Opendoor 2025 Q1 Earnings Narrowing Losses with Net Income Improvement

Opendoor(OPEN) reported its fiscal 2025 Q1 earnings on May 06th, 2025. Opendoor's Q1 revenue of $1.15 billion fell short of expectations, reflecting a 2.4% decrease from the previous year. Despite revenue challenges, the company showed progress by narrowing its net loss by 22%, which exceeded analysts' expectations. Looking ahead, Opendoor has issued guidance for Q2, forecasting a potential revenue increase and improved contribution profit. Investors will closely watch these metrics for signs of continued financial recovery.

Revenue

Earnings/Net Income
Opendoor narrowed losses to $0.12 per share in 2025 Q1 from a loss of $0.16 per share in 2024 Q1 (25.0% improvement). Meanwhile, the company successfully narrowed its net loss to $-85 million in 2025 Q1, reducing losses by 22.0% compared to the $-109 million net loss reported in 2024 Q1. The improved EPS indicates a positive trend in the company's financial health.

Price Action
The stock price of Opendoor has dropped 5.24% during the latest trading day, has tumbled 8.76% during the most recent full trading week, and has plummeted 27.30% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing Opendoor (OPEN) shares following its revenue increase quarter-over-quarter and holding for 30 days has consistently yielded poor results over the past five years. This investment approach has resulted in a negative return of -11.78%, notably underperforming the benchmark return of 44.37%, and translating to an excess return of -56.15%. The compound annual growth rate (CAGR) was -2.86%, indicating substantial financial losses. Additionally, the strategy experienced a steep maximum drawdown of -21.76% and a Sharpe ratio of -0.19, highlighting the considerable risk and negative returns associated with this approach.

CEO Commentary
Opendoor Technologies Inc. CEO Carrie Wheeler emphasized the company's focus on reinventing residential real estate amid a challenging macroeconomic environment, citing heightened uncertainty with rising mortgage rates and a decline in market activity. She noted that despite these headwinds, the company is committed to delivering certainty and convenience to customers while pursuing profitability. Wheeler highlighted the strategic expansion into agent partnerships, enhancing the selling options for customers, and piloting a new experience in select markets. She expressed optimism about the potential for improved conversion rates and asset-light revenue, reinforcing the company’s commitment to long-term growth.

Guidance
Opendoor anticipates second-quarter 2025 revenue between $1.45 billion and $1.525 billion, with a contribution profit expected to range from $65 million to $75 million, reflecting a contribution margin of 4.5% to 4.9%. The company projects an adjusted EBITDA loss between $10 million and $20 million, indicating a year-over-year improvement. Additionally, adjusted operating expenses are guided to approximately $55 million, with non-cash stock-based compensation anticipated to be between $13 million and $15 million. Home acquisitions are projected at around 1,700 in the second quarter, acknowledging current market dynamics and operational efficiency.

Additional News
Opendoor recently announced a strategic partnership with a leading real estate agency to enhance its market presence and offer more comprehensive services to its clients. This collaboration aims to streamline transaction processes and provide greater value to homeowners. Additionally, the company has initiated a new digital marketing campaign to increase brand awareness and attract potential sellers. In a key leadership change, Opendoor appointed a new Chief Technology Officer to drive innovation and further develop its technology platform, ensuring seamless user experiences. These developments reflect Opendoor's commitment to strategic growth and adaptation in the dynamic real estate market.