OPAD - Earnings call transcript Q2 2024

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Operator

Good afternoon. Thank you for attending today's Offerpad Second Quarter 2024 Earnings Conference Call. My name is [ Jameline ], and I'll your moderator for today. [Operator Instructions].

I would now like to pass the conference over to our host, Taylor Giles with Investor Relations. . proceed may you Taylor,

Taylor Giles

Knag. Good afternoon, Call. Chief Quarter Earnings Officer, Offerpad Officer, welcome joined today to Peter Financial I'm Chief and Bair; Second by Brian XXXX and and Offerpad's Executive Chairman

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

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

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

With over . to call that, turn Brian. I'll the

Brian Bair

thanks everyone Thank and to Taylor, for joining you, today.

impact of the and parent EVP understanding in we Before transactions, already contributions. complex Broadcasting, excited into have updates, and June and our With TBS. and CNN, thrilled making confident business introduce company are on CFO, TNT been of operations have the Knag. and was his financial CFO and our him leadership to dive he'll Peter expertise, at organization. us Previously, in to he Peter significant joined we new I'm has Turner

business adjusted the economy make can market, we weather quarter economy. and revenue delivered continuing and real profitable within building uncertainty of any that to of to guidance macro now Turning we the quarter, continue in incremental long-term in improvement despite second a another estate strides and EBITDA, the our

that we clients technology market. Highlights for positioning Partner expect by us Agent end. in profitability are Freddie operations Mae to sustained us in and Program, growth our enhancements of lead new quarter and profitability Fannie EBITDA include in streamlined the year's like initiatives renovate Mac, the These will any

the strategy. As that in we long-term managed, must focused our this a moment for is but housing we be on time market, remain carefully recognize

X.X have affordability the the has volatility on impact of and Over market. we highlighted rates constantly years, interest the and the past home it

very As a have our result, we in to been approach inventory. disciplined

increased a market mortgage QX, In the markets surge buyer rates volatility in across most softening experienced and with country. to the surpassing active again, in demand, which X% inventory led

effectively, to approach to margin quickly Our short disciplined challenges leading to the flexibility gross quarter X.X%. an shifts. market of for us these the improved third term has adapt navigate consecutive to home enabled us provides with Holding

volume seller's anticipation home. focusing of the per more on to from buyer's buying a transition and market the potential less margins our criteria, adjusted we've With wider on market, a

have fewer example, increased hold the homes acquisition that side, For We've homes times margin. actives renovations, are home intentionally buy boost on focus to our more and that to leveraging the on us additionally we need add ultimately the our to renovation value more and area. assumed in strength enabling

cash for we our next. the interested quarter possible property our for X in are stringent strong exercising and Despite from experience market this seen Sellers in services we discipline best take our offer the be significant demand provide of requests in acquisitions the in very our the customers. the transition. turn, continue We increase to to and during acceleration, volume we've pride in

the exceptional unwavering as service our Our our market. real trusted commitment to customer to of XX% and reflects exceeding dedication a underscores reputation in expectations, solidifying score CSAT our leader estate

in believe buyer's market. a mortgage of economy, macro we'll be absence significant the into to reduction heading we rates, Returning

times, marketing our and shift well, especially opportunities home growing, their of for one us see present inventory largest offer may access in quicker America, buyers this As face home longer this competition, cash positions business. significant more liquidity. the sellers to as With

homes. desirable to the alternative buyers is old, and resell continue resell compelling buyers home afford average homes. struggle can or closing. As solution with affordability them years The schools, refreshes market necessary Offerpad provides presents to homes after amenities, over basic making cost restaurants XX living, to on typically upgrades Offerpad even and offering traditional to newly of move-in many the a located established more These option cost-effective are compared ready workplaces, a renovated, by and homes. new close in attractive locations,

established choose prime New homes location can from are making strong of often point, purchase cost typically the home without I amenities longer enjoy at challenging Offerpad come a situated services. renovated a real and Buyers higher benefits an times, the in a Offerpad wait higher alternative to estate and longer further in market. times and newly wait price home. today's

within buy approach evolving patient and in box has market. our disciplined Our proven successful this

opportunities. conditions higher-margin our Our on approach us to a adapting fewer for and will by market, short-term concentrated believe purchasing strategy shift properties excel. we well the on where anticipated estate model focuses changing positions This real to proactively buyer's

million the renovation strong services partners. roughly experienced transition pleased an Now our building versus BXB share offering RENOVATE for growing margins. cost-efficient partners. prior to of instrumental generating We're revenue. home services, our Offerpad and XXX% our to another we've platform and to RENOVATE projects enhancing RENOVATE quarter focused leverages discussing timely, closed other $X expertise in renovations, in let's in extensive year, been I'm with which on high-quality and list operations over that have renovation

the Freddie Mae, Captain technology updates, markets, anticipate and partners. clients new we to our Mac I'm efficiency. excited other platform a launched with fully and share of the management in are of host officially end the our to partners we've quarter. Reno We Fannie enhanced technology project We've for onboarded that multiple along homes transparency giving real-time BXB renovating and will both by deploy all

Offerpad. cost for Captain efficiencies also efficiencies While provides produces substantial Reno third it parties, to significant

channels. cash offers platform. our provide and their our we through Value, sellers The with where to proprietary offer partnership excellent they expand to generated in In Citrus integration extend already integration allowing instant an Utilizing This meet enables results. continue has reach announced us directly [ us to customer. we June, ] We an called process. the estimated are early produced their our for AVM, Realtor.com,

represented Orlando, Agent year, in or In announcing to on from nearly to I'd improve supports and This XX% a Agent APP, XXXX. year-over-year and is focus like at as X, requests produced our and Partner XX% requests Since offer our Partner the cities nearly of contributor revamped that Atlanta, our sellers. this our Program, since of our to now CAC a surged, efficient at Tampa. ability agent have level year Program agent quarter community XX% up ago. requests total earlier represented such acquisitions, Charlotte, most over Phoenix especially X/X QX key agent

a leads listing all information accessing cash seller To platform, by our Agents engagement activities seamlessly our including manage part and an in viewing by teams location, agent program, QX, drive continuous centralized can PRO offers, viewing portal referrals and MAX of within Offerpad for programs. Offerpad and agents property listing managing who launched a and partner efficiently. in their online Powered we detailed are and agent

been have more investing technology efficient. in We business make to

the on transactions through return we the been cash year. technology. to levels, have compared efficiently our we putting consistent investments, able in of in more When towards delivering margins, adjusted expect EBITDA much path to to end the and a flow expenses, investments these to of result improvements a business streamline more normal improve revenues costs As and given grow focused

With years, long-term short-term the In success. set while renovated and coming closing, to innovate an in anticipated an I'm refresh and is in homes Offerpad homes navigate proud of planning become challenges aging our leader team's delivering for ability a shortage of buyers. to and to supply

partners. asset-light offering and include groundbreaking end-to-end expanding This to develop development solutions for thank and in the Offerpad and by partner specifically to technology I product our want our progress solutions. dedicated focus is their Our services, our continuous buying for strategic growth and and imperatives employees driven drive improve teams ecosystem. product on selling committed

Offerpad discipline, while environment any will weather and market this difficult sustained patience profitability preparation, We condition. in with positioning for

to over With Peter. that, the I'll turn call

Peter Knag

to Offerpad coming Brian. and very some CFO as whom deep whose operations profitable and allowed interim such knowledge analysts Grout, the I've and I'm financials a our join for scale. to to industry of our time opportunity grateful at strong join growth the I'm earnings met. drive while vision, to you already you, at first forward look long-term my months, to pleased position pivotal to know me for James of was to and the Offerpad's Thank in competitive step to attracted seamlessly. getting and CFO the call I'm our I investors thrilled in company.

to leverage cash skills business. tough through operational model to huge I put and continues asset-light be and business see these opportunity will in use the offer as managing Additionally, my transitions. business background significant core our environments and opportunity we grow I to experience a what work

In be strategies teams the our to closely key and support the operational growth coming priorities I'll to plans. continue quarters, to with working identify

and environment. cash the on in position business EBITDA to on efficiencies adjusted we is First flow generate foremost estate focus further as real our operating progress and positive any

We're the our strength focus estate As on versus internal managing this Brian our platform, in ROI to with real given volume. optimizing mentioned, and we seasoned are of discipline well our our inventory levels operating with processes positioned technology, a do teams. our

only We had improvement in remained the expectations. quarter-over-quarter line days, homes and during had an QX an and quarter. inventory, a in quarter in which time of to days over sold under financials. Inventory in cash X.X% Homes were position for resale. owned X to contract Turning healthy days XXX strong with of average seasonal not XXX of XXX the

to in dynamics compared time longer We up in We average flat year-over-year. acquired QX quarter, and roughly market. and given X% the expect homes slightly XXX and time-to-cash market current to MLS on QX increase

challenge are more acquisitions. lock-in to persistent the in effect, affordability the Given disciplined we current taking rate approach of a

and of we in half decline mentioned, the the as focus lower we QX we expect on wider compared opportunities to levels. second volume to As spread inventory year,

services traction diversify to While of efforts our our published operating grow. Agent beginning in model Direct momentum to providing a here, and contribution our see revenue XX% including These In almost between with services represented central supplement now cash other our business, to cash on our of focus to we the and Programs offer pleased our quarterly ongoing and IR RENOVATE, QX, this Plus services, earnings profit we're asset-light continue total this Partnership as is offer are we our to site light our quarter. expect the in breakout continue.

which second XX% XX% the improvement or million, million, $XXX XX% within from $X loss Net and sold up down homes, $XX.X XX% a quarter-over-quarter. was year-over-year We revenue XXX quarter, million up XX% a our In improvement and and guidance down range, was was year-over-year QX sequentially. X% year-over-year.

million, asset-light $XX as down Importantly, the gross basis in strength flat total X.X% compared This XX to year-over-year was margin as and quarter-over-quarter. points both the was and first in expanded margin offer services, the expansion business of than our contribution quarter. our XX% gross more driven profit of roughly represented to well transactions which by margin the Gross quarter. cash X%

million million, we as year-over-year of driven excluding $XX.X the improvement operating to property-related our and save $XX make XX% $XX cost of up and or to Program of progress initiatives improved million result cost-out million reduced shared. activities. by That's annually, Agent Partnership prior target on another initiatives. annual costs selling expect by advertising lowering our from expenses, our we from Operating than spend, in million an expenses cost prior management now a the continue holding quarter million $XX $X.X by XXXX, and out leverage versus more $XX.X $X After nearly previously million good

to expect more have improvements You continue. on the to quarters. share in We'll should coming the this cost-out

margin sequential adjusted XX% in ongoing drove improvement through on loss contribution we spend EBITDA cash focus expect year-over-year management, OpEx quarter-over-quarter. adjusted of Through revenue million, XX% cost diversification flow of and disciplined Our and the $X.X end continued and year. an EBITDA of the and improvements

quarter the $XXX balance the incorporating estimated carried to the sheet. of and total million over ended We inventory. value of $XX million cash second with Turning our when liquidity in unrestricted

we longest partners. credit lending In and tenured have largest renewed We second roster our major quarter, into a continue the XXXX. strong supportive and to facility extended of

we Additionally, level to debt. continue parent have X

XXX expect third to now we guidance. to million, supported discussed, revenue by In of to homes Moving the range XXX be in to industry-wide $XXX sold. the light lower $XXX quarter million of volumes we

adjusted a focus we leverage contribution expect mentioned, maintaining improvements sharp we in and achieve are and cash on As flow. margin to and operating sequential EBITDA

and the to beyond, sustainable Looking any XXXX actions of profitability and that back can estate towards environment. we to continue half real building achieving operate take in business a

the as our the we Offerpad on updating forward our our out friction making to in go-to-market we map focused are progress market long-term and the against and mission estate. progress of strategy We for untapped execute the you strategic technology opportunity with patient and are of We quarterly road platform. taking long-term look large real

you Thank attention. for your

now will We questions. take

Operator

Dae first [Operator is Instructions] JPMorgan. Lee question Our with company from the

comes next Our from question Jones Nick JMP. the company, with

Nicholas Jones

for a Brian, new new and up term? history one again, one for well. of Powered have by you How agents, I envisioning solutions, setting baked evolving uncertainties business kind of There's guess, a maybe in today, the still lot announced and you Brian, to Great. kind RENOVATION. Offerpad, you're industry [indiscernible] you you kind estate with one real the of near deep as of there's are in. the chat

do agents through buyer that volume another offering near-to-medium the react days the residential just may terms find and as out Has in agents took see the business large. we'll at be XX and think these we other the or so? kind how I ecosystem days? us of any think it's How . estate real evolving in you term solution depressed of remains settlement

Brian Bair

founded customer where we estate real includes agents to be as at. to when and the center for Offerpad, we everyone, And they're Nick, a want that meet wanted solution well. we

agents, them some to some And by of want them represented be of don't.

the as other do, out we and Powered solution get Offerpad solutions in through technologies things been more key of ] internal partner with so [ integrated agent real-time onboarded can for that the the our agents -- everyone, they for more as And been and we -- and by what on something get platform, you're and our That's been real-time so information and is as Helix build can we've that's more we've focused some agents we program. information.

We continue our there expand well. to technology as

as look if I or mentioned from and But remarks, in in weeks market we've at mean because I as lately. a it, demand next inventory or low of is the it transitioning -- the inventory I see more into look coming yes, at you you market my sellers' months buyer the less affordability the seen

And so our a in we're markets. seeing inventory up of lot amount

again to everyone get hyper-focused for providing And agents so on alike. and want we what to customers is solutions we're do

our services, with the people services. people And renovation RENOVATE renovation daily product, onboarding need we're our use that to almost

to I to iBuyer to to been is is said, lay that All that an has we XXX renovate the a and in foundation, build solution grow what we iBuyer. the of operation just that other that system a or a you -- don't to key we the we want buy But because want lot that benefits be we plug do into as provide can to that, The and need and allows let of platform want to like kind be center. people We us of days. home do sell can well.

Nicholas Jones

then you normalize when the your profitability is accelerate of Great. still and kind things sure making And some kind point And positioned it how EBITDA costs, are thoughts, trying company, that's to business to to really kind of maybe of helpful. to term? Peter, essentially about at newer . in near balancing medium cutting thinking drive the the

Peter Knag

Look, they in Sure. hand. I hand think Yes. go

that are but the line, we're successful taking to We more flow using estate than volume, and as and now I remarks, focused we're in environment. -- position to line focused a any cash on in top prepared are of the positive positive where -- ultimately we place position advantage tougher in are mentioned that and business the we EBITDA bottom the adjusted on real time environment in right lower

-- the always we because some as [indiscernible], So all are hand we the line, do we're when offer, top flywheel. for go part do they with the especially they going to but cash well services really asset-light better the can there, hand get of at level in

volume going -- market. to do not a we're low better market. always We're when volume very higher a there's in We're in

our to ability this the that's So we're play going down taking into ourselves and market, any position right time to to road. participate for

Operator

next with Our the Tomasello company comes Ryan from Stifel. question

Ryan Tomasello

volatile inventory, slowing some you of right the And conversely, you're was Any out in? on these housing Obviously, for of rising Brian, I that stand period just trends that in bucking pretty your et hoping, that markets more color more active cuts, are across seeing price terms notable footprint. provide trends markets dispersion you're can now. on on the cetera. any slowdown performance

Brian Bair

up happening adding is there in Yes. lot Ryan, Affordability, the right to and going pressure more having markets, today. costs any Florida are a there's cost that in now. literally, -- going a there's it Florida market. insurance Obviously, with hurricane already was insurance there's on mean, cost some now, as right there. I But stressed

supply more in Orlando, Jacksonville, those markets. seeing we're markets So Tampa, like in happening

markets say with coming or We some afford the are XX we can that in mortgage I of we're buyer allow down would seeing house. mortgage basis mortgage XX on to house now the with like is -- couldn't also because that -- the today a what have affordability, side the been and Phoenix, most seeing everything maybe afford basis stressed the the drop point even a rates

days And stays more Phoenix some and I more impacted spike didn't Indy, Florida market seeing the the off But markets market. either. market, they that markets more want, they have sellers just the the or really sellers been overall hitting tell seeing can and affordability markets have home that get if pretty tested are more it the home their and slower on overall, those then of to I good are on consistent. XX demand you market. you say a home would inventory the you, will big been the But price that the those More pulling see the and so that's -- tell but with Houston would back we're point market. seeing I their in testing again, inventory, the putting affordability in that market mean putting market, led markets. I price buyer -- and to by the XX yes, for so we're

lieu buyer. in to reach out I start course, or you seeing we're markets we're a of the buyer us demand, slow then to of buyers this And mentioned -- And remarks, and more seeing in as first. start

And us. so to they reach out

seeing our activity. you're request So

our agent us You're seeing offers. the more out more for for of -- partners of reach

and box pay -- so very now in And buying willing we're overall. in to we're buy we're home, but our very, right staying on disciplined a where for what focused

and as recessions recessions. part too, just I transact that mentioned is morning still the that on real and sell on estate talk there's other And those and But -- people transaction Ryan, buy and homes in this that things. and

we're that expecting seeing similar X so all units And watching through And a closely. what of million moving we're to now year.

Ryan Tomasello

Great. were asset-light around all mentioned, Brian. And in think, total you X/X that appreciate of color, quarter. I services transactions the I

of in was more see more I bit near to a the services peaking think If cash fact, mix out to you do last the kind offer which in over do, market a it market transactions see a we of of term in here the willing coming of be the quarter. transactions. take advantage product, buyer's the higher quarters, you to roughly asset-light shift bit X/X this inclines

on any give into acquisition up . the color a as levels the the you you that to in trajectory second relative put follow-up quarter quarter? the fourth to us sequential quarter of volume and And third that, can

Brian Bair

think first volume some as you well. then rates as at things from I'll transaction jump overall, of they've their the and and if down Yes, there. been our been remember of that Peter have partners, transaction SFRs, second you take the the look has levels I by some impacted into long-term the

or other see think a I more levels transaction start pick market in as buyer's to opportunity up there's for switching investors you and -- there. So a

there, in Direct to the going they to I other getting believe as you're going more homes I renovate. think And transaction the now, pick things . And we're [indiscernible] that continue effect, Plus investors started because well. up into the our but buy, channel. good we're they just RENOVATE, which really what volume there really one need then to getting growth market, the grow you're that, jump of see, more homes that the to helps we're secondary in seeing as

so signed the new some And that we -- up. especially partners of with

at And been to the a And when believe, depending think market, those lowest natural. this at that and all over seeing the scalability services that levels market So time some least look in at of see going will on are start you that's little seeing to increase, opinion, been this for I all be through to you that's the go. going bit different we're the as I in year, difficult my the market of as in of channels start you're we what's doing last freeze start what the does. something them,

there. an awesome opportunity So I think there's

about? But Peter, to little want do you talk bit

Peter Knag

get Yes. as Yes. the are fact, in planning And we've down. to we on question, to we just I'd quarter, go and volume acquisition acquisition third add increased that to not volume. expect guided for

We're the could the course, not environment volume. anything -- can macro Of happen. nobody predict and

think advantage I could But we markets remarks, that can comes. change sort -- line the we priority bottom identified and so were as that focused change, the prepared if that really suggesting, Ryan, are that we line are that's could of of the prepared on to take more in we now, as top our top be as And line. change. So again right you our

then to And going mix, to move around. that's the as around question

We to our are break quarter services. this and offer beginning between asset-light revenue cash out

start all those coming that, to lead to -- visibility questions new. more services the quarters. that going to get relatively stages you're more But are sure relatively is -- I'm to mix So and -- at the but new different on will in going

may quarter-to-quarter, all offer cash up sometimes volume, And volume the go little on are bit going depending down. the different. they to dynamics a then -- are or So be there's growing our

mix higher the growth shift had for probably this the offer volume same the mix shift if is going the the we I on were quarter, quarter, services. XX% -- across but and cash guess, of transactions to and the around asset-light between asset-light in business as somewhere we to neighborhood, next So it's and

Brian Bair

we just one in super the thing we add moments more like I'll just talk as And this, than pending are active on much there, Yes. inventory. It's sold. other and focused about volume, important

closely much buyers it watching we're too buyers how If so afford [indiscernible] there's where area. homes, demand. supply, we're And and very or supply active many can competing buying that and

So been do really continue that so. we've managing we'll well, and to

definitely And pockets we're aggressive want that to so more more in homes there's that we in. buy

pockets But just there's now, inventory hitting the seeing right we're at then market other that a pretty pace. fast

we're or And going down acquisitions our so slow pockets. to those in areas

Operator

Our Ng question Michael from comes with the next Goldman. company,

Michael Ng

two. just I have

buyer you the on some What's pressure giving on . you you First, right way on And ancillary $X.X term. second, result? as costs paying buyer lower Are any the commissions. the think thank in margins in those for disclosures seeing then million but quarter. ancillary to services long year-to-date commissions? services, Are the about a on selling also

Brian Bair

Yes, second. and Sure. far as too haven't the would into Peter we in a of commissions, There's early still buyer lot -- jump the the noise industry. tell. then first, I'll as say to take I obviously

believe that dealing are get directly. As the to I going time, I buyers last mentioned used with sellers to strongly

the but early there's think still be over years, tell. industry that change of to lot happens months several next the I a going or in too to

choose submit agent. work to us Instant things Access. an or to offer allow We're homes to themselves an to they agents mentioned buyers can with that before I out. launching directly, are feeling that choose think Again, access and we directly I our

we're but with tell a early lot with commissions to definitely But out side, seeing what on noise of the there. too that

understanding so I that. that getting of a ready update probably quarter things think . these there's next quarter place, better on a we'll probably to are lot next a take have more lot and -- of have

Peter Knag

Then then it, James there's that as should that XX-plus MAX, institutional our X cash margins offer. through know and and we existing which you we is is very homes partner send is partner, a also high ancillary Program, on XX% leads about charge that calls. asset-light but for our for you percent. Direct homes, XX% closing so as to RENOVATE, And don't are to services we think Plus homes balance pretty aren't an as well -- with subscription combination services. take It's outside a from selling otherwise fee third-party in ancillary services. Direct that I -- utilizes MAX. as fee Partnership major then right? sheet that's buy or But think region our for renovation our fee underwriting the And those just Okay. the high are about there the to for is where that for services that or service box Agent percent referral of our asset-light not or as in business well as a our about, for and to very RENOVATE both or going that's either margin. of well. through a business straightforward think prior XX-plus on has as We of and agents business owned to anywhere our accretive It's and BXB to Plus gone use team.

Operator

is . the John Our next Colantuoni question with company Jefferies. from

John Colantuoni

to beginning Brian, And mentioned market. price also moderate. markets Looks just into the is like buyer's a appreciation you home

plan holding you still elevated. question for moderating back rates I'm you're homes Given price to remain curious to days, adjust averages about appreciation how towards That's while XXX one. home historical interest

the the ultimate goal It Powered do. describe to second offer Offerpad, the for similar tools key seems MLSs can what's the that portal. -- you And use one And for the some cases about by regarding agents?

by be NAR you'll if curious that's means the outlined all in compensation operative on that settlement. I'm restrictions the So abiding

Brian Bair

not of And technologies Yes. I'll more take iBuyer there the are a for with second lot model. question first. existing are is today, estate. the Yes, meant that the for Powered real an are by traditional idea efficiency. Offerpad, They're out meant

by the to to with a -- that market. Helix system for the and Offerpad traditional being customers Offerpad, gives something our in in like that rental able data So data which cash real-time to have call integrate and we so Powered offers agent even

agent customer the -- to doing For track time, and meeting be able the is even us with on for that to communicate as to be able what the understand that. and and real agents in to

some working something sure on else but them happy that and watching when our real-time continue -- even to data somebody customers been while the also they there put with to customer Offerpad, make service to to So agent, how on evolve it's different for is well. our our and the same very, with and as use ultimately, that's and a satisfaction communication hold they're efficiencies and the real the treating be idea we're we've track and sure that how estate the are in we when and their make we proud expectations able of surveys customer -- we things to the disposition as very

making same So communication and customer efficiency the sure is they get key in real-time experience gets data. the

As sorry, quarters, home any price been -- me couple price the yes, far of have remind underwriting home listen, sorry, appreciation for on the in appreciation, there. last -- we not

that how underwrite in of We mid-market or to comps that? the the you of you what to have are If you home ROI those not very, into comparables you going going been hold service make. when top underwriting lot lower fees, or you make, area, -- there's can goes you sell think X market, for. of long it's a just you're are very the assumptions assumptions It's

So little happening year-over-year. those because volume in a believe disciplined we've all like that's of integrated couple to are especially it said, bit. when say we've there's know you're home when But going and sell I some see buy, I can saying, all on we very that's specific. very, we're seen we it's have quarters, things market the disciplined we any all underwriting of in it's been appreciation the for very and we've inventory I of don't renovate what's any hitting market -- the that it. last that though where when I stay staying been X% price the making market, last up we sure But type home, Even buy and and

sure renovations. we're the hitting the we inventory market, little some money more on Also spending of starts that bit as make to want that a

[indiscernible]. So our home

appreciation price with been really conservative last quarters. side And So really but home focused that's couple we're the what for of so on. -- -- more we've the

Peter Knag

Yes. period right spreads, lower spreads. that in, I'd efficiencies. on wider and in it's things really we're I X the mean there's cost now just we're wider focused volumes that given this add

we're again, model that pretty to any that. We point the rounding sell to our as was for relying which, market that part. we're away because so way. patience that a it the out not, far our appreciation Brian And we're the point driving We're mentioned, at quarter profit. from also is on almost easy which drive just I'd and not not in discipline I'd $XXX,XXX, this taking certainly certainly with to and volume. [indiscernible] be reflects the them a I think want business and impairment error,

to a I the -- So that Also the from areas. And a been really well. really, again away value the mentioned in areas, in older, spot staying with to amenities, as outlying renovate We're one seeing at we schools, of and up been of home, this is that's spots us that for a the good sweet really remarks, market of good product. that's add outside close better areas home put focused little and areas. buy that a inventory bit we've established a what lot sweet good a we home on. prepared but amount those That's on strong lot can are

in there. inventory of lot almost you're the every up time seeing areas, commute a add Any market, of

services. we're disciplined to So asset-light right and and it's obviously other more staying going on focusing buying interior on what then now, pay we're our

Operator

the Dae with question comes JPMorgan. Lee Our company, next from

Dae Lee

Apologies issue. if phone I have some

might answered been So these questions have already.

Peter, I the guidance? [indiscernible] do a margin on Is you gross healthy basis? anticipate proceeds as you first well? margins in or that improvement net absolute improving And your sales you could we by what an XQ on sequential a improvement And guess clarify mean The in then broadly, percentage. basis one, saw more

is like more So is larger homes much . that more? Brian point? better on of your talked spread driven how of curious, this of Or the just ] And at it by by is how driven RENOVATE that targeting much about? contributing [ being that

Peter Knag

Sorry.

the the Can question, you -- second the heard question? the proceeds I first part So net repeat first of . improvement. the

Dae Lee

Yes.

adjusted mean assumes basis guidance XQ that one is well. improving was clarify in in And hoping basis. you your the if if [indiscernible] or can gross what sequential first EBITDA by . I improvement The on absolute is, margin margin you as

Peter Knag

but we assume adjusted focus profit probably see to there it positive. that -- contribution then important will getting then necessarily margin The EBIT margin doesn't improvement, first gross second flow cash probably positive It gross most sure. improvement. And and Yes, positive. is EBITDA cash to flow

two, levers driving that: cost major margins; but efficiencies. also So that one, X we're doing expanding are really

cost the just quarter-over-quarter, but it to depends those between to margins expanding we're So sequentially we're and going continued see see efficiencies. X, going mix on

million we're rate to of $XX more a the had out came the this that. -- seen XXXX on that We've and already of business of coming business. $XX we out year, come million there's So in seeing run

around next more wood to chop there's quarter. And going be get conversations have and around to ahead. go on as that -- that . that then after -- more more in we information into We and

Dae Lee

. I'll ahead. finish. let go No, you

Peter Knag

mean proceeds we Where Look, across margins net we're on moving proceeds. net services have that, our of then higher asset-light answered on top with towards our And the I Yes. . products. higher I think offer, cash sort expanding sales the growing. the of both I ROI question. with

Dae Lee

follow-up, Brian. then maybe as Mae And big Mac like this you, Freddie one win guess seems I On it. RENOVATE. Fannie a Got for and a for

could that existing like looking if . partnership them versus like any over So partners time? just you're wondering how how different work and and to your with that's ramp

Brian Bair

or high-volume business that having offer cash Yes. clients, both our whether markets things are in that. express this Obviously, markets. those about And We're great a in them without we expand even about can excited they're is market.

in we renovation they actually And some a business so we so our actually as -- can -- market follow great we are that. go services into markets, have expand by a different into led other grow example into our can and

the that high renovations things a dollar they're as well. -- other so And

on a and But in value things, So game the repair have lot boots with little see with how helps ground well. that and they we're knowledge more and estate real a and the of to time. bit efficiencies as what take those the and ground they our homes we seeing there well, as

X excited say don't like up about. little almost we're want I a are want to RENOVATE bit we're signing with I of signing overdramatic to We've very it, lot earlier, we're customers, a but every up to So customers. -- day, be those mentioned I customers. RENOVATE

side-by-side Offerpad I renovations we us side. of the one on people the managers, employees teams your you're a foremen, the own with. are And like an partners don't our cases, And doing watch our you're we put work they "Hey, ground, and of Offerpad now our say, some with when on because project if lot know of it's -- behalf that it's to efficiencies say, those that or like on just different anybody house difference In Offerpad. using the

same so cost value and And ground of efficiencies they get game. and the our

especially And the so that expand with And of there. that we take them. to we continue some side-by-side do with kind from RENOVATE that, of to more and of business partners our challenge continue more

little yields with there. to of the some they're And this buy SFR environment as is a not a something seeing trying bit mentioned we've just kind bit well little other So trying having in to of loosening and a there. asked of that bit as we're and very homes and different But but And things. of that seeing bunch, in of before, acquire with a the things side, Ryan little affordability excited about that. loosening trouble we're loosening of

see overall, and to are the So things of turn and we side, those on so continue we're scale than grow asset-light to what even think we're going anyway, some faster I now. seeing on

Operator

will call. and Thank that your the At this for of today's day. conference time, you enjoy participation, conclude rest your

Offerpad Solutions (OPAD) 5 Aug 242024 Q2 Earnings call transcript