IBuying giant Opendoor saw its fortunes bounce back in the first quarter of 2021 after a pandemic-driven rough patch, according to a newly released earnings report, though the company’s performance still lagged year-over-year.
The report shows that between January and March of 2021, Opendoor brought in $747 million in revenue — a 200 percent jump compared to the previous quarter. The company also sold 2,462 homes during the quarter, up 190 percent compared to the previous three months, and bought 3,594 houses, up 78 percent compared to the end of 2020.
Those numbers — which beat analysts’ expectations that the company would report $623.01 million in revenue — represent a stark contrast to Opendoor’s last earnings report in February. At the time, the coronavirus pandemic appeared to have hit the firm particularly hard, and among other things the report showed that revenue was down for both the quarter and the entire year.
This latest report, however, suggests Opendoor has turned a corner, and is benefiting from the hot real estate market that has buoyed other firms in the industry. In the report, CEO Eric Wu added that the company is “experiencing strong momentum as we look forward to the rest of the year.”
“While we are proud of these results,” Wu added, “we are energized and focused on the opportunities ahead of us.”
Still, while Tuesday’s report exceeded expectations, it still showed that year-over-year revenue for the quarter dropped nearly 40.5 percent, from about $1.3 billion in the first three months of 2020. Of course, most of that period in 2020 preceded the pandemic hitting North America, but the numbers indicate that Opendoor still has work to do before climbing back to its pre-COVID highs.
The company had a net loss during the first quarter of $270 million, compared to $62 million one year earlier.
Investors, however, appeared to be bullish on the company Tuesday.
Opendoor’s stock jumped by more than $2 per share Tuesday in the hours leading up to the company’s earnings report and by mid afternoon it was trading above $17. After the company published its earnings, shares fluctuated but generally moved upward and were going for around $17.50 in after hours trading.
However, that’s still down from over $19.50 a week ago. Opendoor stock has also followed a similar trajectory as other real estate giants who saw their share prices peak in February and then consistently fall since. In Opendoor’s case, shares topped out at nearly $36 on February 11. As of Tuesday afternoon, Opendoor had a market cap of just under $10 billion.
Tuesday was only the second time ever Opendoor has publicly reported earnings since going public in December.
While companies such as Zillow and Redfin have growing iBuying programs, Opendoor is for now the only publicly traded dedicated iBuyer. As a result, the company’s earnings reports offer valuable insights into the way the iBuying model is holding up in difficult times.
During a call with investors Tuesday afternoon, Wu argued that even in a period of rapid price appreciation consumers are still gravitating to the company’s offerings.
“We saw a record number of offer requests,” Wu said. He attributed the jump to “increasing awareness and an expanding buy box.”
Carrie Wheeler, the company’s chief financial officer, also appeared on the call and said that despite general inventory shortages in the market, Opendoor ultimately has “not been constrained in our ability to acquire homes.” She added that the company currently has more than 4,000 homes in contract right now, and that in a market environment with fewer supply constraints Opendoor’s job would become easier.
Wheeler also said she doesn’t see rising mortgage interest rates having a significant impact on Opendoor’s business.
Wu went on to say during the call that Opendoor has also expanded the number of markets it serves, as well as the suite of products it offers. And the goal, he added, is to build a digital end-to-end option for consumers that ultimately serves everyone.
“We are getting better,” he added, “and more efficient at this.”
Update: This post was updated after publication with additional information from Opendoor’s call with investors.