Opendoor Technologies Inc

can be found at investor.opendoor.com. 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 Opendoor's financial condition, 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 may 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 Opendoor's most recent annual report on Form 10-K for the year ended December 31, 2024, as updated by our quarterly report on Form 10-Q for the quarters ended June 30, 2025 and September 30, 2025, and other filings of the SEC. Any forward-looking statements made on this webcast, including responses to your questions, are based on management's reasonable current expectations and assumptions as of today and Open Door assumes 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. With that, let's get into the open house with Kaz and Christy.

Good afternoon. My name is Kaz Najatyan. I'm a computer nerd turned lawyer turned founder, but I think of myself primarily as a product manager. That's what I've spent most of my career doing, building products and leading teams to build better products faster. I'm not the guy you invite to your place if you want someone to bring the party. I'm the guy you invite to your party if you want someone to fix your Sonos. On my first day at work, I told our team at Opendoor that we're going to make a bunch of changes and that the new Opendoor would look nothing like the old one. And that's because, well, the old Opendoor had kind of lost its way. Before I tell you why I think Opendoor was broken, let me share you one example of the thing that has changed just in the last few weeks so you can get a sense of the scale of the change. Look, on my first day at work on September 15th, Opendoor had entered into contracts to buy 120 homes in the prior seven days. By last week of October, that number had risen to 230 homes. In seven weeks, we nearly doubled our speed of acquisition. I think it's reasonable to ask, how can we move so fast right now when we used to move so goddamn slowly? If you give me a couple minutes, I'd like to tell you what caused the old Opendoor to be so broken. I think this diagnosis will kind of matter in how we rebuild Opendoor. Having been inside the company for just over a month, it's kind of obvious to me that the old Opendoor had just lost faith in the power of software to make selling, buying and owning a home easier. It just kind of thought of itself as an asset manager trying to predict the economy. And the previous Opendoor also didn't really believe in the power of AI to do anything, much less to make our work less toilsome. When I joined the team, I'm not kidding, there were a dozen people whose only job it was to copy and paste information from PDFs into glorified spreadsheets. the previous Opendoor also didn't really believe in itself. I was genuinely shocked when I found out that one of Opendoor's biggest expenses in the first half of this year was millions of dollars paid to a well-known consulting firm to tell Opendoor how to do its job. Everywhere I looked in my first 30 days, I found consultants making decisions that should have been made by executives. Finally, the previous Opendoor had become so risk-averse that it no longer really believed in buying and selling homes. If you ignore COVID, we bought fewer homes in Q3 than we have since 2017, when Opendoor was just a tiny startup. Look, in the last few weeks, we've reversed course on all these decisions. We are ditching manager mode. We're now firmly in founder mode. We are refounding this company. This is Opendoor 2.0, and we believe different things. So what do we believe at Opendoor today? We believe that we have to use all of our energy and every modern tool at our disposal to build products that make home ownership easier and less frictionful. We believe we're a software company and our leverage comes from engineers writing code. We believe machines are better at pricing assets than humans. We believe AI will empower us to avoid toilful work and we can have a leaner and more aggressive company. We believe we are here to make hard decisions and we will never ever advocate that responsibility to management consultants. We believe in being operationally excellent, especially in marketing and corporate functions. When I was at Shopify, I insisted that we manage our marketing dollars like a hedge fund would manage its IRR. We're going to do the same thing here. We're going to spend money only on channels that give us great payback. And we're going to stop spray and pray marketing. We believe slowing down buying homes just to buy them at a significant spread is a bad strategy. Look, The only folks who are going to sell their house at a large spread are people who know things that you don't know. They want to get rid of their house as fast as possible. This is the definition of adverse selection. It's not a buying opportunity. It's a massive red flag. To use Wall Street terms, Opendoor is going to be kind of like a market maker in the future, not a prop desk. We're going to profit from flow, speed, and tight spreads, not on bets on the direction of the economy. Our business plan is simple. Buy and sell lots and lots of homes quickly, be operationally excellent, and increase our value to each homeowner by launching services like mortgage, insurance, and warranty. Starting last month, we reduced our spreads while simultaneously stepping up operational rigor and tightening our selection discipline. The goal is simple. We're going to make stronger first offers, buy more good homes, and get more good sellers through our funnel. To avoid adverse selection, we're building our inspection process from ground up, structured in-app video and audio, Feed goes directly into AI that creates condition profiles that are validated through a standardized inspection process that give us great data. The result is going to be a consistent high fidelity view of every single home. This trust but verify approach is going to improve the speed and the quality of homes while giving us amazing data to adjust our process, allowing us to grow our portfolio without sacrificing pricing discipline, without giving up on asset quality, and without slowing down transaction velocity. But buying a great home isn't the end of our job, right? It's also important that when Opendoor buys a house, we provide value and services to both buyers and sellers. That's why earlier this week, we launched Open Door Checkout. It's available in select markets now, and it's going to expand to our entire inventory soon. A buyer can walk into an Open Door home, tour it, and place an offer to buy it on opendoor.com without ever talking to a human being. We're shipping the Buy Now button for homes on the internet. We're going to improve on this. We're going to add more products and more features for homeowners to simplify the home buying experience, starting with mortgages and warranties. Look, in the future, buying a home will be as seamless as buying a car from Tesla. You'll choose your home, your financing, your warranty, your insurance, all in one place, all in one flow. Right now, homeowners have to deal with a bunch of different companies, brokers, agents, a lot of different stuff to get what they need for a house. That doesn't make sense. We have the internet. We're going to fix this. And over time, we'll add everything a homeowner needs when they need it, all bundled into one simple experience. Opendoor's goal is really simple. We're going to tilt the world in favor of homeowners and those working hard to become homeowners. That's our goal, and we're going to pursue it with an incredible amount of aggression. Since my first day as the CEO of our company and our first day in this new open door, we've launched over a dozen new products and features. They include things like an end-to-end AI home scoping, where machines, instead of human beings, decide what repairs are needed and what renovations need to be done. We've automated title and escrow, where AI has started doing some of the work that goes into closing a transaction. We've launched Opendoor's trade-in widget, where we help builders to offer a home trading program like they do in car dealerships. The new Opendoor Key app allows agents, Opendoor experts, and soon any homeowner to assess their homes just like an expert. Now we're going to fully power this with AI rather than someone showing up with a pen and paper. We launched buyer peace of mind, giving people certainty when they buy their home with benefits like home warranty and early move-in. We launched AI-powered multilingual agents explaining home valuation to homeowners and helping them move forward with Opendoor. and we're launching a new partnership with Roam, connecting sellers with Roam's assumable mortgage platform to help them move when they want to. We've also made significant improvements in our SEO products, significantly increasing organic traffic. but closest to my heart has been our push to default to AI everywhere. And this has allowed our frontline operators to iterate without writing code. One of our non-technical teammates built a no-code tool that cut our quarterly inventory management process from 10 hours to about seven minutes. And this list of launches should show you that we have this renewed aggression at Opendoor. We're going to focus on building great products. But aggression by itself is not a strategy. It's better than hope, but it's not enough. So here's our four-step plan to channel that energy. First, by the end of next year, we will drive Opendoor to break even. We think about this in terms of adjusted net income on a 12-month go-forward basis. That means Opendoor will start generating cash and will never be forced to raise equity ever again. Second, we will drive significant positive unit economics while increasing the velocity at which we transact in homes. This includes launching financial services like mortgage. Third, as we increase our unit economics, we will change the company's focus from primarily building channels to transacting directly with buyers and sellers. We're also going to focus on reducing our days in possession rather than arbitrarily increasing spread, which has had genuine significant negative consequences for us. Fourth, once we've accomplished the first three steps, we're going to focus on allowing buyers and sellers to transact on Opendoor without having to buy or sell from Opendoor. This is going to significantly lower our capital risk, but more importantly, it's going to give folks options they want. Over time, as we succeed in these initiatives, Opendoor will change the home ownership experience in the same way Amazon changed the shopping experience, both directly and through its third-party marketplace. Let me be clear. Adjusted net income breakeven is a milestone, not a goalpost. We have a huge runway ahead of us. Yes, there's going to be some headwinds. We're going to get some things wrong, but we're committed to consistently delivering improved new economics. And you're going to begin seeing progress towards adjusted net income breakeven milestones as we clear old inventory and increase our acquisition speed. In my first month, we've already made significant progress on the first three steps. As we move towards breakeven adjusted net income, we're prioritizing durable cost reductions. Christy is going to talk about some of these, but I want to give you some examples. We've reduced spend on external software and have terminated or are in process to terminate over 20 software vendors to date. We've reduced spend on external consultants. Opendoor spent millions on management and PR consultants in the first half of 2025. The go-forward plan is zero. And to drive positive in economics and increase the velocity at which we transact at home, we've significantly changed our buying behavior. For example, up until mid-October, when someone came to Opendoor.com and typed in their address to sell us their house, we would have up to 11 open door employees in the hot path of that sales contract closing. Today, that number in many of our flows is down to one person. And that one person is there to audit the machine to make sure we don't make unnecessary mistakes in underwriting. In fact, we're now doing almost 750 home assessments per week using AI. It used to take us close to a day, from the time we collected artifacts to the time we completed assessments. In our new flows, this takes about 10 minutes. In the last week of September, we entered into contracts to buy 128 homes. In the last week of October, we entered into contracts to buy 230 homes. To accelerate transaction speeds and customer choice, we can now accept the USDC as a payment method for home purchases. And to make the company primarily DTC, we've turned on Opendoor's DTC flow once again. The company had completely shut down almost all of these flows. Look, while we want customers who want experts to be able to work with one, we are once again accepting customers who want to sell us their home directly. Last week, these customers made up over 20% of our total home assessed. And in a test we ran in mid-October on over 2,000 accounts created, we saw that our new D2C totally unoptimized funnel was able to convert six times better than the non-D2C funnel. We're far, far from optimizing this, but we believe we have significant opportunity to improve our overall conversion. Okay, that's a lot. Before I hand off to Christy, I want to spend a minute to talk to you about previous decisions Opendoor made about its capital structure. Because look, I think it's important that you hear from me directly about this. When I took this job, I knew Opendoor needed a balance sheet that was fit for our ambitions. Every home needs a solid foundation, and for us, that's capital. There are aspects of our balance sheet that are just genuinely phenomenal. We have 10 different lending facilities with long-standing partners, some of them as long as nine years, who've demonstrated their ability to scale with us as we grow. Today, we can finance roughly 5,000 homes all at once and close at almost 100% advance rate at great prices. At our peak, that number was about 20,000, and we're going to get back there. And I'm genuinely confident that we can get there with our lending partners. But they're also part of our capital structure that we're not focused on the long term. They seem to have been designed and driven by fear rather than setting us up to win. To be blunt, when I joined, the balance sheet had a ticking clock. The company had issued convertible notes with an early repayment that could have forced us to repay them in full before the end of this year. That would have been disastrous for the company. And my first priority was to remove this pressure and give us a runway to execute on our vision. Let me be clear. I despise dilution. If we issue a share, it has only one job, to make every other share worth more for our existing shareholders. But to give us some breathing room, I made a decision in my first week to use our existing ATM program to raise nearly $200 million. This bought us the time we needed to deal with the notes without a gun to our head. Earlier today, we reached an agreement to retire the majority of these notes. We took the steps we needed to clean up our capital structure, and we now have the balance sheet we need to stop playing defense and start playing offense. But there's a second part to this, and it's about you. We wouldn't be here without you, our shareholders. You believed in the long-term value of this business even when our capital structure didn't really reflect it. And I don't believe in asking you to stay on this journey without sharing directly in the upside we're creating together. Look, public markets have a long history of taking shareholders for granted. We're not going to do that. In fact, we're going to reverse that. This is why we're issuing a dividend warrant. Each of you will receive three series of warrants, series K, series A, and series Z, with exercise prices at 9, 13, and 17. One warrant for each series of 30 shares you hold. These warrants are going to cost you nothing, and their value goes up as we make Opendoor into what it can be. we want to be on the same side of the table as our shareholder. We're returning some value to you today. You can sell the warrants as soon as you get them, but I'm hoping that you'll stay along for this ride, that you'll participate in what we are building together. We're going to move forward together, and when Opendoor succeeds, our shareholders are going to share in that success. And yes, I'll admit it, It gives me just a bit of joy that this will totally ruin the night of a few short sellers. Look, we're building a new company right in the open. Open Door 2.0 is committed to its community because we're building and because who we're building for matters. We're going to talk to you the way we talk in the office, in plain English, sometimes with a few cuss words, but always with transparency. Please consider this our clean break from corporal jargon. We're just going to talk to you and tell you when we make mistakes. And we know that this transparency is not a burden. It's a feature of your trust in us. We want to hear from our shareholders, your ideas, your questions, and even product bugs, because we want to fix things fast and build better. If you haven't already seen this, my DMs are open.x.com. I am more bullish today about Opendoor's ability to change home ownership than I was when I took this job. I'm more bullish because I see a lot more of what is happening inside the company than folks see from the outside. And I think one of the ways in which we can bring you all along for this journey is to just communicate more frequently, more directly, and tell you what we are doing, what's working, what's not. Christy's going to tell you a bit more about how we can do this after she shares our third quarter results. Christy?

Thank you, Kaz. Our third quarter results reflect the deliberate choices made earlier in the year to prioritize risk management over volume growth, defined by widespreads and a risk-averse posture that treated buying homes as something to avoid rather than our core business. The numbers tell the story. In the third quarter, we purchased 1,169 homes, roughly in line with the expectations shared at Q2 earnings, but well below our recent historical acquisition volumes. We delivered revenue of $915 million above the high end of our guidance as we deliberately cleared old inventory before the slower winter selling season. When you stop buying homes, you don't just lose volume, you lose the ability to manage your inventory mix. We were left selling through older homes that were selected under the old strategy, and that showed up in our margins. Gap gross profit was 66 million in Q3 compared to 105 million in Q3 of the prior year. Gap gross margin was 7.2%, down 40 basis points year over year. Contribution profit was 20 million and contribution margin was 2.2% compared to contribution profit of 52 million and contribution margin of 3.8% in Q3 2024. On costs, prior leadership did meaningful work to restructure our cost base, and we will continue that effort. Third quarter gap operating expenses totaled $134 million. Adjusted operating expenses were $53 million, a 41% improvement from $90 million in the third quarter of 2024. This improvement was driven by disciplined cost management across all components, marketing, operations, and fixed operating expense. As we rescale acquisitions, we're doing it from the structurally lower cost base. Net loss for the third quarter was $90 million compared to a loss of $78 million in Q3-24. The prior year number included a $14 million gain from the mainstay deconsolidation. Adjusted net loss totaled $61 million, an improvement from an adjusted net loss of $70 million in the prior year period. These are the results of the old open door. What matters now is what comes next. Earlier, you heard the plan for Opendoor 2.0. I'd like to take a moment to walk through the foundation it runs on, our capital. We ended the quarter with $962 million in unrestricted cash and $187 million of equity invested in homes. We held 3,139 homes, representing $1.1 billion in net inventory. We had $7.6 billion in non-recourse asset-backed borrowing capacity, of which total committed borrowing capacity was $1.8 billion. As Kaz mentioned, we have executed three substantial capital transactions to set our balance sheet up for the scale ahead. First, the rapid increase in our stock price triggered a condition in our 2030 convertible notes that could have required us to repay the full principal balance in cash during the fourth quarter of 2025. Using our at-the-market, or ATM, equity program, we proactively raised equity in September 2025, selling 21.6 million shares at a weighted average price per share of $9.26 for nearly $200 million of gross proceeds. Second, today we refinance a substantial portion of the 2030 notes with equity. As a reminder, these notes bear interest at a 7% annual rate. The combination of these two transactions add meaningful liquidity to our balance sheet, reduce our cash interest costs, and provide enhanced financial flexibility. Third, to align Opendoor's upside with all shareholders, our board declared a pro rata warrant dividend. Every shareholder will receive three series of freely tradable warrants for every 30 common shares held as of the November 18th record date with exercise prices of $9, $13, and $17. Zooming out, we believe we have the right capital setup for the Open Door 2.0 operating model. Higher volumes, faster turns, tighter spreads, and more products to serve homeowners. Now let me tell you how we're executing against that model and how you can hold us accountable. We are targeting to reach adjusted net income profitability by the end of 2026, measured on a forward 12 month basis. To get there, we're focused on three key management objectives that we monitor internally. For each objective, I want to frame for you why this matters, what we're doing, and how you can hold us accountable. First, scale high quality acquisitions. More volume means more revenue from transactions and ancillary services, plus better leverage of our cost base. Further, market concentration creates a flywheel. When we own meaningful share in a market, we attract more inventory, which attracts more buyers, which attracts more sellers. We have multiple initiatives underway to drive this growth. Most importantly, as Kaz described earlier, we started reducing our average spread while increasing our operational rigor and selection. Stronger offers for high velocity, high quality homes, discipline on higher risk homes. We're pairing that with AI-driven scoping and standardized pre-offer inspections to raise conversion and cut time and costs from offer to acquisition. You can track our progress against our acquisition goals through the end of 2026 on our new dashboard at accountable.opendoor.com. Individual weeks will fluctuate. Holidays, weather, local market events will be focused on the trajectory over time. Second, improve unit economics and resale velocity. Speed and profitability per transaction enable us to build a sustainable business while enduring macroeconomic changes. Higher profitability per transaction gives us the ability to decrease the spreads embedded in our offers, leading to more acquisitions. This objective is supported by our tailored spread framework. By pricing more aggressively for high quality, faster selling homes and maintaining discipline on higher risk assets, we expect our acquisition mix to skew toward more marketable homes that need less repair and renovation. We expect this to shorten the time from acquisition to listing and days on market, thereby reducing our holding costs. Second, we are innovating at an incredible pace with a renewed focus on execution and a culture of challenging everything to be better. Much of our product innovation is designed to automate workflows and increase resale velocity, supporting a business model focused on turns, not spread. You can hold us accountable to improving resale velocity by tracking the percentage of Opendoor homes on the market for greater than 120 days, which we report quarterly in our 10Q. You can also follow our product, feature, and partnership launches on accountable.opendoor.com to see how we're building with velocity into the business. Third, build operating leverage. We will scale transactions faster than fixed costs, so each additional home adds a creative profit. We're cutting aggressively in the right places, eliminating consultants, removing redundant tools and software, reducing marketing waste, and streamlining operations, while simultaneously reinvesting a portion of those savings into engineering and AI automation. Importantly, we expect to shift our overall operating expense profile toward variable components that flex with volumes rather than remain fixed through cycles. You can hold us accountable by tracking two specific metrics we report quarterly in our 10Q. Fixed operating expenses should hold relatively steady as we rescale volumes, and trailing 12-month operations expense as a percentage of trailing 12-month revenue should hold relatively steady or decrease over time. These three objectives are the foundation of our path to profitability, and we're building in the open so you can track our progress along the way. Turning to our outlook, our guidance is going to look different than what you've seen in previous quarters. Our business is changing rapidly. Just in the past few weeks, our acquisition contract speed increased by nearly 2x. We're focused on execution and outcomes, not on benchmarking every turn during a transformation of the scale. Thank you. We've already seen the levers in this business work. You can't build a break-even business in a spreadsheet. You build it by shipping product, operating with discipline, and learning from the market. For the near term, I will provide you with these guideposts. Acquisition rescaling. We're committed to rescaling acquisition volumes. We expect fourth quarter 2025 acquisitions to increase by at least 35% from Q3 as our product launches and pricing strategy changes take hold. You can track our weekly acquisition progress at accountable.opendoor.com. Revenue. We expect Q4 revenue to be higher from the outlook we provided at Q2 earnings, but decrease approximately 35% quarter over quarter due to low inventory levels from Q3's reduced acquisition volumes. Contribution margin. Our priority since mid-September has been to clear old inventory homes selected under the previous strategy that prioritize spread over quality. That's pressured our contribution margin sequentially since April through October, and we believe we bottomed out in October. Margins will improve through the end of the year as we replace legacy inventory with better homes, but Q4 contribution margin will be below Q3 as we reverse the downward trend. We are focused on continuing to manage and improve our cost structure. Adjusted operating expenses for the 12 months ended June 30th, 2025 were 307 million. For the 12 months ending June 30th, 2026, we expect to spend 255 million to 265 million. Excluding the $15 million cash make-whole award for our CEO, this is a year-over-year decrease of approximately $62 million, or 20% at the midpoint. We expect to achieve these savings while concurrently investing in engineering and AI automation to drive further operating leverage. We're cutting the waste and reinvesting in what matters. Finally, adjusted EBITDA. Given the near-term margin pressure as we clear old inventory, we expect Q4 2025 adjusted EBITDA loss in the high $40 million to mid $50 million. We're building Open Door 2.0 in the open, holding ourselves accountable to measurable objectives and giving you the transparency to track our progress. The journey won't be perfectly linear, but our conviction in the destination and in the levers that get us there is unwavering. With that, Michael, I'll turn it over to you for questions.