Offerpad Solutions Inc

All lines will be muted during the presentation portion of the call for an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad. I will now have to pass the conference over to our host, Taylor Giles with OfferPad. Taylor, please go ahead.

Good afternoon and welcome to OfferPad's fourth quarter and fiscal 2023 earnings call. I'm joined today by OfferPad's chairman and chief executive officer, Brian Baer, and Interim Principal Financial Officer and Senior Vice President of Finance, James Grapp. During the call today, management will make forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently uncertain, and events could differ significantly from management's expectations. Please refer to the risk uncertainties, and other factors relating to the company's business described in our filing with the U.S. Security and Exchange Commission. Except as required by applicable law, OfferPad does not intend to update or alter forward-looking statements, whether as a result of new information, future events, or otherwise. On today's call, management will refer to certain non-GAAP financial measures. These metrics exclude certain items discussed in our earnings release under the heading non-GAAP financial measures. The reconciliation of OfferPad non-GAAP measures to the comparable GAAP measures are available in the financial tables of the fourth quarter earnings release on OfferPad's website. With that, I'll turn the call over to Brian.

Thank you, Taylor, and thank you all for joining our fourth quarter 2023 call. The past year represented a pivotal moment for the company in terms of our operational advancement and execution capabilities, despite enduring a volatile and challenging macroeconomic landscape. Even with the market difficulties, we cleared through virtually all of our legacy inventory obtained prior to the market transition by the end of the second quarter last year, and have seen meaningful improvements in contribution margin in the second half of the year. Our focus is strong in our commitment to our core vision and strengths, which start with the foundation of our cash offer. Our renovate product line, alongside our ability to involve agents to be part of our solutions, is prospering. And our ability to manage our expenses has never been better. By doubling down on the things we can control, we delivered a solid fourth quarter. Our revenue of $240 million, adjusted EBITDA of negative $7 million, as well as our 712 homes sold We're all within guidance. Though we aren't back to our desired growth trajectory, 2023 brought its share of wins. We demonstrated a clear path toward sustained profitability with adjusted EBITDA up over 1,200 basis points year over year. We grew our partnership and ecosystem networks, especially within our agent partnership programs, greatly expanding our coverage. And we continue to grow our asset-light revenue streams which accounted for more than 35% of our contribution margin after interest in the second half of 2023. I will discuss these accomplishments, then review our three strategic imperatives before transitioning to call to James for an in-depth discussion of the numbers and guidance. During 2023, we improved adjusted EBITDA in each consecutive quarter, while also delivering revenue growth in the last three quarters of the year. We plan to continue these trends and exit 2024 with sustainable adjusted EBITDA profitability and a direct line of sight to positive free cash flow. To do this, we have better defined the scope and deliverables of roles across OfferPad's workforce, continue to enhance our tech stack, expand our partnership programs, and we are improving our customer acquisition cost and marketing reach through more efficient spend and partner engagement. For instance, We are focusing activities and capital in markets yielding the highest returns within our buy box, while optimizing our product lines in our other markets. Offerpad's mission to take the friction out of real estate has always included serving our customers with buying and selling solutions, and through additional services that include our asset-light revenue streams from listings to Direct Plus to Offerpad Renovate. Combined, these accounted for 43% of our unit transactions in 2023. versus 24% in 2022. In fact, we grew revenue in our renovation business by nearly 70% and saw 148% increase in closed renovation projects compared to the previous quarter. Altogether, these other services delivered an exceptional incremental contribution margin of nearly $5,000 per home sold in 2023, a significant leap from previous years at less than $1,000 per home. Our momentum with our B2B clients continues to grow as they rely on our capacity to efficiently deliver top-notch renovations, thereby enhancing their own profitability and customer satisfaction. We're now working with national, regional, and local clients across the country, including single-family and multifamily operators. By allowing our renovation clients to plug into our operations, they gain access to OfferPad's extensive experience, cost savings, and commitment to delivering high-quality work. As a case point, one of our larger Renovate clients in 2023 came to OfferPad because they were dissatisfied with the quality and turnaround time of their home renovations. We executed a pilot program of 30 homes to show them the quality and value we could help them create. Over 300 homes later, we are their preferred renovation partner. It's this dedication to quality and efficiency that enabled us to generate over $12 million in Renovate revenue during our first year operating this product line. Our partner network is a key lever in our growth strategy. It encompasses our home builder services, our agent partnership program, and our agent referral network. By incentivizing partners to leverage OfferPad for property buying, selling, and renovations, we expand our reach and serve customers in markets beyond our direct service area. Since 2019, our agent partnership program has provided an industry-leading referral fee to agents whose sellers select our cash offer. With more than 130,000 cash offer requests, the agent partnership program has grown from generating 5% of our overall requests to more than 20% last quarter. This program is tailored to meet consumers at their exact point of need, enabling them to utilize OfferPad in the way that best suits their home selling situation, while also serving as a valuable resource for real estate agents. In late January, we announced major enhancements to the program. The offer pad pro tier allows agents to continue to request a cash offer on behalf of their clients. And for the first time have the ability to list an acquired home and ready for resale. Offer pad max is our top tier invite only subscription fee based program designed for highly motivated agents with significant marketing region influence. Max agents will receive the same benefits as pro agents with several added advantages. Importantly, They will gain access to highly qualified sellers in defined zones, and they'll have the potential to list other Offerpad-owned homes in their zones. Initial available subscriptions have sold quicker than anticipated. Meanwhile, we are swiftly expanding our available zones for Offerpad Max with plans to expand to additional markets in the near future. All of this supports our three strategic imperatives. First and foremost is our mission to take the friction out of real estate, starting with the cash offer. Our second imperative is to continue to make great progress on our asset-linked product lines, offering end-to-end services that encompass the entire process of selling, buying, and home ownership. OfferPad's third imperative is expanding our partner ecosystem to enhance our reach to meet customers where they are. We are delivering on all three of these imperatives. Reflected on 2023 and the many challenges and tough decisions we faced, I'm so proud of the OfferPad team grateful to our customers and partners, and optimistic that we are moving toward a return to sustained profitability and growth. We have a robust strategic roadmap, a solid operational foundation, and a huge market opportunity ahead of us. I'll now turn the call over to James. With as many years in senior finance leadership at Offerpad, he has taken over the reins as interim principal financial officer seamlessly. Thank you. James?