to listing those? newer should the P&L of like a on over maybe products time? the some starting -- those the model how service, or And Great. about maybe think renovation the uptake up the show what's to Direct Plus, How we follow in And up

Brian Bair

Yes.

customers using Renovate. So then those, Direct which using service, us been with renovation we're for we're both home service our to home buy our -- partners up have them. for for and well a overall, for renovate service great. seeing has see to Plus their day Plus using like to Direct is exciting our as signing the and more of What's both every new renovation

good buying some those affect, in transaction happy both we really especially are and other on been products. going the right channels. so other the where in those market have single-family with and and But the seeing to those now, with of level of conditions that's focused that, the people Obviously, going products growth we're

Operator

comes of with next from Stifel. question Our Tomasello line the Ryan

Ryan Tomasello

inventory environment in allow like ability to feel of market that it Reading but that conditions tempered this are? the spreads? terms given given widen a the targets. somewhat you quarter and sounds volume I stronger funnel Just, conditions between looking over the what prior Do spreads how think I remarks. conditions profitability the stands to your you acquisition in to there? the hit these higher limited more volumes sustainable get tight follow-up are out do filling guess, lines, for I maybe still maintaining current maybe is ramp guess how And volumes? you like on mean Or gap the purchase comfort under you the margins, perhaps, a is next, are lower completely to to more control ramping with

Brian Bair

I'll But we're buying from what home James or right Jawad first let then like the really price. around -- our we're and at buy that. jump and after I in jump Ryan, medium in box, foremost,

like and So is in And we great. what more I we up, as we start get buying up penetration market as this really to want that more buy now scale we're homes. box move right can buying environment, which

-- argue, extremely Right been above And now of country. basis rates mortgage has now, at some in market if points we're is across you things focused even resilient signs, as rates. more this than up reduction the get transactions is like interest look There's XX we're well, and really especially it the Even monitoring the of the that. could a But you from what could sensitivity close, be volume. overall, X%. right just the on watching

with opportunities to way right can a I where really we've where really to across and we And to controlling we and what But continue going just Jawad? really of buy done grow, so disciplined are a -- really we now position focused control. like we are we're can And we're at lot happy in a that's forward, on really seeing the focus or what of product and buying is now with I'm there. where James But our board today. -- legacy inventory good

James Grout

Yes.

to highlights thing interesting that, Plus the the buyer other services to Direct there. the shareholders, that renovation, the one to it shared a those services we And contribution listing our other out that's that break just think Flex add of the graphs letter be particular, -- couple I Ryan. In and would margin. and

and expected for great hoped pace we to as as approach what's that those need and see seen how as So and many look we overall is to of value that. go which contribution to come levers our around profitability, of more forward do to the in gives on right? we've it volume, into and business as the and profitability And really we margin, strategy brought other we lines exactly been all business, down had having provide and income, that homes for acquire of those a lot that us a diversified ramping there opportunity collectively going

Ryan Tomasello

balance the compares cost an including how just then business terms carrying of drive breakeven, volume capital. in to for terms thought base the on in the to and cash about think you And much ultimately generate of volume how negative equity to only but the ultimately flow that about update model? how here of positive drive sheet current off need returns the here on you you Have not financing also side, feel can you the you

James Grout

Yes.

I there’s that. of a sides think couple to

that, we is plan the a The credit going about of out supports facilities in one forward of terms the is thing leverage inventory. with side, capital cash The right? important debt our do our business of the that legacy first on have and with coming the side current structure things

quarter-over-quarter, going that cash be by levels. normalized to a sequential is You look in that big driven returning at of to part leverage and improvement

ability we’ve largest daily to us same you activity to anticipating. maintain we’re our right? efficient back facility our have and regularly, with warehouse us the That good this in a with allows extend with then the those those are of capital. And that our to credit them terms had a that very that It’s And very happening relationships renew volumes lot buy and favorable at our facilities place – partners. take on to facilities be allows

Jawad Ahsan

in chime this is Ryan, I’d here. Jawad. like to

have So great credit relationships in got great team facilities, James really and We’ve reflect to the them. are I got, the us. And we’ve has balance as sheet. that of about mentioned, feel ability want a front the and lot good our volume the get the to of work where done grow market we there, opportunities

thing question company. solutions that love offer the our of But I about the the is because one noncash reasons, big that the joined – ultimately I

We sort but the are and Direct with much asset-light more revenues do going over and of facility FLEX we more of we credit the feel about. positioning mute too Offerpad us great Renovations, our the that’s from to Plus for coming on be need facility, credit to and time to have reliance have

Operator

Michael line with the Our Goldman question next of Sachs. comes from Ng

Michael Ng

the gross I from How how for September that XX% holding nearly have during cohort and much is you home the one 'XX price period fee? on strong much of What's How contribution the really later are what renovation. a into as the some you at target earlier call. XX%. at drivers And follow-up think about service margins margin? questions XXXX, Obviously, that the point. headline thinking of the carrying quick the gross homes on X,XXX about way the are home about right were balance? like X to looks asked guys thinking to you XXXX? to X,XXX inventory what's How your appreciation just

Brian Bair

and with first. performance But the is coming the risk Brian, it Mike, I'll market This legacy underwriting jump We're out we with and in. obviously then let thing underwriting jump of is you're built more in more with risk James our that into inventory. the uncertain with in I'll conservative were the is that. seeing our is

really markets. and well of now. good that price XXX the XXX affordability off. focused performing with points, of right between think spot the a I some we've the along prices to we've is been seen risk home that's really have Florida as started on we've said, stabilize, As been market The Like taken Midwest strong. to markets

of on And we're products so been the type buying. that focused we've hyper

you that value already is note strong. just and is we're thing really that can ever. in renovations. homes Most need that other renovation of the The on seeing hitting that renovation in the than getting we're inventory get Maybe can value the stronger that is market to

And something of data like extent. so that homes like -- from XX% seeing most older the right are XXXX, to the now of a of maybe lot than we're

key value through has renovation adding been as well. So

So I through market, underwriting is how adding the would as product which can important to a then really we buy to value again. that think cash really as people And our underwriting days forward. is XXX homes that's the we're well, and have we and desirable then that's we renovation. then then which houses limits below And our as hit where because happy be very time I'm like move

James Grout

Yes. just it obviously, there's some is but basis. kind on, of the historically, And if usually a add ranges I you in seasonality our on and look think inventory turnover inventory side, to on back there, about quarterly

from in of the So basis. plenty that quarter-by-quarter trends many homes our that we'll into There's inventory we that quarter. whatever following is, -- sell seasonal ending a factor whatever

-- so a around support to that. to that a diversifying carry credit evolve and Direct current generally just forward earlier think opportunities and structure, important adjusted. is base how overall, our change other our But month acquisition conditions just our about But if target, are would on our a seasonally kind We'll as there, would continue mix, based XXX product facility suggest what's product that X,XXX-unit about focusing inventory doing of market But back level that comments I the you the Plus these what go that's and lines are on we of activity. to capital ramping. going think

Brian Bair

will this of just and one think talked a key them if product relaunching we can then the strengths question, help market that maybe wasn't Flex cash see we that on want cash a well, but paused bit said, the well. as the inventory, get on as before And that something just side, can limited that I is Mike, I our what explore this with well. they Because popular offer. know the just I well, way, also Sell backup, people do that the that well flexibility to as see but as what again relaunching as about is it, seeing was and of to James earlier hit offer want the retail they and have of as cash be that a of your offer market little going very people getting can give open as But the to the

Operator

Our next with question John Colantuoni from comes the line of Jefferies.

John Colantuoni

about Two starting growth, and with Great. inventory. inventory

a homes about you but saw the flat purchased, quarter. in So be third ramp you're in to expecting sold homes

sold of your balance. If during been of about profitability from that in end improve when sort second per time? efficiencies will balance our you business to goal And XXX homes you year, in reaccelerating inventory sort a the sort going that imply purchases to the to levels help progress sort the what making month step-up in out of next your with fourth keep growth home permanent you're Does that of QX, substantial suggests X,XXX homes able question, math should think next efficiencies see would between quarter mean we the of expect are over and rightsizing of transitioning you some that key quarter? improving areas and draw about you've to business of inventory growth that to

Brian Bair

Yes.

a -- the on think efficiencies. I'll of lot talk I

all renovations. key underwriting of Also, above, lot, to the and and the market a button the type interest think into as with last from key. done efficiencies. learned lot the that be and rapid we learned is We've absolutely I well year. of buy the want pause inventory and We've of we've the rate lot, is look when hit a a countless to going there's backs

and efficiency more reservation get to teams. our our continue We out of renovations

just And our customer well. engagement with the is as other thing

customer roll As ever, else. on been a satisfaction scores everything never our products getting our And want thousands the than a of for from customer to communication homes out has we're feedback able stronger focus of month, not to and we've we're different buying been we while. and that

the underwriting. from as the property But level, comes segmentation in it

focus buy. we home on homes We so have highly better the that every with a and called we that project get we smarter Limelight type of internally

trying And so to learn better. and get constantly to we're how

And I aligned ever mean think super I so I is than think strong. our efficiencies more of everyone it's are strong, success And looks and like. what

from And increase really as -- meter mortgage Like I box. real our volatility a coming is that's buy if we growth, now we the markets. lot it in is a is market talked the about from can than estate more get said, else anything -- to the

I in certain said, is volatility definitely we're closely. on as comfortable move get that so certain up renovation more help take of kind there side. Again, markets, value growth like and to well also then us we higher the homes something. from And homes on of we as can watching the But

grow The ability and again, disciplined we and it the of to really what that's But now excited grow did. just on profitable. make is that, through on and now are So really in That's where Jim. proud we've really where massive path let going, And you, been super that I'll doing, laser-focused we're every just profitability. but we a we're and about eye important being teams talking the day. right to what but about are

James Grout

exclude that XXX XXX earlier pace you sales homes inventory, right? inventory look and QX. at new was that in the August And year, question acquired homes sold inventory those there, and if the John, last So QX in legacy was Yes. your you in when of around there from million sold,

XX% a of as of But of is spot midpoint there about to terms increase the things expect on growth, inventory quarter-on-quarter range forward. going increase there. you're in So XXX our

uncertainty how year that we're And and month diligent right, play it's though, QX, of going perspective of kind So with need inventory things cautious good caution, would real with holidays. we make and right conditions, particular, just be right? why I are things -- thing from performing to with will that's is a to out, estate seasonal QX. market the remain is one this sure acquiring a slow for in The now to homes that the

Brian Bair

seasonality we've a we've there. couple in seen near I'll because on One just ago. but traditionally. has of not would been years of maybe other years last what some haven't -- seasonality see supply The lack thing, few seasonality supply, of we the jump not the seen The lack seen the we that over

throwing lack But those months. definitely the again, watching at we're one is it's that a is of something the So of closely. different definitely yes, side. range But bit seasonality little of supply is December

Jawad Ahsan

infrastructure weigh is here position I difficult Yes. to it's business us grow to I and been actions challenging from saw I year. that now wasn't rightsized what structure, make and a right-size wanted Jawad. here. as Look, profitably see responded. I really but in we well. John, its tough fundamentally here it, cost the costs way this take love is decisions has to and that gotten and our and I decisions a for

And just flow. so me, it's profitability, not but cash for

on but to and how mortgage go a And well, there's lot on guidance of we're that So sure, -- uncertainty in still our good in mentioned from drive as towards. the the laser-focused positioned cash something gave feel volatility that's some also we but we're Brian going to company's positive profitability, we're I hard market. about There's flow for that getting here. really markets. still very uncertainty,

Operator

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

Jay McCanless

that seen the I uptick have to it homeowners, it you your could where of ago. could first Brian, who terms selling? a had, one if owners primary we've are in pull about heard is some starting homes was in maybe versus landlord, to now on an people years be year ago who thought maybe people bail? and/or a And off supplier base maybe family X selling it Or you, you couldn't talk they The are Airbnb homes typically that of or these

Brian Bair

Yes.

great going to that because it's I right there's a about that's definitely there. was I thinking the fundamentally, said when you happening in I little Airbnb -- posit actually that throw was think a

as just at. or of I rates think fundamentally, story X% their There's X% interest where people locked into where they're mortgage. the definitely

-- cabinets kitchen now. not And wanted are lot right moving they because nicer bigger nicer so backyard of want there's that people the a or of or a

So people purpose. most for moving are a

we rentals and from long-term homes are end are lot are lot of vast -- on the the buying in short-term that of that. we've the action seeing were that, that a owner/occupants even that seen majority of that living saying a of home, some people the with rentals it. But in of a more Majority

well. we're seeing -- we're it end of So volume from seeing as definitely that

point, -- Airbnbs And end activity are whatever, for -- the I your us on a that that people definitely, rush the that more and think think those to we're of rentals And world. those selling are homes. I are their seeing and they're there was the the But owner/occupants short-term having well. just majority as vast are

Jay McCanless

talking and you're median -- around high my And you X% Brian. great. price? at Which great. That's spreads kind volatility, what even with of rate sticking Is second is unpack sounds then the about these a too there new mortgage question, Okay.

XX-year for right it, that's buying approach trying above But underwriting rates, then think what doesn't the rates go and where to sell work ceiling there I you're you're now? now. what right if mortgage a the right is

Brian Bair

watching on lack told have we're -- obviously, been X% while and that we're seen you but of it still because supply, interesting, ago, I market. What's -- with demand very putting we're we've the not would strong would of a have closely. seeing anything still

I think enough still lot in depreciation you jobs had have thing get people with everyone price the coming and their home the one mentioned doesn't we are was haven't the this through a because of strong, holding is current equity still maybe that homes. that expecting

payment of are offset home $XXX,XXX a to cost as the some that So might their put that can that people home $XXX,XXX now into up. equity they can have of down down selling that

is mortgage of of which a at a some offsetting the instead interest $XXX,XXX, So burden they're rates. $XXX,XXX of mortgage or getting at $XXX,XXX, the getting

of been the think, that some -- you're running and maybe that of to they've I I while buyers. cash But or of seeing rental house out we're coming as also, that moved are X mentioned. in last lot a homebuyers that still buying they that get market cut a out or year well, can. seeing on they want of the are in We been have that that So equity XX% first-time a about

that's I your question long-winded but but a what was. answer, -- so And hope that answered where --

Operator

you. the today's like thank participation. that concludes call. all you would concludes to conference question-and-answer your for Thank and That session, I

now your may disconnect You lines.

Offerpad Solutions (OPAD) 2 Aug 232023 Q2 Earnings call transcript