Offerpad Solutions Inc

Good afternoon and welcome to Offerpad's second quarter 2026 earnings conference call. My name is Megan and I will be your conference operator today. At this time, all participant lines have been placed on mute to prevent any background noise. After management's prepared remarks, we will open the call for a question and answer session. If you would like to ask a question, please press star followed by the number one on your telephone keypad. To withdraw your question, press the pound key. With that, I'll turn the call over to Cortney Read, OfferPad's Vice President of Investor Relations and Communications.

Good afternoon and welcome to OfferPad's second quarter 2026 earnings call. Management's remarks today are pre-recorded and accompanied by a presentation. A live question and answer session will follow. 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 and other factors related to the company's business described in our filings with the U.S. Securities 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 reconciliations of OfferPad non-GAAP measures to the comparable GAAP measures are available in the financial tables of the second quarter earnings release on OfferPad's website. With that, I'll turn the call over to Brian Bair, Chairman and Chief Executive Officer.

Thank you, Cortney, and welcome, everyone. Before we get into the quarter, I'd like to take a step back and talk about where we are as a company. Over the past 18 months, we made a series of deliberate decisions that weren't designed to maximize short-term volume. They were designed to build a stronger company for the long term. We protected capital, we sold through our aged inventory, we reset our cost structure, we put the right people in place across pricing, operations, and every product line, expanded from a single product company into a multi-solution platform, and embedded artificial intelligence across our business. None of those investments were made to improve one quarter. They were made to improve the next decade. We believe those investments are now beginning to translate into measurable operating momentum. The rebuilding phase of Offerpad is largely behind us. The buying engine is back on. I'll be walking through several visuals during the call, so I encourage you to follow along on your screen. First, the quarter itself. We guided to 300 to 350 transactions and 80 to 90 million in revenue. We came in at 295 transactions and approximately 78 million in revenue while still delivering another quarter of improved adjusted EBITDA. Alongside those numbers, I'll walk you through some leading indicators, contract signs and acquisitions. We think they're helpful for understanding where the business is headed as we scale. For the past year, you've heard us talk about discipline. You've heard Peter walk through our cost structure. You've heard us talk about contribution margins, conversion, and the investments we've made in our operating platform. Those weren't separate initiatives. They were always the same operating framework, the one that's been guiding how we run this business. By sharing that framework with you today, we want to give you a clear view into how we make decisions, allocate capital, and measure progress. It's also the context behind everything we've reported over the past year. That framework comes down to three objectives. Let's start with the first. Scale transactions through disciplined growth. That's straightforward. But here's what it actually means. We're not chasing volume for its own sake. We're using better home selection, more precise pricing, and the data we built over the past several years to grow where we believe we can generate the strongest outcomes. Our target hasn't changed. Approximately 1,000 transactions a quarter. The level we believe our current cost structure supports at breakeven. But that's not where the plan stops. Beyond breakeven, the plan illustrates the operating leverage available as we scale towards levels we have achieved before. For example, the company averaged approximately 3,500 quarterly transactions in 2022. Here's the visual that helps illustrate how we get there. Starting with the question you may have. How do we get from roughly 300 transactions today to our goal of around 1,000 a quarter? Start on the left. Every closed transaction starts as a signed contract. In April, we signed 129. That grew to 163 in May and 256 by June, nearly double where we started. Now take a look at the middle. Roughly 30 days after signing, approximately 90% of contracts become acquisitions. We acquired 268 homes in quarter two, nearly 70% more than the quarter before. That momentum continued into July, where we acquired roughly 200 homes in a single month, as the stronger June and July signings worked their way through. This growing pipeline is expected to drive higher transaction volumes in the second half of fiscal 2026, as homes typically sell within 120 to 150 days after signing. Think about it this way. We expect another meaningful step up in acquisitions in the third quarter. And we can say that with real confidence because most of the activity is already signed. It's sitting on the left side of this chart right now, moving through the pipeline. Now let's look at the right side. Roughly 90 to 120 days after acquisition, a home sells, which means the fourth quarter is largely being built right now, not in the fourth quarter itself. Today's signings become tomorrow's acquisitions. and those acquisitions become tomorrow's home sales. So when you look at our third quarter transaction guidance next to our longer term target, remember those quarter three closings were mostly locked in by contracts signed earlier in the year before conversion improved. Quarter four is where you'll really start to see today's stronger performance show up. And one more thing to highlight, our platform is now broader than cash offer. Cash offer marketplace and brokerage services shown in light blue on the chart widened the pool of sellers we can serve and generate fee-based revenue with little to no balance sheet capital. What you're seeing here is execution, not spending. The growth in signs I just showed you happened without meaningful increase in marketing. It's conversion. We're converting demand we already had. The second objective is expanding contribution margin. And this is where we made some of our most meaningful progress this quarter. This chart shows the annual picture. margins compressed through the market slowdown, bottomed out in loss in 2023, and have been recovering since, with 2025's numbers still weighed down by the aged inventory we've been working through. But look at what's happening inside this year, quarter to quarter. Contribution profit after interest reached $13,500 per real estate transaction in Q2, up from $5,500 in quarter one, our strongest quarter since 2023. First, we cleared the age book. It peaked at more than 100 homes in 2025. We slowed acquisitions, got it under 30 by quarter one, and we're at under 10 today. What remains consists primarily of homes acquired during the past two quarters. Second, we're moving faster. Our aged homes have taken around 339 days to sell. Our quarter two non-aged homes sold in approximately 82 days. well ahead of our 100 to 120-day target. That velocity is what's driving the stronger margins and putting us on the path toward adjusted EBITDA profitability. Our third objective is driving operating leverage. Over the past several years, we've fundamentally reset our cost structure, removing more than 140 million of annualized operating expense. These weren't cuts tied to the housing market. They were structural changes, and they've left us with a leaner, more efficient business. This chart shows what that means. At today's volume, around 295 transactions a quarter, we're on the steep part of the curve where fixed costs aren't yet fully absorbed. At 1,000 transactions, the level our cost structure is built for, cost per transaction drops sharply. Because that cost base doesn't grow in step with volume, every transaction beyond the point should flow more directly to earnings. Those are the three objectives that guide how we run this business. Discipline Transaction Growth, Expanding Contribution Margin, and Operating Leverage. Today, they're the framework behind every decision we make, every dollar we allocate, and every result we measure ourselves against. I'd encourage you to spend a few minutes with our full operating plan on our investor relations website. It goes deeper into each of these three objectives, the data behind them, and how they connect to our path to profitability. Peter will now take you through our financial results and guidance in detail.