8-K
Offerpad Solutions Inc. (OPAD)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 24, 2025
Offerpad Solutions Inc.
(Exact name of Registrant as Specified in Its Charter)
| Delaware | 001-39641 | 85-2800538 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission<br><br>File Number) | (IRS Employer<br>Identification No.) |
| 433 S. Farmer Avenue<br><br>Suite 500 | ||
| --- | --- | |
| Tempe, Arizona | 85281 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s Telephone Number, Including Area Code: (844) 388-4539
2150 E. Germann Road, Suite 1
Chandler, Arizona 85286
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange<br>on which registered |
|---|---|---|
| Class A common stock, $0.0001 par value per share | OPAD | The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On February 24, 2025, Offerpad Solutions Inc. issued a press release announcing its financial results for the quarter and fiscal year ended December 31, 2024 and a Shareholder Letter. A copy of the press release and the Shareholder Letter are furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K.
The information in this Item 2.02, including the information contained in Exhibit 99.1 and Exhibit 99.2 of this Current Report on Form 8-K, is furnished herewith and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Exhibit Description |
|---|---|
| 99.1 | Press Release of Offerpad Solutions Inc. dated February 24, 2025 |
| 99.2 | Offerpad Solutions Inc. Shareholder Letter dated February 24, 2025 |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Offerpad Solutions Inc. | ||
|---|---|---|
| Date: February 24, 2025 | By: | /s/ Peter Knag |
| Peter Knag<br><br>Chief Financial Officer |
EX-99.1
Exhibit 99.1
Offerpad Reports Fourth Quarter & Full Year 2024 Results
2024 Net Loss Improves 47%, or $55 million Versus Prior Year
TEMPE, Ariz.——(BUSINESS WIRE)— Offerpad Solutions Inc. (“Offerpad”) (NYSE: OPAD), a leading tech-enabled platform for residential real estate, today released financial results for the three months and full year ended December 31, 2024.
“In the fourth quarter, revenue exceeded the midpoint of our guidance, supported by a balanced mix of offerings. This performance was achieved with the support of our Renovate business surpassing $18 million in revenue for the year and our improved advertising efficiencies driven by our Agent Partnership Program growing to nearly a third of our acquisitions,” said Brian Bair, Offerpad’s CEO. “We’ve made tremendous product improvements as we’ve remained focused on delivering real estate solutions for consumers and partners while making progress toward building a long-term, sustainable business.”
FY 2024 Highlights include:
| • | Improved net loss and adjusted EBITDA 47% or $55 million and 65% or $53 million, respectively, from the<br>prior year |
|---|---|
| • | Gross profit per home sold of $26.7k |
| --- | --- |
| • | Contribution profit after interest per home sold of $11.5k, with 33% via asset light services<br> |
| --- | --- |
| • | Total operating expenses for the year decreased to $118.2M from $174.6M the prior year, a $56.4M or 32%<br>improvement |
| --- | --- |
| • | Renovate closed projects grew to 1,096, surpassing $18 million of revenue, up 49% versus the prior year<br> |
| --- | --- |
| • | Acquisitions from Offerpad’s Agent Partnership Program grew to 32% of total compared to 21% the prior year<br> |
| --- | --- |
| • | Time to cash (TTC) came in at 116 days, an improvement of 23 days or 18% year over year |
| --- | --- |
“Through our relentless focus on cost efficiency, we’ve taken big steps towards profitability. After lowering annual operating expenses by nearly $70 million in 2023, we continued to make excellent progress in 2024, removing $44 million of additional cost,” said Peter Knag, Offerpad’s CFO. “As we enter 2025, we remain focused on increasing acquisition activity, maintaining cost discipline, and positioning Offerpad for long-term stability and growth.”
Q4 2024 Financial Results (quarter over quarter)
| Q4 2024 | Q3 2024 | PercentageChange | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Homes acquired | 384 | 422 | (9 | %) | |||||
| Homes sold | 503 | 615 | (18 | %) | |||||
| Revenue | $ | 174.3M | $ | 208.1M | (16 | %) | |||
| Gross profit | $ | 10.6M | $ | 17.1M | (38 | %) | |||
| Net loss | ($ | 17.3M | ) | ($ | 13.5M | ) | (28 | %) | |
| Adjusted EBITDA | ($ | 11.5M | ) | ($ | 6.2M | ) | (86 | %) | |
| Diluted Net Loss per Share | ($ | 0.63 | ) | ($ | 0.49 | ) | (29 | %) | |
| Gross profit per home sold | $ | 21,100 | $ | 27,900 | (24 | %) | |||
| Contribution profit after interest per home sold | $ | 5,500 | $ | 12,400 | (56 | %) | |||
| Cash and cash equivalents | $ | 43.0M | $ | 48.5M | (11 | %) |
Q4 2024 Financial Results (year over year)
| Q4 2024 | Q4 2023 | PercentageChange | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Homes acquired | 384 | 678 | (43 | %) | |||||
| Homes sold | 503 | 712 | (29 | %) | |||||
| Revenue | $ | 174.3M | $ | 240.5M | (28 | %) | |||
| Gross profit | $ | 10.6M | $ | 16.7M | (37 | %) | |||
| Net loss | ($ | 17.3M | ) | ($ | 15.4M | ) | (12 | %) | |
| Adjusted EBITDA | ($ | 11.5M | ) | ($ | 7.1M | ) | (63 | %) | |
| Diluted Net Loss per Share | ($ | 0.63 | ) | ($ | 0.57 | ) | (11 | %) | |
| Gross profit per home sold | $ | 21,100 | $ | 23,400 | (10 | %) | |||
| Contribution profit (loss) after interest per home sold | $ | 5,500 | $ | 10,200 | (46 | %) | |||
| Cash and cash equivalents | $ | 43.0M | $ | 76.0M | (43 | %) |
FY 2024 Financial Results (year over year)
| 2024 | 2023 | PercentageChange | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Homes acquired | 2,443 | 2,812 | (13 | %) | |||||
| Homes sold | 2,707 | 3,674 | (26 | %) | |||||
| Revenue | $ | 918.8M | $ | 1,314.4M | (30 | %) | |||
| Gross profit | $ | 72.2M | $ | 70.2M | 3 | % | |||
| Net loss | ($ | 62.2M | ) | ($ | 117.2M | ) | 47 | % | |
| Adjusted EBITDA | ($ | 29.2M | ) | ($ | 82.4M | ) | 65 | % | |
| Diluted Net Loss per Share | ($ | 2.27 | ) | ($ | 4.44 | ) | 49 | % | |
| Gross profit per home sold | $ | 26,700 | $ | 19,100 | 40 | % | |||
| Contribution profit (loss) after interest per home sold | $ | 11,500 | ($ | 13,900 | ) | n/a | |||
| Cash and cash equivalents | $ | 43.0M | $ | 76.0M | (43 | %) |
Additional information regarding Offerpad’s fourth quarter and full year 2024 financial results and management commentary can be found by accessing the Company’s Quarterly Letter to Shareholders on the Offerpad investor relations website.
First Quarter 2025 Outlook
Offerpad is providing its first quarter outlook for 2025 as follows:
| Q1 2025 Outlook | |
|---|---|
| Homes Sold | 450 to 500 |
| Revenue | $150M to $170M |
| Adjusted EBITDA^1^ | Slightly Better |
| ^1^ | See Non-GAAP financial measures below for an explanation of why a<br>reconciliation of this guidance cannot be provided. |
| --- | --- |
Conference Call and Webcast Details
Brian Bair, Chairman and CEO, and Peter Knag, CFO, will host a conference call and accompanying webcast on February 24, 2025, at 4:30 p.m. ET. The webcast can be accessed on Offerpad’s Investor Relations website. Those interested can register here. Access to a replay of the webcast will be available from the same website address shortly after the live webcast concludes.
About Offerpad
Offerpad, dedicated to simplifying the process of buying and selling homes, is a publicly traded company committed to providing comprehensive solutions that removes the friction from real estate. Our advanced real estate platform offers a range of services, from consumer cash offers to B2B renovation solutions and industry partnership programs, all tailored to meet the unique needs of our clients. Since 2015, we have leveraged local expertise in residential real estate alongside proprietary technology to guide homeowners at every step. Learn more at www.offerpad.com.
#OPAD_IR
Contacts
Investors
Investors@offerpad.com
Media
Press@offerpad.com
Forward-Looking Statements
Certain statements in this press release may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Offerpad’s future financial or operating performance. For example, statements regarding Offerpad’s financial outlook, including homes sold, revenue and Adjusted EBITDA, for the first quarter of 2025, and expectations regarding market conditions, strategic imperatives and long-term sustainability and growth are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “pro forma,” “may,” “should,” “could,” “might,” “plan,” “possible,” “project,” “strive,” “budget,” “forecast,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “potential” or “continue,” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that may impact such forward-looking statements include, but are not limited to, Offerpad’s ability to respond to general economic conditions; the health of the U.S. residential real estate industry; Offerpad’s ability to grow market share in its existing markets or any new markets it may enter; Offerpad’s ability to manage its growth and its costs structure effectively; Offerpad’s ability to accurately value and manage real estate inventory, maintain an adequate and desirable supply of real estate inventory, and manage renovations; Offerpad’s ability to successfully launch new product and service offerings, and to manage, develop and refine its technology platform; Offerpad’s ability to maintain and enhance its products and brand, and to attract customers; Offerpad’s ability to achieve and maintain profitability in the future; and the success of strategic relationships with third parties. These and other important factors discussed under the caption “Risk Factors” in Offerpad’s Annual Report on Form 10-K for the year ended December 31, 2024 to be filed with the Securities and Exchange Commission on or about February 25, 2025, and Offerpad’s other reports filed with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Offerpad and its management, are inherently uncertain. Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Offerpad undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
OFFERPAD SOLUTIONS INC.
Condensed Consolidated Statements of Operations
| Three Months EndedDecember 31, | Year EndedDecember 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except per share data) (Unaudited) | 2024 | 2023 | 2024 | 2023 | ||||||||
| Revenue | $ | 174,272 | $ | 240,458 | $ | 918,819 | $ | 1,314,412 | ||||
| Cost of revenue | 163,683 | 223,766 | 846,624 | 1,244,231 | ||||||||
| Gross profit | 10,589 | 16,692 | 72,195 | 70,181 | ||||||||
| Operating expenses: | ||||||||||||
| Sales, marketing and operating | 13,545 | 17,932 | 73,091 | 116,558 | ||||||||
| General and administrative | 9,874 | 8,775 | 40,621 | 50,091 | ||||||||
| Technology and development | 840 | 1,236 | 4,524 | 7,945 | ||||||||
| Total operating expenses | 24,259 | 27,943 | 118,234 | 174,594 | ||||||||
| Loss from operations | (13,670 | ) | (11,251 | ) | (46,041 | ) | (104,413 | ) | ||||
| Other income (expense): | ||||||||||||
| Change in fair value of warrant liabilities | (109 | ) | (109 | ) | 240 | 68 | ||||||
| Interest expense | (4,084 | ) | (5,154 | ) | (18,684 | ) | (18,859 | ) | ||||
| Other income, net | 476 | 1,065 | 2,357 | 6,149 | ||||||||
| Total other expense | (3,717 | ) | (4,198 | ) | (16,087 | ) | (12,642 | ) | ||||
| Loss before income taxes | (17,387 | ) | (15,449 | ) | (62,128 | ) | (117,055 | ) | ||||
| Income tax benefit (expense) | 62 | 8 | (31 | ) | (163 | ) | ||||||
| Net loss | $ | (17,325 | ) | $ | (15,441 | ) | $ | (62,159 | ) | $ | (117,218 | ) |
| Net loss per share, basic | $ | (0.63 | ) | $ | (0.57 | ) | $ | (2.27 | ) | $ | (4.44 | ) |
| Net loss per share, diluted | $ | (0.63 | ) | $ | (0.57 | ) | $ | (2.27 | ) | $ | (4.44 | ) |
| Weighted average common shares outstanding, basic | 27,478 | 27,292 | 27,410 | 26,385 | ||||||||
| Weighted average common shares outstanding, diluted | 27,478 | 27,292 | 27,410 | 26,385 |
OFFERPAD SOLUTIONS INC.
Condensed Consolidated Balance Sheets
| (in thousands, except par value per share) (Unaudited) | 2023 | ||||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | 43,018 | $ | 75,967 | ||
| Restricted cash | 30,608 | 3,967 | |||
| Accounts receivable | 3,848 | 9,935 | |||
| Real estate inventory | 214,174 | 276,500 | |||
| Prepaid expenses and other current assets | 2,564 | 5,236 | |||
| Total current assets | 294,212 | 371,605 | |||
| Property and equipment, net | 9,127 | 4,517 | |||
| Other non-current assets | 9,714 | 3,572 | |||
| TOTAL ASSETS | 313,053 | $ | 379,694 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | 1,922 | $ | 4,946 | ||
| Accrued and other current liabilities | 11,804 | 13,859 | |||
| Secured credit facilities and other debt, net | 195,378 | 227,132 | |||
| Secured credit facilities and other debt—related party | 41,861 | 30,092 | |||
| Total current liabilities | 250,965 | 276,029 | |||
| Warrant liabilities | 231 | 471 | |||
| Other long-term liabilities | 14,204 | 1,418 | |||
| Total liabilities | 265,400 | 277,918 | |||
| Commitments and contingencies | |||||
| Stockholders’ equity: | |||||
| Class A common stock, 0.0001 par value; 2,000,000 shares authorized; 27,379 and 27,233<br>shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively | 3 | 3 | |||
| Additional paid in capital | 507,696 | 499,660 | |||
| Accumulated deficit | (460,046 | ) | (397,887 | ) | |
| Total stockholders’ equity | 47,653 | 101,776 | |||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 313,053 | $ | 379,694 |
All values are in US Dollars.
OFFERPAD SOLUTIONS INC.
Condensed Consolidated Statements of Cash Flows
| Year EndedDecember 31, | ||||||
|---|---|---|---|---|---|---|
| ($ in thousands) (Unaudited) | 2024 | 2023 | ||||
| Cash flows from operating activities: | ||||||
| Net loss | $ | (62,159 | ) | $ | (117,218 | ) |
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||
| Depreciation | 611 | 728 | ||||
| Amortization of debt financing costs | 1,786 | 4,343 | ||||
| Real estate inventory valuation adjustment | 4,472 | 8,937 | ||||
| Stock-based compensation | 8,080 | 7,915 | ||||
| Change in fair value of warrant liabilities | (240 | ) | (68 | ) | ||
| Loss on disposal of property and equipment | 105 | 76 | ||||
| Change in fair value of derivative instruments | — | (2,124 | ) | |||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | 6,087 | (7,585 | ) | |||
| Real estate inventory | 57,854 | 379,260 | ||||
| Prepaid expenses and other assets | 4,452 | 3,733 | ||||
| Accounts payable | (3,024 | ) | 299 | |||
| Accrued and other liabilities | 2,809 | (16,664 | ) | |||
| Net cash provided by operating activities | 20,833 | 261,632 | ||||
| Cash flows from investing activities: | ||||||
| Purchases of property and equipment | (5,408 | ) | (127 | ) | ||
| Proceeds from sale of property and equipment | 82 | — | ||||
| Purchases of derivative instruments | — | (2,569 | ) | |||
| Proceeds from sale of derivative instruments | — | 4,681 | ||||
| Net cash (used in) provided by investing activities | (5,326 | ) | 1,985 | |||
| Cash flows from financing activities: | ||||||
| Borrowings from credit facilities and other debt | 807,926 | 875,559 | ||||
| Repayments of credit facilities and other debt | (829,461 | ) | (1,286,795 | ) | ||
| Payment of debt financing costs | (236 | ) | (1,948 | ) | ||
| Proceeds from exercise of stock options | 33 | 53 | ||||
| Payments for taxes related to stock-based awards | (77 | ) | (78 | ) | ||
| Borrowings from warehouse lending facility | — | 25,193 | ||||
| Repayments of warehouse lending facility | — | (25,193 | ) | |||
| Proceeds from issuance of pre-funded warrants | — | 90,000 | ||||
| Proceeds from exercise of pre-funded warrants | — | 11 | ||||
| Issuance cost of pre-funded warrants | — | (784 | ) | |||
| Net cash used in financing activities | (21,815 | ) | (323,982 | ) | ||
| Net change in cash, cash equivalents and restricted cash | (6,308 | ) | (60,365 | ) | ||
| Cash, cash equivalents and restricted cash, beginning of period | 79,934 | 140,299 | ||||
| Cash, cash equivalents and restricted cash, end of period | $ | 73,626 | $ | 79,934 | ||
| Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidatedbalance sheet: | ||||||
| Cash and cash equivalents | $ | 43,018 | $ | 75,967 | ||
| Restricted cash | 30,608 | 3,967 | ||||
| Total cash, cash equivalents and restricted cash | $ | 73,626 | $ | 79,934 | ||
| Supplemental disclosure of cash flow information: | ||||||
| Cash payments for interest | $ | 24,464 | $ | 24,730 |
Non-GAAP Financial Measures
In addition to Offerpad’s results of operations above, Offerpad reports certain financial measures that are not required by, or presented in accordance with, U.S. generally accepted accounting principles (“GAAP”). These measures have limitations as analytical tools when assessing Offerpad’s operating performance and should not be considered in isolation or as a substitute for GAAP measures, including gross profit and net income.
Offerpad may calculate or present its non-GAAP financial measures differently than other companies who report measures with similar titles and, as a result, the non-GAAP financial measures Offerpad reports may not be comparable with those of companies in Offerpad’s industry or in other industries. Offerpad has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted net income (loss) within this press release because Offerpad is unable to calculate certain reconciling items without making unreasonable efforts. These items, which include, but are not limited to, stock-based compensation with respect to future grants and forfeitures, could materially affect the computation of forward-looking net income (loss), are inherently uncertain and depend on various factors, some of which are outside of Offerpad’s control.
Adjusted Gross Profit,Contribution Profit, and Contribution Profit After Interest (and related margins)
To provide investors with additional information regarding Offerpad’s margins, Offerpad has included Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins), which are non-GAAP financial measures. Offerpad believes that Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest are useful financial measures for investors as they are used by management in evaluating unit level economics and operating performance across Offerpad’s markets. Each of these measures is intended to present the economics related to homes sold during a given period. Offerpad does so by including revenue generated from homes sold (and ancillary services) in the period and only the expenses that are directly attributable to such home sales, even if such expenses were recognized in prior periods, and excluding expenses related to homes that remain in real estate inventory as of the end of the period presented. Contribution Profit provides investors a measure to assess Offerpad’s ability to generate returns on homes sold during a reporting period after considering home acquisition costs, renovation and repair costs, and adjusting for holding costs and selling costs. Contribution Profit After Interest further impacts gross profit by including interest costs (including senior and mezzanine secured credit facilities) attributable to homes sold during a reporting period. Offerpad believes these measures facilitate meaningful period over period comparisons and illustrate Offerpad’s ability to generate returns on assets sold after considering the costs directly related to the assets sold in a presented period.
Adjusted Gross Profit, Contribution Profit and Contribution Profit After Interest (and related margins) are supplemental measures of Offerpad’s operating performance and have limitations as analytical tools. For example, these measures include costs that were recorded in prior periods under GAAP and exclude, in connection with homes held in real estate inventory at the end of the period, costs required to be recorded under GAAP in the same period.
Accordingly, these measures should not be considered in isolation or as a substitute for analysis of Offerpad’s results as reported under GAAP. Offerpad includes a reconciliation of these measures to the most directly comparable GAAP financial measure, which is gross profit.
Adjusted Gross Profit / Margin
Offerpad calculates Adjusted Gross Profit as gross profit under GAAP adjusted for (1) net real estate inventory valuation adjustment plus (2) interest expense associated with homes sold in the
presented period and recorded in cost of revenue. Net real estate inventory valuation adjustment is calculated by adding back the real estate inventory valuation adjustment charges recorded during the period on homes that remain in real estate inventory at period end and subtracting the real estate inventory valuation adjustment charges recorded in prior periods on homes sold in the current period. Offerpad defines Adjusted Gross Margin as Adjusted Gross Profit as a percentage of revenue.
Offerpad views this metric as an important measure of business performance, as it captures gross margin performance isolated to homes sold in a given period and provides comparability across reporting periods. Adjusted Gross Profit helps management assess performance across the key phases of processing a home (acquisitions, renovations, and resale) for a specific resale cohort.
Contribution Profit / Margin
Offerpad calculates Contribution Profit as Adjusted Gross Profit, minus (1) direct selling costs incurred on homes sold during the presented period, minus (2) holding costs incurred in the current period on homes sold during the period recorded in sales, marketing, and operating, minus (3) holding costs incurred in prior periods on homes sold in the current period recorded in sales, marketing, and operating, plus (4) other income, net which is primarily comprised of interest income earned on our cash and cash equivalents and fair value adjustments of derivative financial instruments. The composition of Offerpad’s holding costs is described in the footnotes to the reconciliation table below. Offerpad defines Contribution Margin as Contribution Profit as a percentage of revenue.
Offerpad views this metric as an important measure of business performance as it captures the unit level performance isolated to homes sold in a given period and provides comparability across reporting periods. Contribution Profit helps management assess inflows and outflow directly associated with a specific resale cohort.
Contribution Profit / Margin After Interest
Offerpad defines Contribution Profit After Interest as Contribution Profit, minus (1) interest expense associated with homes sold in the presented period and recorded in cost of revenue, minus (2) interest expense associated with homes sold in the presented period, recorded in costs of sales, and previously excluded from Adjusted Gross Profit, and minus (3) interest expense under Offerpad’s senior and mezzanine secured credit facilities and other senior secured debt incurred on homes sold during the period. This includes interest expense recorded in prior periods in which the sale occurred. Offerpad’s senior and mezzanine secured credit facilities and other senior secured debt are secured by their homes in real estate inventory and drawdowns are made on a per-home basis at the time of purchase and are required to be repaid at the time the homes are sold. Offerpad defines Contribution Margin After Interest as Contribution Profit After Interest as a percentage of revenue.
Offerpad views this metric as an important measure of business performance. Contribution Profit After Interest helps management assess Contribution Margin performance, per above, when fully burdened with costs of financing.
The following table presents a reconciliation of Offerpad’s Adjusted Gross (Loss) Profit, Contribution (Loss) Profit and Contribution (Loss) Profit After Interest to Offerpad’s Gross (Loss) Profit, which is the most directly comparable GAAP measure, and Contribution (Loss) Profit Per Home Sold and Contribution (Loss) Profit After Interest Per Home Sold to Offerpad’s Gross (Loss) Profit Per Home Sold, which is the most directly comparable GAAP measure, for the periods indicated:
| Three Months Ended | Year Ended<br>December 31, | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except percentages and homes sold, unaudited) | December 31,2024 | September 30,2024 | December 31,2023 | 2024 | 2023 | ||||||||||
| Gross profit (GAAP) | $ | 10,589 | **** | $ | 17,140 | **** | $ | 16,692 | **** | $ | 72,195 | **** | $ | 70,181 | **** |
| Gross margin | 6.1 | % | 8.2 | % | 6.9 | % | 7.9 | % | 5.3 | % | |||||
| Homes sold | 503 | 615 | 712 | 2,707 | 3,674 | ||||||||||
| Gross profit per home sold | $ | 21.1 | **** | $ | 27.9 | **** | $ | 23.4 | **** | $ | 26.7 | **** | $ | 19.1 | **** |
| Adjustments: | |||||||||||||||
| Real estate inventory valuation adjustment - current period ^(1)^ | 2,457 | 848 | 565 | 2,953 | 837 | ||||||||||
| Real estate inventory valuation adjustment - prior period ^(2)^ | (592 | ) | (535 | ) | (713 | ) | (793 | ) | (58,125 | ) | |||||
| Interest expense capitalized ^(3)^ | 1,315 | 1,367 | 964 | 5,771 | 7,234 | ||||||||||
| Adjusted gross profit | $ | 13,769 | **** | $ | 18,820 | **** | $ | 17,508 | **** | $ | 80,126 | **** | $ | 20,127 | **** |
| Adjusted gross margin | 7.9 | % | 9.0 | % | 7.3 | % | 8.7 | % | 1.5 | % | |||||
| Adjustments: | |||||||||||||||
| Direct selling costs ^(4)^ | (5,011 | ) | (5,767 | ) | (5,829 | ) | (24,208 | ) | (35,225 | ) | |||||
| Holding costs on sales - current period^(5)(6)^ | (511 | ) | (693 | ) | (742 | ) | (3,955 | ) | (3,357 | ) | |||||
| Holding costs on sales - prior period<br>^(5)(7)^ | (556 | ) | (341 | ) | (285 | ) | (581 | ) | (2,166 | ) | |||||
| Other income, net ^(8)^ | 476 | 512 | 1,065 | 2,357 | 6,149 | ||||||||||
| Contribution profit (loss) | $ | 8,167 | **** | $ | 12,531 | **** | $ | 11,717 | **** | $ | 53,739 | **** | $ | (14,472 | ) |
| Contribution margin | 4.7 | % | 6.0 | % | 4.9 | % | 5.8 | % | (1.1 | %) | |||||
| Homes sold | 503 | 615 | 712 | 2,707 | 3,674 | ||||||||||
| Contribution profit (loss) per home sold | $ | 16.2 | **** | $ | 20.4 | **** | $ | 16.5 | **** | $ | 19.9 | **** | $ | (3.9 | ) |
| Adjustments: | |||||||||||||||
| Interest expense capitalized ^(3)^ | (1,315 | ) | (1,367 | ) | (964 | ) | (5,771 | ) | (7,234 | ) | |||||
| Interest expense on homes sold - current period<br>^(9)^ | (1,481 | ) | (1,865 | ) | (2,041 | ) | (13,869 | ) | (15,289 | ) | |||||
| Interest expense on homes sold - prior period<br>^(10)^ | (2,629 | ) | (1,687 | ) | (1,466 | ) | (2,976 | ) | (13,924 | ) | |||||
| Contribution profit (loss) after interest | $ | 2,742 | **** | $ | 7,612 | **** | $ | (7,246 | ) | $ | 31,123 | **** | $ | (50,919 | ) |
| Contribution margin after interest | 1.6 | % | 3.7 | % | 3.0 | % | 3.4 | % | (3.9 | %) | |||||
| Homes sold | 503 | 615 | 712 | 2,707 | 3,674 | ||||||||||
| Contribution profit (loss) after interest per home sold | $ | 5.5 | **** | $ | 12.4 | **** | $ | 10.2 | **** | $ | 11.5 | **** | $ | (13.9 | ) |
| (1) | Real estate inventory valuation adjustment – current period is the real estate inventory valuation<br>adjustments recorded during the period presented associated with homes that remain in real estate inventory at period end. | ||||||||||||||
| --- | --- | ||||||||||||||
| (2) | Real estate inventory valuation adjustment – prior period is the real estate inventory valuation<br>adjustments recorded in prior periods associated with homes that sold in the period presented. | ||||||||||||||
| --- | --- | ||||||||||||||
| (3) | Interest expense capitalized represents all interest related costs, including senior and mezzanine secured<br>credit facilities, incurred on homes sold in the period presented that were capitalized and expensed in cost of sales at the time of sale. | ||||||||||||||
| --- | --- | ||||||||||||||
| (4) | Direct selling costs represents selling costs incurred related to homes sold in the period presented. This<br>primarily includes broker commissions and title and escrow closing fees. | ||||||||||||||
| --- | --- | ||||||||||||||
| (5) | Holding costs primarily include insurance, utilities, homeowners association dues, property taxes, cleaning,<br>and maintenance costs. | ||||||||||||||
| --- | --- | ||||||||||||||
| (6) | Represents holding costs incurred on homes sold in the period presented and expensed to Sales, marketing, and<br>operating on the Condensed Consolidated Statements of Operations. | ||||||||||||||
| --- | --- | ||||||||||||||
| (7) | Represents holding costs incurred in prior periods on homes sold in the period presented and expensed to Sales,<br>marketing, and operating on the Condensed Consolidated Statements of Operations. | ||||||||||||||
| --- | --- | ||||||||||||||
| (8) | Other income, net principally represents interest income earned on our cash and cash equivalents and fair value<br>adjustments of derivative financial instruments. | ||||||||||||||
| --- | --- | ||||||||||||||
| (9) | Represents both senior and mezzanine interest expense incurred on homes sold in the period presented and<br>expensed to interest expense on the Condensed Consolidated Statements of Operations. | ||||||||||||||
| --- | --- | ||||||||||||||
| (10) | Represents both senior and mezzanine secured credit facilities interest expense incurred in prior periods on<br>homes sold in the period presented and expensed to interest expense on the Condensed Consolidated Statements of Operations. | ||||||||||||||
| --- | --- |
AdjustedNet Income (Loss) and Adjusted EBITDA
Offerpad also presents Adjusted Net Income (Loss) and Adjusted EBITDA, which are non-GAAP financial measures, which the management team uses to assess Offerpad’s underlying financial performance. Offerpad believes these measures provide insight into period over period performance, adjusted for non-recurring or non-cash items.
Offerpad calculates Adjusted Net Income (Loss) as GAAP Net Income (Loss) adjusted for the change in fair value of warrant liabilities. Offerpad defines Adjusted Net Income (Loss) Margin as Adjusted Net Income (Loss) as a percentage of revenue.
Offerpad calculates Adjusted EBITDA as Adjusted Net Income (Loss) adjusted for interest expense, amortization of capitalized interest, taxes, depreciation and amortization and stock-based compensation expense. Offerpad defines Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue.
Adjusted Net Income (Loss) and Adjusted EBITDA are supplemental to Offerpad’s operating performance measures calculated in accordance with GAAP and have important limitations. For example, Adjusted Net Income (Loss) and Adjusted EBITDA exclude the impact of certain costs required to be recorded under GAAP and could differ substantially from similarly titled measures presented by other companies in Offerpad’s industry or companies in other industries. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of Offerpad’s results as reported under GAAP.
The following table presents a reconciliation of Offerpad’s Adjusted Net Income (Loss) and Adjusted EBITDA to their GAAP Net Income (Loss), which is the most directly comparable GAAP measure, for the periods indicated:
| Three Months Ended | Year Ended<br>December 31, | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except percentages, unaudited) | December 31,2024 | September 30,2024 | December 31,2023 | 2024 | 2023 | ||||||||||
| Net loss (GAAP) | $ | (17,325 | ) | $ | (13,537 | ) | $ | (15,441 | ) | $ | (62,159 | ) | $ | (117,218 | ) |
| Net loss margin | (9.9 | %) | (6.5 | %) | (6.4 | %) | (6.8 | %) | (8.9 | %) | |||||
| Change in fair value of warrant liabilities | 109 | (14 | ) | 109 | (240 | ) | (68 | ) | |||||||
| Adjusted net loss | $ | (17,216 | ) | $ | (13,551 | ) | $ | (15,332 | ) | $ | (62,399 | ) | $ | (117,286 | ) |
| Adjusted net loss margin | (9.9 | %) | (6.5 | %) | (6.4 | %) | (6.8 | %) | (8.9 | %) | |||||
| Adjustments: | |||||||||||||||
| Interest expense | 4,084 | 5,114 | 5,154 | 18,684 | 18,859 | ||||||||||
| Amortization of capitalized interest<br>^(1)^ | 1,315 | 1,367 | 964 | 5,771 | 7,234 | ||||||||||
| Income tax (benefit) expense | (62 | ) | 24 | (8 | ) | 31 | 163 | ||||||||
| Depreciation and amortization | 147 | 150 | 172 | 611 | 728 | ||||||||||
| Amortization of stock-based compensation | 249 | 715 | 2,000 | 8,080 | 7,915 | ||||||||||
| Adjusted EBITDA | $ | (11,483 | ) | $ | (6,181 | ) | $ | (7,050 | ) | $ | (29,222 | ) | $ | (82,387 | ) |
| Adjusted EBITDA margin | (6.6 | %) | (3.0 | %) | (2.9 | %) | (3.2 | %) | (6.3 | %) | |||||
| (1) | Amortization of capitalized interest represents all interest related costs, including senior and mezzanine<br>secured interest related costs, incurred on homes sold in the period presented that were capitalized and expensed in cost of sales at the time of sale. | ||||||||||||||
| --- | --- |
EX-99.2
Exhibit 99.2
Letter to shareholders Q4 2024
A FEW THOUGHTS FROM BRIAN Dear Shareholders, In the fourth quarter, Offerpad’s revenue exceeded the midpoint of our guidance, driven by a balanced mix of offerings, including our Cash Offer and asset-light services such as our B2B Renovate business, Direct+ institutional buyer program, and Agent Partnership Program. This success came despite broader market challenges like historically low residential resale volumes, affordability constraints, and shifting industry commission structures. Throughout these conditions, we remain focused on delivering real estate solutions for consumers and partners while making meaningful progress towards building a sustainable, long-term business. Key highlights from the quarter include growth in asset-light services, continued expansion of our Agent Partnership Program, and improvements in operating efficiency. Customer engagement remained strong, with a 95% customer satisfaction score and steady customer offer request volume. These trends are positioning us well to achieve Adjusted EBITDA profitability, while ensuring financial sustainability across different market conditions. For the past two years, and particularly in recent quarters, we have prioritized returning to positive earnings and cash flow. Given the market’s trajectory, we adjusted our approach to enhance revenue diversity, refine acquisition strategies, and optimize cost structures. This includes aligning inventory management with return objectives, broadening revenue sources through additional service offerings, and implementing cost efficiencies to strengthen operational resilience. These initiatives have contributed to a more agile and efficient organization. By strategically moderating acquisition volumes in the latter half of the year, we maintained a portfolio of high-quality inventory. Additionally, our expansion into asset-light services has provided stability in contribution margins beyond our core Cash Offer business. Continued process improvements and cost-saving measures have further supported progress toward profitability, even in a lower transaction volume environment. Looking ahead, we are preparing for an expected increase in market activity by strategically expanding our buy-box criteria. We are focusing on acquiring specific types of homes in targeted areas where we see strong return potential. We have enhanced how we deliver offers and engage with sellers, allowing customers to receive an estimated offer range within minutes and schedule their inspection instantly. This shift reduces multiple touch points, giving customers more control over timing and decision-making. Progress in our Agent Partnership Program continues to exceed expectations, with the Pro Tier growing quarterly requests and acquisitions significantly. Offerpad Renovate remains a strong line of business, achieving another strong quarter with 187 completed projects, generating over $4 million in revenue, which brought 2024 total revenue to more than $18 million, nearly 50% annual growth. Overall, we have remained focused on our strategic priorities, balancing short-term adjustments with long-term positioning. By diversifying our revenue mix, and improving operational efficiency, we are well-positioned for the future. Sincerely, Brian Bair Chairman & CEO Q4 2024 1
TOTAL REVENUE ($M) & HOMES ACQUIRED $300 $285 1,200 $251 $250 $240 1,000 $208 831 $200 806 800 $174 678 $150 600 422 $100 384 400 $50 200 $0 — Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 RETURNS PER HOME SOLD Gross Profit per Home Sold Contribution Profit After Interest per Home Sold $35K $30K $25K $20K $15K $10K $5K $0K Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q4 2024 2
NET INCOME (LOSS), ADJ. NET INCOME (LOSS) & ADJ. EBITDA ($M) Net Income (Loss) Adj. Net Income (Loss) Adj. EBITDA ($4.4) ($6.2) ($7.0) ($7.1) ($11.5) ($13.8) ($13.5) ($15.4) ($13.8) ($13.6) ($15.3) ($17.5) ($17.3) ($17.2) ($17.9) Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 2024 TOTAL CONTRIBUTION MARGIN AFTER INTEREST PER HOME SOLD $31k $(3k) -1.0% $(11k) -3.3% $16k 9.0% $4k $11k $8k 1.1% 4.7% 3.4% 2.3% Co in Total Net Sales s Holding Selling Contribution Co Contribution in Other T Contribution n Margin After Proceeds Costs Costs Margin Services MarMargin After st Interest Interest See Appendix for a reconciliation to the most directly comparable GAAP measure and additional information Q4 2024 3
Traction in Renovations Since 2015, Offerpad’s core business model has been buying, renovating, and selling homes. Delivering efficient and quality renovations has always been a significant contributor to the performance of our portfolio of properties. We are very proud of our commitment to excellence when it comes to our renovations, considering we utilize in-house talent and vetted external specialists to increase quality and control. OFFERPAD-OWNED PORTFOLIO RENOVATION IMPACT SINCE INCEPTION Q4 2024 ~37k $22k Renovations completed Average cost of renovations completed +$645m 25 days Invested into improving properties Average time for renovation completion Our expertise in renovations speaks for itself. Over time, investor clients we’ve sold homes to requested we renovate homes they owned, knowing we deliver efficient and quality renovations. To meet that need, we built Offerpad Renovate , a sophisticated renovation operation that leverages our existing teams and technology, such as Reno Captain, to offer stand-alone renovation services to clients who need renovations done at scale. OFFERPAD RENOVATE → THIRD PARTY RENOVATION SERVICES Q4 2024 HIGHLIGHTS 2024 HIGHLIGHTS 187 1,096 Total projects completed Total projects completed $4.1m $18.1m Total revenue Total revenue $22k $16.5k Average revenue per project Average revenue per project 17 21 Markets with projects completed Markets with projects completed 1.9 1.9 Average days in renovation per $1k spent Average days in renovation per $1k spent Q4 2024 4
Q1 2025 Outlook HOMES SOLD REVENUE ADJ. EBITDA1 450 to 500 $150m to $170m Slightly Better 1. See Non-GAAP financial measures in Appendix for an explanation of why a reconciliation of this guidance cannot be provided. Q4 2024 5
APPENDIX Forward-Looking Statements Certain statements in this press release may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Offerpad’s future financial or operating performance. For example, statements regarding Offerpad’s financial outlook, including homes sold, revenue and Adjusted EBITDA, for the first quarter of 2025, and expectations regarding market conditions, strategic imperatives and long-term sustainability and growth are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “pro forma,” “may,” “should,” “could,” “might,” “plan,” “possible,” “project,” “strive,” “budget,” “forecast,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “potential” or “continue,” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that may impact such forward-looking statements include, but are not limited to, Offerpad’s ability to respond to general economic conditions; the health of the U.S. residential real estate industry; Offerpad’s ability to grow market share in its existing markets or any new markets it may enter; Offerpad’s ability to manage its growth and its costs structure effectively; Offerpad’s ability to accurately value and manage real estate inventory, maintain an adequate and desirable supply of real estate inventory, and manage renovations; Offerpad’s ability to successfully launch new product and service offerings, and to manage, develop and refine its technology platform; Offerpad’s ability to maintain and enhance its products and brand, and to attract customers; Offerpad’s ability to achieve and maintain profitability in the future; and the success of strategic relationships with third parties. These and other important factors discussed under the caption “Risk Factors” in Offerpad’s Annual Report on Form 10-K for the year ended December 31, 2024 to be filed with the Securities and Exchange Commission on or about February 25, 2025, and Offerpad’s other reports filed with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Offerpad and its management, are inherently uncertain. Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Offerpad undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Q4 2024 6
APPENDIX OFFERPAD SOLUTIONS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended December 31, Year Ended December 31, (in thousands, except per share data) 2024 2023 2024 2023 (Unaudited) Revenue $ 174,272 $ 240,458 $ 918,819 $ 1,314,412 Cost of revenue 163,683 223,766 846,624 1,244,231 Gross profit 10,589 16,692 72,195 70,181 Operating expenses: Sales, marketing and operating 13,545 17,932 73,091 116,558 General and administrative 9,874 8,775 40,621 50,091 Technology and development 840 1,236 4,524 7,945 Total operating expenses 24,259 27,943 118,236 174,594 Loss from operations (13,670) (11,251) (46,041) (104,413) Other income (expense): Change in fair value of warrant liabilities (109) (109) 240 68 Interest expense (4,084) (5,154) (18,684) (18,859) Other income, net 476 1,065 2,357 6,149 Total other expense (3,717) (4,198) (16,087) (12,642) Loss before income taxes (17,387) (15,449) (62,128) (117,055) Income tax benefit (expense) 62 8 (31) (163) Net loss $ (17,325) $ (15,441) $ (62,159) $ (117,218) Net loss per share, basic $ (0.63) $ (0.57) $ (2.27) $ (4.44) Net loss per share, diluted $ (0.63) $ (0.57) $ (2.27) $ (4.44) Weighted average common shares outstanding, 27,478 27,292 27,410 26,385 basic Weighted average common shares outstanding, 27,478 27,292 27,410 26,385 diluted Q4 2024 7
APPENDIX OFFERPAD SOLUTIONS INC. CONDENSED CONSOLIDATED BALANCE SHEETS As of (in thousands, except par value per share) (Unaudited) December 31, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 43,018 $ 75,967 Restricted cash 30,608 3,967 Accounts receivable 3,848 9,935 Real estate inventory 214,174 276,500 Prepaid expenses and other current assets 2,564 5,236 Total current assets 294,212 371,605 Property and equipment, net 9,127 4,517 Other non-current assets 9,714 3,572 TOTAL ASSETS $ 313,053 $ 379,694 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,922 $ 4,946 Accrued and other current liabilities 11,804 13,859 Secured credit facilities and other debt, net 195,378 227,132 Secured credit facilities and other debt—related party 41,861 30,092 Total current liabilities 250,965 276,029 Warrant liabilities 231 471 Other long-term liabilities 14,204 1,418 Total liabilities 265,400 277,918 Commitments and contingencies Stockholders’ equity: Class A common stock, $0.0001 par value; 2,000,000 shares authorized; 27,379 and 27,233 shares issued and outstanding as of December 31, 2024 and December 31, 3 3 2023, respectively Additional paid in capital 507,696 499,660 Accumulated deficit (460,046) (397,887) Total stockholders’ equity 47,653 101,776 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 313,053 $ 379,694 Q4 2024 8
APPENDIX OFFERPAD SOLUTIONS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, ($ in thousands) (Unaudited) 2024 2023 Cash flows from operating activities: Net loss $ (62,159) $ (117,218) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 611 728 Amortization of debt financing costs 1,786 4,343 Real estate inventory valuation adjustment 4,472 8,937 Stock-based compensation 8,080 7,915 Change in fair value of warrant liabilities (240) (68) Loss on disposal of property and equipment 105 76 Change in fair value of derivative instruments — (2,124) Changes in operating assets and liabilities: Accounts receivable 6,087 (7,585) Real estate inventory 57,854 379,260 Prepaid expenses and other assets 4,452 3,733 Accounts payable (3,024) 299 Accrued and other liabilities 2,809 (16,664) Net cash provided by operating activities 20,833 261,632 Cash flows from investing activities: Purchases of property and equipment (5,408) (127) Proceeds from sale of property and equipment 82 — Purchases of derivative instruments — (2,569) Proceeds from sale of derivative instruments — 4,681 Net cash (used in) provided by investing activities (5,326) 1,985 Cash flows from financing activities: Borrowings from credit facilities and other debt 807,926 875,559 Repayments of credit facilities and other debt (829,461) (1,286,795) Payment of debt financing costs (236) (1,948) Proceeds from exercise of stock options 33 53 Payments for taxes related to stock-based awards (77) (78) Borrowings from warehouse lending facility — 25,193 Repayments of warehouse lending facility — (25,193) Proceeds from issuance of pre-funded warrants — 90,000 Proceeds from exercise of pre-funded warrants — 11 Issuance cost of pre-funded warrants — (784) Net cash used in financing activities (21,815) (323,982) Net change in cash, cash equivalents and restricted cash (6,308) (60,365) Cash, cash equivalents and restricted cash, beginning of period 79,934 140,299 Cash, cash equivalents and restricted cash, end of period $ 73,626 79,934 Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet: Cash and cash equivalents $ 43,018 75,967 Restricted cash 30,608 3,967 Total cash, cash equivalents and restricted cash $ 73,626 79,934 Supplemental disclosure of cash flow information: Cash payments for interest $ 24,464 24,730 Q4 2024 9
APPENDIX Non-GAAP Financial Measures In addition to Offerpad’s results of operations above, Offerpad reports certain financial measures that are not required by, or presented in accordance with, U.S. generally accepted accounting principles (“GAAP”). These measures have limitations as analytical tools when assessing Offerpad’s operating performance and should not be considered in isolation or as a substitute for GAAP measures, including gross profit and net income. Offerpad may calculate or present its non-GAAP financial measures differently than other companies who report measures with similar titles and, as a result, the non-GAAP financial measures Offerpad reports may not be comparable with those of companies in Offerpad’s industry or in other industries. Offerpad has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted net income (loss) within this press release because Offerpad is unable to calculate certain reconciling items without making unreasonable efforts. These items, which include, but are not limited to, stock-based compensation with respect to future grants and forfeitures, could materially affect the computation of forward-looking net income (loss), are inherently uncertain and depend on various factors, some of which are outside of Offerpad’s control. Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins) To provide investors with additional information regarding Offerpad’s margins, Offerpad has included Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins), which are non-GAAP financial measures. Offerpad believes that Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest are useful financial measures for investors as they are used by management in evaluating unit level economics and operating performance across Offerpad’s markets. Each of these measures is intended to present the economics related to homes sold during a given period. Offerpad does so by including revenue generated from homes sold (and ancillary services) in the period and only the expenses that are directly attributable to such home sales, even if such expenses were recognized in prior periods, and excluding expenses related to homes that remain in real estate inventory as ofthe end of the period presented. Contribution Profit provides investors a measure to assess Offerpad’s ability to generate returns on homes sold during a reporting period after considering home acquisition costs, renovation and repair costs, and adjusting for holding costs and selling costs. Contribution Profit After Interest further impacts gross profit by including interest costs (including senior and mezzanine secured credit facilities) attributable to homes sold during a reporting period. Offerpad believes these measures facilitate meaningful period over period comparisons and illustrate Offerpad’s ability to generate returns on assets sold after considering the costs directly related to the assets sold in a presented period. Adjusted Gross Profit, Contribution Profit and Contribution Profit After Interest (and related margins) are supplemental measures of Offerpad’s operating performance and have limitations as analytical tools. For example, these measures include costs that were recorded in prior periods under GAAP and exclude, in connection with homes held in real estate inventory at the end of the period, costs required to be recorded under GAAP in the same period. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of Offerpad’s results as reported under GAAP. Offerpad includes a reconciliation of these measures to the most directly comparable GAAP financial measure, which is gross profit. Q4 2024 10
APPENDIX Adjusted Gross Profit / Margin Offerpad calculates Adjusted Gross Profit as gross profit under GAAP adjusted for (1) net real estate inventory valuation adjustment plus (2) interest expense associated with homes sold in the presented period and recorded in cost of revenue. Net real estate inventory valuation adjustment is calculated by adding back the real estate inventory valuation adjustment charges recorded during the period on homes that remain in real estate inventory at period end and subtracting the real estate inventory valuation adjustment charges recorded in prior periods on homes sold in the current period. Offerpad defines Adjusted Gross Margin as Adjusted Gross Profit as a percentage of revenue. Offerpad views this metric as an important measure of business performance, as it captures gross margin performance isolated to homes sold in a given period and provides comparability across reporting periods. Adjusted Gross Profit helps management assess performance across the key phases of processing a home (acquisitions, renovations, and resale) for a specific resale cohort. Contribution Profit / Margin Offerpad calculates Contribution Profit as Adjusted Gross Profit, minus (1) direct selling costs incurred on homes sold during the presented period, minus (2) holding costs incurred in the current period on homes sold during the period recorded in sales, marketing, and operating, minus (3) holding costs incurred in prior periods on homes sold in the current period recorded in sales, marketing, and operating, plus (4) other income, net which is primarily comprised of interest income earned on our cash and cash equivalents and fair value adjustments of derivative financial instruments. The composition of Offerpad’s holding costs is described in the footnotes to the reconciliation table below. Offerpad defines Contribution Margin as Contribution Profit as a percentage of revenue. Offerpad views this metric as an important measure of business performance as it captures the unit level performance isolated to homes sold in a given period and provides comparability across reporting periods. Contribution Profit helps management assess inflows and outflow directly associated with a specific resale cohort. Contribution Profit / Margin After Interest Offerpad defines Contribution Profit After Interest as Contribution Profit, minus (1) interest expense associated with homes sold in the presented period and recorded in cost of revenue, minus (2) interest expense associated with homes sold in the presented period, recorded in costs of sales, and previously excluded from Adjusted Gross Profit, and minus (3) interest expense under Offerpad’s senior and mezzanine secured credit facilities and other senior secured debt incurred on homes sold during the period. This includes interest expense recorded in prior periods in which the sale occurred. Offerpad’s senior and mezzanine secured credit facilities and other senior secured debt are secured by their homes in real estate inventory and drawdowns are made on a per-home basis at the time of purchase and are required to be repaid at the time the homes are sold. Offerpad defines Contribution Margin After Interest as Contribution Profit After Interest as a percentage of revenue. Offerpad views this metric as an important measure of business performance. Contribution Profit After Interest helps management assess Contribution Margin performance, per above, when fully burdened with costs of financing. Q4 2024 11
APPENDIX The following tables present a reconciliation of Offerpad’s Adjusted Gross (Loss) Profit, Contribution (Loss) Profit and Contribution (Loss) Profit After Interest to Offerpad’s Gross (Loss) Profit, which is the most directly comparable GAAP measure, and Contribution (Loss) Profit Per Home Sold and Contribution (Loss) Profit After Interest Per Home Sold to Offerpad’s Gross (Loss) Profit Per Home Sold, which is the most directly comparable GAAP measure, for the periods indicated: Three Months Ended (in thousands, except percentages December September June March December 31, and homes sold, unaudited) 31, 2024 30, 2024 30, 2024 31, 2024 2023 Gross profit $ 10,589 $ 17,140 $ 21,871 $ 22,595 $ 16,692 Gross margin 6.1% 8.2% 8.7% 7.9% 6.9% Homes sold 503 615 742 847 712 Gross profit per home sold 21.1 27.9 29.5 26.7 23.4 Adjustments: Inventory valuation adjustment – 2,457 848 544 623 565 current period Inventory valuation adjustment— (592) (535) (540) (645) (713) prior period Interest expense capitalized 1,315 1,367 1,420 1,669 964 Adjusted gross profit $ 13,769 $ 18,820 $ 23,295 $ 24,242 $ 17,508 Adjusted gross margin 7.9% 9.0% 9.3% 8.5% 7.3% Adjustments: Direct selling costs (5,011) (5,767) (6,461) (6,969) (5,829) Holding costs on sales—current period (511) (693) (622) (887) (742) Holding costs on sales—prior period (556) (341) (443) (483) (285) Other income, net 476 512 615 754 1,065 Contribution profit $ 8,167 $ 12,531 $ 16,384 $ 16,657 $ 11,717 Contribution margin 4.7% 6.0% 6.5% 5.8% 4.9% Homes sold 503 615 742 847 712 Contribution profit per home sold 16.2 20.4 22.1 19.7 16.5 Adjustments: Interest expense capitalized (1,315) (1,367) (1,420) (1,669) (964) Interest expense on homes sold – (1,481) (1,865) (2,103) (2,521) (2,041) current period Interest expense on homes sold – (2,629) (1,687) (2,133) (2,426) (1,466) prior period Contribution profit after interest $ 2,742 $ 7,612 $ 10,728 $ 10,041 $ 7,246 Contribution margin after interest 1.6% 3.7% 4.3% 3.5% 3.0% Homes sold 503 615 742 847 712 Contribution profit (loss) 5.5 12.4 14.5 11.9 10.2 after interest per home sold Q4 2024 12
APPENDIX Adjusted Net (Loss) Income and Adjusted EBITDA Offerpad also presents Adjusted Net Income (Loss) and Adjusted EBITDA, which are non-GAAP financial measures, which the management team uses to assess Offerpad’s underlying financial performance. Offerpad believes these measures provide insight into period over period performance, adjusted for non-recurring or non-cash items. Offerpad calculates Adjusted Net Income (Loss) as GAAP Net Income (Loss) adjusted for the change in fair value of warrant liabilities. Offerpad defines Adjusted Net Income (Loss) Margin as Adjusted Net Income (Loss) as a percentage of revenue. Offerpad calculates Adjusted EBITDA as Adjusted Net Income (Loss) adjusted for interest expense, amortization of capitalized interest, taxes, depreciation and amortization and stock-based compensation expense. Offerpad defines Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue. Adjusted Net Income (Loss) and Adjusted EBITDA are supplemental to Offerpad’s operating performance measures calculated in accordance with GAAP and have important limitations. For example, Adjusted Net Income (Loss) and Adjusted EBITDA exclude the impact of certain costs required to be recorded under GAAP and could differ substantially from similarly titled measures presented by other companies in Offerpad’s industry or companies in other industries. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of Offerpad’s results as reported under GAAP. The following table presents a reconciliation of Offerpad’s Adjusted Net Income (Loss) and Adjusted EBITDA to their GAAP Net Income (Loss), which is the most directly comparable GAAP measure, for the periods indicated: Three Months Ended (in thousands, except percentages, December September June March December unaudited) 31, 2024 30, 2024 30, 2024 31, 2024 31, 2023 Net loss (GAAP) $ (17,325) $ (13,537) $ (13,782) $ (17,515) $ (15,441) Net loss margin (9.9%) (6.5%) (5.5%) (6.1%) (6.4%) Change in fair value of warrant 109 (14) 9 (344) 109 liabilities Adjusted net loss $ (17,216) $ (13,551) $ (13,773) $ (17,859) $ (15,332) Adjusted net loss margin (9.9%) (6.5%) (5.5%) (6.3%) (6.4%) Adjustments: Interest expense 4,084 5,114 4,581 4,905 5,154 Amortization of capitalized 1,315 1,367 1,420 1,669 964 interest(1) Income tax (benefit) expense (62) 24 (54) 123 (8) Depreciation and amortization 147 150 148 166 172 Amortization of stock-based 249 715 3,249 3,867 2,000 compensation Adjusted EBITDA (11,483) (6,181) (4,429) (7,129) (7,050) Adjusted EBITDA margin (6.6%) (3.0%) (1.8%) (2.5%) (2.9%) 1. Amortization of capitalized interest represents all interest related costs, including senior and mezzanine interest related costs, incurred on homes sold in the period presented that were capitalized and expensed in cost of sales at the time of sale. Q4 2024 13
Q4 2024 LETTER TO SHAREHOLDERS investor.offerpad.com