Opendoor Technologies Inc

Good day, and thank you for standing by. Welcome to the Open Door Technologies fourth quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kimberly Niehaus, Investor Relations. Please go ahead.

Thank you and good afternoon. Details of our results and additional management commentary are available in our earnings release and shareholder letter, which can be found on the Investor Relations section of our website at investor.opendoor.com. Please note that this call will be simultaneously webcast on the Investor Relations section of the company's corporate website. Before we start, I would like to remind you the following discussion contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact are statements that could be deemed forward-looking, including but not limited to statements regarding open-door financial conditions, anticipated financial performance, business strategy and plans, market opportunity and expansion, and management objectives for future operations. These statements are neither promises nor guarantees, and undue reliance should not be placed on them. Such forward-looking statements involve risks and uncertainties that can cause actual results to differ materially from those discussed here. Additional information that could cause actual results to differ from forward-looking statements can be found in the risk factors section of our Open Doors most recent annual report on Form 10-K for the year ended December 31st, 2024, as updated by our periodic reports filed after that 10-K. Any forward-looking statements made on this conference call, including responses to your questions, are based on management's reasonable current expectations and assumptions as of today, and Open Door seems no obligation to update or revise them, whether as a result of new information, future events, or otherwise, except as required by law. The following discussion contains references to certain non-GAAP financial measures. The company believes these non-GAAP financial measures are useful to investors as supplemental operational measurements to evaluate the company's financial performance. For reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP metric, please see our website at investor.opendoor.com. I will now turn the call over to Carrie Wheeler, Chief Executive Officer of Opendoor.

Good afternoon, everyone. Thanks for joining us today. With me today is Celine Freja, our Chief Financial Officer. At Opendoor, we're on a mission to reinvent the U.S. residential real estate industry. And in 2024, we took decisive steps to simplify our business sharpen our focus, and drive towards sustainable, profitable growth. Early in the year, we saw a strong home acquisition momentum, but as macro signals pointed to potential instability in late Q2, we acted swiftly, adjusting our pricing to manage risk and maintain healthy unit economics. At the same time, we took proactive steps to strengthen our operations. In Q3, we completed the separation of mainstay. And in Q4, we launched a cost efficiency program and a workforce reduction to align our structure with our profitability goals. Despite persistent macro headwinds, we executed with discipline. In 2024, we purchased 30% more homes than in 2023. We improved contribution margin to 4.7%, up from negative 3.7% the year before. And we significantly reduced our adjusted net losses. As we enter 2025, we're seeing a slower start to the spring selling season, with additional macro pressures compared to last year. On the supply side, clearance rates, meaning how quickly homes go under contract, are pacing 25% lower than last year. New listings are holding steady, but active listings are up nearly 20%, signaling a slowing market. On the demand side, visits to new listings are down 20% to 25%, while delistings are up over 30%. hitting decade highs as more sellers exit the market. And with little near-term rate relief in sight, the lock-in effect of low mortgage rates for sellers and affordability challenges for buyers will persist. Given these dynamics, we are refining our approach further, optimizing contribution profit dollars, exploring new revenue opportunities, and ensuring open doors positioned to drive long-term value. Our commitment is clear, profitable, sustainable growth. And there are four key areas where we're focused on improving our cash offer business. First, we are setting spreads to optimize our contribution margin. Given the continued depressed housing backdrop and a particularly slow start to the spring selling season, we began increasing spreads in January to manage risk. As has always been the case, we will monitor key macro indicators and make prudent adjustments to spreads with a bias towards optimizing for contribution margins. Second, we are enhancing the customer experience. A better experience drives higher conversion. We've enhanced our pricing models, improving price segmentation and market level spread accuracy so that we can better differentiate spreads across price points and expand our conversion. This has allowed us to drive improvements in conversion at like-for-like spreads. Additionally, we know that many sellers come to Opendoor, get an offer, and then wait before making a decision. In fact, over 70% of our 2024 acquisitions came from sellers who declined their first offer but later accepted a refresh one. This year, we're strengthening our re-engagement strategy so when sellers are ready, Opendoor is top of mind. Third, we are better aligning our marketing strategy to seasonal buying and selling patterns. We'll focus our marketing efforts to more closely align with when our spreads tend to be lower and when Opendoor's value proposition for customers is even greater. This will result in increased acquisitions in Q4 and Q1 and will position us to sell those homes in the spring and summer selling seasons when buying demand typically peaks. In Q2 and Q3, we expect to scale back marketing spend and in turn acquisitions since homes acquired in those quarters will be sold into a lower demand environment and recognize lower price appreciation over the holding period. This strategy aligns our marketing spend to how our spreads change throughout the year and allows us to benefit from seasonal price swings and maximize the value of every transaction. And fourth, we're continuing to operate with greater discipline. We enter 2025 as a leaner, more efficient organization and will continue to drive efficiency throughout the year. Beyond improving and expanding our cash offer business, we're also focused on expanding our offerings to serve even more sellers and unlock new revenue opportunities. We are growing lists with Opendoor and our Marketplace. In 2024, we expanded lists with Opendoor to nearly all of our markets, and we launched Marketplace in Charlotte and Raleigh. These products give more sellers more choices. In 2025, we'll continue expanding them, ensuring sellers can choose the option that best fits their needs. We're also helping more sellers who are outside of our buy box. Many high-intent sellers visit our site every day, even if their homes don't fit within our buy box. we see a significant opportunity to connect these sellers with agents, helping them successfully transact while creating new revenue streams for Opendoor. At Opendoor, we're driven by our mission, transforming the real estate experience by making it seamless, convenient, and certain for sellers and buyers. Our customers continue to reinforce the value of our platform every day. And as we move forward, our focus remains the same, building a profitable, sustainable business that delivers innovative solutions for sellers, buyers, and agents alike. And with that, I'll turn it over to Saleem for the financial overview.