Opendoor (OPEN) 3 Nov 222022 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Opendoor Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. to Wang, conference Relations. Vice like speaker to now Elise today, President would turn over the your I of Investor go ahead. Please

the additional Relations of letter, call webcast which corporate Thank our be that found company's in afternoon. this good Investor can section at earnings management Relations on investor.opendoor.com. the and note section our shareholder you, simultaneously available website commentary the will and Details release of be on Investor are our and website. results of Please

plans, Before I the undue like those for meaning objectives promises performance, financial Opendoor's involve cause to remind following limited could Laws. statements that may opportunity to business discussion from Federal future nor financial differ that anticipated deemed should actual are them. the condition, statements than All results and be the here. not we strategy uncertainties to, within forward-looking of forward-looking, reliance guarantees, on would statements not start, are but statements operations. you and historical statements, other and regarding and placed Such neither contains materially expansion, that management forward-looking discussed and of facts, risks market These Securities statements statements be including,

based and to XXXX, on conference could Report are Additional your measurements responses made or investors or in them, updated Form following the can by be measures discussion and XX-K forward-looking company's a Risk are to that statements differ to of measures. the whether revise to actual no non-GAAP useful developments found as cause contains XX-K. information believes Annual filed from required assumptions performance. obligation financial assumes after for that supplemental ended non-GAAP call, The in expectations The most questions, the Opendoor the as current on Opendoor's Factors to new certain results forward-looking these financial this XX, December recent Any management's statements law. periodic to references section operational as reports company financial as as result of except year including of by otherwise, today, evaluate reasonable update

For please comparable website and I Opendoor. of to the Chairman our each call financial of at most metric, will GAAP of a Eric measures these Wu, directly see now the Officer investor.opendoor.com. to Chief reconciliation turn non-GAAP over Executive Co-Founder,

afternoon. Good

On Wheeler, our call Chief Officer; is the our Kee, me Carrie Low Andrew and President. Financial with Ah

is and her day-to-day, has This hearing ahead the of believe has our a transition moment that current with of not reshape Cornie is chapter. in transaction. that is our and health navigate enabling and transaction. Home product is four market our discipline our areas One the which are by the first-party market the is to where Together, easy. sellers thousands both deliver Let's from these who to bought our urgency to inefficiencies we the transaction, two the of While that core the through us to our home platform. from required two traditional growth inventory navigating for navigating customers, move To Two our products vision product this of aligning on new for, offerings recovers. And of drive market market XX-year our potential has enable a is in once of Dent, replacing at start uncertainty our a one buyer. forefront product impact And process. Dream a of the we exclusives, work and real we estate all connect opportunity powers where of of and Exclusives. that [Presentation] the of resell key reminder on our story to Opendoor product, as directly product, Starting facilitate a Cornie's product profitability us operate one to with known first-party against improve around marketplace is we purchase will are the end, hundreds a this our we Opendoor initiatives. product help our engine. and new seller seamless with thrive been as to our attracts and the and the next seller third-party the buyers buyers focused them importantly, fit transition sellers product this market with this leverage listing digital a more And

homes during inventory of we First, by our we on are health of the offers the accelerating QX. focused resell made improving on

the the in will better to expect this behind possible us as fresh, we put term, performing lower with expeditiously and will as losses inventory. losses at While these proceed come short expense it risk us of of and a enable book margin

to on contract market have in As the be are sold versus or quarter homes such, that accelerated we a resell have more of approximately these clearance by to year-end. ago and rate our than track of on XX% double

margin. positive are acquisitions will focused new growing we enable expect Second, spreads contribution we that on at

in performing For our of X%. We to target homes cohorts we offers expectations meeting X% our confident are feel on those on how today. margin homes, QX, expect contribution we made based these they're within to perform

cost includes right-size or we time cost of of XXX example velocity we all ensure platform in reducing reduce amongst days increase hold QX workforce our reduction structure. are employees times. from Third, will our of the Last, and functions. business the continue to announced to an we to prepare days XX% in structure to includes repairs environment and across changes executing expect One we are to adapt home our resell our XX reducing the QX. and needed This listing overall dozens average our for market do XX on and operational that inventory

the difficult and marketplace, deliver we a us on remind believe our increase home. contribution combination a we it's we a it that that cost with long-term our was a ahead spreads decision, having our customer's digital-first mission. While and ability margins to build With successfully of this started to the an balance to future that structure a to to stated will made to was Ultimately, product the sell incredibly forge sustainable platform ensure enable us accomplish since market to sheet regards transition. goal our company, second and buy navigate to important strong was priority, enable safely this vision and to us need,

that is built. belief Our not platforms earned are and

by began So buying the a could marketplace to standards. our layer. marketplace, the directly, a to our to easily to experience with it launch buyers with make to leveraging was who earning home demand, path supply a it and transaction as foundation central to institutional our to a sell supply our customer connect better Opendoor adhere build easy starting then buying and latest ago, Years we experience platform

close year, to secured buyers fact, we more resell of before than a XX% X,XXX our this these sellers. In where purchased we including contract our homes institutional directly, homes with over

of with under unique demonstrating homes of institutional a retail aggregate base, connect pathways transact. the Next, that we thousands like Today, an we Earlier sellers listing. directly exclusive strong we're exclusive our traditional instantly to match base. can benefits buyers platform now platform. the aim leveraging and and both with a built listings Opendoor driving this years to growing all of from we enable the buyer and are and homes, sellers listed them direct to vision experience e-commerce our alike. retail of with from hassle are opportunity largest in Today, umbrella exclusives. platform pre-market our our buyers to sellers streamlined. buyers of those results with within launching our one weeks, buyers as directly With to buyer complexity the under year, This sellers directly contract to and buy on transact hundreds of and without our and two seamlessly us, our our experience our brand home XX% of momentum buy completely This

buyers, they buy homes to hit comes if match up peace bid one which pricing a the lower. guarantee wars. be home first of unique market. the an up Each it's around bidding or enabling customers of this the before mind with We price, For as negotiations pays without buyer the provides back price appraisal now $XX,XXX, with our homes they to see will to of

sellers, the Opendoor. as just experience as selling For easy are our to make we working to home

closing. feel our will discipline our margin inventory In of summary, And our buyer. uniquely with In from benefit to flexibility repairs, seller an acquire extensive I offer, of discuss the operate positioned we accelerate an years. our we Opendoor believe financial alongside prep the home offer, health eight capabilities now and Opendoor that chapter, audience the control inventory no every first-party new past over the additional and managed requisite marketplace built offers to seek contribution need of open months continue our home to we turn third-party to part Carrie will the home improve a call early business next with and line the launch our addition product, without this to houses these is our and require of single of a we critical can to come commitment to I seller trajectory bring and Like with for homeowners and over the performance. an offers targets. listings. or in leveraging

market to we Eric. we were quarter, Thanks, taking Last outlined current actions key navigate the transition.

and reflect sell-through, overall results spreads. inventory quarter health of those the impact acquisition management inventory third priorities are and as reduce expedient risk actions pace Our widening acquisition driving ongoing

solid we this our overall and to the market made We've as to and we'll stronger. we progress emerge actively market confident even In weather these measures, are environment. so far addition adapt reducing structure are cost downturn

it's notwithstanding, our over Before the set target profit financial to on million in QX, year, results housing level expect our or full contribution annual reset. I of based margin X.X% margins, discuss range we QX to the market for X% outlook for guidance, sharp QX contribution which generate just of shy to X%, and is that our $XXX important

decision our to of derisk QX quarter. more our end reflecting sold financial resales the seasonally X,XXX of sheet. of of homes Turning accelerate further the slow We guidance, revenue high and ahead significantly to we've the midpoint pace We about balance guided what in our fourth now results. our to, our exceeded

As offers refer between this March made housing or homes priced cohort. market a offer reminder, QX June and the year the as reset those we before of to

over sold of were over This time, a on year-end. through we acquisitions by end a of the to of and of contracts And cohort. And homes XX% proactively or line acquisitions. of via XX% the marketing our slow be had been substantially approximately sequential higher in way of priorities. our in spreads resulted spend have in offer expect XX% to and contract our resale QX Those with we the A sequential of pace we in acquisition down currently actions number our QX, risk QX through decline to key As in light closed them lower in margins expect targets. performing management are deliver decline well. XX%

of pace lower-than-expected accelerated million $XXX our operating margins, resale our came for expenses expected, adjusted quarter. quarter, with expense at in approximately As the EBITDA guidance. for the resulted consistent of the totaled Adjusted which unit

fortunate Turning to balance sheet. to have design We're weather to by capital our market periods substantial position of a volatility.

third of we As was which of borrowing billion XX% the committed. $XX.X quarter, of $X.X billion of capacity, or the over got end

rolling focused continue capital speaks which our resilience facilities, extend to maturities. to committed the having of staggered lending lending with structure. believe have deliberately we existing Despite uncertainty, structure market our we this capacity We capital on

while over with facilities to and be $XXX and financing financing maintain when QX to optimize facilities new how our financing in existing in performance flexibility X us closed million we our homes the totaling remaining in allowing for These sell lenders, will will borrowing cohort offer recently give used also facilities. us homes. capacity. consistent more these We other

homes. ended we invested in and cash equity the $X.X securities with addition, $X.X our billion quarter unrestricted In and of billion third in

and dictate Looking expect the and hikes for volatility the through into macro outlook to XXXX of continue persist and path housing. the year-end ahead, size, to of inflation duration with we frequency rate Fed

continue with risk to bias. will XP our we result, a off offering product operate As a

$X.X between be expect $X.X to QX our We to billion. billion revenue

this quarter, accelerate be market and to similar our sell-through inventory continue on we conditions. opportunistic Although will to based

expect softness our line We acquired mix margin our contribution longer-dated, fourth resale to while our with the newly lower-margin perform reflect seasonal homes are of quarter, expected margins as homes typical contribution targets. as in in to well

current acquisition to scale quarters. sunset Total Our negative profile QX cohort, for We newer we for be sufficient margin will anticipate and bottom the as of are approximately cohort future in to QX. a of be of have book expect offer adjusted offset more higher expenses in inventory QX $XXX to expected in operating our pacing. fresh QX of resale profit proportion contribution the inventory the given will million volume the

reduction our to cost of annualized company. to marketing this are basis aggressively incredibly yesterday, reflective commensurate costs to structure approximately Having year's reduced but and announced levels. expectations. positive run we our of flow an a our by these is noted, volume say we Inclusive operating that with expenses cash teammates operations business goodbye commitment across adjusted profitable peak are actions free rightsize our our operating necessary have Eric returning we to are difficult, the and relative rate reducing As $XXX generational to Question-and-Answer on to we workforce the Session and million building estimate

roster. call for [Operator Instructions] now by we Please Q&A compile while stand Q&A. you. the Thank the We'll open

the question. Chief Morillo, question, Officer, with current pricing today. us macro questions you who or on I it note, we In wanted the first would have. light take also introduce environment, thought Daniel helpful. to our to take we be But is of can that Operator, address Daniel, Investment related before we macro on the any the call Operator, also first that

you. Thank

line comes of with question the from JMP first Jones Securities. Our Nick

is now line Your open.

if for Two, could taking into. Thanks question. I sneak the Great.

focused. guess, into kind some There's there more one, pretty home declines First XXXX. indicating macro I price is some be of kind might been steep of headlines

to So guess can not risk? you when the think inventory offset What that XQ confidence of there some the Are about inventory. acquiring now, certain I that you're exposed gives kind maybe declines or you up keep that same is still you're of spreads going just kind seeing that be the risk cognizant of? an as that widening, aren't inherent rates to just of markets need and additional we

outlook. the and it's to second Danny question, answer macro a Carrie. tag bit half start, about little talk Hey, I'll for Nick, that I'll probably the

But all offering it forward, acquiring, environment operating the right For you are full we're say, homes have uncertainty spreads been selling continue expectation an those going at performing we in our price depreciation. with line through as homes and on now we expect operating high for as July them that target of well, the peak we we very reasons to they're from to just we're margins with said, home sell the continued to was cohort. those be homes, that relative are the through

the right pricing of comment we're feel we're we to building do good forward? inventory macro you about book Dan, environment. the So on looking want that and new into now, appropriately for

a Yes. in that Yes, say of the the environment. expectations in are guess I future Carrie. that conservative we our I additional we would to means intro, the thing is, bias. And as carry macro mentioned that continue risk-off being Eric

is which, we we're will are And know, incorporating worsen. we for only we're expectation what an so you as for, as the offers today, but about to pricing continue current trend, think that negative, will not making potentially

those so has downside right? we responded in next that into actually a is saying of to business reasonably not are rate but and surprises pine in been items. year would being only essentially, and say incorporating trends, a we And surprises, comfortable quarter what outcomes, the of I we as I'm our forecast sense, mind that for what that pretty we next on in current conservative feel is continued the potential size essentially then having number other here So have that the

question. separate a maybe And it. Got

And know the companies Thanks. How Eric As of that, as things of of institutional kind see kind come sign need some of improving? impacting And stopped that do we a made XX% business? time. the about over buyers kind of in is of buying. have back single-family rental comment fact, being I to a

Eric as our from Hey, Nick, Andrew. of range mentioned, XX% business. to XX% buyers, it's Institutional

a Certainly, buying of as and maker. it's why conversations the of liquidity strategies lot of small minority they're with business reasons folks. there's selling. those in so a And overall. we're constantly we're And a and lot in into the We're a their providing market, market adjusting

you. Thank Great.

you. Thank

Our James Wedbush. next question McCanless comes line from of with the

your button. your Your open. James, is line now Please check line open. mute is

it is. There Yeah.

Sorry about that.

cohort, not XXXX. doesn't valuations the you're that, seem taking on you when over case So why talking guess, on be my market you of a expecting conditions XX% to about those to seller down go going more conditions of for you Is quarter? being moving I I it And this guess, looking better ahead the in think get into answered then, worse. second But get aggressive a if were Because homes inventory I guess, get to this quarter. expectation -- QX question, the that's I and congrats be in worse? going do how it if if we're think fourth time like again that are the net

first Yeah. Hi. of take the It's part Carrie. I'll that question.

now, a mean, I deciding So operate think comments, our are we I with you in to off stance. earlier risk as right saw

are offers, right, compressing more a high do is appropriate through that's we we is than our decision in given -- we the expect we'll That overall sell And the continue to volumes. into embedding homes pace means we fourth We management that spreads quarter. continue just think acquire and macro that And risk environment. QX. you're

Second would all, cohort? faster about selling good part not first progress of on question homes. QX your we've sell made And why, of I really say, was the

challenged half to the of the let's coming So be QX expect And of next directive cohort by is, the first and should QX our cohort. of year, that sometime possible effectively was through out the of around as expeditiously way be first monetize end we that and year. by the the two-thirds we

a comment little that's of or optimizing I a time. want want resale? outcome do pace Dan, over accelerate, mean, on bit can we But to for to As total whether to about you just

the market opportunity intro to to expect mean as the between is the in expected. accelerate we a than clear, much this trade-off resell fact, expect, we in would, to revenue have, were what market to slows in expectations add took of our And we down, comments again obviously we're opportunity expect as have observing to be resells, in right? down the up guess slow all those so saw that in beneficial. what less larger right? we would would you general, the just do way looking negative to the I precisely said the potential as expectations, And right, we phase I would we here that take exactly quarter Carrie market, faster there's market into a had essentially And we're think would would So inclusive lot, essentially, I And But tick do it. that slowed we trade-off we that see that price about trade-off, order right? that were as down to operate is that that in our because because reporting action that out. we far right? incorporating you is additional would of be than that's to what Yeah. the than last I to and basically that that,

guess on rate facilities? these Great. information frame facilities And just time two then, us? I what's any And XX% give those for can the on you the cohort,

cohort knew new they QX to margins. structurally put place we those that address in We mean, I lower offer Yeah. really be facilities two would we had. the

optimize our core we core overall the the And at rate just but I'm pace same outcomes. of flexibility sure time, a came performance given that slightly facility. is and appropriate so short facilities. to the in It duration way more resale At our for for break we're us about out, have this facilities. than higher managing a for

taking Thank great. for Okay, you question. my

Thank you.

the line Oppenheimer. comes Our of from Helfstein with next Jason question

Your line is open. now

questions. Two Thanks.

own do of of have would obviously, significant XP, your has by additive XP, XX% on pretty to think need benefits. with or what Just this of as to hit kind year this of you extent the first, transactions end modeling, next of and goal the up you come The XP to in with done a our substitute? margin we you

thinking you are just about And how follow-up that. that? just a I after have then So,

long-term. as a Eric It's view an the I substitute here. short-term, Jason. it in extremely Thanks additive

of I what And to tell accepted that the into that is beyond that based would sellers Opendoor on tests, early you excited have so And and are very pool can the program. opt is offer. sellers an above

XX% traction it exclusive had roughly side we're so confident in with based on products we additive consumers is The direct on in market, the side. can two which see we've the we're that putting already And hitting the target listing conservative out XX% that long-term. to to be roughly there REITs is on and

that And if it's there is gets so can feel we additive. And what number against. us upside confident a that's we execute to to that

Okay, a clarification that's helpful. in And inventory adjustment then quarter. just the the as on

like we could about kind a sold? basically revaluation second million depending is that of we it today? cohort subsequent quarters, Just another write-off was of entire market or quarter think to connect And on how the in So, that like $XXX be so based home do million, number? on conditions, $XXX

one-way-only the and revaluation Yes, having offset -- your all, for that a It It we're be or of marking adjustment. not the gains in losses. It's no losses first recognizing asset the say, looking all game. level require is adjustment of and and this, way assets expected marking do There portfolio. to portfolio quarter, downward just own like all what let's look one. lower is we portfolio. every of the GAAP, a any we're the not cost valuation stock that would I'll our set of per they is market, to the the a at the And and us taking take on is. The

again, of, sell So, losses. point homes time. view where We, is these uncertainty, It's to it's a we what believe very guess I taking recognize portfolio. revaluation just non-cash moment one. it we forward a a conservative in that's is, over projection. expect peak a are expected to not this Point is two of charge

continued earlier our then pulling home two the losses, quarter expectations, contract. doing those and last and other existing What are QX per the forward. even Daniel's book observing, homes. of talked resetting today under about quarter price comments in downside on. this contract is parts. in those really To We didn't inventory They're own we're depreciation, taking point didn't valuation volumes and of looking depression that losses forward which are decisions, we we assuming them resetting as series to what on clearance. additional is is We a transaction we're in the continued from them. made One an there's your question, We cohort of this perspective. homes is We those to largely touch close under about inventory already

expect are about having realize and unleash And the We of to forward very we having the continued to evaluation charge is just which the expected genesis we're quarter. margins, the for to profitable macro. we it's creating, mix sell time. But over a well. about comprises sell to of homes conservative. to we've have adjustment. performing that's do offset Again, that's yes, in the and the so but take this third going we're Those the to are over deterioration of new that's think over this we're the what quarter, the seen them in adjustment, going and losses expectations going the we'll gains those The remainder We're adjustment. time time. are to the cohort and next that And housing

you. Thank

you. Thank

Tomasello KBW. line next of question with Our from the Ryan comes

open. now is Your line

I you some of release the cash sizable remaining specifically, I $XXX $X.X Shareholder Thanks mentioned of the walk balance. to you still expect that about Hi. increase the drivers taking of of in implies But in cash million you I that from think, the you pretty liquidate, facilities Can us the and know guess a homes. restricted last relation through Letter quarter? your how the unlevered the balance as for billion restricted it questions. to works

if should released any coming wondering expect in quarters? be to that we more just So of

had Yeah. about just come acquisition cash to. that That We function We I was not QX. down temporary weren't restricted you're think, One was trapped volumes. inflated we components, the a talking and there. yes, mean, by It's volumes new balance, weren't on one. all number secured lot them a there. in very because having debt, system. was there's cash I financing this the it of creating the in two of That's what to that's will quarter. That's just

you to, Ryan, the think terms of million equity in. invested about think, the talked alluded have I also homes $XXX we in unlevered correct? that Is I we that

Yes.

will in be come to cash us financed. back this for to going that process That quarter. is in unrestricted It's now. That right

I bigger-picture and Okay. question terms of the Thanks. business positive around I capital-light And longer in and then, XP is the guess that. capital a scalability guess, But a scaling Obviously, we nature as product of the term. the down position the for value destruction how last prospects near you're the about will booked capital changing product XP consider the thinking further. term, scale ability Is was capital longer that term? XX% from presumably quarter, decline to the and

the at mean, I capital. highest level, we of plenty have

and first capital and go That's foremost. the of period forward. plenty have this to We navigate

of line on separating acquisitions being to we're the back new asset to performing we of into inventory through flow margins with sight like offer where we getting you that can well a operating cohort. And QX what a cash that we free get time lot through those That's our of breakeven. building back and what box, we're book fresh that are homes. we're those, sort to as are we're are get I'll to. a But the got done sell going sure making way We to focused and into place call losses, which we've

time. well for feel this not feel We in we no, moment constrained. actually capital So -- don't we're capitalized

the Thanks Okay. questions. taking for

you. Thank

Our line with comes Lee from the JPMorgan. next of question Dae

Your line now open. is

for Thanks taking Great. the question.

the than saw of First I'm in one, going XQ? do will be so If looking at be you expect your XQ what worse [indiscernible] per contribution you that's sold of home online -- profit true, to newer to that XQ? I XQ, XQ, homes what to by of home mix And in do point expect improve XQ guess, your from profit moving saw you more shift your and your towards the you cohort? trough into

by in offsetting choosing We that, of the uncertain. of with said time, do not design QX the amount you cohort, at is end much acquisitions At the new that of reasons the new volumes we're called off. all of expect we're the the market the of which QX high in to doing be we're year. more spreads. out. the by as operate is same We're risk with two-third through to the The We're offer selling trough, you system. just way we're because way One two gaining

cohort, can't that specific change But I versus a old the As short we volumes year. of expect mix just our towards mix book new as sunset to the give QX for new is a the going resale end. mix to acquisition ramp to quarter. you start book into off first obviously, up we a would of we change the coming number

as a is follow-up, and more then question. of macro And this a

You about here. get conditions worse talked from assuming

what demand reality, So for people's more need you see see looking to do come to down Is back? it I changing how housing starts to to come the prices of you or new to perception demand guess, ahead, further before, do need recover?

Daniel. Yes, is this question. Thanks for your

think mostly So the is I now we're want think rates unexpectedly the driven right? is lot quite thing a significantly, decline observing about as in onerous. that finds it what of by you to to marginal volumes, most a transactions, to sell and buyer essentially that rate reset and and seller versa, resulted too the people in decline the because that be vice in buy right, rose in

right? come the to in about et down, volumes down results clearance, cetera, the what then in slowing price that's so rate. pressure, And And change and that's

laser get to somewhat would looking we're state and to either even sort exactly would we matter, is us, what it's have for expect those what is that down stabilize we're for level terms any stabilization, and or, manageable to so get price high is expect in And result that at a it And of particular of of not to rate. our so the that price different to that, than more thing be rate level, pressures, projections to actually if for in clearance in far to prices. for outlook the steady prices that stabilization here for buy terms so of in looking context, to is volumes in stabilization right? simply that normalize. but that what would sell that more right? given -- you et high stabilization reduction of pressures And uncertainty And to and the inventory, cetera, so volumes we level, do And rates much for come because

you. Thank Great.

add The rates, show that thing want They only sight have high spreads. to up. are to of very love, fact high product that lose might really to People notwithstanding, convert at is which don't right? the people I just that other continue still we a

are and continue decision a market more the come your managing again, homes. the So back, in. were environment we're really still in to we dislocation -- still to We're homes we're This gate like buying from still volumes uncertain And product increase the comments expect would still about time, over people buying spreads. when But do that buyers over us. taking works we're this is their volumes temporary to of in the that certainly, high selling our time. even

question comes next Our America. Thank you. from Instructions] of Curtis Nagle, [Operator Bank

now open. is line Your

Great. the for Good thanks taking afternoon. questions. And

I don't where I cost late or higher first say, right, month at is or when of a you're ago you're the imagine last was it's a one rates I or is be buying conversion raised, what the year? think, week higher. in would in a than I it a little finance guess XX% difficult, know. when XX% homes home and mean, of now I market less spreads, rates So offering conversion you for that now, to are terms would compared the the

just buying? be look -- people you're on yes, to how curious So, -- would new much conversion are like rates? And what well, what are the homes conversion rates the these what hear

obviously rates had XX% I'd conversion at which true of levels, sellers, Eric. between XX% of never than -- seen market. we've that observing that is it's north Curtis, somewhere to we've in we're What is is say lower but spread Hey, historically, XX fee actually the

which we we're XX% means having this to that sellers of have delivering the saying, So, somewhere to highest experience And and is, it, for value in are of as houses and off restate company uncertainty which a XX% take north inputs at experience. and impact combination pets the in stance, really moment, One and or peak the history. of and of like. open that a between loving still seeing in we're yes, results us the risk and visitors not or of the customers XX NPS follows. having COVID have The of there kids is to set convenience really that a some -- spreads

And it. the turns out, certainty like what's so, and speed they're and their quite aspect insensitive of over built still massive that set is actually up really price it eight course coming. years, really bit and equity, they're a just in a of customers also versus And their more backdrop convenience they're and of happened -- as just uncertainty. of this or valuing equity time the is they've there's that maximizing of a And

the spread us never amount able the historically. has combination levels on convert surprised that so to we've of customers a tested upside that with And we're meaningful actually our

Got it.

I capital a given less lot guess the follow-up, risk, I would right? have a I the be now, reach the look, ago? as not of it just -- know, say, And or of platform, margins versus XP two guess, a It's rolled why or year Is you didn't -- out a have better. Just don't I matter have why business just to the Okay. sooner? imagine

our two Well, company. Launching I'd we say plan been since a the marketplace managed things. founded has

in funnel a We're build had of of as wanted But -- we stated be side is the be if launch large buyers to so one Series and we buyer the customer. them and launch earn seller of look A can stated ambition sellers. to we would that. ambition buyers. which our And Transparently, we deep in we connect to deck, unique of is And sellers, this at and knew to XXXX. our participant demand it and marketplace. home Opendoor successfully enable the QX you needed to used platform a our a I every be stated and that single to And will ensure remains many

obviously. not supply having is sufficient, Just

XX% side, for against institutional investors. Gap] investments endeavor institutional investors, power year demand made on the pathways those homes has APIs selling significant transactions us building which those XX% And and the so, a to been we've [Audio of between one, somewhere to with starting with four-plus our work

the this have contracts secured we REITs seller. in north before that of of resell example even from is Another closing with X,XXX

product And can we us, more directly needed home. And it second was possible attracted we those you for the as on key XX was piece connect pathways so to opposed make ago, made build than would which to logically, demand. months which say, is to okay, have us twice that a the investment closing

And we that from in again, with opendoor.com. so the buy on homes directly marketplace. sell that can and of our features exclusive we And experience invested listings, the aren't buyers directly a to XX% current ability us demonstrated we've by simple very to offered

that something our if -- market, MLS measure you say, If maps XX% our cities to the in is you in to days, in XX% the the or vis-à-vis XX% maps measure XX market. representing like market,

far so not be standpoint, a we're distribution. And actually velocity from -- behind that too would what full

buyers so product. a our and love of that confidence gives fit market us that ton And there's product

QX before launching but have would have And solve we which loved would ago? the yes, The to the will year, was that it. liked this is I to this have XXXX, original to yes. past two in solved. plan, we the good side launch years consumer is had assumption we so, And evidence that be demand the over launch answer

Okay. Thanks. Appreciate it.

Thank you.

comes Patterson with from Justin Our next of KeyBanc. line the question

open. now is line Your

Two, questions. I Thanks afternoon. the Good if for taking can.

back wanted to question. for First, Eric, Jason's circle on I

it marketplaces less those reinvesting appreciate you of additive flip As for philosophical business. to on watching growth think back you. about risk which the more in overall see speed the about or of And into is realize the How on? you comments letting your you from substitute, you this margin? do Thank it to I drop stabilization. scale, But are through a off more Dan, then signs thinking I signs risk a when of question. emerge, becomes how

Yeah.

versus first the of that I or this do the think as we how on marketplaces velocity live as to for about take say, margins. is margin extraction die of I'll can a So, sides. lot being defensibility about question, growth increase we say is think or gives both and that What reach, And trade-off which let's your opportunity a liquidity lots additive, margin? of you based the once of you

And so they be over multiyear, tend to a multi-step process. built

and of line actually the business long-term, so would we And or the holistically. value And liquidity short-term, prioritize the making expected substantial And both investments. will prioritize increases without sides unit that expansion. we in then growth margin of business

XP we Daniel succinctly, sellers that it both growth believe marketplaces. we're put right do to can buyers to within can question. benefit over and with answer the this business get we positive expand of as of And the time that having alongside negative. so denser to go our And margins unit second And we that with within having it cities. the economics is on local now, without we I'll more focused and denser those pass part to of

actually the good for a question. Thanks It's question. Yes.

the of have real-time on is features, highlight so say the what's cetera. we or do leaves macro that about of policy looking best set very much And give our are would on sort building et its pretty now I'm thing on side. compared the metrics instead, I right, the funnel we're what out indicators series think, to buyer So and diagnostics as the much and we on leave believe tea the there the full, for of Fed seller of call sort to is, literally market, not there, us focused in and platform the to anybody what of I behavior that what itself, we like both the happening going did it, a right?

would there scheduled, from does make So side, people side, Like real how visits. many offers have a sort view, to in on it's stabilization offers that so, do sort on back we're the observe in taking that good looking to across, spectrum we from we market, say up of that, that, retail of Everything picking macro, we views strategy, the the of from strategy, we take, translating pretty And in change properties so, pretty in macro the right? good to behavior that our time would to spread the tomorrow, they confidence sort And not? want react. is What in to much I on action, side we pretty time is cetera. or right? Do starts mechanism we're of said, of right? happen, is the visits visits, applications, have what And observing et the the on of up strategy, the really pricing in the stabilization they actions the ops for those of our behavior the to actually point those real how selling the of the from of changes are negotiation buying in and saddling how rating what like there at results how that actual observe to mortgage let's what result market, show make? behavior all

Thank you.

you. Thank

of from comes question with the next line Justin Our Ages Berenberg.

now Your line open. is

Hi. question. Thanks taking for my

going forward, to I if be taken get a current that normal could what on on and color renovations a going just driving wondering, that's the reduction time is more whether that's the Just push? and little in from renovations or new Thanks.

that in push, turning emphasis and operating Andrew. Andrew can. that our It's homes of number that metrics. showing focused we as Justin. as quickly is in here, a our the focus current teams, on environment, up are The And

team. all rate are are of that's homes do to And and a finding thanks those out called the the our day credit driven a we from market down way that's work market deteriorated. cancellation all out they XX. And press. who to XX to things improvements turning the That's teams talked doing quickly, it. important, a And big our backdrop to and buyer the the more about us And XX% of in where days against the our book and teams over drive actually focus improving to contribute those -- fields improvement to new You push. ways reno reorganize who really in productivity our Equally by a the down.

for detail if And appreciation a Great. color geographic just weakness? you versus gave was Thank could price you're so on where I that. think, more last quarter, seeing little home you. Thanks strength have following on wondering on next, relative I some we that. diversity

Daniel. is This that. do to happy I'm Yes,

of volume metrics. speaking, We is are not last as but just some seen HPA, around. think you of broadly to observing, sort of other frankly time metrics, similar metric, had That we what -- a shape sort about

So in and market price of surprising And say was generally sort smaller to adjustment for least at market that that poorly somewhat side markets. And goes and places the more have that, other less of other been that hot, really the when markets higher hotter. example, in sense markets, then sort that's not was they the appreciation sort of place some little markets, there we performed markets were room that would of more like take to the for the the broadly better. hot, when volatile the expensive as on a have larger of Austin, Phoenix more had and compared think so speaking, generally of this that Western have done

to tend they so sort more markets. And and of be Midwest Eastern

that multiple places gains, you sort regions. example, that when less similar negotiation highlight, bit Once And offers surprising, to not terms price something part is and saw I making and in what you like have cools drove across example, a the say, appreciation things market people it's of and was significant for right? from that's see the likely for overlift tends to getting a the offers and that list, happen, do again, overlift of So came as less of equalize a symmetric, of that start would behavior, far the the in Orlando, you of one offers, to tended hot appreciation the better. Nashville market lot

or important note you're that These increasing of looking in at seeing is that will clearance, differences relative relative decline the one think negative, is all coming in is last of about performance, the the the was markets in concept. of are I but the the price saying the in that we're all I pressures context across. that differences be decline this here of So just larger volume, -- happening sort least pretty right? reality are that's thing talking in decline to in

you. answers. Thank the appreciate I

you. Thank

line Our last the from question Ryan Zelman. of with McKeveny comes

open. now is Your line

you the XP Hey, thank very more marketplace. One on much.

X% mentions think us revenue that Obviously, about So side. letter fees. the helps service the

principle, if looking pretty can margins at should that profile the as high. structure But you up? you I cost XP like Assumingly, the or guess the without scales the being think be -- anticipate looking us marketplace about what within potentially margin help

Ryan, yet. it's the Eric. cost We're not giving on structure guidance

correct. goal economics of again, I a we accretive the that this and our this really we're to which service time would positive this as believe drop the buy to box guiding XXXX. demonstrate XX% say, could end And in in able assumption And this over I to different the that constraints. of constraints very what and the disclosing from -- in to are is north breakdown able bottom should sellers all our question also is service earlier, short-term of is, should think our TAM the to line independent the increases we're that And of operational at I all on actually time. be But by customers well, fundamentally unit not home we're types. economics, unit be

map always opportunities you're where player, Got maybe or it's I also where footprint, degree something with a kind XP the this. to available? or geographically, effectively of there's you assume envision where down it. acting XX And current marketplace, to to be to the on markets XP expand the this XP is as do That's kind the just we helpful. the road years markets be within the you're could more XP, expect where some one your player guess, road Eric, would fair of very

short-term, density What to on focus I can tell you is important really it's in liquidity. the and

And a is playbook same the at in all providing then all XX-plus nature. markets. hundreds Opendoor attracts for come The essential the in business, in and of buy in would the hundreds from thousands sellers. them to of business an first-party sizable offer of XP get series works The thousands the different complementary and sellers the buyers of to from and third-party the ability attracts of say, term, a that goal that buyers. of get our way to both also short to ability us expanding are and business of so Opendoor time to solution and minutes a I portion the

XX the is brand that I able XP And think years, the is to additive in In model if the model XP the so XP we are today. to -- a our build additive way platform, business but the a that's services trust people and of actually in we're a not enable map. a short-term on we operating XP where possibility, not market the that business, transaction realm the seamless within road have to

Got very it. of Thank you End much. Q&A

Wu you. for closing Thank the to like now hand conference over I remarks. would Eric back to

Yes, goals I'd to I short-term financial challenging, attest that think with to and that, will discipline table with customer around you of necessary term. the will can the enable moment navigate this both this to like many for and folks attending. close we Thank us manage long uncertainty, while focus

participation. today's concludes you This conference call. Thank your for

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