Opendoor’s first quarter results were well received by the market, as management’s efforts to control costs and adjust to a subdued U.S. housing market stood out. CEO Carrie Wheeler credited operational discipline and the company’s evolving agent partnership model as key drivers of performance, even as macro pressures like elevated mortgage rates and slowing home sales persisted. Wheeler explained, “Our progress is reflected in our first quarter results, where our acquisition volumes, revenue, contribution profit, and adjusted EBITDA demonstrate strong execution amidst a challenging macro backdrop.”
Is now the time to buy OPEN? Find out in our full research report (it’s free).
Opendoor (OPEN) Q1 CY2025 Highlights:
- Revenue: $1.15 billion vs analyst estimates of $1.05 billion (2.4% year-on-year decline, 9.3% beat)
- Adjusted EPS: -$0.09 vs analyst estimates of -$0.10 (15.9% beat)
- Adjusted EBITDA: -$30 million vs analyst estimates of -$44.02 million (-2.6% margin, 31.8% beat)
- Revenue Guidance for Q2 CY2025 is $1.49 billion at the midpoint, above analyst estimates of $1.45 billion
- EBITDA guidance for Q2 CY2025 is $15 million at the midpoint, above analyst estimates of -$12.29 million
- Operating Margin: -4.9%, up from -7.4% in the same quarter last year
- Homes Sold: 2,946, down 132 year on year
- Market Capitalization: $392.3 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Opendoor’s Q1 Earnings Call
- Dae Lee (J.P. Morgan) pressed on whether the slowed acquisition pace in Q2 would persist and how this might vary by market. CFO Selim Freiha replied that acquisition volumes would follow seasonal patterns, with a likely ramp in Q4, and that current spread levels and market uncertainty are influencing the cautious approach.
- Ygal Arounian (Citigroup) sought clarity on the health of Opendoor’s inventory and the risk of declining home values. Freiha explained that inventory valuation is actively managed with pricing levers, and recent acquisitions are starting at higher contribution margins, though older inventory can dilute margin performance.
- Ygal Arounian (Citigroup) also asked about the agent partnership’s structure and the expected mix of direct versus agent-driven business. CEO Carrie Wheeler described the pilot as an evolution of existing agent relationships and emphasized the company will continue to offer both direct and agent-mediated options, adjusting mix based on customer preferences.
- Ryan Tomasello (KBW) inquired about the nature of cost savings, specifically whether Opendoor’s operating expense reduction was structural or driven by seasonal marketing cuts. Freiha indicated the majority of reductions are from lower marketing spend, with some additional fixed cost savings.
- Benjamin Black (Deutsche Bank) questioned what success signals would prompt a broader rollout of the agent partnership and whether further investment is needed. Wheeler responded that conversion improvements are the main signal, and that existing infrastructure supports expansion without significant new investment.
Catalysts in Upcoming Quarters
In the coming quarters, our team will be watching (1) the adoption and impact of Opendoor’s agent partnership pilot on conversion rates and asset-light revenue, (2) the sustainability of cost reductions and margin improvements in a challenging macro environment, and (3) management’s ability to navigate inventory mix and resale timing to maintain profitability. The evolution of the U.S. housing market will continue to be a critical external factor.
Opendoor currently trades at $0.54, down from $0.70 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
