The pandemic-induced pause of iBuyer transactions in the early days of COVID-19 nearly slashed revenue in half for Opendoor in 2020. In a U.S. Securities and Exchange Commission (SEC) filing, the newly public company revealed Tuesday it expects to report approximately $2.58 billion in revenue in 2020, down from the $4.7 billion it reported in 2019.
The financials are still preliminary, with Opendoor’s first earnings report as a publicly traded company expected to come on March 4, at which time it will report both full-year 2020 and fourth-quarter results.
Opendoor also expects to report an adjusted loss of between $98 million and $103 million. Opendoor reported an adjusted net loss of $327 million in 2019.
The preliminary results are the first look at the full-year picture of just how significantly the pandemic slowed the iBuyer business, even as more and more Americans look to transact digitally.
Most of the nation’s iBuyer platforms — including Opendoor, Zillow Offers, Offerpad and RedfinNow — all paused homebuying as COVID-19 cases surged in March. The full pause only lasted a month, but transactions were slow to return as the iBuyers more carefully returned to markets on a rolling basis.
In the third quarter of 2020, for example, Zillow posted its lowest Zillow Offers revenue since the first quarter of 2019.
Opendoor’s revelation that revenue is expected to plummet by nearly 50 percent for the year comes as the company looks to raise more capital through a new public offering of 24 million shares of common stock.
“Opendoor intends to use the net proceeds from this offering to invest in increasing existing market penetration and to expand into new markets, and for working capital and general corporate purposes,” the company said in a release announcing the stock offering.
In the filing, the company specifically acknowledged plans to double the markets it serves in 2021. Opendoor is currently available in 21 markets, although the services it offers vary by market.
Opendoor went public in December 2020 after merging with Social Capital Hedosophia Holdings Corp. II, a special purpose acquisition company (SPAC). The company opened trading Wednesday with its stock valued at approximately $27 per share and a market cap north of $14.8 billion.