In its first earnings report since becoming a publicly-traded company in December, Opendoor beat revenue expectations, posting $248 million in revenue, ahead of the $220 million that was expected by analysts.
But the numbers reveal just how deep the toll that COVID-19 took on the iBuyer business, as the early days of the pandemic put a total pause on Opendoor’s homebuying operations. Its fourth-quarter revenue came in more than $1 billion below the fourth quarter of 2019. Most of Opendoor’s revenue comes in the form of home sale proceeds.
For the entire year of 2020, Opendoor posted $2.5 billion in revenue, down from $4.7 billion the year prior.
The company sold roughly half of the number of homes in 2020 as it did in 2019. The total number of homes sold in 2020 was 9,913, compared to 18,799. In the fourth quarter, the company only sold 849 homes, compared to 5,013 in the fourth quarter of 2019.
“While 2020 was an unprecedented year, I’m proud of our team’s relentless focus on digitizing the transaction and delighting customers,” Opendoor CEO Eric Wu, said in a statement. “As we reflect on our [fourth quarter] and enter 2021, this focus has resulted in increasing business momentum.”
“More customers are coming to us and choosing Opendoor than ever before, we are seeing healthy margins, and we plan on doubling our footprint to 42 markets,” Wu added.
Opendoor wasn’t alone in feeling the impact of COVID-19. Zillow’s iBuyer business was similarly slowed, with the company only selling 923 homes in the fourth quarter of 2020.
But Opendoor also picked up its homebuying pace at the end of the year. As of the end of the fourth quarter, the company had tripled its inventory balance from the quarter prior, ending with 1,827 homes in its portfolio.
Opendoor is also seeing more interest in its platform generally, Wu revealed on an earnings call. The company is receiving 50 percent more offer requests versus the same period as last year and converting sellers at the highest rate in company history.
“We believe this is the future of real estate and it’s coming faster than expected,” Wu said.
The company expects its post-pause recovery to resume in the first quarter, with expected revenue between $600 million and $625 million.
The pause in homebuying also slowed the company’s losses, but Opendoor was still far from profitable in 2020. The company posted a net loss of $286 million in 2020 and $87 million in the fourth quarter alone, with the high loss in the fourth quarter likely due to the company ramping up homebuying again.
For comparison, Opendoor posted a net loss of $339 million in 2019 and $91 million in the fourth quarter of 2019.