IBuying behemoth Opendoor saw its revenue jump more than 46 percent in the second quarter of 2021, according to a new earnings report.
The report shows that between April and June of this year, Opendoor raked in $1.2 billion. That easily bested the second quarter of 2020, when the coronavirus pandemic walloped the U.S. economy and the iBuyer earned about $740 million in revenue. It also represents a 59 percent increase over the first quarter of 2021, when the company was beginning to see a major rebound.
Opendoor’s revenue numbers also beat analysts’ expectations, which had forecast a haul of $1.07 billion in revenue. That would have represented a year-over-year increase of 43.4 percent.
In a letter to investors, Opendoor co-founder and CEO Eric Wu said the company’s “strong outperformance is further evidence of the seismic shift in consumer demand towards the modern real estate experience we are pioneering.”
Wednesday’s report additionally shows that Opendoor bought 8,494 homes during the quarter — a 136 percent quarter-over-quarter increase and a record for the company — and sold 3,481. The increase in home purchases happened in part thanks to a “15 percent increase in our buybox coverage versus last quarter,” the report notes.
The company also experienced an overall loss of $144 million. That loss is down from $270 million between January and March, but up from about $56 million one year ago. The company’s losses this quarter were influenced by what the report describes as a “stock-based compensation expense of approximately $164 million.”
Wednesday’s report sent Opendoor stock soaring. While shares spent much of the day falling, and ultimately settled at around $14.50 as the market closed, they jumped up to more than $17 in after hours trading following the report’s publication. That’s up significantly compared to a week ago, but down from highs of nearly $40 per share in late winter — a time when many real estate stocks hit highs before then declining.
When the markets closed Wednesday, Opendoor had a market cap of nearly $8.8 billion.
Wednesday’s report is the third time Opendoor has announced earnings since going public in December. The first report, from March, showed Opendoor earning $248 million in revenue during the fourth quarter of 2020. The second report showed that between January and March, the company brought in $747 million in revenue — a notable rebound after the comparative hard times of 2020.
As the biggest and best-known of the dedicated iBuyers, Opendoor’s successes or failures inevitably serve as a litmus test for the category generally. That category has drawn attention in particular lately thanks to multiple reports suggesting iBuyers offers are becoming more competitive, to the point that they now on average pay above homes’ market value. However at the same time, iBuyers are also selling houses for more money than ever before, real estate analyst and Inman contributor Mike DelPrete recently found.
Much of Wednesday’s report focused on growth, both in the present and the future. Among other things, the report notes that consumers are becoming more aware of Opendoor, with direct traffic to the company’s websites up 103 percent since the beginning of the year.
“We have also gained scale across our existing markets,” the report continues, “demonstrating that we have the platform and operational capabilities to dial up our market share as our buybox coverage expands.”
In a call with investors, Wu said that in mature iBuyer markets such as Phoenix, Opendoor is now “exceeding pre-pandemic highs” in terms of market share. The company is also focusing on building up services for buyers, as opposed to just sellers, and Wu said that for every two homes Opendoor sells, it picks up a buyer as well.
“We’re seeing rapid adoption,” Wu said of the company’s efforts to cater to buyers. He added at another point during the call that Opendoor is “building the connective tissue” so that it can offer an array of related services to consumers in-house.
Wu ultimately concluded that homeowners “crave what we’re offering” in terms of a fast and efficient transaction, and that “over the long haul, we think it could be the majority of transactions.”
Update: This post was updated after publication with additional information from Opendoor’s earnings report, and with details from a conference call company leaders held with investors.