Opendoor Technologies Aktie

Okay. All right. We're going to get started. I'm Dae Lee, JPMorgan's Internet analyst, and we're pleased to have here with us Opendoor's CEO, Kaz Nejatian.

That was good. That was as good as anyone does that last name, man.

Okay. That's great. I practiced. Okay. So Opendoor is the leading digital platform for homes, buying and selling powered by AI-driven pricing and operations. In 1Q, Open had contracts to purchase over 5,000 homes which is a lot, probably the biggest home purchaser in the U.S. And it's the highest acquisition level since 2022. And Kaz became CEO in Fall 2025 after time as COO at Shopify and leadership positions at PayPal and LinkedIn, a builder and a tech native, and he is the architect behind Opendoor 2.0, a faster volume-driven AI-powered model. And we'll dig into all of this today.

So Kaz, thank you for coming.

Thanks for having me, man.

All right. Let's start with how you -- or the reason why you joined Opendoor as CEO last fall? Walk us through your decision to take this role? What did you see in Open's platform, data or market positioning that convinced you this was a generation opportunity? And what was it that you felt like you could do for Opendoor?

Yes. I mean -- I honestly like -- so I had been at Shopify for 6 years, and I never thought I would leave the company. Like I thought Shopify was going to be my last job. And Opendoor felt like a flaw in the matrix. I could not believe that the whole world wasn't running towards this company because from what I was seeing from the outside, I'm like, okay, this is just there's something wrong about it.

Let me talk through why I think that was. The first is, look, let me just broadly talk about the mission. Kids that grow up in homes that their parents own have better life outcomes. When people buy homes, crime goes down. Like it is as close to [ panacea ] as we have in the world. Owning a home is incredibly important. The mission felt like one that I wanted to dedicate my life to and that could be a deeply meaningful one. And second, I'm a start-up founder, like I'm an honest to goodness nerd, I learn how to speak English by coding.

And the thing you learn after you have a few startups is that nothing beats native intent and proprietary data. Native intent and proprietary data like that's 2/3 of the ball game. And Opendoor has had stupid native intent, like in core markets of Opendoor, 1 in 5 Americans who sell a home tie itself to Opendoor. It's just like approximately a bajillion dollars worth of marketing spend wouldn't get you that. So it's a very real thing. And the data moat of Opendoor is one that nerds love. Like it's the single largest asset class in the world and Opendoor has like proprietary data on it that no one else does and can't get. So that's the second thing.

And the third thing that just like drove me nuts was look, I think there's a lot -- a lot of people say a lot of words about AI, but like a lot of it's become like buzzword bingo for CEOs, and it's just deeply boring. But the cost of a transaction in real estate is the single highest human labor cost per transaction in the world. Like there's no transaction that costs this much in the world. So if you think of like the companies that AI should be helpful to their native mission on, the mission is important, there's proprietary data native intent and the company seems to have been built perfectly expecting that AI would fall from heaven.

So I think those 3 things have just been like, I just couldn't get out of my head. I also look at -- I think it's well leaked that I consider taking the company private that people have talked about it. But I'm genuinely like very, very excited about this, and I never thought I would leave Shopify.

Okay. Yes, I agree. So the intent, the data and the tech foundation, I mean I agree that those are all important things for Opendoor. And I felt like real estate industry, covering it from outside in, there's an industry word the -- like tech disruption just has not worked like it has in other industries. And I felt like Opendoor is in that position as all of the building blocks. So like what do you, I guess with that said, like what -- like coming in, like what were the 2 or 3 most impactful changes that you've made so those building blocks can start clicking together and propel Opendoor in a newer direction?

Yes. Look, can you just -- that you know me a bit, so you know I tend to go on a rant. So stop me if you want me to stop. But I want to actually talk about the first thing first, which is in the history of the internet, every asset class that has gone online has gone through its same progression. Like first, internet solved discovery, then internet solved trust, then internet solved underwriting. The best way to think about it is actually is e-commerce, eBay solved discovery, PayPal solved trust, Amazon solved all 3, like short-term home rentals, Craiglist solved discovery, Airbnb solved discovery, trust, underwrite. Like this has been the pattern. But basically, all that's happened in real estate is the flyers that used to exist in offices of real estate agents have now been jammed into a browser. And everyone is like, cool, we're done. That's just not how the internet works, like someone is going to solve all 3 of these things. I think it will be Opendoor. And it's very clear like where value accrues. But like -- I don't -- like I'm not a guy that talks like this, but it's like been clear.

But the single biggest change we've made at Opendoor has not really been like a change in pixels or underwriting, although we've made lots of changes in pixels underwriting. It's a change in the company's stance. I think this is why the market appropriately valued Opendoor a year ago, which is Opendoor's key decision -- Opendoor is trying to answer a year ago was what will home prices be a year from now? Like the company was basically a prop desk buying homes. And predicting what home prices will be a year from now is about as fruitful an endeavor as predicting what the lottery will be a year from now. Like it's just dumb thing trying to answer. You think like it's just not a useful value. We can't get value out of it in a real way as a company like ours.

What we have changed is we no longer try to be good about predicting asset prices a year from now. We try to be good about predicting when will this home sell. We try to be home about -- we try to be right about time, not right about value. We're like much more of a market maker than a prop desk. And when -- let's imagine when -- if the market, I mean, a bunch of folks here run hedge funds. If the market is going down and you are a long-only hedge fund, what do you do? You just like withdraw from the market, right? But if you're a market maker, what do you do? Just turn faster. If your market is pulling down, just turn faster and you'll be fine. And that has been the key underlying fact about Opendoor.

Like if you look at Opendoor, 6 months ago or I guess, 2 quarters ago, over 50% of our homes have been sitting in a market for more than 120 days. We talked last quarter, that number is less than 10% now or 10% now. So that's -- we have significantly decreased the amount of time we hold a home for. And that has allowed us to buy a lot more homes. And this is what you're seeing. We publish our numbers every week. I think we're the only company in the open market that does that. We are accountable that opendoor.com and see our markets. And you see that our acquisitions have 6x year-over-year, and we're like beating seasonality right now. So that's been the biggest change.

Okay. That's good to hear. But I guess there's a disconnect or there could be a disconnect from what you're seeing from within and I guess, what the market is seeing from outside. So where do you think the biggest disconnect is right now? And where do you -- I guess, is there like a timeline or time frame in which we might be able to see what you're seeing from within? There's clearly positive changes happen in terms of volume acquisition, but I think people value seeing that in the P&L -- investors. So just curious how you're thinking about that.

I mean, look, I'm not a good investor. I should not have your job. I bought 2 stocks in my life, Shopify and Opendoor. So like not -- I'm not that guy, but I do think there's a very real thing, which -- let me tell you the thing we have said publicly. So like, it's true. We -- I came in and I said our goal was adjusted net income breakeven on a forward 12-month basis end of this year, right? We announced last earnings that Opendoor is now adjusted EBITDA breakeven even on a 12-month go-forward basis. So that's what we're working towards. And the -- you have seen margin improve every single month since I took over. October was better than September. November was better than October, December is like every single month. And we said we're -- we guided that our margin will be between 5% and 7%, which is what we thought we said we should be in order for the company to work. So all of the external metrics are like doing what we said they would do.

But Opendoor is a cohort business. Like the way to value Opendoor is to look at the cohorts of home we buy and what those cohorts do. And if -- and we published cohorts in the last earnings. If you look at the cohorts, they look fundamentally different than they used to do. Opendoor's cohorts used to start and then just have this massive collapse down as they sold through. We published October, November, December, January cohorts, and they're basically flat lines. They're selling faster, margin degradation is lower, margin maintenance is higher.

So I think if you're just waiting for those cohorts to bake, you should -- those cohorts will bake on the time frame we told you they will bake, like 120 days [ issues ] when they bake. And you can see like literally it flows through. But it's not magic that our margin is higher. We're buying better homes, selling them faster. That tends to increase margin. So I don't -- I actually don't know when the P&L will show the things that people wanted to show. But I can tell you, there is a very real thing that if you assume Opendoor is a company it was a year ago, your models are wrong. And the company is just fundamentally different in nature.

Okay. All right. Well, hopefully, my models are right than wrong at this point, but we'll see.

Yes, I mean I think you follow the company more closely than the average investor.

Yes. We'll let the numbers do the talking in due time. Okay. I guess moving on, so I think a critique that Opendoor has faced before was that it is highly dependent on the housing and the macro environment. Do you feel like you've made the changes? Or has there been enough changes where you feel like you've kind of disconnected the 2 where you should be able to thrive in the current environment?

Look, I mean, I think it is -- like it is folly to say macro doesn't impact Opendoor. It's just like dumb, right? It's like macro impacts everyone in retail and everyone thought [indiscernible] like a Shopify, I understand what macro does, and we have assets. So macro has a real impact.

The question is, is Opendoor defined by macro or impacted by macro? That's a real thing. And Opendoor is not defined by macro anymore. You can actually literally see it in -- we published October cohort, and you can actually literally see in other cohorts we published. Home prices have gone down about 3.5% since we bought them in October. Our margins have gone up and stayed steady, right? We are less than 1% of homes in the U.S. today. I mean, we're about 5x bigger than we were last year, this time last year, but we're still less than 1%. So we're not capped by clearance. We'll have 4 million homes trade this year, 4 million homes is plenty of homes for Opendoor to do what it needs to do. We're not assuming macro will rescue us.

But you can see we've bucked seasonality like we publish our numbers every week. Our margins have bucked macro and TAM is not constrained. So I don't -- I mean, are we impacted? Yes. But the very real thing, most CEOs would sit here and tell you that like you want where macro will help, but we're waiting for macro to recover. I am actually saying the opposite. I like the fact that we're running this company and turning it around in tough macros. I actually really like this about the company because what I saw happen in tech during the [indiscernible] era was everyone was hitting singles pretending they were hitting home runs. And like when the water went out, no one was wearing shorts. And it's like that really happened.

Like we're building the company and proving steady and increasing margins in the toughest macro. And I have -- I like this environment. Like this is where we build our muscle. And if you look at the homes we're buying, dispersion is up, dip is down, the [ impossession ] is down. So like I think we're building the right muscle, and I like this environment. I don't -- I mean I think it's odd to hope for macro do anything.

But it's hard -- like if you look at actually -- sorry, I'm just going to go on around for a second here, just because I haven't ranted enough today. If you look at world-defining companies, almost all of them were built in tough macros, almost all of them. Like let's go back in time, Carnegie Steel, Standard Oil, like more recently, Amazon, Uber, Airbnb, like tough macros are what allow you to build the muscle you require and the shape that you require such that you don't allow yourself to think you're winning when you're losing. Like this is -- Amazon is such a clear example of this. Like Amazon, the Amazon that exists today, got built in 2001. And that's -- so I like the macro we have right now.

Okay. Yes, certainly, challenge builds character. So I agree with that. So let's talk about AI a bit in that like there's been a lot of talks about how AI is impacting the industry. How do you feel like AI will, one, affect the real estate industry broadly? And two, how are you better utilizing or incorporating AI into how you guys operate at Opendoor?

I think there's like the bingo card AI CEO thing I have to do, which is like I think if you don't do it, they will take your CEO card away. But I think that's just a very like an odd boring thing. So let me just answer in the non-boring answer. Look, AI is this like manna from heaven for us, but there's a reason why it is. If you think of old SaaS software, like what was SaaS? SaaS was a discovery that you could build UX on top of a [ CRUD ] database that enforces business logic and you could increase productivity while lowering the cost of software, right? That was like the SaaS like revolution.

And if you are -- AI, if you -- with AI, like it becomes deeply odd because the business logic is no longer useful to enforce because you can literally have AI enforce it. You don't need software to enforce it and the CRUD database is less useful. Like so this is what's happened to SaaS. Like point solution SaaS is like very odd in this day and age. And this has been what we've proven. So it sounds like a long answer, so [indiscernible].

This is what we've proven. We launched a mortgage product in 6 weeks. Like we launched a mortgage product in 6 weeks with 3 engineers. We couldn't have done that with AI. That's a very real thing. I would put the penetration of AI at Opendoor against any company, not any company, any company in tech, like we're relatively AI-pilled. But structurally, for like what it will do to industry, it is the same. If you think of what AI will do, it will take human labor and make it far more efficient. And the structural knock against what we do was that it took too much human labor. That was a structural knock. The structural knock is you require too many people to do this well.

Opendoor's head count has gone down. It's public. I'm sure every hedge fund in this room scrapes LinkedIn. But our acquisitions have gone up. We used to have 11 people review every home. We now have 1 and dispersion has gone up. Margin has gone up. Like you can build a machine exoskeleton around a person such that our underwriters can review an order of magnitude more homes than they used to and be better at it.

So I think AI is for housing and for clearance to this market, like structurally a different thing. It's like trying to pretend you are in transportation before railroads existed. Like these are different markets and it will have different clearance.

And last, promise, this is last. If you look at this talent coming into Opendoor today, the ML talent and engineering talent and innovative talent, I would put it up against any company, not any company in real estate, any company in tech. And you will find that the quality that we are hiring, the work we're getting done is just insane. And I think that has been like -- now look, our sales [ AI-pilled ], yes, supported AI-pilled, yes, all the AI stuff that other people say is also true here. It's just that we're not like buying off-the-shelf randomness and pretending we're good at this.

Okay. Yes. All right. So you got the talent. Let's talk about the data advantage that Opendoor has. Like what do you feel like you -- what's most unique about what you guys see from a data perspective?

We're the single largest buyer and seller of homes in the U.S. We buy more homes than anyone else, and we see more homes than anyone else. We have pictures of more homes than anyone else. We looked at more foundations than anyone else. We are -- like you can build a really good dispersion model based on quality of roofs, like the [ umbilical ] dispersion model on foundations and clearance and demand, the slope of the driveway, like we just have data on our servers that you can scrape MLS from now to like end of time and not get relatively useful data to build a real model with.

Whereas what happened is not only do we have proprietary data, we also -- so what you need is proprietary data and the right eval model, right? You can't build a good eval model without real-time signal, right? Whether we buy a home or not buy a home, we see what happened to that home and we see it 120 days before everyone else is it. So like the guy who leads our -- we actually have a bunch of new people in our data team. One of them came from building data models for one of the largest market makers in the world in commodities. And one of them is a former Signal intelligence officers that used to track where [indiscernible] would land. And like these guys are just like having -- like you just cannot believe the amount of proprietary data on our servers.

So we're just -- like we have now -- I think it's a fair thing to say. And before I arrived, Opendoor had not run a model in shadow mode for some time. We now have multiple models running in shadow mode this week, which means you just have this amazing thing where AI competes with AI for the best vision of the world. They can back test it, which no one else can.

Okay. That's interesting. Okay. So it kind of feels like, again, you guys have all of the building blocks. And I think you said earlier, was it 1 in 5...

In our core markets, 1 in 5 sellers that sell a home come to Opendoor to sell it.

Right. So if that's the case, what do you think is preventing more sellers from selling to you guys?

Look, we are far from great at doing our job. Like we're less bad than we used to be, to be clear. Like we're just -- like we're better than we used to be, but we're very ordinary about ourselves and our opportunity. Look, if -- let's just go back 6 months because I think it's important to talk about it. Let's say, 100,000 people came that month to sell a home to Opendoor. Half of them would come in the door, we'd say, sorry, not available but you want to sell us a home. Great. Lost half.

Then we'd say, oh, your home outside our buybox, please go away. Lost another half. So I'm now down to 25%. And then we say, okay, this 25%, I will buy your home at a 20% discount to its value. And everyone else who was saying would tell us to please go away. And the people who sell us a home are people who knew something about their home that we didn't know. We're paying for negative feedback loops. It's was like amazing.

What do we do? We launched nationally. Why do we launch nationally? Because it's a really dumb idea when someone comes to you and said, I would like to deal with you for you to say, no, it's like free [ CAC ]. CAC is much more efficient. Like our marketing spend has gone down, our acquisitions have gone up. There's like no magic here. We just improved the funnel. We expanded our buybox. So we basically can now buy almost every home in the U.S. in the [ Lower 48 ] now. We expand our partnership network, so we can actually renovate almost every home in the U.S. now.

Now we shipped a product 4 weeks ago, 4 weeks ago. That tells you more information about your home that you can discover otherwise. So you can decide if it's a good deal or not if that improves conversion by double-digit percentage. So look, we don't need to spend a significant amount of money telling people Opendoor exists. We don't. We just need to be better at converting the volume that's already coming to opendoor.com. And what you have seen this significant increase in our contract, we're like up 5x, 6x, whatever, we have like 550 contracts last week in a worst housing market, isn't caused by us spending money on brand. We actually literally took our ads off TV for a while. It's just we need to be better at converting it, and we're getting better at it every single day, generally every single day, we're getting better at this.

Okay. All right. So the opportunity is already knocking on your door. You just got to open the door and let them in.

I would have killed for this when I was at Shopify, man. I would have killed to have 1 in 5 -- like my biggest problem at Shopify was going to entrepreneurs or potential entrepreneurs and they would say, what is a Shopify? It was like my biggest problem. Like Shopify was a default for choice at the time. I am shocked by the volume of people who come to Opendoor trying to sell us their home. We just need to do a better job buying these things.

Yes. Okay. That makes sense. All right. We talked a lot about the opportunity. So let's talk about some of the risk a little bit. So I mean, what are the biggest risks that you see as you go down this mission path? I guess, put differently, like what keeps you up at night? Are there any...

I have 4 kids, the youngest one of them is 2. So like kids keep me up at night.

I feel that.

I used to joke around that I sleep like a baby. I wake up every 2 hours. But I think the responsible answer to this question is this. Opendoor takes assets its class on its balance sheet. Those assets have 4 distinct risk periods. The way we're dealing with those risk periods is by shortening the number of days we're in each risk period. Like why do you have a mortgage product? Because if you come to Opendoor with a Wells Fargo mortgage, that house takes 45 days to close. If you come to Opendoor with an Opendoor mortgage, that house takes 14 days to close. There's a difference between 14 days of risk and 35 or 45 days of risk.

Why do we buy the homes we do? Because on average, we start renovations on day one right now rather than day 45, like why do we buy this [indiscernible] because we've shortened -- like that's the responsible answer, like we're taking risk and shorten the time we're in each risk for a while, so we can calculate better. But more importantly, cash now more later allows us to share that risk with our customers. So a significant portion of our asset book is now asset lighter. And you can imagine how we launch an asset-light product eventually. Those are the real answers.

But that's honestly not what keeps me up at night. That's what keeps Judd up at night. What keeps me up at night is this. I feel a depth of responsibility to the world because the worst thing you can do is take a $1 trillion opportunity and build a $1 billion business out of it and pretend you were smart. It's offensive. And lots of people go around wearing fancy watches and flying private jets, who have done that. And I judge myself not against that, but against the history of people who have solved large problems for the world.

And I don't want I don't want to wake up and have to tell my kids that story. Like I had a great job at Shopify. It was just like a dream job. I was like -- I was clearly winning. And I didn't leave it to build a small but successful business. Like we're on a mission here, and it's not like a random thing. I literally like on my first day at Opendoor, actually, that's not true, it was a Saturday, so it was before my first day at Opendoor. The first thing I changed was Opendoor's career page, you logged in, get pushed, change your career page. The career page used to say some [indiscernible] corpo word about like, what -- I don't know, [indiscernible] it used to say.

But it now says this is hard, valuable and fun, and we're on a mission to tilt the world in favor of homeowners. And it tries to convince you very hard to not come work at Opendoor. Like that's what keeps me up at night is waking up. Look, I think there's -- there are people who question who have your job and who live in hedge fund world whose job -- it is a reasonable one, which is like will Opendoor survive? That's a reasonable question for people to ask. That question has been answered in my mind. Like we've answered that question. I know where it's going. The question is, will Opendoor be the default in the world for this problem because defaults matter on the internet. That's what keeps me up -- as I'm answering this, I'm seeing our CFO at the eye of my corner, and she's like really -- doesn't like this answer. So -- but it's true. It's -- like that's what keeps me up at night.

That's fair. Yes. I mean housing is consumers' biggest asset that they purchase. So solving that challenge of ownership, I think, is an important one, too. Okay. So like based on everything we talked about, it feels like velocity at which you're purchasing and selling a home, how long you're holding those homes for are the 2 most important KPIs that you might be tracking? Is there anything else that you are looking...

If I were outside Opendoor, I would track the following things to know if Opendoor was failing. Like this is -- we publish what we need to do to get to ANI breakeven.

We're succeeding, right?

Exactly. Like if we are not buying the number of homes we say we should get to ANI breakeven, like we're failing. I think it's important to tell people -- like it's important to tell people to know how you're failing because then you can hold yourself accountable to it. Part of reason we did accountable that opendoor.com was to hold ourselves to account. So if we buy fewer homes and we say we need to buy to get to ANI breakeven, we're failing. If our average days on market goes back to where it was in Q4, we're failing. If the cohort curve starts collapsing, we're failing.

But if we continue to buy the homes, the number of homes that we need to buy, if the average days on market continues to be low and if our cohort curves continue to be flat, then this is a fundamentally different company than it used to be. And I think that's how you can judge us or you can just wait for the quarterly results to come out and you can judge that also.

But in the toughest housing market in a while, we've had our margins go up, like our margins are going up as the industry's margins are collapsing. Our listings are clearing fast as delistings is going up. Like delistings went up, our listings cleared faster. Like we are bucking the market, bucking seasonality and bucking history. And I don't know how long we need to do that for other people to say, oh, there's something different here. But internally, because we see further than folks externally see, we are all incredibly bullish about the mission.

Okay. All right. We'll hold you accountable for that. Last question. Let's talk -- we talked a lot about your core product. Let's talk about what you're doing outside of the core. So you talked about cash plus, the mortgage. Like how are you envisioning like Opendoor, let's say, like 3 to 5 years? Like what is Opendoor down the line?

I think there's a very odd thing that happens in the world now where people try to think of companies as verticalized things. That's not how you build software. You do not build software by verticals. Like if you do that, you will fail. Like the way you build great software companies is you build a very thick platform upon which you build very same verticals, right? Whether we buy a home or not, whether we give a mortgage at home or not and whether we eventually give insurance for that or not, those are exact same decisions. They are the same decision, like the price of the home, the mortgage issued on home and the insurance at the home are highly correlated things. So we will build a very thick underlying model to actually value those things and very [ thin line ].

Let me give you actually an example. I launched Shopify Capital, which is our lending product in the United Kingdom in 11 days in a country where we didn't have a bank account or an entity or employees. It took 11 days. Why were we able to do that? Because we built a very thick platform. So mortgage is just our first attempt at this, at Opendoor, and we are proving, by the way, like -- there are ways from the outset, we can cover this up, but I figured this out. But our mortgage attach is much higher than I thought it would be in Colorado. And the people who are buying a home from us and taking a mortgage from us often tell us that they have the home to sell to close that mortgage. And guess what, we're buying that home. So the loop is closing, and I think the attach opportunity is larger than I thought it would be.

Okay. All right. All right. That wraps up.

Thanks, Dae.

Thanks for coming.

I appreciate you giving me a chance to rant. I know this is usually different than these conversations go. But thanks, man.

Thanks for coming.

Thank you.

[Presentation]

Hi, everyone. Welcome to Opendoor's Q1 2026 Financial Open House Earnings Live Stream. I'm Michael Judd, Opendoor's Head of Investor Relations. A few quick housekeeping guidance before we get started. Like all things Opendoor, we're going to do this faster. Details of our results and additional management commentary are available in our earnings release, which can be found at investor.opendoor.com.

The following discussion contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact are statements that could be deemed forward-looking, including, but not limited to, statements regarding Opendoor's financial condition, anticipated financial performance, business strategy and plans, market opportunity and expansion and management objectives for future operations.

These statements are neither promises nor guarantees, and undue reliance should not be placed on them. Such forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those discussed here. Additional information that could cause actual results to differ from forward-looking statements can be found in the Risk Factors section of Opendoor's most recent annual report on Form 10-K for the year ended December 31, 2025, as updated by our quarterly report on Form 10-Q for the quarter ended March 31, 2026, and other filings with the SEC.

Any forward-looking statements made on this webcast, including responses to your questions, are based on management's reasonable current expectations and assumptions as of today, and Opendoor assumes no obligation to update or revise them, whether as a result of new information, future events or otherwise, except as required by law.

The following discussion contains references to certain non-GAAP financial measures. The company believes these non-GAAP financial measures are useful to investors as supplemental operational measurements to evaluate the company's financial performance. For a reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP metric, please see our website at investor.opendoor.com.

And with that, let's get into the open house with Kaz and Christy.

Good afternoon, everyone. I opened the Q4 financial open house by showing you a clip from the Q3 financial open house. I did this because I think among the most important things you can do to build trust is to just do what you said you would do. Don't promise and moon and deliver dust. Just do what you said you would do.

Our last open house might as well have been called the look at the October cohort open house. With that in mind, let's once again take you back to our last financial open house.

That the October cohort is going so well is not a plan, it's a proof point. The product launches I'm going to talk to you about aren't promises of things that might work. They're the explanation for why October happened and why it's repeatable. Now look, because we're committed to transparency, let me get ahead of a couple of things. October was not our largest cohort by volume. But it was about double the size of what we were doing just a few months ago.

We're not getting lucky on a few homes in a friendly market. And given how the past few weeks have gone, I believe we're on track to significantly increase our acquisition size as we said we would do. What October shows is that the structural changes we made under Opendoor 2.0 are working. And then we're compounding those learnings into every single cohort going.

During that call, I told you that Opendoor 20 cohorts would perform fundamentally differently than Opendoor 1.0. And back then, some folks said, October was a fluke or that we'd fall apart when the markets got harder or the sample set got larger. And one of my favorite investors said, look, 1 month does not make a trend. That was fair. Fair enough. So here are the facts. We now have a few more months of data, and we should compare the first full 4 months of Opendoor 2.0 against the last couple of years of Opendoor 1.0.

Don't pay attention to me. Look at the chart. These are the cohort arrival curves. They show what happens when a group of homes margins on the y-axis as that group of homes sells on the X-axis. Every one of those purple lines is an old Opendoor cohort. They all do the same thing. They bleed margin as we sell through. Now look at the blue curves. Margin doesn't drop the way it used to. This is a step function change in how this company operates.

4 consecutive months tell us something October alone could not. This isn't an accident. This isn't small sample luck. Mortgage rates are still far too high and the listings are at all-time highs. But in a housing market that was supposed to break us, our cohorts are delivering. October wasn't a fluke. It was just the first month we could see it. We've now sold through over 80% of the October cohort and our trends have continued.

Margins for our core cash products have come down only 90 basis points from where they were at 10% sold to over 80% sold. Last year, that same journey cost us over 260 basis points. So we've seen about a 3x improvement. And then November, December, January, they all showed the same pattern 4 months in a row. In fact, Q4 of '25 and January '26 cohorts have the best combination, the best combination of margin, margin stability and resale velocity of any cohort in Opendoor history, obviously, excluding the COVID era.

Our cohort curves or the slope of our margins as homes sell-through are basically flat. And we're doing this at great speed. Every single cohort from October through January is selling faster than any corresponding cohort since COVID. And we're meaningfully scaling growth. In Q1, we entered into contract in over 5,000 homes. That's 2x bigger than Q4 and 3x bigger than Q3. In fact, when it comes to contracts, this was our single best quarter since 2022.

Cohorts are performing better, resale velocity is improving, and we're scaling growth. But how can we do this? Well, let's talk about it for a second. Two quarters ago, I laid out the blueprint and told you exactly what we were going to do. Underneath this all, there was one simple goal, make Opendoor faster. Last quarter, we graded ourselves and we're green across the board, and I promise we will do this every single quarter. So let's do that.

Step one, profitability, breakeven by the end of 2026. We're on track. We'll be ANI positive on a forward 12-month basis by the end of the year. And as of April 1, Opendoor is adjusted EBITDA profitable on a forward 12-month basis.

Step two, unit economics that make the model work, positive contribution margin while increasing velocity. We're on track. Our contribution margin has increased every single month since we bottomed out in September and October, November, December and January cohorts. They're all selling faster than any corresponding cohort since COVID. We're improving margins, speeding up clearance, and we're doing all of it in a worst market.

Acquisitions are growing. In Q1, we entered into contracts in over 5,000 homes, 2x what we did in Q4, 3x Q3. And our Q1 DTC acquisition contracts are up more than 4x compared to Q3 '25. This was our single best contract quarter since 2022.

Step 4, we're making really good progress on our capital-light products for sellers and transacting directly with buyers. Opendoor Checkout has now helped us sell homes in a bunch of states and more than 1/3 of our acquisition contracts in Q1 were cash now more later. This time last year, that number was exactly 0. That's our scoreboard. We're green across the board. This quarter, the scaffolding came down and what's underneath is a company that finally knows exactly what it is and how it wins.

For a long time, the core assumption of Opendoor was that we had to be better at predicting the future than the rest of the world. We operated like a front desk. We looked at the macro and made directional bets based on where we thought the prices were going to be in 3, 6, 9 months. And then we pushed billions of dollars on to the table. The issue was never the people and not the model. The problem was a wrong problem to solve. Even if our models had been perfect, they were still pointed in the wrong direction.

Everything flowed from a single question, where are home prices going? That one guess drove everything. It set the spread, which set what we bought and determine whether or not we made money. And when we got the answer wrong, we blamed the market every single time. Macro became our excuse for everything. Look, when predicting the future is your North Star, a reflex in the down market is always the thing, widen spreads, slow down, pull back, wait for the market to recover.

Every defensive move said the thing that was actually killing us. We were playing prevent defense when we were down by touch down. So of course, we were losing. We widened the spread to protect ourselves, but in doing so, we changed their funnel. We changed the thing that was making the company work. We got worse homes. Worse homes meant worse margins. Worse margins went back into the model. The system got more conservative and spreads widened even more.

We didn't just have risk that we could not calculate. We actually built a machine that amplify it. Every move made everything worse. That was our fatal flaw. In a business where time is risk, the old model got us to slow way down. And once that reflex exists, every department in the company, product, operations, finance, everyone starts running the same defensive operating system. The default everywhere was slow down just to protect ourselves.

Look, I'm a nerd's nerd. I think models are really cool, but they're incredibly worthless when you had the wrong strategy. So what we did wasn't just improve the pricing model. We changed the question that it was meant to answer. A year ago, the most important input into every decision was our home price appreciation forecast. Today, it's how fast we can sell the home we're looking to buy.

Market makers do not win by being right about direction. They win by controlling their exposure to being wrong. They win by being right about time. When a prop that gets scared, it pulls right back. That's how the spiral starts. When a market maker sees risk, it does the exact opposite. It speeds up and prices to clear. The faster you move, the less any single home can hurt you.

And velocity is how we know our pricing is right. A home that fits doesn't give us any signal. It just increases risk. Opendoor 1.0 was a Kobayashi Maru. It wasn't a game we should have played. Without fundamentally changing it, we will just totally kill the company. You don't beat that game by getting better at simulation. You beat it by changing the program. So we're now running on a velocity OS.

The difference is totally structural. We have rebuilt our engine around a totally fast team of high-frequency thinkers. Our signal intelligence officers, hedge fund quants and they're all maniacally focused on data loops. They have a mandate, ship a change every single week, optimized for both margin and velocity. And as our models get better and they're getting better every single week, the whole machine moves faster.

The whole company runs faster. We now run on a weekly cadence across the company. Products ship every single week. We don't need to be perfect in order for this business to work. We just need to be faster with hundreds of acquisitions a week, we see pricing signals, renovation costs and clearance patterns faster than anyone else in this market. Every home keeps to something. And every single day, we shave hold times, our capital turns go up and our returns go up.

Speed. Speed pays for everything. In a bad market or a great one, the variable thing that actually matters is time. So when you ask what has made the change? What makes this whole thing work? It's one word. Faster. I wear a T-shirt at every financial open house that says one thing, Faster. You can see it. I'm wearing one right now. Most of you think it's just a personality quote, right? A founder nerd thing, a costume of a wartime CEO. It's really not. Look, we used to be in a business that lived or died and whether we got the future right.

Now we're in a business that lives or die and whether we move fast. Faster isn't just our competitive advantage. It's an absolute moral imperative. Let me just say this again, so you don't think I'm being subtle about it. Faster is not just our competitive advantage. It's our whole reason for being here. It's our moral imperative. Every day, someone is stuck and cannot move is a day in their life that they cannot move on. They're on hold.

If we're in the business of helping people move, then days matter. It's a job offer they haven't accepted, a planned retirement put on hold and finally not started. The traditional home sale process is more than just inconvenient. It holds these people back. 40 million homeowners in this country want to move in the next 12 months, but only 1 in 5 think they can actually do it, not because moving is too expensive, but because everything about it is just too uncertain.

There's a simple test for any system. Would you design it this way if your family had to live in it? The legacy real estate system fails to test. It's our job to fix this. Every product decision Opendoor goes through does goes to one single filter.

We only care about one thing. Are we returning time to people. Last week, across all sellers, Opendoor gave back over 100 years of time, over 100 years of time, over 500 families said yes to an Opendoor offer and reach certainty about 90 days sooner than they would have in a traditional process. You do the math. In just 1 week, we got rid of a century of human waiting, time that got returned to families who got to move on.

Faster is a moral imperative. It is a good in and of itself, and that is what this company is for. Every product launch ultimately serves one question. How do we move faster for sellers, for buyers, for Opendoor for everyone? So let me run through some product launches. This quarter, we expanded cash down more later coverage. Every week, hundreds of families who would have heard, sorry, we can't help you are now getting the real offers.

We totally rebuilt the foundations of our buyer apps. We acquired Doma's Escrow division. Noah, our AI underwriter, prices normal homes in Phoenix now. We rebuilt every message a buyer gets from us, 6 different systems became just one conversation. We rebuilt our offer page, giving customers the type of information they would have gotten from an expert who was at their kitchen table.

We also built a portable assessment scheduling. You can now get your home assessment done on your own terms. More than half of our assessments are now seller-led, 6,000 in March alone. We migrated our component library to an AI-native front end. While we were in there, we killed our legacy cake service, a transition that had failed 3 times in 4 years, finished in 6 weeks.

The platform is what makes everything else faster. Talk to any Opendoor engineer, and they'll tell you this is a really big deal. We built an AI audit tool that automatically reconciles inspection scopes with actual repair decisions, giving our field teams real actionable feedback to improve operating compliance and cost discipline.

At title intake, it used to take us up to 5 hours. It now takes 15 minutes. We launched Opendoor Mortgage in Colorado. One of our marketing managers replaced our $0.5 million life cycle legacy e-mail system with one Claude skill. A field manager in our Southeast division runs 5 states on Claude. Afinance team turned 20 hours of SOX deliverables into 1-minute query. None of these people, by the way, were engineers.

We also tripled our Cash Now, More Later product. Our voice bots dropped seller contract time from 30 minutes to 5. We replaced 72 manual exports a month with 1 pipeline. We built a new listing operated consoles in 8 days, we merged 8 different HR systems into one and end process. We built dozens of point solutions. Now that's not the full list. It's just what I had time for before they play to walk me off stage music.

As you can tell, we've changed a lot, but I also want to tell you what we haven't figured out. Look, I'm a Leafs spin. I know what it feels like to we promise lots of things and get absolutely none of them. I know what it feels like to watch the same group of people over and over again, give you false hope and give you nothing. I thought about this more than I probably should, but I've decided that the promise is not the same thing as a proof.

You do not get credit for what should have happened. You only get credit what actually did. I know what it feels like to have momentum in March and tears in May, which is why this t-shirt says faster and not done. Faster is a setting. It's not a destination. We don't get to celebrate signals. Every quarter is just another shift for us. We're not done. We're not even close.

Mortgage is live, and the early data is honestly going a lot better than I thought it would go. We're getting really good attach rates and our customers love it. But look, it's early. We don't fully know how the product is going to work across different market conditions in different home price tiers. We have a thesis. It's working really well, but we haven't proven it at scale. Cash Now, More Later, it's growing really fast. It's over 1/3 of our growing pie. And that's just really remarkable for a product that didn't exist a year ago.

And that was totally reworked just 3 months ago. We're iterating how it works. We're fine-tuning it, trying to get the balance right between what the seller gets and what Opendoor keeps. But let me be honest with you. Every product that Opendoor ships has to earn its place in our portfolio. Cash Now, More Later is earning it, but we're not done changing it. And like we said earlier, the housing market, look, it just remains what it is. We believe the model we have built on faster works across macro cycles.

We're no longer dependent on the macro. We control our own destiny. October, November, December, January cohorts, they were all bought during the most aggressive expansion in our history in a market that I don't think anyone would describe as favorable, and this is the best evidence we have. But that's just what it is. It's evidence. It's not proof. Proof will take more time, more reps, more shifts, more aggression, more products shipped faster.

And we've said this before, and you'll always hear us saying this. We're not asking you to take our word for it. We're asking you to watch and to hold us accountable. Christy is going to walk you through the numbers in a minute. But before she does, I want to close with this. I've been asked a lot what Opendoor is. We changed our LinkedIn profile from real estate to software, but software is too generic.

Look, Opendoor is on a mission. Our job is to get people who are stuck moving. We're a machine that helps America move. When I joined Opendoor, I did it because the home ownership matters. It is the thing. It is the single thing that leads to better families, better neighborhoods. When people buy a home they love, they're buying a share in this country. We don't buy homes at Opendoor to hold them. We buy them. We buy them so we can get them into a next family faster, with less friction at a better price.

And every family we help move is a family that is clear down roots. It's a neighborhood, we're getting better. It's children that get to grow up in a home that their parents love. Faster is what this company was built to do. This T-shirt, that's just a reminder. The Opendoor machine is now running and every day it runs, every single day it runs, friction disappears and people move. We do not need a better market. We just need a better machine.

Last week, we gave back over 100 years. That's 100 years of human pain just gone. That's not corporate dragon. That's just families moving and building better lives. Please track it. Please hold us accountable. Christy?

Thank you, Kaz. I'm not wearing a T-shirt, but I promise I'll match the pace. Three things to know about Q1 before we get into the details. One, we reduced aged inventory from 51% to 10% in 2 quarters. The book is the freshest it's been in nearly 4 years. Two, margins bottomed out in September and have improved every month for 6 months straight. Q1 closed at 4.4%, up 3.4 points quarter-over-quarter, and we expect the upward trend to continue into next quarter.

Three, acquisitions are up 45% from Q4, and Q1 was our strongest quarter for signed contracts since Q2 2022. And the headline behind those 3, starting in Q2 2026, we expect to be adjusted EBITDA profitable on a 12-month go-forward basis. The machine is working. Let's get into it.

As a reminder, we are executing against 3 management objectives on our path to profitability. The table in our earnings release shows our progress on each. Let me walk through the highlights. First, scale acquisitions. We purchased 2,474 homes in Q1, up 45% from Q4. This is the second consecutive quarter of meaningful growth.

And signed acquisition contracts, our leading indicator, tell an even stronger story. March was our highest single month for signed contracts since June 2022, and Q1 was our highest quarter since Q2 2022. An acquisition contract will typically close about a month later. Q1's 2,474 purchases are mostly from late Q4, early Q1 contracts. Late Q1 contracts will close primarily in Q2.

Also, we want to be clear, we don't close on every home we go into contract on. Under Opendoor 2.0, we're deliberate about which contracts we take all the way to purchase. So the funnel narrows between contract and close. So more contracts mean more opportunities to be selective and the trajectory matters.

In a short period of time, we've gone from our lowest contract volume since COVID to our highest since 2022. This is the tempo required to achieve the goals we set for ourselves, and we're building the volume and the discipline at the same time. You can continue to track our weekly progress on accountable.opendoor.com.

Volume only counts if the quality holds, and our second management objective is the scorecard for whether we're delivering the right kind of growth. The second, improve unit economics and resale velocity. This is where the work really shows up, and there are 3 data points I want to highlight. One, resale contribution margin has improved every month since September 2025, closing Q1 at 4.4%, up 3.4 percentage points quarter-over-quarter.

Two, our Q4 2025 and January 2026 cash acquisition cohorts have the best combination of margin, margin stability and resale velocity of any corresponding cohort in company history, excluding the COVID era. And three, the percentage of homes on the market for more than 120 days fell to 10%, down from 33% at year-end and 51% at the end of Q3, a 41 percentage point improvement in just 2 quarters.

Let me stay at this point for a moment. Two quarters ago, more than half of our homes had been sitting on the market for over 120 days. At the end of Q1, that number was 10%. That is the lowest it's been since Q2 2022. To put it in perspective, the broader market was at 23% 2 quarters ago and rose to 33% at the end of Q1. We are now carrying a book that is materially fresher and healthier than the market.

Inventory health is both a leading indicator of forward margin and evidence that our approach is working. A faster-moving book means lower holding costs, less market exposure, better resale outcomes and more efficient use of capital, and that's exactly what's showing up in our margins. This didn't happen because the market got friendlier. It happened because of tailored underwriting, disciplined close to listing workflows and resale systems designed to move homes quickly while protecting unit economics.

Third, build operating leverage. Fixed operating expenses were $33 million in Q1, down $2 million quarter-over-quarter and down $6 million year-over-year. Our trailing 12-month operations expense as a percentage of trailing 12-month revenue held steady quarter-over-quarter at 1.3%. We are holding the fixed cost base flat while simultaneously investing in the AI and infrastructure that powers our product, and it's worth pausing here for a minute.

We're going all in on AI, and we're doing it responsibly. There's a lot of noise right now about companies blowing their 2026 budgets on AI before the second quarter. That's not us. We're focused on results, not token leaderboards. We have an internal Slack channel called Default to AI, where teams celebrate measurable impact.

Some highlights in addition to what Kaz shared earlier: an AI-powered repair negotiation tool cut our buyer fall-through rate by over double digits; field managers are using AI scoping feedback, helping to reduce pre-list renovation spend by up to 10% to 20% per home in pilot markets; and a ticket triage automation, redeployed 3 full-time employees from classification to resolution.

What's notable is that most of these tools were built by operators, not engineers using the AI infrastructure we've invested in. We're cutting waste and reallocating into capabilities that move the business. Our flat fixed operating expense is the output of that discipline, not the absence of investment. 3 objectives, 3 quarters of consistent progress. The plan is working.

Turning to the balance sheet. We ended the quarter with $999 million in unrestricted cash, our highest cash balance in years. That's a product of 2 things: the strength of our parent level capital position following the work we did last fall and the health of our inventory book. We held 3,420 homes in inventory at quarter end, representing $1.1 billion in net inventory.

Our nonrecourse asset-backed borrowing capacity remains robust at $7.1 billion with $1.5 billion committed. Between liquidity, facility capacity and the quality of what we're financing under those facilities, we have meaningful flexibility to execute against our plans.

Now let me give you the guidepost for Q2. Acquisitions. You can continue to track our acquisition contracts on accountable.opendoor.com. We've updated our contract road map for the remainder of the year. The ranges reflect our current outlook, inclusive of typical seasonality, and we'll continue to update them each quarter as we learn more.

Revenue. Our Q1 increase in home acquisitions will start to flow through to resales, leading to expected revenue growth of approximately 25% quarter-over-quarter. Contribution margin. Our contribution margin bottomed out in September and has been improving every single month since then. We expect the contribution margin for Q2 2026 to fall in the middle of our 5% to 7% goal we shared in the first Opendoor 2.0 financial open house.

Adjusted EBITDA. We expect Q2 adjusted EBITDA to be breakeven, plus or minus a few million dollars, and we see Q2 as an inflection point. We expect to be adjusted EBITDA profitable on a 12-month go-forward basis starting in Q2.

In closing, last quarter, I said you can't build a great business in a spreadsheet. You build it by shipping product, operating with discipline and learning from the market. Q1 is what that looks like when the machine starts to work. Acquisitions, margin, resale velocity, inventory health and cost all moved the right way at the same time. That's not a lucky coincidence. That's a system that's working.

Two quarters ago, we laid out our plan. Every quarter since we graded ourselves against it and delivered. We have a lot left to prove. We intend to keep doing exactly that.

With that, Michael, I'll turn it over to you for questions.

Great. Thanks, Christy. Our first question comes to us via video submission from Mike Alfred.

It's Mike Alfred, Founder and Managing Partner of Alpine Fox LP as well as Board Director in IREN and Bakkt. Great job on the execution side. I really like the way the business is integrating AI into everything you're doing. My question is about the longer-term implications of AI. Do you believe when you look at the strategic direction of the company that we are well prepared for all the things that AI is likely to change about the way the real estate market operates in the coming years?

That's a great question. Look, I think the answer to this is like in a bunch of layers. And I can't think about the layers, so let me just go through them. Layer 1 is like the earnings call answer. AI is important. We're leaning right in. We're spreading across the entire business. If you kind of hear that from every corporate CEO. I mean it's true, but it tells you like nothing actually useful.

Layer 2 is actually important. That's like the software leverage story. Like the original SaaS era, the insight was that you could take a CRUD database, wrap business logic around and some workflow around it. And then you'd find that people could do a lot more, right? Software would get cheaper, people could do a lot more because you could encode the rules and the processes and decision-making into software.

And the leverage was just insane. AI extends that by quite a bit because you're now encoding judgment on top of rules and the leverage becomes really high. Like that's real and it's important. And we're capturing a lot of this. But that's just the story of software broadly. It doesn't say anything specific about Opendoor. We just happen to be honestly just really good at this.

Layer 3 is actually fundamentally more interesting. It's like the automation versus the collaboration split. AI as collaboration software is very misunderstood. Let me talk about that for a second. Look, our goal isn't to use AI to cut 15% of our expenses by doing the same things we're doing just cheaper, right? Like that's the automation applied to cost. And the goal isn't like a black box replaces a human process end-to-end. That's just not what we doing. Like what we want to do, given everything AI can do is to rebuild our processes from scratch, from a blank piece of paper so that we can use AI to have a fundamentally different process.

Layer 4 is actually our complexity as a structural advantage. This one is important to understand, and this is why we're not afraid of AI is the way like some software incumbents are. Real estate is atoms and risk and not just bits, it's also some bits. The underlying transaction involves a level of complexity and condition and local dynamics and human emotion and all of it like makes the system very complex, and that's actually our advantage, right? AI doesn't eliminate this complexity. It just makes navigating it a lot easier.

So what we don't need to do here is just stick to some hypothetical end state. We just need to be meaningfully better than the alternative and the legacy process at every step. Like this is a Red Queen's Race dynamic, and it works in our favor here. Look, we've been running in this very complex environment for years, and we have a craft ton of operational knowledge, and that is deeply, deeply useful.

The last -- I promise this is the last layer. I like 5-layer cakes. The fifth layer is about what AI does to the other side of the transaction. So there are 2 parts to this, right? What the customer feels and sees and what it does to the category. On the customer side, look, the traditional real estate process is defined by information asymmetry, right? That's just not an accident. That's the foundation of the whole process, but experts who know the market make profit from transaction friction because the parties themselves can't navigate it.

AI totally dissolves this asymmetry, right? What that means is the customers are being like upgraded. We can build AI concierge that feel to the customer like the expert is sitting at the kitchen table, right? That's an incredibly important thing, and it's what we're doing. On the category side, this is the actual metabit, right? Every major Internet transition, every industry has had winners that didn't just jam the Sears catalog into a browser, they actually helped with the transaction, travel, retail, fintech, that's been true across of Internet.

It just hasn't happened in real estate and real estate is like honestly, the last major holdout, not because the category is fundamentally immune from this, but because the underlying complexity made it a little too messy to transact at scale. AI just totally removes this constraint. I think I should actually start the answer by saying yes. But yes, we believe we're well positioned. It's honestly on the inside, it feels as though our business was built waiting for this mana to fall from heaven, and it now has.

Great. We got a few questions submitted via Say Technology that all kind of clustered around profitability. So I wanted to pull out 2. The first comes from Heejun C., who's asking, you said in the last earnings call that turning profitable by the end of the year was achievable. Now the first quarter has passed and interest rates remain high. Is that still a realistic goal? Also, Arun Jacob V. asks, how confident are you today in the Q2 positive EBITDA and year-end profitability forecast? And what are the key swing factors from here, which might influence it?

So great questions. Thank you. We reconfirmed our goal and expectations earlier on the call, and I'll say it again here. We expect Opendoor to be breakeven or profitable, adjusted net income profitable, by the end of this year on a 12-month go-forward basis. And Arun, to answer your question, we also shared in the call earlier that we're going to reach an important milestone on that path to profitability in that starting in Q2 2026, we expect to be adjusted EBITDA profitable on a 12-month go-forward basis.

Our management objectives that we report every single quarter are the 3 legs to the stool that help ensure we're on the right path, and we're building momentum. Acquisition closes are up. Acquisition contracts, the leading indicator to closes, are also up. In fact, Q1 2026 had over 5,000 contracts. That's the highest quarter of contracts since Q2 2022. Retail contribution margin has improved every single month since September, and we guided Q2 to the middle of our 5% to 7% targeted CM range. Long-held inventory went from 51% to 10% in 2 quarters.

And we did all of this while holding fixed OpEx down. The last time acquisition contracts exceeded 5,000 in a quarter, our fixed OpEx was double where it is right now, yes, double. And that's the AI investments and operator empowerment that we talk about every single quarter, that's what's happening here in fixed OpEx. We have made meaningful changes to what is required to run Opendoor 2.0, and we are beginning to demonstrate that those changes are durable as the volumes return. We're clear on our profitability goals, and we will continue to check back in every quarter with updates.

Can I add something here? I think Warren Buffett famously said you find out who's swimming without shorts when the tide goes out. I have 4 kids, and they actually sometimes go swimming and I have to worry about them wearing shorts. So I feel for Warren. But right now, like the tide is out in housing, right? In the real estate market, the tide is out. And most CEOs will tell you that they wished conditions were friendlier.

I'm telling you the opposite. When I took this job, I knew the tide was out. That was the entire point. I didn't take this job because I was hoping macro would turn and would bail us out. Like I wasn't looking for a company of sunshine patriots. I think Kelly Clarkson famously retweeted Nietzsche and said, what doesn't kill you actually makes you stronger. We chose -- I chose hard mode. We choose hard mode because that's what's going to make us stronger.

Look, we do not need permission from the Fed to put on our shorts to go swimming. Everything we've accomplished so far, everything has been done in the face of an unforgiving macro. And I think we've told you how it looks like when we're winning. And some of you are watching this. But I think I should tell you what it would look like if we were losing, if we could not do the things Christy said we will do. This is the thing most company CEOs don't do because they're afraid they're going to end up losing and they want to be able to hide it, but I want you to hold us accountable.

Here's how you would know. Cohort curves start looking like they did with the purple lines. They would start high, would have massive losses as we went through. Contracts would plateau at the low end of our range or below the low end of our range for a whole bunch of weeks and homes greater than 120 days in the market would go back to what we had in Q4. If those 3 things happen, if all those 3 things happen, then we're not doing what we said we would do, right? It's all about slope, acquisition, inventory health. That's the business. Those 3 things.

Look, I don't think any of those 3 things are going to happen. I don't think all 3 of them are going to happen together because we believe we've built a model that works better. Faster is the key. We can't ignore the macro. We're not stupid, but it will never be our excuse. Good excuses don't make great companies, right? We control our own destiny. We don't need the market to recover. We don't need rates to fall. We don't need perfect conditions. We just need to keep moving more families faster and faster through a machine that's already working.

So as I've said before, look, we're not asking you to take our word for it. We're just asking you to watch those 3 things that Christy talked about.

Great. The next question, Andrew L. asks, as you accelerate acquisition velocity, how are you ensuring that underwriting quality remains high and that you won't need to raise equity to fund this expansion?

Thank you for the question, Andrew. It's important to know that we're not accelerating acquisitions by driving like blunt spread compression. It is driven by a combination of tailored underwriting that allows us to give really compelling offers to high-quality homes, product expansion through our Cash Now, More Later product, geographic expansion and just conversion improvements realized from such things as making improvements to the offer page.

While we've removed the requirement for an in-person visit from pre-contract to post contract, we still perform an in-person inspection before we purchase the home. This sequencing change helped remove friction from the contracting process, and it saved the cost of an in-person inspection for higher intent sellers. without compromising our understanding of the home we're about to acquire.

But what I just described isn't proof that our underwriting quality remains intact and high. The proof is in the cohorts themselves. Our October, November, December and now January cohorts are each coming in with higher contribution margin, improved margin stability, increased resale velocity compared to their prior year cohorts.

On the capital question, our cash position actually grew as we acquired more inventory, which reflects the underlying health of our inventory book. Younger homes with shorter days on market are structurally easier to finance, and we have sufficient warehouse capacity to more than keep up with our acquisition pace and plans. We also have warrant structures that provide additional capital optionality. To the extent any future capital decision is made, we expect to be opportunistic rather than necessary, and we will continue to evaluate the capital stack with an eye toward minimizing dilution.

I say a couple of things here. Like first, there's a persistent myth that to move fast, you have to be sloppy. I just fundamentally reject this. Look, there was a rumor when I joined Opendoor that Opendoor was the best buyer of homes with foundation issues. Like whether or not that was true, it's definitely not true anymore. Today, we use AI to remove this toil we had accrued. We no longer have 11 people touching every single home so that one person that does touch it can actually do their job well, right?

That's actually all I want to say about underwriting because I don't want to give away all of our secrets. But on the equity piece, let me add to what Christy said. I said it in my very first earnings calls, but I want to repeat it. I despite dilution. If we issue a share, it has only one job to make every other share worth more for our existing shareholders. We will never issue shares to extend the runway. That's not what we're going to do. The goal is for Opendoor to never be in a position where it has to raise money to survive.

In the history of this company, it has raised way too much money. We're going to stop doing that. The discipline we need going forward is that we're going to fund this business from the cash flow we generate. I'm not interested in like building a company that needs a life graph every time. I'm interested in building a ship that actually floats, right? What Christy talked about isn't the best case scenario. It's the only way we were going to run this company.

Great. Our next question comes from Heejun C., who asks, I'm interested in your 4.99% mortgage promotion currently exclusive to Colorado. Are there plans to expand this offer to other regions or states soon? If so, please provide an estimated time line or a list of upcoming locations.

Well, look, first of all, it wasn't a promotion. I want to be clear about that. That was the actual rate. We don't run rate connect here. We charge what the math allows us to charge, right? Look, mortgage is early right now. We're live in Colorado and loans are doing well without any optimization, right? Attach rates are above even my most optimistic expectations. And I'm not going to give you a launch calendar for every market, but we're in flight on licensing in about just over 20 states right now, and we expect to kind of roughly double that by the end of Q3, and we're rolling this out as fast as we can.

But we've gotten some early feedback that I think is helpful. One of the customers told us that our rates blew the other lenders out of the water. And I want to talk about our math and why our rates below other lenders out of water, right? The math is simple. Big bank lenders take about 340 basis points in revenue per loan. Most of that is just a toil tax on the borrower, right? It pays for branch offices, loan officers, manual underwriting, paper shuffling, terrible ads and like expensive lunches.

We've built an AI-native mortgage platform from day 1. No legacy system, no commission-driven sales force, right, as few humans as possible to get the job done. So we're not just discounting our way to a lower rate. We're actually building our way towards this. That structural advantage means that the regular mortgage on our homes will always be the lowest rate the customers can get, right? Today, our rates are running about 100 basis points below the market average. And that translates to about 10% to 15% lower mortgage rates per month. And that's the gap, right? Our job is to just chip away at this to make sure that we actually make housing affordable in this country.

Great. James M. on Say asks, tokenization of real estate?

What's the question? That's the whole thing?

That's the question.

Okay. Well, I think this is a question that gets asked frequently, and I have a rule of not announcing product launches before they're ready. I think the worst thing tech companies do is they make software for PowerPoint presentations, and that's just stocks, that's what makes people hate software companies.

Opendoor exists to tilt the world in favor of homeowners, right? Simpler, faster, fairer, and you do that by reducing the friction tax. Like the embedded friction tax in the system today on a given transaction is a double-digit percentage of the home's value. And tokenization is an incredibly important way of reducing this. Here's like how I think about it. And it's important to be mindful of this. The patterns that we treat today as the natural order of things are usually just the last hack that someone installed on our machines, right? This is when Judd starts rolling his eyes. But it matters, so I'm going to talk about my favorite topic, history of money.

Look, we went from barter to coinage to build an exchange to checks to ACH to SWIFT, right? And it really does feel like we're living in the future. But the entire system of money that we rely on runs on banks running COBOL software. This is a programming language from 1959. So the infrastructure powering our banking system that moves trillions of dollars is older than the moon landing. And we feel like we're in a stable place, but the people who were bartering also felt like they were in a stable place, right? These are not permanent solutions. None of them are permanent because of the following. They all require intermediaries between people to get anything done, right? That cannot be the end state.

Onchain settlement is the first time in the history of money where you don't need permission from other people to move value between 2 parties. This isn't an incremental improvement. It's like an inevitable category end, right? And within our lifetime, we're going to see what it does and everything we do today will seem antiquated. And title is the same story. It's just about 100 years behind, right? Like animals mark their territory physically and humans mostly have done the same thing for most of history, right?

The real innovation here was in Medieval England. We formalized this with a clot of dirt and some witnesses, and now we have some paperwork. All that has happened between then and now is that some of these are searchable on the Internet. That's the entire innovation that these paper records that live in courthouses are now searchable. Look, the fact that there is a lobbying group, defending the current way of doing things is the most reliable evidence that we'll do for the next thing. It's like the petition of the candle makers against the sun.

When I look at the housing transaction, I find it really hard to imagine that title to the most expensive asset in our lifetime does not live on chain. It's hard to imagine that we have 3 transactions doing the same thing, Title, insurance, mortgage, and they all have data trapped in silos. These will all move on chain. Now look, I'm not announcing any of this today, but we are doing work that's on the green path to end. Our acquisition of Doma's escrow business is one example, right? We're taking the closing infrastructure of America, building checkout for real estate. And this is not tokenization, but it's clearly the step in the right direction. And in that world, title and mortgage and insurance, all of it can move on chain, and this all gets better.

Thanks, Kaz. I can't wait for the TED Talk. Our next question comes to us from Dae Lee from JPMorgan. Kaz, you've now been leading Opendoor for over half a year and have had time to implement meaningful changes across the product and operations. As you reflect on the moves you've made, which specific change do you believe is having the most measurable impact on seller conversion rates and acquisition volumes today? And what does the data tell you about that's compounding across your markets? Looking ahead, where do you see the biggest opportunity to structurally drive more homes purchased per market without proportionately scaling OpEx?

Dae, I want you to know that I noticed that was 2 questions. Let me answer them one at a time. On what's actually moving the numbers? Look, I don't think any single thing we shipped is moving anything by itself, but the real structure change in our system is, right? Like think about the classic sell me this pen story. The old Opendoor was the guy who would say, this pen is amazing. It's so smooth. It's lovely. The guy who would aggressively show up and give you one choice. Like that was the old cash offer world. We'd show at your door, give you one choice, say, yes or no. That's not how people transact, right?

The new Opendoor starts by asking the customer what they want. What do they actually need? What are they worried about? How much cash they want upfront? What do they want later, what time line they want? Cash Now, More Later isn't a single offer. It actually allows the customer to change Opendoor's business logic so that it works for them, right? The new offer page also does the same thing. It is the digital equivalent of sitting down with someone and explain to them the realities of their neighborhood, their home instead of just flashing a headline number, right? We want the customer to have the full picture and make the right choice that is best for them, and we want to be helpful in that process.

And most people think that in order to do that, you need a human at a kitchen table. I think that's just wrong. Most people just want the information themselves so they can decide for themselves what's best for themselves. That's the shift. That's driving the conversion improvement. We also used to believe we would need boots on the ground everywhere we had homes. I actually insisted on launching every state in the Lower 48 because I want to test this hypothesis. It turned out that if you have a good underwriting model, a good product and a good partner network, you can buy homes anywhere, like we closed a home in South Dakota this week, and we have 0 employees in South Dakota. So that actually helps a lot.

And to your second question on OpEx, I mean, I think we've already answered a lot of this. But the same machine does both of these things, right? More offer types mean more sellers, more sellers per market means we can have more transactions without adding headcount city by city. But the big price, obviously, is the tens of millions of people who want to move who can't, right? Between supply and demand, there is friction, right? If you reduce friction, you move both supply and demand lines. I actually saw this every day at Shopify. We made entrepreneurship easier. Therefore, we created more entrepreneurs.

The same dynamic is true in housing, right? As we make things easier in buying a house, selling a house, mortgage, title and eventually insurance, all of this will increase the demand and increase the supply. And none of this requires like significant incremental headcount. Now, look, now this works if the underlying engine isn't good, but I think we've shown you that we're no longer peanut buttering spread across cohorts. And we've shown you we have now 4 cohorts of data and Q1 was our largest contract quarter in years. The last time we had this many homes in contract, our fixed OpEx was twice as high. So I think that answers your second question.

Great. Andrew from Citizens is curious to help us understand a little bit more about seasonality kind of through the balance of the year.

I'm happy to provide some color on seasonality, and I'm sure Kaz will be happy to add something as well. Each quarter, we provide a series of macro charts, and those charts show a consistent pattern in every macro, strong macro, neutral macro, challenged macro, one thing remains the same, and it's the seasonal pattern. They present themselves year after year.

Macro changes the level of the curve and seasonality is the shape of the curve. The selling season kicks off shortly after the Super Bowl, peaks in early summer, then tapers through fall and bottoms out in December. This affects our resale velocity, which is considered in our spreads and therefore, impacts our acquisition cadence. Days on market lengthens in the back half, margins compress in Q4.

Our acquisition cadence runs inversely to market resale activity. We acquire less in late spring when we'll be selling into weaker demand, and we build inventory throughout the fall in anticipation of the spring selling season.

You'll now see seasonality more reflected in our estimates on accountable.opendoor.com. We've updated our projected acquisition range with the shape easing through spring and summer and building through the fall.

I will add something. Look, seasonality is just like gravity. It's like a rule of nature. You don't blame gravity and if you try to fight it, you tend to lose. We know how to fly planes. We don't do it by fighting gravity. We just build math to fly them, right? And while we can't flatten the curve entirely, we can collapse the impact over time, and that's what we're working on.

Opendoor is like a retail like Walmart, like Home Depot, like Amazon, like Shopify, these retailers have known seasonality, but obviously, Q4 is a better quarter for them because of Christmas. And Q1 numbers are always lower than Q4. But no one would argue that Walmart's strategy has failed because January sales were lower than December sales. That would just be insane.

The shape is just like the shape. The same general seasonal shape that shows up in housing in 2021 when the market was on fire, in 2022 when the rates spiked and in 2025, when delistings like hit record highs, that's the shape, the different macro environments, but the same calendar like since Pope Gregory invented it, I guess. Opendoor knows more about the shape of the curve than almost anyone else in the world, and we shape our underwriting engine around it, right? We underwrite homes based on when we plan to sell them. That's what our underwriting engine does. And I think it is working better and better every day.

Look, I want to end this answer with what I said earlier. We committed to being ANI profitable on a go-forward 12-month basis at the end of this year. Hard macro or not, we will do that. Our floor model assumes this hard macro will continue. If there's an interest rate cut or the macro improves, our floor will be higher.

So I think we're running out of time. So let me just close with this okay. Look, we're not asking you to believe in vibe here. We're asking you to watch the scoreboard, the cohort slope, acquisition contracts, inventory health. That's it. Those are the tells, right? If we keep moving the way we moved this quarter, then the machine is doing exactly what we said it would do. The market didn't bail us out here. Rates didn't save us. The team just did the work.

They rebuilt the company's operating system. They shipped products. They cleaned up the book. They grew contracts, and they did it way more efficiently than anyone thought we could do it. That doesn't just give me optimism. It gives me confidence. we will have a lot left to prove, and we always will. When we reach profitability, the next part is how much? It just won't stop, right? We're going to keep shipping. We're going to keep showing you the data, and we're going to keep moving faster because families matter.

Okay. That's it. Thank you. Thank you, and see you all next quarter.

That's what we're building Opendoor for. It's why the results we're sharing today matter because every number behind them represents a homeowner who got to focus on what comes next instead of what comes with selling. I'm Michael Judd, Opendoor's Head of Investor Relations. Welcome to Opendoor's Fourth Quarter 2025 Earnings Live stream. Details of our results and additional management commentary are available in our earnings release, which can be found at investor.opendoor.com.

The following discussion contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact are statements that could be deemed forward-looking, including, but not limited to, statements regarding Opendoor's financial condition, anticipated financial performance, business strategy and plans, market opportunity and expansion and management objectives for future operations.

These statements are neither promises nor guarantees, and undue reliance should not be placed on them. Such forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those discussed here. Additional information that could cause actual results to differ from forward-looking statements can be found in the Risk Factors section of Opendoor's most recent annual report on Form 10-K for the year ended December 31, 2025, and other filings with the SEC. Any forward-looking statements made on this webcast, including responses to your questions, are based on management's reasonable current expectations and assumptions as of today, and Opendoor assumes no obligation to update or revise them, whether as a result of new information, future events or otherwise, except as required by law.

The following discussion contains references to certain non-GAAP financial measures. The company believes these non-GAAP financial measures are useful to investors as supplemental operational measurements to evaluate the company's financial performance. For a reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP metric, please see our website at investor.opendoor.com. With that, let's get into the open house with Kaz and Christy.

Good afternoon, everyone. Early in my career, I used to write a plan that told my team what we were going to get done during any given cycle. Then at the end of the cycle, I would go through the dock and color every sentence of the plan, green, yellow or red, based on whether we had done what we said we would do and if we were on track to go where we wanted to go. I kind of always found it useful to write things down so you can hold yourself to account.

With that in mind, I'd like to remind you of the last financial open house. In my first open house, I told you that we had a 4-step plan to turn Opendoor around with renewed energy. Let's go back in time and listen to what I said. So here's our 4-step plan to channel that energy. First, by the end of next year, we will drive Opendoor to breakeven. We think about this in terms of adjusted net income on a 12-month go-forward basis. That means Opendoor will start generating cash and will never be forced to raise equity ever again. Second, we will drive significant positive unit economics while increasing the velocity at which we transact in homes. This includes launching financial services like mortgage. Third, as we increase our unit economics, we will change the company's focus from primarily building channels to transacting directly with buyers and sellers. We're also going to focus on reducing our days in possession rather than arbitrarily increasing spread, which has had genuine significant negative consequences for us.

Fourth, once we've accomplished the first 3 steps, we're going to focus on allowing buyers and sellers to transact on Opendoor without having to buy or sell from Opendoor. This is going to significantly lower our capital risk, but more importantly, it's going to give folks options they want. Today, I want to grade Opendoor against these 4 steps. And then I'll give you some details. Here's the bottom line. We did what we said we would do. But let's go through this line by line. So we're on track for our first step. We're driving Opendoor to be adjusted net income positive by the end of 2026 on a 12-month go-forward basis. The goal is simple, start by generating cash and never be forced to raise equity ever again. Second, since September, we've increased our acquisition velocity by 300%. We bought 537 homes last week alone. In the last -- the third quarter, we did only 128. And we grew while we drove significant positive unit economics. This improvement is a result of deliberate change to our product, our pricing strategy and our operations.

Most importantly, our October 2025 cohort, which is the first full cohort under Opendoor 2.0 and it's the first one with enough sell-through data is performing really well. I'll get back to this in a second. Third line, we grew our DTC acquisition contracts while reducing our average days in possession. Comparing this last week to the last week of the third quarter, we've grown our DTC acquisitions by almost 700% and reduced our days in possession by almost 25%. Fourth, we've made it easier for sellers to choose the path that works best for them. And increasingly, they're choosing our capital-light product, Cash Plus. In the last week of Q3, Cash Plus was about 19% of our total contracts. Last week, it was 35% of a much higher volume. To give you a sense, Cash Plus was over 600% bigger last week than it was in the last week of Q3.

This is the first step towards our goal of allowing buyers and sellers to eventually transact directly with each other. Christy is going to go through all the details of all the financials. But before she does, I want to say this. We laid out a plan for you. We're going to turn this company around, and we laid that plan out during Opendoor 2.0's first open house. That plan is working. We're green all across. We're already delivering results and are on track to deliver against our mission. In a minute, I'm going to tell you a lot about our product changes and all the things we've done since Q3. I'm really proud of how fast our team is moving and how much we're shipping. And the list I'll tell you about is a public CEO's dream. It sounds good in the script and it looks amazing in a pitch deck.

But look, I know what this sounds like. New products, expanded TAM, ops improvement, pricing efficiencies and a bunch of business school words like strategic operationalization of North Star paradigm shifts with best-in-class synergy. Oh, flywheel. Look, I get it. Every public company does a stupid dance that pretends, folks can't look at the slope of a graph. One of my favorite investors, -- Sir John Templeton, used to say the 4 most dangerous words in investing are this time, it's different. So I'm not going to sit here and say random school words and ask you to believe that this time is different.

This time, I'm going to show you. Our October acquisition cohort, which is the first cohort of Opendoor 2.0 that has had reasonable sell-through data is on track to be the most profitable October cohort in company history. Again, when it comes to the key metric that matters, our contribution margin, October 2025 is on track to be the most profitable October since Opendoor was incorporated. And we achieved this in the middle of the most aggressive market expansion in Opendoor's history. Given that this isn't really the strongest housing market, this performance, I think, shows a structural shift in how we operate, a shift that I genuinely think will be durable across macro cycles. We are no longer a prop desk. We're now a market maker. And I want to put a finer point on this cohort. What makes this cohort significant isn't just the margin level. It's the shape of the cohort.

From 10% to 50% sold through, our margin degradation relative to home price appreciation has been the lowest of any cohort in our history, not any October cohort, any cohort period. That the October cohort is going so well is not a plan. It's a proof point. The product launches I'm going to talk to you about aren't promises of things that might work. They're the explanation for why October happened and why it's repeatable. Now look, because we're committed to transparency, let me get ahead of a couple of things. October was not our largest cohort by volume. But it was about double the size of what we were doing just a few months ago. We're not getting lucky on a few homes in a friendly market. And given how the past few weeks have gone, I believe we're on track to significantly increase our acquisition size as we said we would do. What October shows is that the structural changes we made under Opendoor 2.0 are working.

And then we're compounding those learnings into every single cohort going forward. We have a lot left to prove. I know that. But for the first time, we're not asking you to take our word for it. This is a new company. Look, the way I think about my job is that my job is to build Opendoor as those product. Just like Tesla builds robots that build cars, my job is to build the tools and the systems inside Opendoor that help us build a great product. In the last few months, we've made a great deal of progress on this front. I don't want to spend a lot of time talking about this, but I kind of want to take a second to talk about the most important part of it.

As Vinod Khosla says, the team you build is a company you build, not the plan you make. Today, 18 people report to me at Opendoor. Of those 18, 10 didn't even work at Opendoor a year ago. Our 10-K filing has a list of our executive team, and you can take a look at it. Not a single one of those people on that list was in our last filing. Since I joined Opendoor, we have a new Chief Operating Officer, a new CFO, a new President, a new Chief Growth Officer, a new Chief People Officer and a new Chief Business Officer. This is a world-class leadership team that I would put up against any other tech company. And on top of this, Opendoor 2.0 is the single most AI-pilled company in the public market that I know of.

Let me give you an example. Not that long ago after we bought a home, someone on our team would set their desk and manually pull up data from 5 different systems, things like property records, inspection notes, HOA docs, pricing history, contract terms, stuff like that. And they would copy these things field by field into a seller disclosure PDF. It took hours per home, every single time. Last week, someone at Opendoor shipped an AI workflow that does all of this kind of automatically with no humans in the loop. It queries our data warehouse, cross-references inspection history and generates a plain English disclosure summary, fills a compliance PDF and then sends it up for review.

But here's the best part. Other companies talk about how AI native their engineers are. The person I just talked about, that person is a non-engineer. He works on our ops team. He built this in his spare time in a week, no ticket field, no sprint planned. No one asked them to do this. He understood this simple fact. It's war time. And our primary weapon is our ability to prompt machines to create a new world. And he's not the only person doing this. Our ops team, sales team, compliance teams, they're all building their own tools now. Now if this is what our ops team does, I want you to imagine what our engineers are up to.

So when I say we default to AI, I don't mean engineers use Copilot. That's not what I mean. Opendoor is a different type of company. It's a company where everyone, everyone is learning how to think like an engineer. Okay. With that, let's talk about what we built. We shipped a lot in Q4. I'll try to move through this fast, but I want you to see how what we shipped caused the October results. We shipped across 3 fronts, better products, bigger markets and stronger margins. And we did this, well, faster. First, we made our products better for buyers and sellers. For years, years, Opendoor's product was a one-size-fits-all product. You want to sell a home, here's an offer, take it or leave it. But look, all sellers are not the same. Someone with 80% equity in their home doesn't have the same needs as someone with 20%.

But under the old model, both of these folks paid the same fee, which means that we're taking on risk and neither side wanted. The seller didn't need it and we didn't want it, but the product forced it. That's not a pricing problem. It's not an underwriting problem. It's a product problem. So we fixed it. We now put the ability to change the offer that fits your needs into your hands. You choose how much cash you want upfront and the fee adjusts, take less upfront, pay less fees, often a lot less. Every dollar that a seller does not need upfront is a dollar that we don't need to put at risk and a dollar that they don't need to pay for. So they pay less and we make more. It's a win-win. And it also allows us to serve customers that we could have never served before.

This risk reduction, it allows us to do something else, too. It allows us to tighten spreads on our core cash product. It's early, but from best I can tell, this is working. We're seeing demand that we would have never seen before. And because we're seeing a lot of extra demand, we also launched our self-assessment app. With our self-assessment app, the seller takes pictures of their home and AI does the assessment work. No humans needed. And because there are no humans in the loop, in January, we nearly doubled the number of homes that we assessed compared to September. And so far this month, about half the homes we've assessed have needed 0 people to show up at your doorstep.

On top of this, we expanded our buyer products, Opendoor Checkout. As of this morning, it is now live in 40 states. Opendoor Checkout embeds mortgage preapproval directly. It also supports Opendoor's Euros home credit where we give the brave men and women of America's Armed Forces $4,000 towards closing costs of a home. Opendoor Checkout also includes the Opendoor guarantee. It allows for free cancellation, warranty and early move-in. We also launched our seller guarantee. When a seller sells us a house using Cash Plus, they now get the chance to make sure they like how we are selling the home. If they don't, they can just undo the transaction and pick the home back by paying us a low restocking fee. Okay. That was a core product. Outside the core product, we also expanded our growth levers.

To start, we dramatically expanded how many people we could serve by expanding our geo coverage and our buybox. It took Opendoor from 2015 to 2025 to become available as an option for about 1/3 of the homes in the U.S., 10 years. Opendoor 2.0 almost tripled that in about 10 weeks. Thanks to AI, our product went from being available to about 1 to every 3 homeowners to being available to nearly every homeowner in the Lower 48. Now you would expect that, that kind of rapid expansion would reduce risk, sloppy underwriting, margin compression, operational blowups. We saw the opposite. You'll hear Christy talk about our margin guide points in a bit, but the new system is working, and it's already generating thousands of incremental qualified leads per week with 0 incremental marketing spend. Making this work well required us to build across almost 200 MLS data sets, coordinate over 100 brokerage regions and expose 150 standardized attributes.

This was hard work, but we believe software should not be limited by ZIP codes. And as we expand our product, we also significantly improved our data ingestion. We now have a nearly real-time data ingestion with over 1,000 pipelines. They serve our new market-agnostic pricing tools, and we also have a new ML model that predicts customer conversion propensity at the time of underwriting. It uses like a dozen different data points, so we can best target our sales and marketing efforts. And because we have all these new potential customers, we also focused on making sure we can grow profitably.

I want to tell you something a little counterintuitive. Usually, CEOs get in front of investors and say, we're focused on cutting costs. And usually, that doesn't work and actually, it increases costs. So we didn't do that. We didn't focus on cutting costs to improve margins. We focused on improving the product and taking pride in our code and the costs started disappearing kind of on their own. Look, products frequently get better by removing things, not adding them, by deleting code, not writing it. So we deleted a lot of things. They just weren't needed. Last quarter, I talked to you about the actual debt that was weighing down the company. We're now focused on a different kind of debt, but one that is just genuinely equally pernicious. There's a concept in engineering called tech debt. It's the accumulated cost of every shortcut, every extra layer, every micro service that was added for no good damn reason.

This tech debt across the entire stack is a reason that it's 2026 and connecting an office printer still feels a little like diffusing a bomb. And honestly, before the recent changes, Opendoor wasn't that much better than your printer. We weren't just carrying tech debt. We're also carrying organizational debt and the interest payments on these bad decisions were just killing us. So we started paying this down and the results are just wonderful. When Opendoor entered 2025, our annual run rate costs on hosting was $12 million a year. Exiting 2025, Opendoor 2.0's cost and hosting infrastructure is less than $5 million a year. We haven't just significantly cut the cost of providing our products to our customers. We've also made the product better. We also significantly increased the sample set used in our valuation model while decreasing our cost.

This means that the run time in our model was reduced by about 50% from 12 hours to 5.5 hours. The entire pipeline can now run in a script that's about 50 lines of code and the feature building Dags are now 90% cheaper. This saves us at least $1 million a year. We also replaced third-party tools with in-house vision models for thinking through home conditions. Not only did this save us a few million dollars in backfill costs for large-scale experiments, it also brought a core AI capability fully in-house and cut the processing time for 100,000 listings from 34 hours to just 4, cheaper, better, faster.

On top of this, we also cut over $1 million in cost by replacing SaaS tools with more cost-effective and genuinely better AI alternative. And we stopped paying for tools we barely used. Land and expand SaaS no longer works inside Opendoor. And we didn't just cut costs and focus on better infrastructure. We also invested in advanced ML models and data-driven pricing strategies. They're improving our margins per home while maintaining or actually improving our conversion rate. Our home sale pricing is now powered by our new ML model that avoids Opendoor's previous policy of just blanketed price drops.

The model now helps us make targeted pricing decisions for every single home. We also built a new home level days in possession model using real demand signals. I think this is going to increase our dispersion by about 2x. Okay, that's a lot. Let's take a step back. Look, I opened this call by grading Opendoor against the plan that we laid out last quarter, green, yellow, red. We're not caring. We're going to keep doing this every single quarter. You can track our acquisition contracts and our progress in real time at accountable.opendoor.com. We're going to revisit this every single quarter just like we did right now, and we're going to make it reflect our path to profitability.

As we learn more, we'll tell you more. You can see the results of our work, what we ship and whether it moves the needle. Please hold us to it. We're asking you to hold us accountable because this matters. There are millions of families in this country where the experience of buying or selling a home is so bad, so slow, so uncertain that people who want to do it just don't. This is a hard problem, but we're going to fix it. And for the first time, we have the team, technology and the proof points to actually do it. If you have questions about anything, DM me on X, seriously, DM me on X, I'll try to answer your questions. We're not hiding behind consultants or scripted callbacks. That's not how we operate. Christy is going to walk you through numbers, but to steal a bit of her thunder, the numbers are good. Christy?

Thank you, Kaz. Bottom line, we're executing. Last quarter, we laid out 3 goals: scale acquisitions, improve unit economics and resale velocity and build operating leverage, and we delivered on all 3. We increased acquisitions 46% from the third quarter. Our October 2025 acquisition contract cohort is over 50% sold through or in resale contract. This represents over a 2x improvement in resale velocity compared to October 2024 and a roughly 50% improvement from October 2023. At 50% sold through, this cohort is yielding the highest contribution margins for an October acquisition cohort in company history.

And we delivered all of this while reducing fixed operating expenses and holding trailing 12-month variable operations expense flat as a percentage of revenue. Our fourth quarter results reflect the early days of Opendoor 2.0. While we implemented the operational changes Kaz described, it's important to note that 94% of the homes we sold in Q4 were acquired before October. We were clearing the old book while building the new one with higher quality homes.

In the fourth quarter, we purchased 1,706 homes, an increase of 46% from Q3. This marked an important inflection point as we shifted from the high spread posture of the first 3 quarters to a more tailored approach. We provided stronger offers for higher-quality homes with greater expected resale velocity and maintained higher spreads for lower-quality homes with elevated risk and slower resale clearance expectations. We delivered revenue of $736 million, representing a 20% quarter-over-quarter decline, meaningfully better than our guidepost of a 35% quarter-over-quarter decline. We sold through more aged inventory than initially forecasted, a direct result of the resale velocity improvements we've made.

As anticipated, our margins face near-term pressure as we work through legacy inventory. GAAP gross profit was $57 million in Q4 compared to $66 million in Q3. GAAP gross margin was 7.7%, up 50 basis points sequentially. Contribution profit was $7 million and contribution margin was 1% compared to contribution profit of $20 million and contribution margin of 2.2% in Q3. This sequential decline reflects the continued clearing of older, lower-quality inventory acquired during the prior high-speed strategy and Q3's historically low acquisition volumes, leaving us with minimal new inventory to improve the mix.

Adjusted EBITDA loss was $43 million compared to $33 million in Q3 and exceeded the favorable end of our guidance range of a high $40s to mid-$50 million loss. Net loss for the fourth quarter was $1.1 billion compared to $90 million in Q3. This included a $933 million noncash loss from last quarter's convertible note refinancing. Adjusted net loss, which excludes that item, totaled $62 million compared to $61 million in Q3. Turning to our balance sheet and capital structure. We ended the quarter with $962 million in unrestricted cash and $133 million of equity invested in homes. We held 2,867 homes at quarter end, representing $925 million in net inventory.

Our nonrecourse asset-backed borrowing capacity remains robust at $7.2 billion, with total committed borrowing capacity of $1.6 billion. These facilities built over years of partnership with our lenders provided us the flexibility to scale as we execute our growth plan. Last earnings call, we announced the refinancing of the majority of our convertible notes with equity, eliminating a near-term repayment trigger. We reduced our cash interest burden, and we issued the warrants dividend to align our shareholders directly with the upside we're working to create. The foundation is set for Opendoor 2.0 operating model, and now we're focused on delivery.

As we introduced last quarter, we are executing against 3 management objectives we believe are key to reaching profitability. The table in our earnings release shows our progress against each objective. Let me walk you through the highlights. First, scale acquisitions. We increased homes purchased by 46% quarter-over-quarter from 1,169 homes in Q3 to 1,706 homes in Q4. Last week, we signed 537 acquisition contracts, up from 236 contracts at the time of our last earnings call. You can continue to track our weekly progress on our dashboard at accountable.opendoor.com. Second, improve unit economics and resale velocity. We made significant progress on resale velocity this quarter. The percentage of Opendoor homes on the market for greater than 120 days decreased from 51% at the end of Q3 to 33% at the end of Q4, an 18 percentage point improvement in a single quarter.

This reflects the operational changes we've made to move homes faster, better pricing, more robust monitoring system and an improved buyer experience through products like Opendoor Checkout. In addition, the margin performance and resale velocity of the October acquisition cohort demonstrates the improvements we've made in pricing and selection. I also want to be clear about what this means for our go-forward strategy. October's margins thus far have come in above our long-term target range. That's a good problem to have, but you should not expect every quarter to look like October on a margin basis. You should expect us to reinvest that spread advantage into growth, faster turns, broader coverage and more competitive offers, while we aim to maintain contribution margins within our target range. You can track our product, feature and partnership launches on accountable.opendoor.com to see how we're continuing to build velocity into the business.

Third, build operating leverage. On our last earnings call, we committed to holding fixed operating expenses flat and trailing 12-month operations expense, the variable component of our operating expenses, flat or down as a percentage of revenue. We achieved both goals. Fixed operating expenses were $35 million in Q4 2025 compared to $37 million in Q3 2025 and $43 million in Q4 2024, down $2 million quarter-over-quarter and $8 million year-over-year. Our trailing 12-month operations expense as a percentage of trailing 12-month revenue held steady at 1.3% in Q4. As we scale acquisitions from this lower cost base, we expect meaningful operating leverage to emerge in 2026. These 3 objectives remain the foundation of our path to profitability, and we're executing against them with discipline, transparency.

As I said last quarter, you can't build a great business in a spreadsheet. You build it by shipping product, operating with discipline and learning from the market. Now let me give you some guideposts for Q1 and the year ahead. Acquisitions. Our profitability framework remains unchanged. We're targeting approximately 6,000 quarterly home acquisitions as we exit Q4 2026. As we've learned more in production, we're refining our acquisition trajectory to be more weighted to the back half of the year. We're investing Q1 and Q2 in improving how the funnel operates to scale more efficiently.

This means refining conversion, sharpening pricing and developing adjacent services to bolster unit economics. You'll also notice we've updated how we present accountable.opendoor.com. We replaced the cumulative projections chart with a single view that shows weekly actuals, a fitted trend line with its slope and a projected range for where we plan to be. Cumulative charts can mask what actually matters, whether we're accelerating and whether we're progressing towards our year-end targets. This view shows you both. We'll update the projected range each quarter as we learn more.

On revenue, we expect a decrease of approximately 10% quarter-over-quarter. This is a direct function of entering Q4 with low inventory levels due to the prior high spread acquisition strategy and the successful clearing of aged inventory in Q4. We're focused on scaling acquisitions throughout Q1 to rebuild inventory with higher quality homes that underpin our improved unit economics. Contribution margin. The mix of old inventory versus fresh inventory drives margins and Q1 2026 will reflect this shift. We made a concerted push in Q4 to clear legacy inventory. The homes we're selling in Q1 2026 are more representative of our new model, higher quality and faster turns. Our contribution margin bottomed out in September and has been improving every month since. We expect to exit Q1 with the highest contribution margin we've posted since Q2 2024.

Finally, on adjusted EBITDA, we expect Q1 2026 adjusted EBITDA loss in the low to mid-$30 million. This represents continued sequential improvement as we maintain cost discipline while simultaneously investing in automation and product velocity. Last quarter, we showed you the blueprint. This quarter, the house is going up. Our goal remains adjusted net income profitability by the end of this year on a 12-month go-forward basis. We have a lot of work ahead of us, but the proof points are building, and we intend to keep earning your confidence every quarter. With that, Michael, I'll turn it over to you for questions.

Great. Thanks, Christy. Okay. We've had a handful of questions that center around a common theme. We grab 2 of them. First, Zach H. asks, where is Opendoor at currently compared to expectations and profitability and where would you like to be? And Ryan Tomasello from KBW asks, according to your accountability dashboard, acquisition contract volumes are running at or below the low end of your targets. Aside from seasonal factors, what are the primary macro or pricing drivers preventing a faster ramp?

Yes. Thanks for the questions. Look, to be blunt, we're right where we need to be. We're on track. If you had told me 3 months ago that we'd be here, I would have told you you're being a little too optimistic. Last quarter, we laid out a 4-step plan, and I think we're green across all 4 steps. We did what we said we would do, and it's working. Our contribution margin bottomed out in September, has improved every single month after that. We're going to exit Q1 with the highest contribution margin we've had since Q2 2024. Look, it's early, but things are going well. And to be clear about it, this isn't the macro helping us.

This is us helping ourselves. So -- to answer your question, the reason we said our goal was adjusted net income profitability at the end of this year on a 12-month go-forward basis is because that is what needed to make sure Opendoor starts generating cash and doesn't need to raise equity ever again. That's our goal. But just like Google Map find different routes to get home, we're finding the best route to get home. And actually, let's take a step back before that. Before we become ANI profitable, we're going to become adjusted EBITDA profitable. Now I think adjusted EBITDA is not the best metric for measuring our business, and I'm not about to give you guidance. I think our lawyers have very particular feelings about me saying guidance. But to be transparent about it, the plan I have on this laptop right now has us being adjusted EBITDA profitable on an annual basis starting in Q2, right? So things are going well.

Things change and company building is a little messy, but things are going really well. Now I think there's a question behind the question. There's like an actual hard question here, which is, why are you at the bottom end of your acquisition goals? Let me say 2 things. First, I reserve the right to wake up smarter every single morning than I was yesterday. I want to learn. And I've learned a lot in the last 3 months. I've learned that the levers we have at our disposal are generally working faster than I expected. And we've discovered we've had levers that I didn't think we would have. So if we wanted to hit the top end of the range, we could do it very easily. But that would come at a cost. And I want to tell you about the cost, okay? So in a product company, you always basically have 2 choices. You can invest in product or you can invest in growth. That's the back and forth, right? Engineers are your most precious resource, and they could usually work on 1 of 2 things.

And like here's what I mean by this, like when you invest in product, you're putting fuel in the tank. When you invest in growth, you're spending that fuel. And this is actually key difference between product companies and not. Right now, I want to invest in having the best product we can before we go and invest in growth again. So I'm choosing to work on the funnel rather than the number that just happens to come out at the end of the funnel. Let me give you an example. This actually matters. So early in January, we took 4 engineers aside, and we asked them to work on our mortgage product. Those engineers could have worked on the Opendoor app. And I think the Opendoor app is genuinely bad and fixing it would be good and it would lead to growth. But we bought 500 homes last week and growth is going well, and we have lots of levers.

So we chose to work on our mortgage product and our infrastructure over the Opendoor app. And because of that, we're going to launch our mortgage product in beta this week. Okay. Let me be blunter. We built a mortgage product in less than 10 weeks. People told me it would take at least a year. We did it in 10 weeks. This is genuinely better for the long-term growth of the company than hitting the top end of the old accountable range. What matters to us is profitability, -- and in order to get there, the thing that matters is the pace by which we exit this year, what Christy just said, 6,000 last quarter. I am very confident in the levers we have and the levers we have built, and we can hit that pace. I'm very confident when I was 3 months ago.

That's why I'm so comfortable that we can take a moment to spend time investing in product to put fuel in the tank so we can burn it later. I promise I will never ever sell the future growth of our company at a discount. We're going to do the right thing and focus on the things that matter. Look, our October results proved something. They proved that what we are doing is working. The bets and the actions we've taken are the proof points we need to get to profitability. So we're going to invest in product and then growth.

Great. Our next question comes to us via video submission from [ Anthony Pompliano ].

Hi Kaz. I hope you and the Opendoor team are doing great. My question today is about artificial intelligence. Obviously, this has become really pronounced in the market. But what are you guys using it for internally? And how should that change the customer experience in the Opendoor product moving forward?

Thanks, [ Ben ]. I think the best example I can give you for AI use is what's happening at Opendoor in underwriting. Give me some rope. I love football. I think it's a great support. But I hate the fact that in any given football game, there's about 11 minutes of football and 3 hours of not football dressed up as football. And when I got here, Opendoor's Workday was kind of the same, like a lot of not work dressed up as work, a lot of toil that humans should not do anymore. Now look, -- every company says AI. It's like the buzzword of the day. And honestly, a lot of it sounds to me like yes.

Look, real estate is basically the last industry that is untouched by technology, where we pretend humans have a better sense of what an asset is worth than a model that's been trained on decades of data. And for a long time at Opendoor, we pretended that was true, too. But machines are better at something than humans. Look, humans do taste. Machines do ETLing data, creating documents. machines do math. Here's my principle. Humans do humans work and machines do machines work, right? And -- but human work is the work that machines cannot competently do yet. So what can't they do yet, for example? The last mile of our work they can't do yet. So the house that backs onto a highway, the machines are bad at valuing the asset. That's where human judgment comes in.

Our problem at Opendoor was never that we had humans in the process. The problem we had was that we had humans doing the wrong part of the process. So what have we changed, right? Our analysts are no longer doing valuations today. They're auditing what AI has prepared. They are working on evaluating the output rather than doing paperwork to prepare the input, right? Go back to football, is this one.

AI kind of lets us run a no huddle offense faster and more efficient, but the [ QB ] still calls the place. So I think you asked what should investors expect? I think initially, what customers should expect first because that's actually more important. Customers should expect a fair and fast offer with fewer errors. Investors should expect declining operational expense as a portion of our revenue like we talked about and a company that doesn't move as slow as the San Francisco part. So -- and there's also a separate thing. I think there's a key thing folks don't appreciate about AI. AI constitutionally destroys some businesses and improves others, right? If you're a point solution selling SaaS, I feel sorry for you. But if you deal with a real world where the primary problems are pricing and operational complexity and variance, AI is basically like manna from heaven. It's the thing we need to make the business work.

Great. Our next question comes to us via video submission from [ Catherine Ann ].

I'm [ Catherine Morgans ] from Portland, Oregon. I became a shareholder in Opendoor in 2021. I was inspired to invest in the company following my experience using Opendoor to sell my home. It was the most streamlined and painless home selling experience that I've ever had. And I cannot imagine should I ever need to sell a home again in the future using any other option. I've been following the progress of Opendoor mainly via the Datadoor Discord.

And it's been very thrilling over the past 6 months to see all of the innovation, especially with the improved implementation of AI to enhance operations and sharpen modeling. So as far as I'm concerned, things are looking very good on the, let's call it, the software front. My question has to do with, let's call it, the human front or the customer front. And that is, how do we get to the point where sellers think, I'm going to try Opendoor first before even considering going via a realtor. How do we turn that corner where Opendoor becomes the default first option that people try when they're ready to sell their home?

Yes. That's a great question. Defaults are like incredibly powerful and usually, folks talk about defaults the way they talk about brands. You use a [ Kleenex ], I then my friends. I put a Band-Aid on my kids legs basically every night. I want you to Opendoor your home. But brand is just another like word for reputation and reputations are earned backwards, not forwards, right? You can't spend your way into having a great brand.

Otherwise, all of you, all of you would be watching me right now on [ Quibi ]. Look, selling your home is one of the most important financial decisions for average American families. Selling a home is -- it's an act of trust, right? And historically, folks have placed that trust in people, not software. Opendoor exists to build software worthy of that trust. And to become trusted, you need to have lots of people use your product, lots of people be delighted by your product, right? So my favorite example of this is like Jeff Bezos and Sam Walton, right? The best marketing is a product that delights you. Jeff Bezos didn't spend money on advertising. He spent money on making the product there fast. Same with Sam Walton. So for us, if we want to be the first place people go to, we need to kind of earn that same level of trust.

And that for us starts with the offer. The offer is a product. It needs to be accurate, fair, reliable. It needs to feel great. And if I'm being honest, we're not the default yet, but we're on the right track. Like I know we're on the right track. Let me tell you why. In markets that we've been operating for a while in our mature markets, 20% of folks who go on to list their home before they call a person, they try opendoor.com. That's the beginning of looking like a default, right? As we expand more markets, we'll get there.

But so how do you -- like how do you become a default? That was your question, I think. I realize I've been talking for a really long time. So in order to become a default, you have to do a few things. First, you have to be available. At the end of last quarter, Opendoor wasn't available everywhere. So we expanded all over the Lower 48. We're available to almost everyone right now. Second, you have to remove every point of friction, right? Opendoor needs to make a fair offer, a good offer, a real offer fast. Trying Opendoor needs to be a delightful experience for our sellers. And last, you need to consistently deliver value. You need to be a fast transaction, better pricing, great services, including an amazing mortgage product. And our new unit economics help us do that, right? Better unit economics means better offers, better offers build a trust. Defaults follow trust and trust follows great products.

Great. Our next question comes to us from [indiscernible]. With the stock down significantly since your tenure began, how should investors assess progress? What key metrics best reflect operational improvement? What is the strategy to restore market confidence?

I mean, look, I just like ask your question a bit personally first. I am very highly motivated to see Opendoor's stock price go up, right? My family is the most levered family in the world on Opendoor stock. My salary is $1 and unless stock levels see levels they haven't seen in years, I don't get paid. So I don't want you to take what I'm about to say the wrong way, but I just want you to -- let me say this. I don't manage the stock price. I manage the business and look at what we're building. Now my responsibility is to create shareholder value. That's literally my job to create value for our shareholders whom I deeply appreciate.

But I fulfill that. I fulfill my responsibility by not looking at the stock price every day. I fulfill it by building something people want and value. The stock price will follow. It literally always does. My favorite book, one of my favorite books is a book called the score takes care of itself. I have it on my desk. It's in our library at Opendoor. It was written by Bill Walsh. Look, Bill Walsh didn't win Super Bowls by telling his team to focus on the scoreboard. This is a football-themed earnings call. His whole philosophy was simple, like execute the right way, take care of everything, the score takes care of itself. And I'm pretty sure he won more than 82 games. The stock is not the company, right? Jeff Bezos didn't become a worst CEO when Amazon stock dropped 90%. I bet you. I bet you, he didn't even flinch.

He kept building. And the stock eventually reflected the business, not the other way around. Now I've been here for 4 months. In that time, we've demonstrated clear evidence that the model we are building is working and the business is structurally improving, right? But how should you judge our progress? I think that was the question. I don't think you should do it by where the stock is today, but you should think about whether the underlying business is getting structurally better. I've given you how I would grade us, but I genuinely honestly think you should find a way to do that, too.

You should build your own model on us. But I want to be transparent about this. My job is to build a company that can host a product that people want. My job is to improve the economics of that business. And everyone here, everyone who works at Opendoor is focused on executing. The score will take care of itself.

Great. Thank you. Next, Victoria B asks, if home prices drop another 5% to 10% nationally, what happens to your margins and inventory risk? How prepared is Opendoor for that scenario?

Thank you for the question, Victoria. It is the right question to ask. Opendoor 2.0 is built to move homes, not hold them. The longer you hold when the market turns, the more it hurts. So the whole game is turn faster. And here's what's genuinely different now. We have more tools than we've ever had. Previously, the primary lever was spread, price conservatively enough to absorb a market move, and that works, but it's blunt and it has terrible adverse selection. We now have a broader toolkit. First, selection. Under Opendoor 2.0, we are a more tailored approach. We offer strong prices on high-quality homes where we expect faster resale velocity, and we maintain wider spreads on homes with more risk or slower clearance expectations.

Second, velocity. We reduced homes on market greater than 120 days from 51% to 33% in a single quarter. Our October cohort is clearing at 2x the velocity of October 2024. A home we own for 45 days has fundamentally different risk exposure than one we own for 180 days. And as we grow volume, the goal isn't to hold more homes, it's to move more homes. Scale and velocity compound together. Third, cash plus. This is an underappreciated as a risk management tool. When a seller opts in, they're retaining more of the price risk, and we earn fees with less capital at risk. That structurally shifts our exposure.

Are we immune from a 5% to 10% decline? No, nobody is. But the question isn't whether it hurts, it's whether Opendoor is structurally positioned to navigate and withstand it. The October cohort is a great example of this. Over the past 5 months, national home prices came down roughly 300 basis points. During that exact period, our contribution margins on that cohort held steady or slightly improved. That's not hope or an expectation that happened.

Great. Our next question comes to us from Andrew Boone from Citizens, who's wondering, there's some testing of a mortgage product with Lennar. Where is Opendoor in extending the services opportunity? What should our expectation for 2026 be for Opendoor to be able to attach more adjacent products to transactions?

I feel like I'm now on a football thing, so I need to find a football analogy. I just don't have one. Okay. Look, like I said, we started building our mortgage product in January, and we're going to launch it in beta this week. I showed it to Christy last night. I'm very, very bullish on this product. I think it's going to be good. It's going to take us a second to get all the right things because that's how products work. But I'm very bullish, and we're going to have more news on this soon. I think there was a part of the question that was about unit economics. Let me hand wave because I think the unit economics of the mortgage space are like relatively well understood. We're going to do some special things about them, but let us tell you about them when we do those things.

So I think the primary unknown question is this. what will be our attach for mortgage and adjacent products, right? How many people who buy or sell a home from Opendoor take a mortgage from us? I have a hypothesis, but not a good answer. I've done this a couple of times, but we're going to underpromise and overdeliver here. But separately, I think there's very likely that there is a world where we have partners, especially our homebuilder partners that use some of the software we're building. We're building a new stack with the help of some partners, and it will be more finely tuned to people who own assets they're selling than a typical mortgage stack. I still don't have a football analogy.

We can come back. Our next question comes to us from Dae Lee from JPMorgan asking, what has stood out to you so far about the quality and profitability of the homes you're buying since ramping up acquisitions? Any surprises as you pick up the pace and have those led to any changes in your approach? And looking ahead, what are the key factors or milestones you're watching most closely to gauge progress toward your current profitability and margin targets?

Thank you for the question, Dae. As you may have noticed, the October 2025 acquisition cohort is something we've been paying a lot of attention to. And that is because that's the first cohort where we had the offers, the contracts, the acquisitions and now 50% of the resales are under the Opendoor 2.0 model. So it is a very important source of data for us. The performance of this cohort isn't just one thing. It's everything working together for the first time. So I talked earlier about selection and spread dispersion, but we are targeting higher quality, higher velocity homes so that we can turn them faster and get better selection.

When you have better selection coming through the door, that really improves our operations. Those are homes that we can get relisted faster and have less variance in outcomes. And then it comes to the resale systems and our ethos. We, as an organization, fundamentally believe that it's better to identify a margin-optimized clearing price than to wait around for the perfect offer to come along. And so our machine learning pricing model, it has meaningfully improved the precision of pricing decisions, better demand signals, better timing and better calibration at the individual home level rather than blanketed spread reduction or price reductions.

The result, resale velocity in our October cohort was 2x what it was in October 2024 and with margins that exceeded our expectations. And so that puts to rest the idea that speed and margin are a trade-off. We've shown the answer to both can be yes in a market that, frankly, no one would characterize as particularly strong. To answer your question about surprises, I think what surprised us was how quickly some of the changes we put in place showed up in our results. For example, the degradation. And so when you have a cohort of homes that you buy, you expect the homes that you sell right upfront to probably perform a little bit better than the homes later in the cohort.

But in this last October cohort, we saw that from 10% to 50%, our margins basically held flat. They were actually up about 18 bps, and that was during a tough market. And so seeing that flat degradation was very promising. Finally, you asked about looking ahead. And I guess I would just bring us back to our management objectives, scale acquisitions. We've said we want to exit the year with 6,000 acquisitions per quarter, and that will set us up well for our adjusted net income profitability.

As a reminder, we're now available through the Lower 48, and we'll start leaning into marketing in Q1 as we expand to reach those markets. Objective number two is improving margin and resale velocity so that we return to our 5% to 7% targeted CM. And objective 3, build operating leverage as we rescale. Fixed operating expenses flat or down and trailing 12-month operation expense flat as a percentage of revenue or down.

Great. Our next question also comes to us from video submission and will be answered by Brad Bonney, Opendoor's Chief Business Officer.

Opendoor. My name is [indiscernible]. I'm here with my daughter, Eva, and we're in Ohama from Hawaii that relocated to Tennessee. We purchased with Opendoor a few months ago because of the convenience. We tried the traditional way many times, and we stumbled upon Opendoor. It allowed us just unlimited access to the property we're looking at. Speed of response, and it's just the easiest way to work with. We didn't need any rotor. We didn't need our attorney to help us. It was just us and Opendoor. And we're promoting Opendoor a lot to our whole [ Ohama ] because this is new to us. This is a new way of buying and selling or relocating.

And because of that, that's what got us to also invest into the company because we saw something brand new, something convenient and something totally different that goes against the traditional way of buying and selling. My question to cause is, as you know, I'm a veteran. A lot of military people have to move. We come on orders really quick. And I see this being a great platform for a lot of military people, veterans, active duty. What is Opendoor doing? -- to help our community. I really appreciate the time [indiscernible] Talk to you guys later.

Thank you Brad. Thank you for your question, and thank you for your service. As a fellow veteran, you spent more than 7 years in the Navy serving primarily out of nuclear submarine. I know what it means to raise your hand and say, I will go where you need me, when you need me for as long as you need me. That commitment makes the American dream possible for all of us, and it shouldn't come at the cost of the dream itself. Nearly 400,000 service members PCS every year. That's almost 0.5 million families navigating a home sale on a time line they don't control.

The traditional real estate process wasn't built for that reality. Opendoor was. Fast offers, close dates you control and certainty in an otherwise uncertain transition. Here's how we're helping. We've already launched the Heroes Home Credit. This is a $4,000 credit towards closing costs for active duty service members and veterans buying an Opendoor home. That's not just some marketing gimmick, that's Opendoor recognizing that military families already absorb significant out-of-pocket expenses every time they move.

They shouldn't have to sacrifice when buying their next home too. We're building from there. We're working hard to make sure VA loans work seamlessly with Opendoor because that's how many military families buy. These are some early steps, but we really need to continue to build trust with the military community. Trust doesn't happen with ads. It happens through word of mouth.

One soldier tells another how easy it is to sell their home. On sailer tells her shipmate how they seamlessly moved their family across the country. And each time, it's Opendoor who made it happen. That means the most important thing we can do is exactly what we've always said, build a product that actually works for the people who need it most and deliver on every promise we make. Every military family we help becomes an advocate and every advocate helps spread the word. Coupa, your question today is exactly what this looks like. Thank you, and thank you again for your service to our country.

Great. Thanks, Brad. I think we have time for one more. And Zach H is wondering, where do you expect to see Opendoor in 2 years?

That's a great question. It's actually my favorite question. Before I answer that question, I want to say something. One of the things that makes me deeply proud of working at Opendoor is the number of veterans that work at Opendoor. We deeply recognize that freedom isn't free. So thank you, genuinely thank you. So where will it be 2 years from now? And what do I expect? Well, 2 years from now, I expect to be sitting in front of you telling you that we delivered exactly what we said we would do. 2 years from now, I want Opendoor to be the default that we talked about. I don't want to have to choose anymore between margin and volume. 2 years from now, we're going to get both. Two years from now, the AI infrastructure we're building right now is going to have a compounding effect across our cohorts. We're no longer going to be talking about the model. We're going to be talking about scaling it and how we can serve as many people as we can.

And we're going to be okay with the people who doubt us now, taking credit for our work 2 years from now. But the most important question for me generally is where homeownership is going to be 2 years from now. Will a teacher living in Kansas City be able to afford a home on her salary so that her kids can grow up in a home owned by their mom and dad.

Today, the answer to that question is no. 2 years from now, I hope can stand in front of you and say the answer to that question is yes because then our work will have mattered. Okay. Thank you. Thank you. Thanks for putting up with us. We'll see you in 3 months. Cheers.

Hey, everyone. I'd like to welcome you all to Opendoor's inaugural Open House earnings live stream. I'm Michael Judd, Opendoor's Head of Investor Relations.

A few housekeeping items before we get started. Details of our results and additional management commentary are available in our earnings release, which can be found at investor.opendoor.com. The following discussion contains forward-looking statements within the meaning of the federal securities laws.

All statements other than statements of historical fact are statements that could be deemed forward-looking, including, but not limited to, statements regarding Opendoor's financial condition, anticipated financial performance, business strategy and plans, market opportunity and expansion and management objectives for future operations.

These statements are neither promises nor guarantees, and undue reliance should not be placed on them. Such forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those discussed here.

Additional information that could cause actual results to differ from forward-looking statements can be found in the Risk Factors section of Opendoor's most recent annual report on Form 10-K for the year ended December 31, 2024, as updated by our quarterly report on Form 10-Q for the quarters ended June 30, 2025, and September 30, 2025, and other filings with the SEC.

Any forward-looking statements made on this webcast, including responses to your questions, are based on management's reasonable current expectations and assumptions as of today, and Opendoor assumes no obligation to update or revise them, whether as a result of new information, future events or otherwise, except as required by law.

The following discussion contains references to certain non-GAAP financial measures. The company believes these non-GAAP financial measures are useful to investors as supplemental operational measurements to evaluate the company's financial performance. For a reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP metric, please see our website at investor.opendoor.com.

With that, let's get into the open house with Kaz and Christy.

Good afternoon. My name is Kaz Nejatian. I'm a computer nerd turned lawyer, turned founder, but I think of myself primarily as a product manager. That's what I spent most of my career doing, building products and leading teams to build better products faster. I'm not the guy you invite your place if you want someone to bring to party. I'm the guy you invite your party if you want someone to fix your Sonos.

On my first day at work, I told our team at Opendoor that we're going to make a bunch of changes and that the new Opendoor would look nothing like the old one. And that's because, well, the old Opendoor had kind of lost its way. Before I tell you why I think Opendoor was broken, let me share you one example of the thing that has changed just in the last few weeks, so you can get a sense of the scale of the change.

Look, on my first day at work on September 15, Opendoor had entered into contracts to buy 120 homes in the prior 7 days. By last week of October, that number had risen to 230 homes. In 7 weeks, we nearly doubled our speed of acquisition.

I think it's reasonable to ask how can we move so fast right now when we used to move so God damn slowly. If you give me a couple of minutes, I'd like to tell you what caused the old Opendoor to be so broken. I think this diagnosis will kind of matter in how we rebuild Opendoor.

Having been inside the company for just over a month, it's kind of obvious to me that the old Opendoor had just lost faith in the power of software to make selling, buying and owning a home easier. It just kind of thought of itself as an asset manager trying to predict the economy.

And the previous Opendoor also didn't really believe in the power of AI to do anything, much less to make our work less toilsome. When I joined the team, I'm not kidding, there were a dozen people whose only job it was to copy and paste information from PDFs into glorified spreadsheets. The previous Opendoor also didn't really believe in itself.

I was genuinely shocked when I found out that one of Opendoor's biggest expenses in the first half of this year was millions of dollars paid to a well-known consulting firm to tell Opendoor how to do its job. Everywhere I looked in my first 30 days, I found consultants making decisions that should have been made by executives.

Finally, the previous Opendoor had become so risk-averse that it no longer really believed in buying and selling homes. If you ignore COVID, we bought fewer homes in Q3 than we have since 2017 when Opendoor was just a tiny start-up.

Look, in the last few weeks, we've reversed course on all of these decisions. We are ditching manager mode. We're now firmly in founder mode. We are refounding this company. This is Opendoor 2.0, and we believe different things. So what do we believe at Opendoor today?

We believe that we have to use all of our energy and every modern tool at our disposal to build products that make homeownership easier and less frictionful. We believe we're a software company, and our leverage comes from engineers writing code.

We believe machines are better at pricing assets than humans. We believe AI will empower us to avoid toilful work, and we can have a leaner and more aggressive company. We believe we are here to make hard decisions, and we will never ever abdicate that responsibility to management consultants.

We believe in being operationally excellent, especially in marketing and corporate functions. When I was at Shopify, I insisted that we manage our marketing dollars like a hedge fund would manage its IRR. We're going to do the same thing here. We're going to spend money only on channels that give us great payback, and we're going to stop spray and pray marketing.

We believe slowing down buying homes just to buy them at a significant spread is a bad strategy. Look, the only folks who are going to sell their house at a large spread are people who know things that you don't know. They want to get rid of their house as fast as possible.

This is the definition of adverse selection. It's not a buying opportunity. It's a massive red flag. To use Wall Street terms, Opendoor is going to be kind of like a market maker in the future, not a prop desk. We're going to profit from flow, speed and tight spreads, not on bets on the direction of the economy.

Our business plan is simple: buy and sell lots and lots of homes quickly, be operationally excellent and increase our value to each homeowner by launching services like mortgage, insurance and warranty.

Starting last month, we reduced our spreads while simultaneously stepping up operational rigor and tightening our selection discipline. The goal is simple. We're going to make stronger first offers, buy more good homes and get more good sellers through our funnel.

To avoid adverse selection, we're building our inspection process from ground up, structured in-app video and audio, feed goes directly into AI that creates condition profiles that are validated through a standardized inspection process that give us great data.

The result is going to be a consistent high-fidelity view of every single home. This trust but verify approach is going to improve the speed and the quality of homes while giving us amazing data to adjust our process, allowing us to grow our portfolio without sacrificing pricing discipline, without giving up on asset quality and without slowing down transaction velocity.

But buying a great home isn't the end of our job, right? It's also important that when Opendoor buys a house, we provide value and services to both buyers and sellers. That's why earlier this week, we launched Opendoor Checkout. It's available in select markets now, and it's going to expand to our entire inventory soon.

A buyer can walk into an Opendoor home, tour it and place an offer to buy it on opendoor.com without ever talking to a human being. We're shipping the buy now button for homes on the Internet. We're going to improve on this. We're going to add more products and more features for homeowners to simplify the home buying experience, starting with mortgages and warranties.

Look, in the future, buying a home will be as seamless as buying a car from Tesla. You'll choose your home, your financing, your warranty, your insurance, all in one place, all in one flow. Right now, homeowners have to deal with a bunch of different companies, brokers, agents, a lot of different stuff to get what they need for a house.

That doesn't make sense. We have the Internet. We're going to fix this. And over time, we'll add everything a homeowner needs when they need it, all bundled into one simple experience. Opendoor's goal is really simple. We're going to tilt the world in favor of homeowners and those working hard to become homeowners. That's our goal.

And we're going to pursue it with an incredible amount of aggression. Since my first day as the CEO of our company and our first day in this new Opendoor, we've launched over a dozen new products and features. They include things like an end-to-end AI home scoping, where machines instead of human beings decide what repairs are needed and what renovations need to be done.

We've automated title and escrow, where AI has started doing some of the work that goes into closing a transaction. We've launched Opendoor's trade-in widget, where we help builders to offer a home trading program like they do in car dealerships.

The new Opendoor Key app allows agents, Opendoor experts and soon any homeowner to assess their homes just like an expert. Now we're going to fully power this with AI rather than someone showing up with a pen and paper. We launched Buyer Peace of Mind, giving people certainty when they buy their home with benefits like home warranty and early move-in.

We launched AI-powered multilingual agents, explaining home valuation to homeowners and helping them move forward with Opendoor. And we're launching a new partnership with Roam, connecting sellers with Roam's Assumable Mortgage platform to help them move when they want to.

We've also made significant improvements in our SEO products, significantly increasing organic traffic. But closest to my heart has been our push to default to AI everywhere. And this has allowed our frontline operators to iterate without writing code.

One of our nontechnical teammates built a no-code tool that cut our quarterly inventory management process from 10 hours to about 7 minutes. And this list of launches should show you that we have this renewed aggression at Opendoor.

We're going to focus on building great products. But aggression by itself is not a strategy. It's better than hope, but it's not enough. So here's our 4-step plan to channel that energy.

First, by the end of next year, we will drive Opendoor to breakeven. We think about this in terms of adjusted net income on a 12-month go-forward basis. That means Opendoor will start generating cash and will never be forced to raise equity ever again.

Second, we will drive significant positive unit economics while increasing the velocity at which we transact in homes. This includes launching financial services like mortgage.

Third, as we increase our unit economics, we will change the company's focus from primarily building channels to transacting directly with buyers and sellers. We're also going to focus on reducing our days in possession rather than arbitrarily increasing spread, which has had genuine significant negative consequences for us.

Fourth, once we've accomplished the first 3 steps, we're going to focus on allowing buyers and sellers to transact on Opendoor without having to buy or sell from Opendoor. This is going to significantly lower our capital risk, but more importantly, it's going to give folks options they want.

Over time, as we succeed in these initiatives, Opendoor will change the homeownership experience in the same way Amazon changed the shopping experience, both directly and through its third-party marketplace.

Let me be clear, adjusted net income breakeven is a milestone, not a goalpost. We have a huge runway ahead of us. Yes, there's going to be some headwinds, we're going to get some things wrong, but we're committed to consistently delivering improved unit economics and you're going to begin seeing progress towards adjusted net income breakeven milestones as we clear old inventory and increase our acquisition speed.

In my first month, we've already made significant progress on the first 3 steps. As we move towards breakeven adjusted net income, we're prioritizing durable cost reductions. Chris is going to talk about some of these, but I want to give you some examples.

We reduced spend on external software and have terminated or are in process to terminate over 20 software vendors to date. We've reduced spend on external consultants. Opendoor spent millions on management and PR consultants in the first half of 2025. The go-forward plan is 0. And to drive positive unit economics and increase the velocity at which we transact in home, we've significantly changed our buying behavior.

For example, up until mid-October, when someone came to opendoor.com and typed in their address to sell us their house, we would have up to 11 Opendoor employees in the hot path of that sales contract closing. Today, that number in many of our flows is down to one person, and that one person is there to audit the machine to make sure we don't make unnecessary mistakes in underwriting.

In fact, we're now doing almost 750 home assessments per week using AI. It used to take us close to a day from the time we collected artifacts to time we complete assessments. In our new flows, this takes about 10 minutes. In the last week of September, we entered into contracts to buy 128 homes. In the last week of October, we entered into contracts to buy 230 homes.

To accelerate transaction speeds and customer choice, we can now accept a USDC as a payment method for home purchases. And to make the company primarily D2C, we've turned on Opendoor's D2C flow once again. The company had completely shut down almost all of these flows.

Look, while we want customers who want experts to be able to work with one, we are once again accepting customers who want to sell us their home directly. Last week, these customers made up over 20% of our total home assessed. And in a test we ran in mid-October on over 2,000 accounts created, we saw that our new D2C totally unoptimized funnel was able to convert 6x better than the non-D2C funnel.

We're far, far from optimizing this, but we believe we have significant opportunity to improve our overall conversion. Okay, that's a lot. Before I hand off to Christy, I want to spend a minute to talk to you about previous decisions Opendoor made about its capital structure. Because look, I think it's important that you hear from me directly about this.

When I took this job, I knew Opendoor needed a balance sheet that was fit for our ambitions. Every home needs a solid foundation. And for us, that's capital. There are aspects of our balance sheet that are just genuinely phenomenal.

We have 10 different lending facilities with long-standing partners, some of them as long as 9 years, who've demonstrated their ability to scale with us as we grow. Today, we can finance roughly 5,000 homes all at once and close at almost 100% advance rate at great prices. At our peak, that number was about 20,000, and we're going to get back there.

And I'm genuinely confident that we can get there with our lending partners. But they're also part of our capital structure that were not focused on the long term. They seem to have been designed and driven by fear rather than setting us up to win.

To be blunt, when I joined, the balance sheet had a [ pink lock ]. The company had issued convertible notes with an early repayment that could have forced us to repay them in full before the end of this year. That would have been disastrous for the company. And my first priority was to remove this pressure and give us runway to execute on our vision.

Let me be clear, I despise dilution. If we issue a share, it has only one job, to make every other share worth more for our existing shareholders. But to give us some breathing room, I made a decision in my first week to use our existing ATM program to raise nearly $200 million. This bought us the time we needed to deal with the notes without a gun to our head.

Earlier today, we reached an agreement to retire the majority of these notes. We took the steps we needed to clean up our capital structure, and we now have the balance sheet we need to stop playing defense and start playing offense.

But there's a second part to this, and it's about you. We wouldn't be here without you, our shareholders. You believed in the long-term value of this business, even when our capital structure didn't really reflect it. And I don't believe in asking you to stay on this journey without sharing directly in the upside we're creating together.

Look, public markets have a long history of taking shareholders for granted. We're not going to do that. In fact, we're going to reverse that. This is why we're issuing a dividend warrant.

Each of you will receive 3 series of warrants, Series K, Series A and Series Z with exercise prices at $9, $13 and $17. One warrant for each series of 30 shares you hold. These warrants are going to cost you nothing and their value goes up as we make Opendoor into what it can be.

We want to be on the same side of the table as our shareholder. We're returning some value to you today. You can sell the warrants as soon as you get them, but I'm hoping that you'll stay along for this ride, that you'll participate in what we are building together.

We're going to move forward together. And when Opendoor succeeds, our shareholders are going to share in that success. And yes, I'll admit it, it gives me just a bit of joy that this will totally ruin the night of a few short sellers.

Look, we're building a new company, right the open. Opendoor 2.0 is committed to its community because we're building and because who we're building for matters. We're going to talk to you the way we talk in the office in plain English, sometimes with a few cuss words, but always with transparency. Please consider this our clean break from corpo jargon.

We're just going to talk to you and tell you when we make mistakes. And we know that this transparency is not a burden. It's a feature of your trust in us. We want to hear from our shareholders, your ideas, your questions and even product bugs because we want to fix things fast and build better. If you haven't already seen this, [indiscernible].

I am more bullish today about Opendoor's ability to change homeownership than I was when I took this job. I'm more bullish because I see a lot more of what is happening inside the company than folks see from the outside. And I think one of the ways in which we can bring you all along for this journey is to just communicate more frequently, more directly and tell you what we are doing, what's working, what's not.

Christy is going to tell you a bit more about how we intend to do this after she shares our third quarter results. Christy?

Thank you, Kaz. Our third quarter results reflect the deliberate choices made earlier in the year to prioritize risk management over volume growth, defined by wide spreads and a risk-averse posture that treated buying homes as something to avoid rather than our core business.

The numbers tell the story. In the third quarter, we purchased 1,169 homes, roughly in line with the expectations shared at Q2 earnings, but well below our recent historical acquisition volumes. We delivered revenue of $915 million, above the high end of our guidance as we deliberately cleared old inventory before the slower winter selling season.

When you stop buying homes, you don't just lose volume, you lose the ability to manage your inventory mix. We were left selling through older homes that were selected under the old strategy, and that showed up in our margins.

GAAP gross profit was $66 million in Q3 compared to $105 million in Q3 of the prior year. GAAP gross margin was 7.2%, down 40 basis points year-over-year. Contribution profit was $20 million and contribution margin was 2.2% compared to contribution profit of $52 million and contribution margin of 3.8% in Q3 2024.

On costs, prior leadership did meaningful work to restructure our cost base, and we will continue that effort. Third quarter GAAP operating expenses totaled $134 million. Adjusted operating expenses were $53 million, a 41% improvement from $90 million in the third quarter of 2024. This improvement was driven by disciplined cost management across all components, marketing, operations and fixed operating expense. As we rescale acquisitions, we're doing it from the structurally lower cost base.

Net loss for the third quarter was $90 million compared to a loss of $78 million in Q3 '24. The prior year number included a $14 million gain from the Mainstay deconsolidation. Adjusted net loss totaled $61 million, an improvement from an adjusted net loss of $70 million in the prior year period.

These are the results of the old Opendoor. What matters now is what comes next. Earlier, you heard the plan for Opendoor 2.0. I'd like to take a moment to walk through the foundation it runs on, our capital.

We ended the quarter with $962 million in unrestricted cash and $187 million of equity invested in homes. We held 3,139 homes, representing $1.1 billion in net inventory. We had $7.6 billion in nonrecourse asset-backed borrowing capacity, of which total committed borrowing capacity was $1.8 billion.

As Kaz mentioned, we have executed three substantial capital transactions to set our balance sheet up for the scale ahead. First, the rapid increase in our stock price triggered a condition in our 2030 convertible notes that could have required us to repay the full principal balance in cash during the fourth quarter of 2025.

Using our at-the-market or ATM equity program, we proactively raised equity in September 2025, selling 21.6 million shares at a weighted average price per share of $9.26 for nearly $200 million of gross proceeds.

Second, today, we refinanced a substantial portion of the 2030 notes with equity. As a reminder, these notes bear interest at a 7% annual rate. The combination of these two transactions add meaningful liquidity to our balance sheet, reduce our cash interest costs and provide enhanced financial flexibility.

Third, to align Opendoor's upside with all shareholders, our Board declared a pro rata warrant dividend. Every shareholder will receive 3 series of freely tradable warrants for every 30 common shares held as of the November 18 record date with exercise prices of $9, $13 and $17.

Zooming out, we believe we have the right capital setup for the Opendoor 2.0 operating model, higher volumes, faster turns, tighter spreads and more products to serve homeowners. Now let me tell you how we're executing against that model and how you can hold us accountable.

We are targeting to reach adjusted net income profitability by the end of 2026 measured on a forward 12-month basis. To get there, we're focused on three key management objectives that we monitor internally. For each objective, I want to frame for you why this matters, what we're doing and how you can hold us accountable.

First, scale high-quality acquisitions. More volume means more revenue from transactions and ancillary services plus better leverage of our cost base. Further, market concentration creates a flywheel. When we own meaningful share in a market, we attract more inventory, which attracts more buyers, which attracts more sellers.

We have multiple initiatives underway to drive this growth. Most importantly, as Kaz described earlier, we started reducing our average spread while increasing our operational rigor and selection, stronger offers for high velocity, high-quality homes, discipline on higher-risk homes.

We're pairing that with AI-driven scoping and standardized pre-offer inspections to raise conversion and cut time and costs from offer to acquisition. You can track our progress against our acquisition goals through the end of 2026 on our new dashboard at accountable.opendoor.com. Individual weeks will fluctuate, holidays, weather, local market events will be focused on the trajectory over time.

Second, improve unit economics and resale velocity. Speed and profitability per transaction enable us to build a sustainable business while enduring macroeconomic changes. Higher profitability per transaction gives us the ability to decrease the spreads embedded in our offers, leading to more acquisitions. This objective is supported by our tailored spread framework.

By pricing more aggressively for high-quality, faster-selling homes and maintaining discipline on higher-risk assets, we expect our acquisition mix to skew toward more marketable homes that need less repair and renovation. We expect this to shorten the time from acquisition to listing and days on market, thereby reducing our holding costs.

Second, we are innovating at an incredible pace with a renewed focus on execution and a culture of challenging everything to be better. Much of our product innovation is designed to automate workflows and increase resale velocity, supporting a business model focused on turns, not spread.

You can hold us accountable to improving resale velocity by tracking the percentage of Opendoor homes on the market for greater than 120 days, which we report quarterly in our 10-Q. You can also follow our product, feature and partnership launches on accountable.opendoor.com to see how we're building the velocity into the business.

Third, build operating leverage. We will scale transactions faster than fixed costs. So each additional home adds accretive profit. We're cutting aggressively in the right places, eliminating consultants, removing redundant tools and software, reducing marketing waste and streamlining operations while simultaneously reinvesting a portion of those savings into engineering and AI automation.

Importantly, we expect to shift our overall operating expense profile toward variable components that flex with volumes rather than remain fixed through cycles. You can hold us accountable by tracking two specific metrics we report quarterly in our 10-Q.

Fixed operating expenses should hold relatively steady as we rescale volumes and trailing 12-month operations expense as a percentage of trailing 12-month revenue should hold relatively steady or decrease over time. These three objectives are the foundation of our path to profitability, and we're building in the open so you can track our progress along the way.

Turning to our outlook. Our guidance is going to look different than what you've seen in previous quarters. Our business is changing rapidly. Just in the past few weeks, our acquisition contract speed increased by nearly 2x. We're focused on execution and outcomes, not on benchmarking every turn during the transformation of this scale.

Our results in the upcoming quarter are largely the outcome of us managing decisions that were made several months ago. We're focused now on making the right long-term decisions for the business, not managing the short-term guidance. What matters and what we want to be held accountable for are the actions we take from here and the results they drive over time.

Our destination is clear, adjusted net income profitability by the end of next year, measured on a 12-month go-forward basis. We've already seen the levers in this business work. You can't build a breakeven business in a spreadsheet. You build it by shipping product, operating with discipline and learning from the market.

For the near term, I will provide you with these guideposts. Acquisition rescaling. We're committed to rescaling acquisition volumes. We expect fourth quarter 2025 acquisitions to increase by at least 35% from Q3 as our product launches and pricing strategy changes take hold. You can track our weekly acquisition progress at accountable.opendoor.com.

Revenue. We expect Q4 revenue to be higher from the outlook we provided at Q2 earnings, but decrease approximately 35% quarter-over-quarter due to low inventory levels from Q3's reduced acquisition volumes.

Contribution margin. Our priority since mid-September has been to clear old inventory homes selected under the previous strategy that prioritize spread over quality. That's pressured our contribution margin sequentially since April through October. And we believe we bottomed out in October. Margins will improve through the end of the year as we replace legacy inventory with better homes, but Q4 contribution margin will be below Q3 as we reverse the downward trend.

Cost discipline. We are focused on continuing to manage and improve our cost structure. Adjusted operating expenses for the 12 months ended June 30, 2025, were $307 million. For the 12 months ending June 30, 2026, we expect to spend $255 million to $265 million. Excluding the $15 million cash make-whole award for our CEO, this is a year-over-year decrease of approximately $62 million or 20% at the midpoint.

We expect to achieve these savings while concurrently investing in engineering and AI automation to drive further operating leverage. We're cutting the waste and reinvesting in what matters.

Finally, adjusted EBITDA. Given the near-term margin pressure as we clear old inventory, we expect Q4 2025 adjusted EBITDA loss in the high $40 million to mid-$50 million.

We're building Opendoor 2.0 in the open, holding ourselves accountable to measurable objectives and giving you the transparency to track our progress. The journey won't be perfectly linear, but our conviction in the destination and in the levers that get us there is unwavering.

With that, Michael, I'll turn it over to you for questions.

Great. Thanks, Christy. Our first question comes to us from video submission from Vlad Tenev.

What's up, Kaz? By the way, we're super pumped that you guys are streaming live to retail on Robinhood. I think the question on everyone's mind is what's going on with tokenization? How real is it? And how do you think it could revolutionize the homeownership experience?

Thanks, Vlad. Thanks for hosting us. Look, I'm such a big fan of Robinhood, and I hope that we can continue to do things together. Our mission at Opendoor is to tilt the world towards homeowners and those working hard to become homeowners. And I love that Robinhood does some of the same things, this whole thing of taking power away from fancy people and giving to average person.

Now to answer your question, look, I have a habit of not announcing products before they're launched. That's because I build products, not spreadsheets. And I think it's important that we ship things before we talk about them. And I don't want to say we're going to do this next week, but I generally can't imagine a future where real estate is not tokenized.

And I also can't imagine a future where Opendoor isn't leading innovation in real estate. Look, asset tokenization is not a side quest for us. Tokenization allows us to increase the speed of transactions, decrease the cost of transaction and broaden base of homeownership. That's our job.

Today, we talked about how we can now accept USDC. This week, I bought Bitcoin on my own laptop so we can start developing. And we've begun talking with partners about how we can work across stablecoins and tokenization. The work is active. We're very serious about it, and we'll tell you more when we launch something.

Great. Our next question comes to us also via video submission from Eric Jackson.

Eric Jackson, welcome. On behalf of the entire $OPEN Army, we are thrilled to have you here leading the charge. I have two questions. Can you say specifically what the headcount is now at the company? I believe it was 1,407 over the summer.

And second, can you say more about the revenue opportunities that you see around iBuying? Do you expect to add mortgage and title and other ancillary services? Zillow experimented with doing this a few years ago by acquiring a legacy company, and that didn't really take. So what is the Kaz approach to revenue? And how do you expect to grow this in the coming quarters? Thank you, again.

Thanks, Eric. Look, to start with, I think Opendoor has had far too complicated structure for a company of this size. To give you a sense, we've had 11 different HR software products. We're going to go down to one.

As of this morning, there were 1,100 people working at Opendoor. And the most important thing isn't the number of people, but how aggressive and efficient those people are. I believe every single Opendoor employee needs to be 2 to 3x more aggressive and more efficient than the average employee in tech.

We will have the most aggressive software company in the public market because our mission is incredibly important. And like I said in the prepared remarks, our job is to be incredibly mindful of OpEx and to reduce our fixed OpEx over time so that it becomes a smaller and smaller part of our income statement.

On the second question, look, I'm incredibly bullish on what I call services. When I joined Shopify, Shopify was 50-50 in its revenue between SaaS and services. Today, services are 75% of Shopify's revenue. And while I didn't have everything to do with it, I had something to do with it and was the services guy at Shopify.

The reason why these embedded fintech things typically don't work is because they're usually designed by some dude in a Boardroom trying to figure out how can I make more money from my users. That's what it typically work. And that's just not how users interact with products.

We will build excellent products. They will feel whole, and you will buy a home from Opendoor the same way you buy a car from Tesla or something from Amazon. They will feel like one product, and there won't be a different -- bunch of different cross-sell motions that you have to keep feeling that you're talking to different companies. I hope that answers your question.

Great. Our next question comes from Zach H, who asks, when will we see a dramatic change in profitability?

Next year. The answer is next year, we're going to see a dramatic change in profitability.

Zach, let me walk you through some of the details. So as we shared in the prepared remarks, we are driving the company to adjusted net income profitability exiting 2026 on a 12-month go-forward basis.

The framework to achieve that goal requires us to rescale acquisitions. We guided to rescaling acquisitions, growing them by 35% quarter-over-quarter for Q4 2025, and we are driving to exit Q4 2026 by buying somewhere around 6,000 homes. You can track that -- our progress against that goal and hold us accountable to that goal at accountable.opendoor.com, which will be updated weekly.

On the margin side, we expect to get contribution margin of 5% to 7% as we approach the acquisitions with renewed rigor, decreasing tail homes, improving days in possession and therefore, holding costs. In addition, as we get more shots on goal and buy more homes, we get the opportunity to attach more products and drive margin from ancillary services.

We expect financing costs of 2% to 3% of revenue. These costs are highly sensitive to our turns and will benefit from our faster resale velocity. We're targeting adjusted OpEx of 3% to 4% of revenue. We expect to leverage our existing fixed OpEx structure, as Kaz mentioned, to invest slightly more in marketing, but with the discipline that Kaz discussed earlier, and we expect to scale operations marginally as we rescale volumes. That's a framework. It's not new guidance. But it's -- yes, go ahead.

I'm going to add a little to this, if you don't mind. Look, I spent the last few years of my career at Shopify, and I think folks would say that I had something, though obviously not everything to do with Shopify's profitability and growth. In late 2022, when I became Shopify's Chief Operating Officer, I'm going to read this because it was a quote. There was an analyst that said, "Shopify will lose money every year through 2025. Profitability is nowhere to be seen."

Well, Shopify became profitable 2 quarters after I became COO, and it has been profitable ever since and have hit the Rule of 40 every quarter. Companies don't become profitable in Excel sheets. The way this works pragmatically is what [indiscernible] and I did at Shopify.

You create a list of projects, you put odds -- adjusted odds of success against each of them and you execute every single day. At Shopify, we had a few dozen of these, 3 or 4 of them ended up really mattering. And we have the same list here. We have a list of projects.

And the reason I say we're going to drive to profitability is because this is not a passive thing. It's not just going to happen to us. We know what we are going to do. We're going to take those actions, and we're going to exit 2026 profitable on a go-forward basis. Sorry, I cut you off.

Our next question comes to us from Victoria B.

Short sellers keep attacking Opendoor, spreading negativity and driving the stock down despite strong progress. What’'s your strategy as CEO to fight these daily short-selling pressures, protect shareholders, and make sure the market sees Opendoor's true strength?

Look, I care a great deal about our average shareholder. And you've seen us do some things today to help align us to our average shareholder. Having said that, I don't spend that much of my time thinking about short sellers.

I never worked on Wall Street, and I generally don't understand why these people do what they do. It just seems deeply boring and like just bad for the soul. I mostly just pity them. They don't really build anything.

Look, we run the company for long-term owners, not for people that bet against us every week. And what matters to us is execution week in, week out, how fast we buy and sell homes, how operationally excellent we are, how we turn over inventory.

And I think the best way to deal with short sellers is just prove them wrong through numbers. Every quarter, we're going to improve unit economics. Every quarter, we're going to get better. Every week, we're going to show you the numbers. We're going to do all the right things. And I think when you do that, the score takes care of itself.

Great. Our next question comes from Dae Lee from JPMorgan. How do you define Open's identity? What do you see as its biggest strength? And how will you leverage that to achieve sustainable growth and profitability as Open navigates the currently depressed housing market and longer term?

That's a great question. I'll take it first, if you don't mind. Look, Opendoor is a software company. We're not a hedge fund waiting for macro to turn around. That's our job. Our job is to help people sell, buy and own homes. And our leverage comes from building excellent products. And you do that by writing excellent code.

So that's the largest source of our leverage, right? Codes written by our engineers, data on our databases and the models we have and we're improving the value not just the valuation of home, but dispersion on them and days in possession. And I firmly believe that the best software companies are built in hard times because the times forces you to be disciplined, right? You end up having to care about your user more. You end up building deeper integrations that solve more of the problem. So when times get good, you end up having abnormally large profits. I'm very bullish on the company.

Just in the last couple of weeks, we've shown that we can grow acquisitions relatively quickly. I think we grew 60% on acquisitions just this past week. We'll see how much we grow next week. And we've shown that we have relatively good levers in this company.

And when you decide that you're going to do that, you have the good levers, you have great software and you have the balance sheet that we do, you get the chance to go on offense. And I really like our odds, and I think things are starting to work for us.

Great. Our next question comes to us from Ryan Tomasello from KBW. Does management intend to continue to emphasize the Cash offer as Opendoor's primary product? Or do you envision moving the business more capital light? Will the Key Agent program be the primary distribution channel for the cash offer? And if so, how should we think about potential bottlenecks on growth given this high-touch approach tied to agents?

That's just not how I think of the business, to be honest. Let me answer your question first. Look, I think companies fail when they think of themselves first and their users second. Like our job is to serve our users and people come to us to sell or buy a home. That's why they come to us. And our job is to meet them where they are.

Some of them want to use an expert, some of them don't. And the question is, how do we answer? I think Cash is a great product. I think Cash Plus is a great product. We're going to have different products along both the risk and the ownership axis because I think that's just not the final two products we're going to have. And I like our D2C model. I think we talked about how in our tests early on, it has been converting 6x better.

So I think the question isn't really one of which channel are you going to pick. We're going to pick the channels that allow us to have the maximum impact on behalf of our users. And I firmly believe in our DTC channels are going to be the future of the company. And if there are users that want to use experts, we want to serve them where they are.

Great. We have a few questions on sustainable acquisition growth, so I'll read for you those out. One from Ygal at Citi. How are you expecting to manage guardrails and acquisitions as you pick up pace? Another from Andrew at Citizens. Can you talk about controlling the long tail and how those purchases have outsized losses? And Nick McAndrew at Zelman. How do you balance near-term transaction growth with your stated goal of evolving into a platform business?

Okay. I'll try to take these one at a time. I think the tail question is actually the best question. Let me take that one first. So what you actually want to have is a lot of dispersion in your model, right? Opendoor historically have not had that, where it has kind of like just had a peanut butter spread across its space.

We now have significant dispersion, and this is basically all we talk about is how we can have excellent offer on good homes where we know days in possession is going to be low and be more careful on longer days in possession homes. And we have a new process for inspecting every home to make sure that we don't get caught by surprise. This is a trust but verify approach that I talked about, which will be great because it will both, a, variable cost and b, more importantly, allows us to have lots of data on our servers.

Last question second. I don't think these two things are at conflict. Look, at Shopify, we had high growth and high free cash flow. I think these two things actually go together because when you buy lots of homes, you get opportunities to sell lots of homes. And when you sell lots of homes, you get opportunity to attach additional services to them. And I think these two things go hand-in-hand.

And to answer your first question last. Look, I think we have shown that we have really good levers at our disposal. Morgan and the growth team have been working only for a couple of weeks now. But every single day, we're seeing improvement on buying the types of home we want to buy, and we really like our top of funnel. We have cut marketing and have seen acquisition go up, which is always a good sign. Am I missing something?

That's great. We have another question from Ben Black with DB. There's a few in there, but his last question was, in what ways can AI be an accelerant to growth?

I mean, look, in all the ways, and basically all the ways. Look, I don't spend that much of my time worrying about like the problems Opendoor has traditionally had on this area because there have been different types of problems. I spend a lot of time about what the problems are today.

Let me give you one example. I talked about this a bit. We would have up to 11 people touch a home before we had a sales contract go out for it. Today, in many of our flows, that's down to 1. And the job of that one person is to watch the machine, right? This significantly reduces OpEx per home that we acquire, far, far, far fewer human beings, far more machines. This is better speed, better user experience, lower OpEx, win, win and win.

And then secondly, on the -- just the top of funnel part, you've seen us cut marketing and we cut marketing when I came in and increase acquisition. We're able to do this because we can optimize our funnels and put more of the experience in the hand of the user. And by the way, AI is also able to help us explain to our users the valuation of each home.

So across top of funnel, middle of funnel, bottom of funnel, already, we are seeing the impact of AI. And we're also seeing the impact on closing, which is the last step, where we've had machines do much of their work for closing these days, and that's just going to continue.

Great. We had one more question from Margarita M, who asks, how can you guys make homeownership easier for younger generations?

I mean this is like the fundamental goal of the company. Look, home prices have increased by something like 50% since 2020. Mortgage rates are much higher than they used to be. Housing inventory is far too low. Typical sale is taking like 60-plus days and like 1 in 7 deals are falling through.

And the average time for a person to buy a home is almost 40 now. This is just terrible because it's harming our communities, harming our families and people who want to own are facing real barriers. People feel trapped in their homes because of mortgage rates. This is why we announced our partnership with Roam today.

But the enemy really isn't any one group of people or any one company. That's just not how it works. The enemy is the process. There are so many people involved in the process of you buying and selling a home that the costs are just out of hand.

And one of the things I'm super excited about is the fact that we can underwrite a home gives us excellent power to underwrite mortgages and the fact that we can do things that allow you to buy a home earlier, buy a better home earlier and know that you have the peace of mind to buy it, is going to be a key part of the company's future. But that's the mission, right, tilt the world towards homeowners and people who are working hard to become homeowners.

Great. We're getting close to the top of the hour. So that was our last question. So Kaz, if you have any closing remarks?

Yes. Let me -- thanks. I appreciate it. Thanks for your question, folks. Look, I spend most of my day in Cursor and GitHub. I don't spend much of my time in spreadsheets. I started writing code on my Commodore 64 when I was 6. And I'm opinionated about what Opendoor's product should look like.

We are a product company building software to enable homeownership. And you've seen us launch many products, like dozens of products just in the past few weeks, and you should expect us to do the same. And you should expect us to be operationally excellent and incredibly mindful of your dollars as our shareholders.

You're going to see us be accountable. We're going to make mistakes along the way, but at every single step, you're going to see us care deeply about our mission and be transparent as we build.

I'm incredibly bullish. I am more bullish today than I was when I took this job. And I think we're going to actually make a change and make a real difference in the future of homeownership in this country.

Great. With that, we'll conclude our third quarter open house.

Good day, and thank you for standing by. Welcome to the Opendoor Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Michael Judd, Capital Markets and Investor Relations.

Thank you, and good afternoon. Details of our results and additional management commentary are available in our earnings release and shareholder letter, which can be found on the Investor Relations section of our website at investor.opendoor.com. Please note that this call will be simultaneously webcast on the Investor Relations section of the company's corporate website.

Before we start, I would like to remind you that the following discussion contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact are statements that could be deemed forward-looking, including, but not limited to, statements regarding Opendoor's financial condition, anticipated financial performance, business strategy and plans, market opportunity and expansion and management objectives for future operations. These statements are neither promises nor guarantees and undue reliance should not be placed on them. Such forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those discussed here.

Additional information that could cause actual results to differ from forward-looking statements can be found in the Risk Factors section of Opendoor's most recent annual report on Form 10-K for the year ended December 31, 2024, as updated by our quarterly report on Form 10-Q for the quarter ended June 30, 2025, and other filings with the SEC. Any forward-looking statements made on this conference call, including responses to your questions, are based on management's reasonable current expectations and assumptions as of today, and Opendoor assumes no obligation to update or revise them, whether as a result of new information, future events or otherwise, except as required by law.

The following discussion contains references to certain non-GAAP financial measures. The company believes these non-GAAP financial measures are useful to investors as supplemental operational measurements to evaluate the company's financial performance. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP metric, please see our website at investor.opendoor.com. I will now turn the call over to Carrie Wheeler, Chief Executive Officer of Opendoor.

Thank you for joining us. At Opendoor, our mission is straightforward but bold: to make selling your home simple, certain and fast. For most people, selling a home is one of the biggest financial transactions of their lives and too often is also one of the most stressful. We believe it doesn't have to be that way. Over the past 10 years, we've built deep infrastructure in real estate, pricing intelligence, operational capabilities and a marketing engine that reaches high-intent sellers. In doing so, we've amassed an unparalleled data set: photos, videos, agent notes and customer interactions from millions of home visits. This proprietary data fuels our AI, and that AI powers our flagship product, the cash offer, which delivers what traditional sales cannot: speed, certainty and control.

Our customers understand this. Over the past 4 years, our Net Promoter Score has been near 80, exceptional in any industry. And increasingly, agents understand it, too. In fact, 1 in 4 of our acquisitions already come from an agent bringing us their client for a cash offer.

We are now making the most important strategic shift in our history: moving from a single product to a distributed platform with multiple offerings delivered through agents. Agents already come to us every single day for a cash offer. We're simply changing the direction of traffic, putting the power of Opendoor into their hands so they can bring our products straight to the seller.

We have 2 things no one else can give an agent: one, unparalleled lead quality. We are not getting agents cold names from a spreadsheet. We're putting them in the home with a motivated seller. Two, a differentiated product suite, more selling options powered by a trusted local adviser. Sellers can choose the certainty of a cash offer, the upside potential of a market listing or a hybrid of both. This means sellers get more choice, more speed and more certainty. Sellers win, agents win and Opendoor wins because we can serve far more sellers, monetize more leads and expand high-margin, capital-light revenue streams.

We began piloting this new approach in select markets last quarter. The early proof points were compelling. 2x more customers are reaching a final underwritten cash offer relative to our traditional flow. We're delivering offers faster with streamlined in-home agent assessments. Listing conversion rates are 5x higher, and we're unlocking more capital-light earnings through our share of listing commissions. On the strength of these results, we've gone from pilot to full rollout in record time. Today, partner agents are live in every market we operate.

Our next phase is optimization: more agents, better tools, better training and more products. We've launched our Key Agent iOS app so agents can do high-fidelity home assessments right from their phone, enriching our AI and deepening the customer connection. Being in the home gives agents a chance to guide the seller through every option, and we believe that face-to-face trust will be a powerful driver of conversion.

We've also launched Cash Plus, a hybrid product designed for sellers who want the convenience of a cash offer, but hope to maximize upside by going to market. Opendoor provides immediate cash to the seller, gets the home list ready and works with a partner agent to list the home. Upon resale, the seller can receive additional proceeds after expenses. For sellers, it's the best of both worlds. For agents, it's another competitive tool and keeps them engaged with the customer throughout the sales process. For Opendoor, it's a better risk-adjusted product that uses less capital, protects our downside and aligns our incentives even more closely with the customers.

We are building a vibrant distributed ecosystem. Agents coming to us for cash offers. We're bringing sellers to partner agents. Sellers gain more choice, more speed, more certainty and Opendoor gains more opportunities to monetize leads, serve customers and expand high-margin revenue streams.

This is our flywheel. The more agents we enable, the more sellers we serve. The more transactions we handle, the stronger our platform gets. Our marketing dollars become more efficient as we monetize more of the sellers who come to us. And as we grow transactions, we further leverage our cost structure. Value compounds for customers, agents and shareholders alike.

We are making these changes amidst a very challenging housing market. The second half of 2025 will reflect lower acquisition and resale volumes due to the macro environment and continued high spreads, seasonality and the fact that we are early in our transition. Our near-term outlook, however, does not reflect what we're building towards: durability, relevance and scale for the next decade. We know exactly where we're going, and we're taking decisive steps to get there. With that, I'll hand it over to Selim for the financials.

Thank you, Carrie. We delivered a strong second quarter. At $1.6 billion in revenue, we achieved our first quarter of adjusted EBITDA profitability in 3 years. This outcome is an indicator of the meaningful operating leverage we have driven and provides a road map for what ANI breakeven could look like in the future. Our Q2 performance reflects deliberate choices we've made, including increased marketing spend in Q4 2024 and Q1 2025 to acquire more homes ahead of the spring selling season and widening offer spreads in Q2 2025 to manage risk as we prioritize marketing spend efficiency and disciplined underwriting.

On the acquisition side, we purchased 1,757 homes in the second quarter, slightly ahead of our expectations, but down year-over-year, driven by meaningfully wider spreads and accompanying reduced marketing spend. Contribution profit was $69 million in the second quarter, representing a contribution margin of 4.4%. This was down from $95 million and 6.3% in Q2 2024, driven by a higher mix of older inventory in our Q2 resale cohorts. Adjusted EBITDA was $23 million in the second quarter compared to a loss of $5 million in Q2 2024.

Turning to our balance sheet. We ended the quarter with 4,538 homes, representing $1.5 billion in net inventory. We also had $1.1 billion in total capital, primarily comprised of $789 million in unrestricted cash and $167 million of equity invested in homes net of inventory valuation adjustments.

At quarter end, we had $7.8 billion in nonrecourse asset-backed borrowing capacity, of which total committed borrowing capacity was $2 billion. In May, we issued $325 million of convertible senior notes due in 2030. This transaction allowed us to extend the maturities on $246 million of our existing converts by 4 years and add $75 million in cash to our balance sheet.

Turning to our outlook. The housing market has further deteriorated over the course of the last quarter. Persistently high mortgage rates continue to suppress buyer demand, leading to lower clearance and record delistings. Our second half expectations take into account current macro dynamics, typical seasonal patterns in our cash offer business and the early-stage nature of our platform evolution, which is not yet a material contributor to our results.

Our guidance for the third quarter of 2025 includes the following: approximately 1,200 homes acquired, revenue between $800 million and $875 million, contribution margin of 2.8% to 3.3% adjusted EBITDA between negative $28 million and negative $21 million and stock-based compensation expense between $10 million and $12 million.

And while we're not providing full year guidance at this time, I would like to add some additional color for the balance of the year. We expect Q4 revenue to decline sequentially at a similar level to the Q3 sequential decline based on the dynamics I just mentioned. Contribution margin will also be pressured in the second half by an unfavorable mix of older, lower-margin homes given lower acquisition volumes, likely putting our goal of year-on-year contribution margin improvement out of reach.

Thanks, Selim. I want to acknowledge the great deal of interest in Opendoor lately and that we're grateful for it. We welcome engagement from all of our investors, including the many shareholders who are new to the company. We appreciate your enthusiasm for what we're building, and we're listening intently to your feedback.

This increased visibility is an opportunity to tell our story to a broader audience. We intend to make the most of it. We've been laying the groundwork to execute on the strategy we have laid out: to serve every seller possible, to build a profitable business and in doing so to create long-term shareholder value. We look forward to updating you on our progress in the coming quarters. And with that, I will ask the operator to open the line for questions.

[Operator Instructions] Our first question comes from Dae Lee with JPMorgan.

First one for Selim. With regards to your 3Q guidance, you talked about macro conditions worsening throughout 2Q. Is it kind of stable now? Or do you -- are you still seeing incremental softness heading into the back half? And I think you talked about the 3Q guidance not including meaningful impact from the newer initiatives like the agent -- working with agents. Is that -- like how long does that process take? And when do you expect that to be a more meaningful contributor? And then I have a follow-up.

Dae, thanks for the questions. I'll take the first one, and then I'll let Carrie talk a little bit about our new initiatives. Just in terms of the macro and what we see I would say, yes, I think at the current moment, things seem to have stabilized, definitely well below where things were at the beginning of Q2. We did see sort of ongoing deterioration throughout the quarter, and now things seem to be in a bit of a stable pattern. And so our outlook for both Q3 and Q4 assume that we stay at or around this sort of overall macro environment, subject to seasonality adjustments that are normal for this time of year.

Right. On the topic of like when can we see the impact of all the changes we're talking about, our new go-to-market, our expanded product suite, I'd say a couple of things. One is we're going to see the impact of that show up in conversion and in contracts long before we see it hit the P&L for a couple of reasons. One is we have been ramping into Key Connection markets throughout the last quarter or so, now live in every single market, but certainly ramping. And our job right now is to optimize, get more agents enrolled, more training and get them live.

Two, there's just a natural lag between when we enter into a contract and where -- or a listing agreement and then when that home actually gets sold and when we record it with revenue. So if you think about ramping activity, a lag between a contract or listings to when we actually realize it on the P&L, we're going to see the real impact of this kind of show up in 2026.

And then last point would be Cash Plus. That's a meaningful growth lever for us, we believe, based on what we're seeing so far in our pilot markets incremental to conversion. But that's in a handful of markets ramping very quickly. Next quarter, when we have this call, it will be in all markets. But again, that's going to take some time to kind of get in the hands of all of our Key Connection agents.

Got it. And as a quick follow-up, does these newer initiatives like Key Connections or Cash Plus change your contribution margin profile of the business?

I think with respect to the various outcomes or the product suite that we have, I think Cash Plus enables us to have more confidence in being able to deliver within our target contribution margin range. It's a better risk-adjusted process or a risk-adjusted product for us in addition to the fact that the initial cash outlay is lower than it would be otherwise for a normal cash offer. And then with respect to listing outcomes, that is high-margin revenue for us, but obviously will not show up as much on the revenue line, but should help contribution margin over time.

Our next question comes from Ryan Tomasello with KBW.

This is [ Juan ] on for Ryan. On the 4Q guidance commentary, when the company says that it expects a sequential decline in 4Q revenue similar to what the 3Q guidance implies, is that going to be on an absolute dollar basis or on a percent basis? And similarly, would the $50 million third quarter OpEx guidance be a good run rate for fourth quarter as well?

Thanks for the questions. And sorry that the sequential guidance comment was not clear, but just to clarify, that's sequential on a percentage basis, not on a dollar basis.

And then in terms of $50 million OpEx run rate, I would say, no, that it's going to move from quarter-to-quarter. We've talked about in the past our new marketing strategy, which is heavier in Q1 and Q4 to align with the time of year when spreads are lower and we're acquiring homes in advance of the spring selling season. And so we would expect a heavier marketing load in Q4 and Q1 and a lighter marketing load in Q2 and Q3. And so what you have in Q3 is a lighter marketing load, all else equal. So we would expect OpEx to ramp back up in Q4 and Q1, driven by marketing.

Okay. That's clear. And I have just a quick follow-up. With the shift to more of a buyer's market across parts of the country, are you seeing any notable increases in request volumes from sellers in those markets? And generally, how are you thinking about the potential for more seller demand coming into the platform?

Yes. I would say, no, our guidance and our outlook doesn't imply that there is any increase in seller demand coming. Because we haven't yet seen an increase in buyer demand leading to higher clearance. If and when that does happen, then we would expect more sellers to be comfortable taking offers and wanting to sell their homes, but we're not currently seeing that, and our guidance doesn't imply that, that's going to happen.

And then how do we think about demand, generally speaking, we are -- like I mentioned before, we're aligning our marketing spend to points in time in the year when we can be acquisitive and acquire homes ahead of the spring selling season when you tend to have higher buyer demand and can realize better prices. And so we are going heavier in marketing, as I mentioned, in Q4 and Q1 to drive more acquisitions at a time when spreads historically have been lower. And then we lean back out in the summer months when the focus is more on resale than it is on us being buyers in the market at that time.

Our next question comes from Ygal Arounian with Citigroup.

This is Wayne Trinh on for Ygal. I just wanted to ask about the distributed platform. It seems to be performing well with the twice as many customers reaching a cash offer and getting said offer faster. Can you just walk us through how it's kind of done since you got into rapid expansion? And can you talk about the share economics you'll have there with agents between conversions and lead generation?

Yes, I'm happy to do that. Let's talk a little bit about why we're doing this. First of all, to make it clear, I'll talk about what we're seeing on the conversion side, which is exciting, and then we'll talk about unit economics. On the why, based on what we've been trialing over the last quarter or so is that pairing our sellers with an agent early in the selling journey drives incremental conversion, full stop. An agent is able to get to a customer early, they can contextualize a suite of options, not just one option, but a whole range of alternatives for how they sell and they guide that seller to the best outcome, and that converts better.

So, so far, what we're seeing is twice as many customers getting through our funnel all the way to a final underwriting than we had seen historically on our traditional direct-to-consumer flow. That means we have more customers that we have a chance to convert on. We're seeing total conversion to selling outcomes be higher. We're seeing 5x more people convert to a listing than otherwise we would have been able to monetize a lead into. Those are all great proof points.

We're seeing some small amount of degradation of cash conversion so far, but that was anticipated and we believe is temporary. Two reasons for that. One, our spreads are wide right now, given macro and seasonality; and two, our agents are still early on and getting trained in using the cash offer as part of everyday motion. Probably most importantly, though, is we don't have Cash Plus in any of those numbers yet.

Where we have got Cash Plus in our pilot markets, it's incremental to cash conversion. In other words, more people are choosing the Cash Plus option than they are choosing cash, and we think that is a -- should be a durable conversion lever to serve more sellers than we're seeing today on the cash side. So that's the conversion story.

With respect to -- you asked unit economics, I think, in terms of how this all rolls through for agents or for us or for both, I assume. I'll keep going. Yes. So on the Cash Plus versus cash economics, the way to think about it at a high level, we're valuing the home in the exact same way we do today for our traditional cash offer product. We're just providing less cash upfront. The seller is still able to unlock a ton of their equity, they can pack up, they can move out, they can do what they need to do next. We'll take on the burdens of repairs, and we'll take on the burden of getting listed with that partner agent. But that seller gets additional proceeds after the resale net of expenses.

Selim said this earlier, but just to be very clear, it reduces our upfront capital needs. It gives us better downside protection. And it still targets a similar contribution margin to our historical cash offer product, but we think the likelihood of hitting that target is higher in this model. In terms of the economics to the agent, they get their listing commission on the back end when that home resales.

On the listing, to the extent that we have taken one of our customers, paired them with an agent, that agent eventually goes on to list the home for that customer, there's a listing commission involved. The agent earns that, and we take a share of that commission. Our share is at the high end of industry standard because our lead quality, frankly, is so strong and high converting. And what that gives us is capital-light, high-margin revenue.

Very helpful. And then my second question would be on the pace of acquisitions. Last quarter, you talked about barbell kind of shape. I guess, are you still thinking about the same way? And is there any sense you can give us of the magnitude of sequential increase from Q3 to Q4?

Yes. We are still thinking about it in the same way, obviously, all else equal for the macro environment. As you know, we've been responsive to that, and we've adjusted our pace according to what we see in the macro. But as we currently sit here today, we would expect acquisitions to sequentially scale back up in Q4 relative to Q3, but we're not in a position to guide or give color on how much that could be or what that could look like. It's really dependent on what happens in the macro environment, where we set spreads and the progress that we make on this platform pivot. And so we'll update you on that in 90 days.

Our next question comes from Andrew Boone with Citizens.

I wanted to ask about the new platform and just kind of where is agent and consumer awareness within some of kind of your oldest markets. How are you guys thinking about driving the awareness of kind of newer offerings and changing the consumer perception of what Opendoor is?

And then I'd love just something a little bit more tactical as we think about the back half of '25. Can you just talk about the trend in spreads and how we should think about spreads in terms of offers for the back half of the year?

I'll go first. It's Carrie. Thanks for the question. A couple of things. First of all, how are we going to get the word out about Key Connections to agents? One of the things I think is important to understand is we already have 25% of our business coming to us today from agent partners. Those are agents who fully understand the power and importance of having a cash offer in hand when they're going to a listing appointment, and they're coming to us with their customer asking for a cash offer today.

So we already have tons of agent relationships. They understand the power of it. They know that they can rely on it. We don't retrade. We close on time. We make it very easy and seamless for them to extend that offer to their client. This is just us changing the flow of traffic. This is us taking our high-intent seller leads and putting in the hands of agent partners.

My sense of what we're going to see is that this is going to become very symbiotic, right? Agents coming to us, us going to agents. On the news of some of the marketing we've done recently around our Key Agent app, our push on Key Connections, had a ton of inbounds from agents who understand what this could mean for their business. They understand what it means for their next lead. We're solving a problem for them. They're not having to go find their next customer. They understand they get a differentiated suite of products to sell to their clients that they can't get anywhere else. They understand the quality of our leads. We are putting them in the home. That is not a lead you get somewhere else. It's totally differentiated. And so I don't really foresee a lot of problems getting this into the hands of agents and having it kind of stem from there.

Consumers, listen, we've been marketing for a long time to consumers. We get lots of sellers that come to us. Our brand awareness has continued to accrete over time. We'll continue to market to consumers. Our #1 job right now is to take more of those many, many sellers that come to us and convert them, monetize those leads through the agent channel. That's what we're excited to do.

Yes. And then with respect to spreads, in a normal seasonal environment, I would say that spreads tend to peak in late summer or late spring, early summer. And then they will trend down from there throughout the course of the second half before they will start to come back up in late winter and early spring. That's what we -- how we normally manage the business. And so all else equal, that is what we would expect to see between now and the end of the year.

[Operator Instructions] Our next question comes from Nick McAndrew with Zelman & Associates.

Maybe just to start, you've noted that spreads have remained elevated and above historical norms, just given weaker clearance rates. And I'm just wondering if you could provide any color or translate some of that to how much cushion you're building into today's pricing environment. And what kind of home price volatility you expect in the back half of the year?

Yes. So generally, we strive to set price to enable us to deliver within our target contribution margin range. And so that's how we set our spreads or approach setting our spreads. The challenge that I sort of referenced in the comments is when we assume a certain macro and then the macro further deteriorates, it starts to eat into any cushion that we have and therefore, makes it more difficult for us to hit the target contribution margin range. But that is generally the approach that we take.

And then with respect to home prices, home price appreciation tends to vary sort of depending on the time of year. The spring is when you tend to see the highest or positive home price appreciation. And then as you get into the fall and the winter, home price appreciation tends to go negative. That's no different to what we're planning today. The only difference that we saw, I would say, in Q2 is the positive home price appreciation period of time this year was actually the shortest that it has been in quite a number of years. We provide some charts on that in the back of our shareholder letter that I would refer you to. I think that can be a helpful guide to understand that.

That's helpful. And Selim, maybe just a follow-up for you. I know you've established the ATM equity offering about a year ago, and it doesn't look like you've accessed it to date even with the recent improvement in stock price and volume. So I'm just curious if you can talk about the environment or circumstances in which you would consider raising capital through the ATM.

Yes. Look, generally speaking, we don't comment on future capital raises. As for the ATM, no, we have not used it yet. We have 1.5 years remaining to use it, and we'll be opportunistic in how we leverage it. And beyond that, I would say there's not much more I can say.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.