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What changed in Opendoor Technologies Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Opendoor Technologies Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+493 added−481 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-15)

Top changes in Opendoor Technologies Inc.'s 2024 10-K

493 paragraphs added · 481 removed · 356 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

74 edited+3 added−10 removed58 unchanged
Biggest changeEach component of our real estate business and transaction experience has been purpose-built to delight our customers through a streamlined, digital-first, flexible, and vertically-integrated platform. We have reimagined the traditionally inefficient and labor-intensive processes required to purchase, repair, and resell a home, and we have designed our technology and processes to do so at scale.
Biggest changeWe have reimagined the traditionally inefficient and labor-intensive processes required to purchase, prepare, and resell a home, and we have designed our technology and processes to do so at scale. With this in mind, we have invested in developing technology that enables virtualization, centralization, and automation to reduce cost, increase speed and improve quality of execution.
Since our inception, we have invested in our research and data science teams, modeling capabilities, and systematized tooling to gather, aggregate, and synthesize an expanding catalog of proprietary, hyper-local data in order to enhance and automate pricing decisions. We have also acquired third-party data to improve our pricing models and forecast quality.
Since our inception, we have invested in our research and data science teams, modeling capabilities, and systematized tooling to gather, aggregate, correct, and synthesize an expanding catalog of proprietary, hyper-local data in order to enhance and automate pricing decisions. We have also acquired third-party data to improve our pricing models and forecast quality.
Since our initial market launch in Phoenix in 2014, we have expanded across the United States and operated in 50 markets as of December 31, 2023: Albuquerque, Atlanta, Austin, Birmingham, Boston, Charleston, Charlotte, Chattanooga, Cincinnati, Cleveland, Colorado Springs, Columbia, Columbus, Corpus Christi, Dallas-Fort Worth, Denver, Detroit, Greensboro-Winston, Greenville, Houston, Indianapolis, Jacksonville, Kansas City, Killeen, Knoxville-Morristown, Las Vegas, Los Angeles, Miami, Minneapolis-St.
Since our initial market launch in Phoenix in 2014, we have expanded across the United States and operated in 50 markets as of December 31, 2024: Albuquerque, Atlanta, Austin, Birmingham, Boston, Charleston, Charlotte, Chattanooga, Cincinnati, Cleveland, Colorado Springs, Columbia, Columbus, Corpus Christi, Dallas-Fort Worth, Denver, Detroit, Greensboro-Winston, Greenville, Houston, Indianapolis, Jacksonville, Kansas City, Killeen, Knoxville-Morristown, Las Vegas, Los Angeles, Miami, Minneapolis-St.
In order to finalize our offer, we conduct a combination of virtual and in-person home assessments to verify the condition of the home and determine what kind of repairs and home quality improvements may need to be performed after we acquire the home.
In order to finalize our offer, we conduct a combination of virtual and/or in-person home assessments to verify the condition of the home and determine what kind of repairs and home quality improvements may need to be performed after we acquire the home.
By leveraging software, data science, product design and operations, we are building a technology platform for residential real estate that offers buyers and sellers a digital, on-demand experience that we believe will be the future of how people buy or sell a home. Residential real estate is the largest undisrupted category in the United States.
By leveraging software, data science, product design and operations, we are building a technology platform for residential real estate that offers buyers and sellers a digital, on-demand experience that we believe will be the future of how people buy or sell a home. Residential real estate is the largest consumer category in the United States.
The seller often needs to get the home “sale ready.” This preparation, including cleaning, staging and any necessary upgrades, typically involves a lot of guesswork, time and money. • List the home. A home typically needs to be listed for over 30 days on average before it goes into contract. • Host open houses and home visits .
The seller often needs to get the home “sale ready.” This preparation, including cleaning, staging and any necessary upgrades, typically involves a lot of guesswork, time, and money. • List the home. A home typically needs to be listed for over 40 days on average before it goes into contract. • Host open houses and home visits .
Since our inception, we have prioritized investment in our pricing capabilities across our home acquisition processes and our forecasting and resale systems. Our pricing function focuses on ensuring we are providing competitive offers to customers while managing acquisition volumes and resale policy decisions to meet our underwriting and risk management objectives. 7 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
Since our inception, we have prioritized investment in our pricing capabilities across our home acquisition processes and our forecasting and resale systems. Our pricing function focuses on ensuring we are providing competitive offers to customers while managing acquisition volumes and resale policy decisions to meet our margin and risk management objectives. 7 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
One example is our virtual home assessment capability for our lowest risk homes, where home sellers are able to take our operators on a virtual, guided tour of their home, both interior and exterior. Our centralized teams then assess home condition and home features, and compare the subject home to nearby recently sold homes.
One example is our virtual home assessment capability for our lowest risk homes, where home sellers or their agents are able to take our operators on a virtual, guided tour of their home, both interior and exterior. Our centralized teams then assess home condition and home features, and compare the subject home to nearby recently sold homes.
We define this as the “real seller” conversion rate, which is the percentage of unique leads who either accept an Opendoor offer or list their home on the MLS within 60 days of receiving an offer from us. We believe this is an important measure of the strength of our value proposition.
We define this as the “true seller” conversion rate, which is the percentage of unique leads who either accept an Opendoor offer or list their home on the MLS within 60 days of receiving an offer from us. We believe this is an important measure of the strength of our value proposition.
Currently, we offer title insurance services in a majority of our markets and on both the acquisition and resale side of the transaction. In the markets where our title services are offered, we provided these services for over 80% of Opendoor home transactions that closed in 2023.
Currently, we offer title insurance services in a majority of our markets and on both the acquisition and resale side of the transaction. In the markets where our title services are offered, we provided these services for over 80% of Opendoor home transactions that closed in 2024.
We recalibrate our view of pricing and where market values are trending using high-frequency detailed metrics across all segments of our business, including inputs related to the dynamics of market demand and supply across markets, home types, and time periods.
We recalibrate our view of pricing and where market values are trending using high-frequency detailed metrics across all aspects of our business, including inputs related to the dynamics of market demand and supply across markets, home types, and time periods.
We are focused on continued growth in our existing markets — greater scale improves awareness, trust and adoption, operational cost efficiencies, and pricing competitiveness from more data. We have historically demonstrated our ability to capture over 4% market share in multiple markets, with our oldest market cohorts 9 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. showing deeper market penetration.
We are focused on growing market share in our existing markets — greater scale improves awareness, trust and adoption, operational cost efficiencies, and pricing competitiveness from more data. We have historically demonstrated our ability to capture over 4% market share in multiple markets, with our oldest market cohorts 9 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. showing deeper market penetration.
These proprietary data points have led us to make approximately 2.1 billion annotations and adjustments to MLS and tax assessor data, as well as build out unique geospatial data assets, such as power line and busy road proximity.
These proprietary data points have led us to make approximately 2.3 billion annotations and adjustments to MLS and tax assessor data, as well as build out unique geospatial data assets, such as power line and busy road proximity.
During the process, the seller will typically host dozens of strangers walking through their home, and deal with the hassle of cleaning up and clearing out, often on short notice and during inconvenient times. • Receive an offer. Almost 30% of home sellers reduce their asking price at least once, while approximately 20% of sellers offer incentives to attract buyers.
During the process, the seller will typically host dozens of strangers walking through their home, and deal with the hassle of cleaning up and clearing out, often on short notice and during inconvenient times. • Receive an offer. Over 30% of home sellers reduce their asking price at least once, while over 20% of sellers offer incentives to attract buyers.
Using our website or mobile app, sellers can receive a preliminary offer online. We then conduct a home assessment to verify the home information and finalize the offer, taking into consideration the home’s condition. Sellers can then select their preferred closing date and close electronically (where permitted). 5 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
Using our website or mobile app, sellers can receive an estimated offer online. We then conduct a home assessment to verify the home information and finalize the offer, taking into consideration the home’s condition. Sellers can then select their preferred closing date and close electronically (where permitted). 5 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
This is a particularly important feature as over two-thirds of sellers are also buyers, who are often looking to line up the timing of these two transactions to ensure they have their next home to move to before locking in the sale of their current home or to avoid double moves or mortgages.
This is a particularly important feature as the majority of sellers are also buyers, who are often looking to line up the timing of these two transactions to ensure they have their next home to move to before locking in the sale of their current home or to avoid double moves or mortgages.
After the offer is accepted, the buyer conducts an inspection, which often forces the seller to renegotiate the offer or fix issues, increasing the homeowner’s costs and potentially delaying closing. • Wait for closing. Once the contract is signed, it still takes over 40 days on average to close.
After the offer is accepted, the buyer typically conducts an inspection, which often forces the seller to renegotiate the offer or fix issues, increasing the homeowner’s costs and potentially delaying closing. • Wait for closing. Once the contract is signed, it still takes almost 40 days on average to close.
Our Business Model The vast majority of our revenue and margins today are generated by our core product offering, where we acquire homes directly from sellers and resell those homes to buyers. We also provide additional services to home sellers and home buyers, including title and escrow services, List with Opendoor, and Opendoor Marketplace.
Our Business Model The vast majority of our revenue today is generated by our core product offering, where we acquire homes directly from sellers and resell those homes to buyers. We also provide additional services to home sellers and home buyers, including title and escrow services, List with Opendoor, and Opendoor Marketplace.
This feature further differentiates our service from a traditional sale. Following acquisition, we bear the subsequent risk of conducting repairs and home quality improvements on a timely and on-budget basis. The scope of this work before resale is focused on ensuring the home is in “sale ready” condition.
This feature further differentiates our service from a traditional sale. Following acquisition, we bear the subsequent risk of conducting repairs and home quality improvements on time and on budget. The scope of this work before resale is focused on ensuring the home is in “sale ready” condition.
Home sellers can visit our website or mobile app and answer a few questions about their home’s condition, features, and upgrades. For eligible homes, customers receive a preliminary offer, which can be refreshed at any time through their personalized seller dashboard.
Home sellers can visit our website or mobile app and answer a few questions about their home’s condition, features, and upgrades. For eligible homes, customers receive an estimated offer, which can be refreshed at any time through their personalized seller dashboard.
We have conducted approximately 690,000 assessments during which we collect over 150 data points on average for each home and its surroundings using custom inspection and operator tooling to systematically source and translate home features into a robust data library.
We have conducted over 850,000 assessments during which we collect over 150 data points on average for each home and its surroundings using custom inspection and operator tooling to systematically source and translate home features into a robust data library.
In 2023 alone, more than four million existing homes were sold, representing approximately $1.6 trillion in transactions. Additionally, with approximately two-thirds of Americans living in a home they own, housing is the single largest consumer expenditure in the United States, ahead of transportation, food, insurance, and healthcare.
In 2024 alone, more than four million existing homes were sold, representing approximately $1.7 trillion in transactions. Additionally, with approximately two-thirds of Americans living in a home they own, housing is the single largest consumer expenditure in the United States, ahead of transportation, food, insurance, and healthcare.
Launched in 2014, sellers utilize our core product offering to sell their home directly to us and we resell the home to a home buyer. By selling to Opendoor, homeowners can avoid the stress of open houses, home repair coordination, overlapping mortgages, and the uncertainty that can come with listing a home on the open market.
Launched in 2014, sellers utilize our core product offering to sell their home directly to us and we resell the home to a home buyer. By selling to Opendoor, homeowners can avoid the stress of open houses, preparing the home for market, overlapping mortgages, and the uncertainty that can come with listing a home on the open market.
We also continue to build our prospective customer base by maintaining relationships and re-engaging with homeowners who might not have been ready to sell during their first interaction with Opendoor. With over two-thirds of sellers also being buyers, these homeowners represent a large part of our marketing funnel that we are focused on converting when they are ready to transact.
We also continue to build our prospective customer base by maintaining relationships and re-engaging with homeowners who might not have been ready to sell during their first interaction with Opendoor. With the majority of sellers also being buyers, these homeowners represent a large part of our marketing funnel that we are focused on converting when they are ready to transact.
In addition, OS National LLC, and its subsidiary, OSN Escrow, are licensed as escrow agents in seven states and OS National LLC is authorized to conduct the business of title insurance in five additional states that do not require entity and/or individual licensing. • Open Exchange Brokerage LLC, holds real estate brokerage licenses in 18 states. • Tremont Realty LLC (dba Opendoor Connect), holds a real estate brokerage license in Texas.
In addition, OS National LLC, and its subsidiary, OSN Escrow Inc., are licensed as escrow agents in seven states and OS National LLC is authorized to conduct the business of title insurance in five additional states that do not require entity and/or individual licensing. • Tremont Realty LLC (dba Opendoor Connect), holds a real estate brokerage license in Texas.
The Problem The traditional process of selling or buying a home is a lengthy and stressful experience for both the seller and buyer. For over 85% of United States sellers that list their home on the market using an agent, this is what their experience typically looks like: • Find a listing agent.
The Problem The traditional process of selling or buying a home is a lengthy and stressful experience for both the seller and buyer. For nearly 90% of United States sellers that list their home on the market using an agent, this is what their experience typically looks like: • Find a listing agent.
Nearly 25% of sellers who listed or sold their homes have previously entered their home address on Opendoor.com across our active markets, which suggests that our registered user base is a powerful source of future sellers that we can use to drive our future growth.
Over 20% of sellers who listed or sold their homes have previously entered their home address on Opendoor.com across our active markets, which suggests that our registered user base is a powerful source of future sellers that we can use to drive our future growth.
At scale, we believe these offerings have the potential to reduce our inventory exposure, capital intensity, and macro risk. Additionally, we plan to achieve operating leverage by growing our revenue at a faster pace than our fixed cost base, which includes general and administrative as well as technology and development expenses.
At scale, we believe our List with Opendoor and Opendoor Marketplace offerings have the potential to reduce our inventory exposure, capital intensity, and macro risk. Additionally, we plan to achieve operating leverage by growing our revenue at a faster pace than our fixed cost base, which includes general and administrative as well as technology and development expenses.
We believe that the quality and scale of information we utilize in our inventory management decisions and our ability to manage these decisions across a scaled, diversified portfolio provides us with a structural advantage over individual sellers or agents in the traditional home selling process. • Our operations across 50 markets and a range of price and home types allow us to benefit from significant diversification effects.
We believe that the quality and scale of information we utilize in our inventory management decisions 8 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. and our ability to manage these decisions across a scaled, diversified portfolio provides us with a structural advantage over individual sellers or agents in the traditional home selling process. • Our operations across 50 markets and a range of price and home types allow us to benefit from significant diversification effects.
For home sellers, we are focused on providing options: in addition to receiving an Opendoor offer, sellers can also look for a higher offer from our network of buyers. For sellers who choose to place their home into our marketplace, we charge a listing fee. There is no need for making repairs on spec and no upfront commitment.
For home sellers, we are focused on providing options: in addition to receiving an Opendoor offer, sellers can also look for a higher offer from our network of buyers. For sellers who successfully sell their home via our marketplace, we charge a listing fee. There is no need for making repairs on spec and no upfront commitment.
As of December 31, 2023: • Opendoor Brokerage LLC and Opendoor Brokerage Inc., collectively, hold real estate brokerage licenses in all our markets and certain other states. • OS National LLC, and its subsidiaries, OSN Texas LLC and OSN Alabama LLC, are licensed as title agents in 27 states.
As of December 31, 2024: • Opendoor Brokerage LLC and Opendoor Brokerage Inc., collectively, hold real estate brokerage licenses in all our markets and certain other states. • OS National LLC, and its subsidiaries, OSN Texas LLC, OSN Alabama LLC, and OSN Title Company are licensed as title agents in 28 states.
While the majority of home buyers browse for homes online, the transaction itself is still largely offline, requiring consumers to engage with real estate agents to access homes and 4 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. requiring in-person closings. The COVID-19 pandemic catalyzed an increase in demand for digital-first experiences with consumers prioritizing simplicity and certainty.
While the majority of home buyers browse for homes online, the transaction itself is still largely offline, making it difficult for consumers to access homes and requiring in-person 4 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. closings. The COVID-19 pandemic catalyzed an increase in demand for digital-first experiences with consumers prioritizing simplicity and certainty.
For customers who sell directly to us, we charge a service fee. We also charge the seller for expected repairs and home quality improvements that relate to our assessment of home condition and the expectations of buyers in the market.
For customers who sell directly to us, we charge a service fee. Our final purchase price also reflects expected repairs and home quality improvements that relate to our assessment of home condition and the expectations of buyers in the market.
We also use the Investor Relations page of our website for purposes of compliance with Regulation FD and as a 12 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. routine channel for distribution of important information, including blogs, news releases, analyst presentations, financial information and corporate governance practices.
We also use the Investor Relations page of our website for purposes of compliance with Regulation FD and as a routine channel for distribution of important information, including blogs, news releases, analyst presentations, financial information and corporate governance practices.
As of December 31, 2023, all of our preliminary offers are algorithmically generated and require minimal human intervention. 6 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
As of December 31, 2024, all of our estimated offers are algorithmically generated and require minimal human intervention. 6 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
For certain licenses, we are required to designate individual licensed brokers of record, qualified individuals and control persons. Seasonality For information regarding the seasonality of our business, please see “ Part II – Item 7.
For certain licenses, we are required to designate individual licensed brokers of record, qualified individuals and control persons. 11 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. Seasonality For information regarding the seasonality of our business, please see “ Part II – Item 7.
Our final offer, inclusive of purchase price, service fee, and repair charge, provides the homeowner with more certainty and transparency as to their expected sale proceeds, while removing the hassle of doing any repairs to get the home “sale ready.” • List with Opendoor.
Our final offer, inclusive of purchase price, service fee, and condition pricing adjustment, provides the homeowner with more certainty and transparency as to their expected sale proceeds, while removing the hassle of doing any repairs and other work to get the home “sale ready.” • List with Opendoor.
We are focused on continuing to refine our best-in-class seller experience, drive additional scale and efficiencies, expand the options available to sellers to best suit their specific needs, invest in enhancing the buyer experience, and continue to integrate the seller and buyer journey. Over time, we plan to launch additional products related to real estate transactions and ancillary services.
We are focused on continuing to refine our best-in-class seller experience, drive additional scale and efficiencies, expand the options available to sellers to best suit their specific needs, invest in enhancing the buyer experience, and continue to integrate the seller and buyer journey. We continually evaluate the need for additional products related to real estate transactions and ancillary services.
Finally, there is an approximately 20% chance the contract falls through between signing and closing (based on average multiple listing services (“MLS”) contract fall-through rates in our markets in 2023), forcing the home seller to start the entire process all over again. Additionally, we estimate over two-thirds of home sellers are also home buyers.
Finally, there is over a 20% chance the contract falls through between signing and closing (based on average multiple listing services (“MLS”) contract fall-through rates in our markets in 2024), forcing the home seller to start the entire process all over again. Additionally, we estimate over one-half of home sellers are also home buyers.
In addition, we employ sophisticated resale pricing management systems that are designed to allow us to optimize sell- 8 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. through and margin using real-time, local market demand information, including down to an individual home level.
In addition, we employ sophisticated resale pricing management systems that are designed to allow us to optimize sell-through and margin using real-time, local market demand information, including down to an individual home level.
We believe that this increases the attractiveness and liquidity of our portfolio. • At any moment in time, a significant portion of our inventory is under resale contract; this means we have already found buyers for those homes and are in the process of closing the resale transactions.
We believe that this increases the attractiveness and liquidity of our portfolio. • At any moment in time, a portion of our inventory is under resale contract; this means we have already found buyers for those homes and are in the process of closing the resale transactions. This further limits the exposure of our inventory portfolio to macro market changes.
Of the $1.6 trillion residential real estate transactions in 2023, iBuyers (companies that use technology to price homes, acquire properties, and facilitate real estate transactions) captured less than 1%. The current landscape is highly fragmented. Today, over 85% of residential real estate transactions in the United States involve an agent.
Of the $1.7 trillion residential real estate transactions in 2024, iBuyers (companies that use technology to price homes, acquire properties, and facilitate real estate transactions) captured less than 1%. The current landscape is highly fragmented. Today, nearly 90% of residential real estate transactions in the United States involve an agent.
There are over three million licensed real estate agents in the United States, who each complete fewer than four transactions on average per year, and many of whom do not solely work in real estate. This can lead to an inconsistent and frustrating experience for consumers looking for guidance in what is typically the largest financial decision of their lives.
There are approximately two million licensed real estate agents in the United States, who each complete approximately five transactions on average per year, and many of whom do not solely work in real estate. Without appropriate support, this can lead to an inconsistent experience for consumers looking for guidance in what is typically the largest financial decision of their lives.
We further control the use of our proprietary technology and intellectual property through provisions in both our general and product-specific terms of use on our website. Government Regulation We operate in highly regulated businesses through a number of different channels across the United States.
Certain of our employees and contractors are also subject to invention assignment agreements. We further control the use of our proprietary technology and intellectual property through provisions in both our general and product-specific terms of use on our website. Government Regulation We operate in highly regulated businesses through a number of different channels across the United States.
When we receive an acceptable offer on a given home, we enter into a resale contract. Buyers will then typically conduct an inspection on the property, finalize their mortgage application process and ultimately take possession of the home upon closing of the transaction. Industry-Leading Pricing Capabilities Our ability to price homes competitively is fundamental to our business model.
Buyers will then typically conduct an inspection on the property, finalize their mortgage application process and ultimately take possession of the home upon closing of the transaction. Industry-Leading Pricing Capabilities Our ability to price homes competitively is fundamental to our business model.
To achieve our long-term margin objectives, we plan to continue to make competitive offers that customers choose, provide value-added adjacent services for our customers to increasingly adopt, and offer products that meet our customers where they are on their selling and buying journeys. We plan to incrementally scale our listing and marketplace offerings to expand into more markets over time.
To achieve our long-term margin objectives, we plan to continue to make competitive offers that customers choose, provide value-added adjacent services for our customers to increasingly adopt, and offer products that meet our customers where they are on their selling and buying journeys.
This feedback enables rapid response in the event of condition defects that would otherwise persist unaddressed. Quickly fixing potential quality issues helps ensure listed inventory remains in the necessary condition to maximize probability of resale. Strategic Growth Priorities Our growth strategy is to innovate and execute on the following key strategic priorities: Increase penetration in existing markets.
Quickly fixing potential quality issues helps ensure listed inventory remains in the necessary condition to maximize probability of resale. Strategic Growth Priorities Our growth strategy is to innovate and execute on the following key strategic priorities: Increase penetration in existing markets.
We are the registered holder of a variety of domestic domain names, including “opendoor.com.” In addition to the protection provided by our intellectual property rights, we enter into confidentiality and proprietary rights agreements with certain of our employees, consultants, contractors and business partners. Certain of our employees and contractors are also subject to invention assignment agreements.
As of December 31, 2024, we had 12 trademark registrations and 11 patent registrations. We are the registered holder of a variety of domestic domain names, including “opendoor.com.” In addition to the protection provided by our intellectual property rights, we enter into confidentiality and proprietary rights agreements with certain of our employees, consultants, contractors and business partners.
Launched in 2022, our capital-light marketplace offering connects home sellers with both institutional and retail buyers, facilitating transactions without Opendoor taking ownership of the home. For home buyers, we are building an e-commerce-like experience that focuses on unique selection and a streamlined process, including, in some cases, self-touring and click to purchase pricing.
Our listing product is currently available in nearly all Opendoor markets. • Opendoor Marketplace. Launched in 2022, our capital-light marketplace offering connects home sellers with both institutional and retail buyers, facilitating transactions without Opendoor taking ownership of the home. For home buyers, we are building an e-commerce-like experience that focuses on unique selection and a streamlined process.
Employees As of December 31, 2023, we employed 1,982 individuals, including 1,711 in the United States. None of our employees are currently represented by a labor organization or a party to any collective bargaining. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and additional employees.
None of our employees are currently represented by a labor organization or a party to any collective bargaining. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and additional employees.
We currently use third-party cloud computing services to allow us to quickly and efficiently scale up our services without upfront infrastructure costs, allowing us to maintain our focus on building great products. We also use third-party services to allow customers to digitally sign contracts, upload videos of their home and manage customer support services.
We currently use third-party cloud computing services to allow us to quickly and efficiently scale up our services without upfront infrastructure costs, allowing us to maintain our focus on building great products.
We believe our singular focus on an end-to-end digital solution, our best-in-class pricing engine, and our low-cost operational platform differentiate us from our competitors and provide a meaningful and sustainable competitive advantage. Human Capital Resources Our Values and People Our values.
We believe our singular focus on an end-to-end digital solution, our best-in-class pricing engine, and our low-cost operational platform differentiate us from our competitors and provide a meaningful and sustainable competitive advantage. Human Capital Resources As of December 31, 2024, we employed 1,470 individuals, including 1,128 in the United States.
We are giving home sellers control and flexibility, including over showings and selling timelines. We have launched our marketplace offering in one market, Dallas Fort-Worth, so we can iterate on the product experience quickly.
We are giving home sellers control and flexibility, including over showings and selling timelines. We have launched our marketplace offering in three markets: Dallas-Fort Worth (launched in 2022), and Charlotte and Raleigh-Durham (launched in late 2024), and we continue to iterate on the product experience.
We are subject to compliance audits of our operations by many of these authorities. For a discussion of the various risks we face from regulation and compliance matters, see “Item 1A.
For a discussion of the various risks we face from regulation and compliance matters, see “Item 1A.
Regulatory bodies include the Consumer Financial Protection Bureau (“CFPB”), the Federal Trade Commission (“FTC”), the Department of Justice (“DOJ”), the Department of Housing and Urban Development (“HUD”), and 11 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. various state licensing authorities, consumer protection agencies, financial regulatory agencies and insurance agencies.
Regulatory bodies include the Consumer Financial Protection Bureau (“CFPB”), the Federal Trade Commission (“FTC”), the Department of Justice (“DOJ”), the Department of Housing and Urban Development (“HUD”), and various state licensing authorities, consumer protection agencies, financial regulatory agencies and insurance agencies. We are subject to compliance audits of our operations by many of these authorities.
We engage third-party contractors within each market to conduct repairs, and continuously refine and adjust our repair strategies based on our operating experience in markets and reviewing neighborhood-level resale outcomes. Home resale After we complete the repairs and list the home for resale, we market our homes across a wide variety of channels to generate buyer awareness and demand.
We engage third-party contractors within each market to conduct repairs, and continuously refine and adjust our repair and improvement strategies based on our operating experience in markets and reviewing neighborhood-level resale outcomes.
With this in mind, we have invested in developing technology that enables virtualization, centralization, and automation to reduce cost, increase speed and improve quality of execution. Our proprietary construction management technology enables us to drive efficiencies across all home servicing functions, tying together pre-acquisition assessments, pricing, repair scoping, centralized back-office operations, renovation project management, and listed home maintenance.
Our proprietary construction management technology enables us to drive efficiencies across all home servicing functions, tying together pre-acquisition assessments, pricing, repair and preparation scoping, centralized back-office operations, renovation project management, and listed home maintenance.
These channels include the Opendoor website and mobile app, local MLS, and syndication across real estate portals. We also generate buyer awareness through Opendoor signage for listed properties. The majority of our sales are to individual consumers, with a minority sold to institutional investors.
Home resale After we prepare the home for market and list the home for resale, we market our homes across a wide variety of channels to generate buyer awareness and demand. These channels include the Opendoor website and mobile app, local MLS, and syndication across real estate portals. We also generate buyer awareness through Opendoor signage for listed properties.
Customers can choose to list their home on the MLS with Opendoor while also receiving the certainty of our cash offer. By choosing this product, sellers work with one of our local agents (or partner agents) to list their home through the open MLS market, leveraging the expertise of the Opendoor brokerage that has sold thousands of homes.
Customers can choose to list their home on the MLS with a partner agent while also receiving the certainty of our cash offer, which is valid for a limited time period while the seller tests the market. By choosing this product, sellers work with one of our partner agents to list their home through the open MLS market.
Efficiently turning our inventory, inclusive of repairing, listing, and reselling the home, is important to our financial performance, as we bear holding costs (including utilities, property taxes, maintenance and insurance) and financing costs during our ownership period. As part of the listing and marketing process, we determine an appropriate resale strategy for each home.
The majority of our sales are to individual consumers, with a minority sold to institutional investors. Efficiently turning our inventory, inclusive of preparing, listing, and reselling the home, is important to our financial performance, as we bear holding costs (including utilities, property taxes, maintenance and insurance) and financing costs during our ownership period.
As our newer markets mature, we believe we have significant runway for growth. We will continue to expand our customer base through partnerships and marketing campaigns that increase awareness and engage customers early in their home selling and buying research. Expand to new markets.
We will continue to expand our customer base through partnerships and marketing campaigns that increase awareness and engage customers early in their home selling and buying research. Expand to new markets. At 50 markets as of December 31, 2024, we have made good progress towards our long-term goal of being able to deliver for customers nationwide.
In addition to informing the offer price for that particular home, we incorporate the proprietary data that we collect during home assessments as structured data into our underlying pricing models.
We have developed purpose-built software to guide home assessment workflows and collect over 150 unique data points on average regarding a home’s condition and quality. In addition to informing the offer price for that particular home, we incorporate the proprietary data that we collect during home assessments as structured data into our underlying pricing models.
We typically ask for a repair charge that relates to our assessment of home condition and what it will require to get the home “sale ready” based on the expectations of buyers in the market. We have developed purpose-built software to guide home assessment workflows and collect over 150 unique data points on average regarding a home’s condition and quality.
We typically ask for a condition pricing adjustment that relates to our assessment of home condition and what it will require to get and maintain the home as “sale ready” based on the expectations of buyers in the market.
While the real estate industry generates a wealth of publicly sourceable data, much of this data lacks the quality and specificity essential to price individual homes.
These factors are reflected in our spreads, which we define as total discount to our home valuation at the time of offer, less our 5% service fee. While the real estate industry generates a wealth of publicly sourceable data, much of this data lacks the quality and specificity essential to price individual homes.
This further limits the exposure of our inventory portfolio to macro market changes. Efficient Digital Platform We continue to invest in having an agile, low-cost platform, which allows us to provide more competitive offers to home sellers and adapt to changes in macro conditions.
Efficient Digital Platform We continue to invest in having an agile, low-cost platform, which allows us to provide more competitive offers to home sellers and adapt to changes in macro conditions. Each component of our real estate business and transaction experience has been purpose-built to delight our customers through a streamlined, digital-first, flexible, and vertically-integrated platform.
Leveraging a combination of industry best practices and big data, we can fully underwrite these lower risk homes via centralized teams in order to provide sellers fast and frictionless final offers. This centralization has also enabled us to shift an increasing amount of back-office work to our offshore teams, which we believe will help deliver structural cost improvements over time.
Leveraging a combination of industry best practices and large, complex data sets, we can fully underwrite these lower risk homes via centralized teams in order to provide sellers fast and frictionless final offers.
In addition, we have designed our home inventory management processes and home access technology to ensure our homes are regularly cleaned, well-maintained and safe to enable our on-demand, self-tour experience. We receive regular home condition status updates from our trade partners and local service provider network who are in our homes multiple times per month.
Due to our scale, we have procured volume discounts on the cost of materials used in our home repairs. In addition, we have designed our home inventory management processes and home access technology to ensure our homes are regularly cleaned, well-maintained and safe to enable our on-demand, self-tour experience.
As the principal rather than the agent in the transaction, we are in a structurally advantageous position as seller, relying on data-driven decisions against a large, diversified portfolio of homes. Our proprietary pricing engine helps automate many of these steps, including relevant adjustments over time.
As part of the listing and marketing process, we determine an appropriate resale strategy for each home. As the principal rather than the agent in the transaction, we are in a structurally advantageous position as seller, relying on data-driven decisions against a large, diversified portfolio of homes.
We have also established a network of approximately 600 trade partners and local service providers that use our proprietary technology to complete home repairs and maintenance. By leveraging our technology platform and directly interfacing with our trade partners, we reduce delays, eliminate waste, and improve quality of repairs while capturing data at every step to continuously improve the system.
By leveraging our technology platform and directly interfacing with our trade partners, we reduce delays, eliminate waste, and improve quality of repairs while capturing data at every step to continuously improve the system. This increase in third-party capacity also gives us the flexibility to adapt to macro conditions and adjust our operating expenses commensurate with volume expectations.
Since launch, customers have demonstrated their desire for our digital, on-demand real estate solution with over 246,000 homes bought and sold by Opendoor across the United States. In 2023, we sold over 18,700 homes and generated $6.9 billion in revenue, the latter of which represents a compound annual growth rate of over 45% since 2017.
Since launch, customers have demonstrated their desire for our digital, on-demand real estate solution with over 274,000 homes bought and sold by Opendoor across the United States. In 2024, we sold over 13,500 homes and generated $5.2 billion in revenue while continuing to delight customers, maintaining an average Net Promoter Score of nearly 80 from our sellers since 2021.
We manage and measure our inventory performance by listing cohort and by market, and our pricing models can incorporate granular, relative demand signals to optimize pricing and sell-through across the portfolio. Our resale models, in conjunction with input from our pricing team, are designed to enable realized margins within our targets while maintaining appropriate transaction velocity and inventory portfolio health.
Our proprietary pricing engine helps automate many of these steps, including relevant adjustments over time. We manage and measure our inventory performance by listing cohort and by market, and our pricing models can incorporate granular, relative demand signals to optimize pricing and sell-through across the portfolio.
Intellectual Property We rely on trademarks, domain names, patents, copyrights, trade secrets, contractual provisions and restrictions on access and use to establish and protect our proprietary rights. As of December 31, 2023, we had 11 trademark registrations and 8 patent registrations.
We also use third-party services to allow customers to digitally sign contracts, upload videos of their home and manage customer support services. 10 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. Intellectual Property We rely on trademarks, domain names, patents, copyrights, trade secrets, contractual provisions and restrictions on access and use to establish and protect our proprietary rights.
At 50 markets as of December 31, 2023, we are making good progress towards our long-term goal of being able to deliver for customers nationwide. We select new markets by looking at drivers of supply, demand and affordability, housing stock, cost structure and expected pricing competitiveness.
In the future, we may choose to expand our market presence. We will select any new markets by looking at drivers of supply, demand and affordability, housing stock, cost structure and expected pricing competitiveness.
For customers who list their home with us, we charge a listing fee. For sellers who do not receive the offer they are looking for on the market, they can choose to accept our cash offer. Our listing product is currently available in 17 Opendoor markets. • Opendoor Marketplace.
If the seller sells their home through the MLS, Opendoor receives a referral fee from the partner agent. If the seller does not receive the offer they are looking for on the market, they can choose to accept our cash offer and Opendoor charges its same service fee.
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Importantly, we have achieved this growth while continuing to delight customers, maintaining an average Net Promoter Score of nearly 80 from our sellers since 2021.
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Our resale models, in conjunction with input from our pricing team, are designed to enable realized target margins while maintaining appropriate transaction velocity and inventory portfolio health. When we receive an acceptable offer on a given home, we enter into a resale contract.
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These factors are reflected in our spreads, which we define as total discount to our home valuation at the time of offer, less our 5% service fee, which in turn affects seller conversion. In general, the more spread is reduced, the higher our seller conversion is, which results in more home acquisitions and ultimately more home sales.
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This centralization has also enabled us to shift an increasing amount of back-office work to our offshore teams, which we believe will help deliver structural cost improvements over time. We have also established a network of over 450 trade partners and local service providers that use our proprietary technology to complete home repairs and maintenance.
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Accordingly, changing market conditions are reflected in our pricing for new acquisitions, largely leaving previously-acquired inventory and homes under contract to be acquired at risk for potential market volatility.
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We receive regular home condition status updates from our trade partners and local service provider network who are in our homes multiple times per month, as well as from home shoppers and agents who provide feedback through our mobile application after their home tours. This feedback enables rapid response in the event of condition defects that would otherwise persist unaddressed.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeA number of factors have impacted and could in the future negatively impact and harm our business, including the following: • downturns in the U.S. residential real estate market that may be due to one or more factors, whether included in this list or not; • changes in national, regional, or local economic, demographic or real estate market conditions; • increased mortgage interest rates, such as the recent significant increases in interest rates in 2022 and 2023, or down payment requirements and/or restrictions on mortgage financing availability; • low home inventory levels or lack of affordably priced homes; • high rental occupancy rates; • labor or materials supply shortages; • slow economic growth or inflationary or recessionary conditions; • increased levels of unemployment or declining wages; • declines in the value of residential real estate and/or the pace of home appreciation, or the lack thereof; • illiquidity in residential real estate; • overall conditions in the housing market, including macroeconomic shifts in supply or demand, and increases in costs for homeowners such as property taxes, homeowners’ association fees and availability and/or affordability of insurance; • low levels of consumer confidence in the economy and/or the U.S. residential real estate industry; • the future impacts of pandemics or epidemics, including any future resurgences of COVID-19 and its variants, on buying and selling trends in the residential real estate market; • changes in household debt levels; • volatility and general declines in the stock market; • federal, state, or local legislative or regulatory changes that would negatively impact owners or potential purchasers of single family homes or the residential real estate industry in general, such as the Tax Cuts and Jobs Act of 2017, which limited deductions of certain mortgage interest expenses and property taxes; or • natural and man-made disasters and other catastrophic events, such as hurricanes, windstorms, tornadoes, earthquakes, wildfires, floods, hailstorms, terrorist attacks and other events that disrupt local, regional, or national real estate markets. 13 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
Biggest changeA number of factors have impacted and could in the future negatively impact and harm our business, including the following: • seasonal or cyclical downturns in the U.S. residential real estate market that may be due to one or more factors, whether included in this list or not; • changes in national, regional, or local economic, demographic or real estate market conditions; • increased mortgage interest rates, such as the recent significant increases in interest rates in 2022 and 2023, or down payment requirements and/or restrictions on mortgage financing availability; • low home inventory levels, which may result from zoning regulations, higher construction costs, and housing market uncertainty that discourages some potential home sellers, among other factors, or lack of affordably priced homes, which may result from home prices growing faster than wages, among other factors; • high rental occupancy rates; • labor or materials supply shortages; 12 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. • slow economic growth or inflationary or recessionary conditions; • changes in trade policies of the U.S. or other countries, such as tariffs or retaliatory tariffs, which may contribute to inflationary conditions and increase the cost of materials for home repairs; • new and changing laws, regulations, executive orders, and enforcement priorities; • increased levels of unemployment or declining wages; • declines in the value of residential real estate and/or the pace of home appreciation, or the lack thereof; • illiquidity in residential real estate; • overall conditions in the housing market, including macroeconomic shifts in supply or demand, and increases in costs for homeowners such as property taxes, homeowners’ association fees and the availability and/or affordability of insurance, including as a result of more frequent and severe natural disasters or severe weather due to climate change; • low levels of consumer confidence in the economy and/or the U.S. residential real estate industry; • the future impacts of pandemics or epidemics on buying and selling trends in the residential real estate market; • changes in household debt levels; • geopolitical tensions; • volatility and general declines in the stock market; • loss in confidence in the debt, obligations, or operations in the U.S. government, or a shutdown of the U.S. government, which could impact broader credit markets or economic activity; • federal, state, or local legislative or regulatory changes that would negatively impact owners or potential purchasers of single-family homes or the residential real estate industry in general, such as the Tax Cuts and Jobs Act of 2017, which limited deductions of certain mortgage interest expenses and property taxes; or • natural and man-made disasters and other catastrophic events, such as hurricanes, windstorms, tornadoes, earthquakes, wildfires, floods, hailstorms, terrorist attacks and other events that disrupt local, regional, or national real estate markets.
Accordingly, we may not be able to achieve or maintain profitability and we may continue to incur significant losses in the future. Moreover, as we continue to invest in our business, we will incur expenses related to those investments, which may not result in increased revenue or growth in our business.
Accordingly, we may not be able to achieve or maintain profitability and we may continue to incur significant losses in the future. Moreover, as we invest in our business in the future, we will incur expenses related to those investments, which may not result in increased revenue or growth in our business.
Disruptions in the supply chain for the materials, such as paint and carpet, and constraints in the market for labor necessary to restore and resell home inventory could lengthen the period of time during which we must hold home inventory.
Disruptions in the supply chain for materials, such as paint and carpet, and constraints in the market for labor necessary to restore and resell home inventory could lengthen the period of time during which we must hold home inventory.
Identifying partners, and negotiating and documenting agreements with them, and establishing and maintaining good relationships requires significant time and resources. In addition, we rely on our relationships with MLS providers in all our markets both as key data sources for our pricing and for listing our inventory for resale.
Identifying partners, negotiating and documenting agreements with them, and establishing and maintaining good relationships requires significant time and resources. In addition, we rely on our relationships with MLS providers in all our markets both as key data sources for our pricing and for listing our inventory for resale.
We could be subject to additional tax liabilities and our ability to use net operating loss carryforwards and other tax attributes may be limited in connection with the Business Combination or other ownership changes. We are subject to federal and state income and non-income taxes in the United States, and foreign income and non-income taxes in Canada and India.
We could be subject to additional tax liabilities and our ability to use our net operating loss carryforwards and other tax attributes may be limited in connection with the Business Combination or other ownership changes. We are subject to federal and state income and non-income taxes in the United States, and foreign income and non-income taxes in Canada and India.
Any actual or alleged security breaches or alleged violations of federal or state laws or regulations relating to privacy and data security could result in mandated user notifications, litigation, government investigations, significant fines, and expenditures; divert management’s attention from operations; deter people from using our platform; damage our brand and reputation; and materially adversely affect our business, results of operations, and financial condition.
Any actual or alleged security breaches or alleged violations of federal or state laws or regulations relating to data privacy and security could result in mandated user notifications, litigation, government investigations, significant fines, and expenditures; divert management’s attention from operations; deter people from using our platform; damage our brand and reputation; and materially adversely affect our business, results of operations, and financial condition.
We believe that our ability to compete depends upon many factors both within and beyond our control, including the following: • the financial competitiveness of our products for consumers; • the number of potential customers; • the timing and market acceptance of our products, including new products offered by us or our competitors; • our selling and marketing efforts; • our customer service and support efforts; • our continued ability to develop and improve our technology to support our business model; • customer adoption of our platform as an alternative to traditional methods of buying and selling residential real estate; and • our brand strength relative to our competitors.
We believe that our ability to compete depends upon many factors both within and beyond our control, including the following: • the financial competitiveness of our products for consumers; • the number of potential customers; • the timing and market acceptance of our products and the iBuying model, including new products offered by us or our competitors; • our selling and marketing efforts; • our customer service and support efforts; • our continued ability to develop and improve our technology to support our business model; • customer adoption of our platform as an alternative to traditional methods of buying and selling residential real estate; and • our brand strength relative to our competitors.
If we are unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims brought by third parties against our suppliers and licensors or against us, or if we are unable to continue to obtain the technology or enter into new agreements on commercially reasonable terms, our ability to develop our services containing that technology could be severely limited and our business could be harmed.
If we are unable to obtain or maintain rights to any of this technology because of intellectual property rights infringement or misappropriation claims brought by third parties against our suppliers and licensors or against us, or if we are unable to continue to obtain the technology or enter into new agreements on commercially reasonable terms, our ability to develop our services containing that technology could be severely limited and our business could be harmed.
We rely on licenses to use the intellectual property rights of third parties which are incorporated into our products and services. Failure to renew or expand existing licenses may require us to modify, limit or discontinue certain offerings, which could materially affect our business, financial condition and results of operations.
We rely on licenses to use the intellectual property rights of third parties that are incorporated into our products and services. Failure to renew or expand existing licenses may require us to modify, limit or discontinue certain offerings, which could materially affect our business, financial condition and results of operations.
Cybersecurity incidents may occur to us or our third-party providers and, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption or unavailability of critical data and confidential or proprietary information (our own or that of third parties, including personal information of our customers and employees) and the disruption of business operations.
Cybersecurity incidents may occur to us or our third-party providers and, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption or unavailability of critical data and Confidential Information (our own or that of third parties, including Personal Information of our customers and employees) and the disruption of business operations.
Under that method, if the conversion value of the 2026 Notes exceeds their principal amount for a reporting period, then we will calculate our diluted earnings per share assuming that all of the 2026 Notes were converted at the beginning of the reporting period and that we issued shares of our common stock to settle the excess.
Under that method, if the conversion value of the 2026 Notes exceeds their principal amount for a reporting period, then we calculate our diluted earnings per share assuming that all of the 2026 Notes were converted at the beginning of the reporting period and that we issued shares of our common stock to settle the excess.
Further, incorporating AI gives rise to litigation risk and risk of non-compliance and unknown cost of compliance, as AI is an emerging technology for which the legal and regulatory landscape is not fully developed, (including potential liability for breaching intellectual property or privacy rights or other laws).
Further, incorporating AI Technologies gives rise to litigation risk and risk of non-compliance and unknown cost of compliance, as AI Technology is an emerging technology for which the legal and regulatory landscape is not fully developed, (including potential liability for breaching intellectual property or privacy rights or other laws).
Persistent or pervasive fraudulent activity may cause customers and real estate partners to lose trust in us and decrease or terminate their usage of our products, or could result in financial loss, thereby harming our business and results of operations. Our risk management efforts may not be effective.
Additionally, persistent or pervasive fraudulent activity may cause customers and real estate partners to lose trust in us and decrease or terminate their usage of our products, or could result in financial loss, thereby harming our business and results of operations. Our risk management efforts may not be effective.
We cannot be certain that our licensors are not infringing the intellectual property rights of others or that our suppliers and licensors have sufficient rights to the technology in all jurisdictions in which we may operate. Some of our license agreements may be terminated by our licensors for convenience.
We cannot be certain that our licensors are not infringing or misappropriating the intellectual property rights of others or that our suppliers and licensors have sufficient rights to the technology in all jurisdictions in which we may operate. Some of our license agreements may be terminated by our licensors for convenience.
Our business model and growth strategy depend on our marketing efforts and ability to attract buyers and sellers to our website and mobile application in a cost-effective manner. Our long-term success depends in part on our ability to continue to attract more buyers and sellers to our platform in each of our markets.
Our business model and growth strategy depend on our brand, marketing efforts and ability to attract buyers and sellers to our website and mobile application in a cost-effective manner. Our long-term success depends in part on our ability to continue to attract more buyers and sellers to our platform in each of our markets.
These rules and regulations result in legal and financial compliance costs that are costly and our management and other personnel will continue to need to devote a substantial amount of time to these compliance initiatives. The increased costs will increase our net loss.
These rules and regulations result in legal and financial compliance expenses that are costly and our management and other personnel will continue to need to devote a substantial amount of time to these compliance initiatives. The increased costs will increase our net loss.
For example, during 2023, historically low listing volumes, due in part to macro uncertainty in the housing market and elevated mortgage rates, constrained the supply of homes on the market and limited our access to desirable inventory.
For example, during 2023 and 2024, historically low listing volumes, due in part to macro uncertainty in the housing market and elevated mortgage rates, constrained the supply of homes on the market and limited our access to desirable inventory.
In the future, third parties may claim that we are infringing on their intellectual property rights, and we may be found to be infringing such rights. Any claims or litigation could cause us to incur significant expenses.
In the future, third parties may claim that we are infringing on or misappropriating their intellectual property rights, and we may be found to be infringing or misappropriating such rights. Any claims or litigation could cause us to incur significant expenses.
Various tax authorities may disagree with tax positions we take and if any such tax authorities were to successfully challenge one or more of our tax positions, the results could adversely affect our financial condition.
Various tax authorities may disagree with tax positions we take and if any such tax authorities were to successfully challenge one or more of our material tax positions, the results could adversely affect our financial condition.
These risks include, without limitation: possible declines in the value of real estate; risks related to general and local economic conditions; demographic and population shifts and migration; possible lack of availability of mortgage funds; overbuilding; extended vacancies of properties; increases in competition, property taxes and operating expenses; changes in zoning laws; increased labor costs; unemployment; costs resulting from the clean-up of, and liability to third parties for damages resulting from, environmental problems; casualty or condemnation losses; changes in meteorological or climatic conditions; and uninsured damages from floods, hurricanes, wildfires, earthquakes or other natural disasters, which may become more frequent or severe as a result of climate change.
These risks include, without limitation: possible declines in the value of real estate; risks related to general and local economic conditions; demographic and population shifts and migration; possible lack of availability of mortgage funds; overbuilding; extended vacancies of properties; increases in competition, property taxes and operating expenses; changes in zoning laws; increased labor costs; unemployment; costs resulting from the clean-up of, and liability to third parties for damages resulting from, environmental problems; casualty or condemnation losses; changes in meteorological or climatic conditions; and uninsured damages from floods, hurricanes, tornadoes, wildfires, earthquakes or other natural disasters or severe weather events, which may become more frequent or severe as a result of climate change.
In addition, even if holders do not elect to convert their 2026 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2026 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital. 29 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
In addition, even if holders do not elect to convert their 2026 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2026 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital. 32 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
We currently intend to retain our future earnings, if any, to finance the further development and expansion of our business and do not intend to pay cash dividends in the foreseeable future.
We do not intend to pay cash dividends for the foreseeable future. We currently intend to retain our future earnings, if any, to finance the further development and expansion of our business and do not intend to pay cash dividends in the foreseeable future.
For example, the Inflation Reduction Act of 2022, enacted on August 16, 2022, imposed a one-percent non-deductible excise tax on repurchases of stock that are made by U.S. publicly traded corporations on or after January 1, 2023, which may affect any future share repurchases.
For example, the Inflation Reduction Act of 2022, enacted on August 16, 2022, imposed a one-percent non-deductible excise tax on repurchases of stock that are made by U.S. publicly traded corporations on or after January 1, 2023, which may affect any future share repurchases we undertake.
Because of the novelty of our business model and our limited track record as a public company, high profile failures of companies operating in similar or adjacent spaces, including companies in our market or companies operating in different markets but utilizing an “iBuyer” business model, may impact investor perceptions of the digital home buying industry as a whole.
Because of the novelty of our business model and our limited track record as a public company, high profile failures of companies operating in similar or adjacent spaces, including companies in our market or companies operating in different markets but utilizing an iBuyer business model, may impact investor perceptions of the digital home buying industry as a whole.
While these agreements will give us contractual remedies upon any unauthorized use or disclosure of our proprietary information, we cannot guarantee that we will be able to detect such unauthorized activity, or if detected, that our rights under these agreements will be effective in controlling access to, or use and distribution of, our proprietary information, intellectual property or technology.
While these agreements will give us contractual remedies upon any unauthorized use or disclosure of our proprietary information and trade secrets, we cannot guarantee that we will be able to detect such unauthorized activity, or if detected, that our rights under these agreements will be effective in controlling access to, or use and distribution of, our proprietary information, intellectual property or technology.
We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, its board committees or as executive officers.
We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors (the “Board”), our Board committees or as executive officers.
While new AI initiatives, laws, and regulations are emerging and evolving, what they ultimately will look like remains uncertain, and our obligation to comply with them could entail significant costs, negatively affect our business, or entirely limit our ability to incorporate certain AI capabilities into our offerings.
While new AI Technologies initiatives, laws, and regulations are emerging and evolving, what they ultimately will look like remains uncertain, and our obligation to comply with them could entail significant costs, negatively affect our business, or entirely limit our ability to incorporate certain AI Technologies into our offerings.
As a result, fluctuations in our ultimate tax obligations may differ materially from amounts recorded in our financial statements and could adversely affect our business, financial condition and results of operations in the periods for which such determination is made. 28 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
As a result, fluctuations in our ultimate tax obligations may differ materially from amounts recorded in our financial statements and could adversely affect our business, financial condition and results of operations in the periods for which such determination is made. 31 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
In addition, the availability of committed financing is typically subject to us meeting certain conditions, which may include financial or collateral performance tests or metrics. As of December 31, 2023, we satisfied the financial and collateral performance-based conditions to borrowing under our debt facilities.
In addition, the availability of committed financing is typically subject to us meeting certain conditions, which may include financial or collateral performance tests or metrics. As of December 31, 2024, we satisfied the financial and collateral performance-based conditions to borrowing under our debt facilities.
For example, due in part to macroeconomic factors such as increased interest rates and lower consumer confidence stemming from recession risk, in the second half of 2023, market clearance rates slowed, which resulted in reduced pace of our resales.
For example, due in part to macroeconomic factors such as increased interest rates and lower consumer confidence stemming from recession risk, in the second half of 2023 and most of 2024, market clearance rates slowed, which resulted in reduced pace of our resales.
Additionally, we may incur significant losses in the future for a number of reasons, including the following: • our failure to appropriately price and manage the home inventory we acquire; • changes in our fee structure or rates; • the availability of debt financing and securitization funding to finance our real estate inventories; • our inability to grow market share in our existing markets or any new markets we may enter; • our expansion into new markets, for which we typically incur more significant losses immediately following entry; • increased competition in the U.S. residential real estate industry; • our failure to realize anticipated efficiencies through our technology and business model; • costs associated with enhancements of our products and introducing new product offerings; • our failure to execute our growth strategies; • declines in U.S. residential real estate transaction volumes; • increased marketing costs; • lack of access to housing market data that is used in our pricing models at reasonable cost, if at all; • hiring additional personnel to support our overall growth; • loss in value of real estate due to changes in market conditions in the area in which real estate or assets are located; • increases in costs associated with holding our real estate inventories, including financing costs; and • unforeseen expenses, difficulties, complications and delays, and other unknown factors.
Additionally, we may incur significant losses in the future for a number of reasons, including the following: • our failure to appropriately price and manage the home inventory we acquire; • changes in our fee structure or rates; • the availability of debt financing and securitization funding to finance our real estate inventories; • our inability to grow market share in our existing markets or any new markets we may enter; • our expansion into new markets, for which we typically incur more significant losses immediately following entry; • increased competition in the U.S. residential real estate industry; • our failure to realize anticipated efficiencies through our technology, business model and cost management strategies; • costs associated with enhancements of our products and introducing new product offerings; • our failure to execute our growth strategies; • declines in U.S. residential real estate transaction volumes; • increased marketing costs; 13 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. • lack of access to housing market data that is used in our pricing models at reasonable cost, if at all; • hiring additional personnel to support our overall growth; • loss in value of real estate due to changes in market conditions in the area in which real estate or assets are located; • increases in costs associated with holding our real estate inventories, including financing costs; and • unforeseen expenses, difficulties, complications and delays, and other unknown factors.
The use of AI to support business operations carries inherent risks related to data privacy and security, such as intended, unintended, or inadvertent transmission of proprietary or sensitive information, as well as challenges related to implementing and maintaining AI tools, such as developing and maintaining appropriate datasets for such support.
The use of AI Technologies to support business operations carries inherent risks related to data privacy and security, such as intended, unintended, or inadvertent transmission of proprietary or sensitive information, as well as challenges related to implementing and maintaining AI Technologies, such as developing and maintaining appropriate datasets for such support.
Such events may negatively impact our stock price and ability to raise capital regardless of whether those events have any actual relationship with our business and financial or operational performance. While we have experienced rapid growth historically, our business experienced significant contraction in the second half of 2022, which continued throughout 2023.
Such events may negatively impact our stock price and ability to raise capital regardless of whether those events have any actual relationship with our business and financial or operational performance. While we have experienced rapid growth historically, our business experienced significant contraction in the second half of 2022, which continued throughout 2023 and into the first half of 2024.
Our success depends in part on us not infringing upon the intellectual property of others. Our competitors and other third parties may own or claim to own intellectual property relating to the real estate industry.
Our success depends in part on us not infringing upon or misappropriating the intellectual property rights of others. Our competitors and other third parties may own or claim to own intellectual property relating to the real estate industry.
As a result of these restrictions and safety concerns for our customers and employees, we temporarily suspended home acquisitions and sold down most home inventory before resuming home acquisitions later in the year. We also have a large employee presence in San Francisco, California, a region that contains active earthquake zones.
As a result of these restrictions and safety concerns for our customers and employees, we temporarily suspended home acquisitions and sold down most home inventory before resuming home acquisitions later in the year. We also have a large employee presence in San Francisco, California, a region that contains active earthquake zones and increasingly frequent wildfires.
We buy and sell homes, provide real estate brokerage services, provide title insurance and settlement services, provide other product offerings, and have historically provided mortgage lending and brokerage services, which results in us receiving or facilitating transmission of personally identifiable information. This information is increasingly subject to legislation and regulation in the United States.
We buy and sell homes, provide real estate brokerage services, provide title insurance and settlement services, provide other product offerings, and have historically provided mortgage lending and brokerage services, which results in us receiving or facilitating transmission of Personal Information. This information is increasingly subject to legislation and regulation in the United States.
There are numerous federal and state laws, as well as regulations and industry guidelines, regarding privacy and the storing, use, processing, and disclosure and protection of personal information, the scope of which are changing, subject to differing interpretations, and may be inconsistent among countries or conflict with other rules.
We are therefore subject to numerous federal and state laws, as well as regulations and industry guidelines, regarding privacy and the storing, use, processing, and disclosure and protection of Personal Information, the scope of which are changing, subject to differing interpretations, and may be inconsistent among countries or conflict with other rules.
Furthermore, laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our products and business. Our business is subject to the risks of international operations. Some of our employees are located in Canada and India.
Furthermore, laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our products and business. Our business is subject to the risks of international operations. Some of our employees are located in Canada and India, and we also have consultants located in Poland.
We may not be able to reverse such contraction and grow our business in the future if we do not, among other things: • continue to increase the number of customers using our platform; • avoid future inventory valuation adjustments; • acquire sufficient inventory based on our underwriting standards to meet demand for our homes; • increase our market share within existing markets and expand into new markets; • manage operating expenses; • increase our brand awareness; 15 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. • retain adequate availability of financing sources; • obtain necessary capital to meet our business objectives; • expand our third-party vendor networks; and • scale our internal operations and customer support teams.
We may not be able to reverse such contraction and grow our business in the future if we do not, among other things: • continue to increase the number of customers using our platform; • avoid future inventory valuation adjustments; • acquire sufficient inventory based on our underwriting standards to meet demand for our homes; • increase our market share within existing markets and expand into new markets; • manage operating expenses; • increase our brand awareness; • retain adequate availability of financing sources; • obtain necessary capital to meet our business objectives; • expand our third-party vendor networks; and • scale our internal operations and customer support teams.
However, if reflecting the 2026 Notes in diluted earnings per share in this manner is anti-dilutive, or if the conversion value of the 2026 Notes does not exceed their principal amount for a reporting period, then the shares underlying the 2026 Notes will not be reflected in our diluted earnings per share.
However, if reflecting the 2026 Notes in diluted earnings per share in this manner is anti-dilutive, or if the conversion value of the 2026 Notes does not exceed their principal amount for a reporting period, then the shares underlying the 2026 Notes are not reflected in our diluted earnings per share.
As we expand to new markets, we may find that local preferences, conditions, or regulations differ from our other markets such that the benefits of scale do not materialize. In addition, developing and marketing our listing and marketplace products could have higher costs than anticipated and could adversely impact our results or dilute our brand.
As we expand to new markets, we may find that local preferences, conditions, or regulations differ from our other markets such that the benefits of scale do not materialize. In addition, developing and marketing our List with Opendoor and Opendoor Marketplace products could have higher costs than anticipated and could adversely impact our results or dilute our brand.
In addition, it is possible that a resolution of one or more such proceedings could result in reputational harm, liability, penalties, or sanctions, as well as judgments, consent decrees, or orders preventing us from offering certain features, functionalities, products, or services, or requiring a change in our business practices, products or technologies, which could in the future materially and adversely affect our business, operating results and financial condition.
In addition, it is possible that a resolution of one or more such proceedings could result in reputational harm, liability, penalties, or sanctions, as well as judgments, consent decrees, or orders preventing us from offering certain features, functionalities, products, or services, or requiring a change in our business practices, products or technologies, which could in the future materially and adversely affect our business, operating results and financial condition. 39 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
This assessment includes estimates on time of possession, seasonality, macroeconomic and local market conditions, renovation costs and holding costs, transaction costs, and anticipated resale proceeds.
This assessment includes estimates regarding time of possession, seasonality, macroeconomic and local market conditions, renovation costs and holding costs, transaction costs, and anticipated resale proceeds.
Expanding offerings such as our listing and marketplace products and setting up new offerings comes with substantial upfront costs and we may not achieve profitability in time, if at all, to make up for those costs.
Expanding offerings such as our List with Opendoor and Opendoor Marketplace products and setting up new offerings comes with substantial upfront costs and we may not achieve profitability in time, if at all, to make up for those costs.
Under various federal, state and local environmental laws, a current or previous owner or operator of real property may be liable for the cost of removing or remediating hazardous or toxic substances on such property.
Under various federal, state and local environmental laws, a current or previous owner or operator of property may be liable for the cost of removing or remediating hazardous or toxic substances on, in, from, or under such property.
We have a history of losses, and we may not achieve or maintain profitability in the future. We have incurred net losses on an annual basis since we were founded. We incurred net losses of $275 million, $1.4 billion, and $662 million for the years ended December 31, 2023, 2022, and 2021, respectively.
We have a history of losses, and we may not achieve or maintain profitability in the future. We have incurred net losses on an annual basis since we were founded. We incurred net losses of $392 million, $275 million, and $1.4 billion for the years ended December 31, 2024, 2023, and 2022, respectively.
Estimates of market opportunity may prove to be inaccurate. Market opportunity estimates are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate.
Market opportunity estimates are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate.
We process, store, and use personal information and other data, which subjects us to governmental regulation and other legal obligations related to privacy, and violation of these privacy obligations could result in a claim for damages, regulatory action, loss of business, or unfavorable publicity. We receive, store, and process personal information and other customer information (“personal information”).
We process, store, and use Personal Information and other data, which subjects us to governmental regulation and other legal obligations related to privacy, and violation of these privacy obligations could result in a claim for damages, regulatory action, loss of business, or unfavorable publicity.
In addition, our net operating loss carryforwards are subject to review and possible adjustment by the IRS, and state tax authorities.
Our net operating loss carryforwards are subject to review and possible adjustment by the IRS, and state tax authorities.
The price of our common stock may fluctuate due to a variety of factors, including: • changes in the industries in which we and our customers operate; • developments involving our competitors; • changes in laws and regulations affecting our business; • variations in our operating performance and the performance of our competitors in general; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about us or our competitors or our industry; • changes in financial estimates and recommendations by securities analysts; • short sellers manipulating our stock, resulting in a price decrease; • our business being subject to seasonality with greater demand and home price appreciation from home buyers in the spring and summer, and typically weaker demand and lower home price appreciation in late fall and winter; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC; 33 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. • actions by stockholders, including the sale of their shares of our common stock; • additions and departures of key personnel; • commencement of, or involvement in, litigation involving our Company; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of our common stock available for public sale; and • general economic and political conditions, such interest rate increases, including the recent significant increases in 2022 and 2023, higher inflation and decreased consumer confidence, recessions, the future impacts of pandemics or epidemics, including any future resurgences of COVID-19 and its variants, local and national elections, fuel prices, international currency fluctuations, corruption, inflation, political instability, and acts of war or terrorism.
The price of our common stock may fluctuate due to a variety of factors, including: • changes in the industries in which we and our customers operate; • developments involving our competitors; • changes in laws and regulations affecting our business; • variations in our operating performance and the performance of our competitors in general; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about us or our competitors or our industry; • changes in financial estimates and recommendations by securities analysts; • issuances of shares of our common stock upon conversion of our 2026 Notes; • short sellers manipulating our stock, resulting in a price decrease; • our business being subject to seasonality with greater demand and home price appreciation from home buyers in the spring and summer, and typically weaker demand and lower home price appreciation in late fall and winter; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC; • actions by stockholders, including the sale of their shares of our common stock; • additions and departures of key personnel; • commencement of, or involvement in, litigation involving our Company; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of our common stock available for public sale; and • general economic and political conditions, such as interest rate increases, including the recent significant increases in 2022 and 2023, higher inflation and decreased consumer confidence, recessions, the future impacts of pandemics or epidemics, local and national elections, fuel prices, international currency fluctuations, corruption, inflation, political instability, and acts of war or terrorism.
Launches of new product or service offerings and expansions of existing products, like our listing and marketplace products, may consume significant financial and other resources and may not achieve the desired results. We regularly evaluate launching new product or service offerings to our customers, as well as expanding existing offerings.
Launches of new product or service offerings and expansions of existing products, like our List with Opendoor and Opendoor Marketplace products, may consume significant financial and other resources and may not achieve the desired results. We regularly evaluate launching new product or service offerings to our customers, as well as expanding existing offerings.
We utilize a significant amount of debt and financing arrangements in the operation of our business. Our cash flows and operating results could be adversely affected by required payments of debt or related interest and other risks of our debt financing. As of December 31, 2023 we had approximately $2.2 billion of non-recourse asset-backed loans.
We utilize a significant amount of debt and financing arrangements in the operation of our business. Our cash flows and operating results could be adversely affected by required payments of debt or related interest and other risks of our debt financing. As of December 31, 2024 we had approximately $1.9 billion of non-recourse asset-backed loans.
See “Forward-Looking Statements.” Risks Related to Our Business and Industry Our business and operating results may be significantly impacted by general economic conditions, the health of the U.S. residential real estate industry, and risks associated with our real estate assets.
See “Forward-Looking Statements.” Risks Related to Our Business and Industry Our business and operating results have been and may in the future be significantly impacted by general economic conditions, the health of the U.S. residential real estate industry, and risks associated with our real estate assets.
Furthermore, if we have excess inventory or our average days to sale increases, as was the case in the second half of 2022 alongside home price value decreases, the results of our operations may be adversely affected because we may be unable to liquidate such inventory at prices that allow us to meet margin targets or to recover our costs. 16 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
Furthermore, if we have excess inventory or our average days to sale increases, as was the case in the second half of 2022 alongside home price value decreases, the results of our operations may be adversely affected because we may be unable to liquidate such inventory at prices that allow us to meet margin targets or to recover our costs.
The successful assertion of one or more large claims against us that exceed available insurance coverage, denial of coverage as to any specific claim, or any change or cessation in our insurance policies and coverages, including premium increases or the imposition of large deductible requirements, could have a material adverse effect on our business, results of operations, and financial condition.
The successful assertion of one or more large claims against us that exceed available insurance coverage, denial of coverage as to any specific claim, or any change or cessation in our insurance policies and coverages, including premium 38 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. increases or the imposition of large deductible requirements, could have a material adverse effect on our business, results of operations, and financial condition.
As of December 31, 2023, we were in 50 markets across the United States. For the year ended December 31, 2023, a majority of our revenue was generated from our top-eight markets by revenue. As a result, local and regional conditions in these markets may differ significantly from prevailing conditions in the United States or other parts of the country.
As of December 31, 2024, we were in 50 markets across the United States. For the year ended December 31, 2024, a majority of our revenue was generated from our top-nine markets by revenue. Local and regional conditions in these markets may differ significantly from prevailing conditions in the United States or other parts of the country.
As a result of such review, we recorded an inventory valuation adjustment of $65 million in 2023, of which $23 million related to homes remaining in inventory at December 31, 2023. These adjustments, based upon anticipated, but not realized losses, caused an immediate reduction of net income and a corresponding decrease in real estate inventory in the accounting period identified.
As a result of such review, we recorded an inventory valuation adjustment of $57 million in 2024, of which $25 million related to homes remaining in inventory at December 31, 2024. These adjustments, based upon anticipated, but not realized losses, caused an immediate reduction of net income and a corresponding decrease in real estate inventory in the accounting period identified.
To the extent people migrate outside of these markets due to lower 18 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. home prices or other factors, and this migration continues to take place over the long-term, then the relative percentage of residential housing transactions may shift away from our historical top markets where we have generated most of our revenue.
To the extent people migrate outside of these markets due to lower home prices or other factors, and this migration continues to take place over the long-term, then the relative percentage of residential housing transactions may shift away from our historical top markets where we have generated most of our revenue.
We may be subject to examination in the future by federal, state and local authorities on income, employment, sales and other tax matters.
We may be subject to examination in the future by federal, state, local, and non-U.S. authorities on income, employment, sales, and other tax matters.
We seek to control access to our proprietary information by entering into a combination of confidentiality and proprietary rights agreements, invention assignment agreements and nondisclosure agreements with our employees, consultants and third parties with whom we have relationships.
We seek to protect and control access to our proprietary intellectual property, technology, and information by entering into a combination of confidentiality and proprietary rights agreements, invention assignment agreements and nondisclosure agreements with our employees, consultants and third parties with whom we have relationships.
If we are unable to recover our marketing costs through increases in customer traffic and in the number of transactions by users of our platform, or if our broad marketing campaigns are not successful or are terminated, it could have a material adverse effect on our growth, results of operations, and financial condition. 17 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
If we are unable to recover our marketing costs through increases in customer traffic and in the number of transactions by users of our platform, or if our broad marketing campaigns are not successful or are terminated, it could have a material adverse effect on our growth, results of operations, and financial condition.
Any expansion in our markets depends on a number of factors, including the cost, performance, and perceived value associated with our platform and the products and services of our competitors. Some of our potential losses may not be covered by insurance. We may not be able to obtain or maintain adequate insurance coverage.
Any expansion in our markets depends on a number of factors, including the cost, performance, and perceived value associated with our platform and the products and services of our competitors. 22 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. Some of our potential losses may not be covered by insurance. We may not be able to obtain or maintain adequate insurance coverage.
The foregoing considerations significantly increase the likelihood that a default or related enforcement or foreclosure event under one or more of our debt facilities would result in adverse consequences for our other debt facilities. 32 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. Failure to hedge effectively against interest rate changes may adversely affect our results of operations.
The foregoing considerations significantly increase the likelihood that a default or related enforcement or foreclosure event under one or more of our debt facilities would result in adverse consequences for our other debt facilities. Failure to hedge effectively against interest rate changes may adversely affect our results of operations.
Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the code.
Our use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding intellectual property rights infringement claims or the quality of the licensed code.
Changes in tax laws or tax rulings could materially affect our business, results of operations, and financial condition. The tax regimes we are subject to or operate under, including income and non-income (including indirect) taxes, are unsettled and may be subject to significant change.
Similar rules may apply under state tax laws. Changes in tax laws or tax rulings could materially affect our business, results of operations, and financial condition. The tax regimes we are subject to or operate under, including income and non-income (including indirect) taxes, may be subject to significant change.
Our effective tax rates could be affected by numerous factors, such as entry into new businesses and geographies, changes to our existing business and operations, acquisitions and investments and how they are 27 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. financed, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles and interpretations.
Our effective tax rates could be affected by numerous factors, such as entry into new businesses and geographies, changes to our existing business and operations, acquisitions and investments and how they are financed, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles and interpretations.
In the event of a major earthquake, hurricane, windstorm, tornado, flood, or catastrophic event such as pandemic (including any future resurgences of COVID-19 and its variants), epidemic, fire, flood, power loss, telecommunications failure, cyber-attack, war, or terrorist attack, we may be unable to continue our operations and may endure reputational harm, delays in developing our platform and solutions, breaches of data security and loss of critical data, all of which could harm our business, results of operations and financial condition.
In the event of a major earthquake, hurricane, windstorm, tornado, flood, fire, or catastrophic event such as pandemic, epidemic, power loss, telecommunications failure, cyber-attack, war, or terrorist attack, we may be unable to continue our operations and may endure reputational harm, delays in developing our platform and solutions, breaches of data security and loss of critical data, all of which could harm our business, results of operations and financial condition.
Any failure or perceived failure by us to comply with our privacy policies, privacy-related obligations to customers or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized access to or unintended release of personally identifiable information or other customer data, may result in governmental enforcement actions, litigation, or public statements against us by consumer advocacy groups or others.
Any failure or perceived failure by us to comply with our privacy policies, privacy-related obligations to customers or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized access to or unintended release of Personal Information or other customer data, may result in governmental enforcement actions (including fines and penalties), litigation, or public statements against us by consumer advocacy groups or others.
These claims could also result in litigation, require us to purchase a costly license or require us to devote additional research and development resources to re-engineer our software or change our products or services, any of which would have a negative effect on our business and results of operations.
These claims could also result in litigation, require us to purchase a costly license or require us to devote additional research and development resources to re-engineer our software or change our products or services, any of which would have a negative effect on our business and results of operations. 26 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
Under the Tax Act, as modified by the CARES Act, U.S. federal net operating loss carryforwards generated in taxable periods beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such net operating loss carryforwards in taxable years beginning after December 31, 2020, is limited to 80% of taxable income.
Under the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), as modified by the CARES Act, U.S. federal net operating loss carryforwards generated in taxable years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such net operating loss carryforwards in taxable years beginning after December 31, 2020, is limited to 80% of taxable income.
In certain cases, we could be required to repay all or a portion of the relevant debt immediately, even in the absence of a payment default. The occurrence of these events would have an adverse impact on our financial condition and results of operations and such impact could be material.
In certain cases, we could be required to repay all or a portion of the relevant debt immediately, even in the absence of a payment default. The occurrence of these events would have an adverse impact on our financial condition and results of operations and such impact could be material. 34 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
This in turn could negatively impact our revenue, gross margins and results of operations, which could have a material adverse effect on our business, financial condition and results of operations. Our business is dependent upon our ability to expeditiously sell inventory. Failure to expeditiously sell our inventory could have an adverse effect on our business, sales and results of operations.
These factors could negatively impact our revenue, gross margins and results of operations, which could have a material adverse effect on our business, financial condition and results of operations. Our business is dependent upon our ability to expeditiously sell inventory. Failure to expeditiously sell our inventory could have an adverse effect on our business, sales and results of operations.
Successful breaches, employee malfeasance, or human or technological error could result in, for example, unauthorized access to, disclosure, modification, misuse, loss, or destruction of company, customer, or other third-party data or systems; theft of sensitive, regulated, or confidential data including personal information and intellectual property; the loss of access to critical data or systems through ransomware, destructive attacks or other means; and business delays, service or system disruptions or denials of service.
Successful breaches, employee malfeasance, or human or technological error could result in, for example, unauthorized access to, disclosure, modification, misuse, loss, or destruction of company, customer, or other third-party data or systems; theft of sensitive, regulated, or Confidential Information and intellectual property; the loss of access to critical data or systems through ransomware, destructive attacks or other means; and business delays, service or system disruptions or denials of 37 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. service.
The cost of defending against environmental claims, of 20 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. compliance with environmental regulatory requirements or of remediating any contaminated property could materially and adversely affect us. Compliance with new or more stringent environmental and climate-related laws or regulations or stricter interpretation of existing laws may require material expenditures by us.
The cost of defending against environmental claims, of compliance with environmental regulatory requirements or of remediating any contaminated property could materially and adversely affect us. Compliance with new or more stringent environmental and climate-related laws or regulations or stricter interpretation of existing laws may require material expenditures by us.
If we are unable to pay the outstanding balance of our debt obligations at maturity, the financing sources generally have the right to foreclose on the homes and other collateral securing that debt and to charge higher “default rates” of interest until the outstanding obligations are paid in full. 31 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
If we are unable to pay the outstanding balance of our debt obligations at maturity, the financing sources generally have the right to foreclose on the homes and other collateral securing that debt and to charge higher “default rates” of interest until the outstanding obligations are paid in full.
If these increased costs are significant across our homes inventory, both in terms of costs per home and numbers of homes impacted, this could have an adverse material impact on our results of operations. Environmentally hazardous conditions may adversely affect us.
If these increased costs are significant across our homes inventory, both in terms of costs per home and numbers of homes impacted, this could have an adverse material impact on our results of operations. Environmentally hazardous conditions, and regulations relating to climate change and energy, may adversely affect us.
These laws and regulations are generally intended to protect the privacy and security of personal information, including borrower Social Security numbers and credit card information that is collected, processed and transmitted. These laws also can restrict our use of this personal information for other commercial purposes.
These laws and regulations are generally intended to protect the privacy and security of Personal Information, including borrower Social Security numbers and credit card information that is collected, processed and transmitted. These laws 27 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. also can restrict our use of this Personal Information for other commercial purposes.
A change in these principles or interpretations could have a significant effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of a change. Our management is required to evaluate the effectiveness of our internal control over financial reporting.
A change in these principles 29 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. or interpretations could have a significant effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of a change. Our management is required to evaluate the effectiveness of our internal control over financial reporting.
In addition, the shares underlying the 2026 Notes will be reflected in our diluted earnings per share using the “if-converted” method.
In addition, the shares underlying the 2026 Notes are reflected in our diluted earnings per share using the “if-converted” method.
If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster, and successfully execute on those plans in the event of a disaster or emergency, our business and reputation would be harmed. 34 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster, and successfully execute on those plans in the event of a disaster or emergency, our business and reputation would be harmed.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

7 edited+1 added−1 removed7 unchanged
Biggest changeOur Chief Technology Officer, who possesses a 25-year track record in overseeing technology, 15 of which includes oversight of information security systems, reports directly to our Chief Executive Officer. This extensive experience spans both public and private companies and includes over a decade as the dedicated key individual responsible for cybersecurity.
Biggest changeOur Chief Technology and Product Officer, who possesses a 20-year track record in product development and engineering, eight years of which consist of overseeing technology, including the oversight of information security systems, reports directly to our Chief Executive Officer. This extensive experience spans both public and private companies.
Our cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of vulnerability scans and penetration testing; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management, including annual incident training, regular phishing email simulations and tabletop exercises to simulate incident responses; • a robust cybersecurity incident response plan that includes documented procedures for preparing for, detecting, responding to and recovering from cybersecurity incidents, as well as processes to triage, assess severity for, escalate, contain, investigate, and remediate the incident; and 37 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. • a third-party risk management process for service providers, suppliers, and vendors.
Our cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; 40 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. • the use of vulnerability scans and penetration testing; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management, including annual incident training, regular phishing email simulations and tabletop exercises to simulate incident responses; • a robust cybersecurity incident response plan that includes documented procedures for preparing for, detecting, responding to and recovering from cybersecurity incidents, as well as processes to triage, assess severity for, escalate, contain, investigate, and remediate the incident; and • a third-party risk management process for service providers, suppliers, and vendors.
We have not identified any risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
To date, we have not identified any risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
Our Chief Technology Officer and Head of Security supervise efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, and alerts and reports produced by security tools deployed in the IT environment, such as regular network and endpoint monitoring, vulnerability assessments, penetration testing, and tabletop exercises.
Our Chief Technology and Product Officer supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, and alerts and reports produced by security tools deployed in the IT environment, such as regular network and endpoint monitoring, vulnerability assessments, penetration testing, and tabletop exercises.
Our Chief Technology Officer, in coordination with our Head of Security and our internal security staff, is responsible for assessing and managing our material risks from cybersecurity threats, and has primary responsibility for our overall cybersecurity risk management program and supervising both our internal cybersecurity personnel and our retained external cybersecurity consultants.
Our Chief Technology and Product Officer, in coordination with our internal security staff, is responsible for assessing and managing our material risks from cybersecurity threats, and has primary responsibility for our overall cybersecurity risk management program and supervising both our internal cybersecurity personnel and our retained external cybersecurity consultants.
The Committee receives reports at least annually from our Chief Technology Officer and management on our cybersecurity risk management and strategy, including, as applicable, progress towards our risk-mitigation goals, results from third-party assessments, and the emerging threat landscape. In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential.
The Committee receives updates at least annually from our Chief Technology and Product Officer and management on our cybersecurity risk management and strategy, including, as applicable, progress towards our risk-mitigation goals, results from third-party assessments, and the emerging threat landscape.
The Committee reports to the full Board regarding its activities, including those related to cybersecurity and, will, from time to time, brief the full Board on our cybersecurity risk management program.
In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Committee reports to the full Board regarding its activities, including those related to cybersecurity and, will, from time to time, brief the full Board on our cybersecurity risk management program.
Removed
Our Head of Security, who leads our internal security staff and reports directly to our Chief Technology Officer, has over 20 years of software development experience, ten of which have focused on cybersecurity, and includes managing information security systems, developing cybersecurity strategy and implementing effective information and cybersecurity programs.
Added
We have experienced a limited number of immaterial cybersecurity incidents in the past, regularly experience cybersecurity attempts, and expect that we will continue to experience varying degrees of cybersecurity attempts and incidents in the future.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed0 unchanged
Biggest changeLocation Purpose Approximate Square Feet Principal Lease Expiration Dates Tempe, Arizona General Office Space, Corporate Mailing Address 53,867 2030 Duluth, Georgia General Office Space 71,085 2029 In addition, we lease office space in several other locations in the United States and India. 38 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
Biggest changeLocation Purpose Approximate Square Feet Principal Lease Expiration Dates Tempe, Arizona General Office Space, Corporate Mailing Address 53,867 2030
Item 2. Properties. We have various operating leases for office space, which are summarized as of December 31, 2023 in the table below. We believe that our facilities are adequate for our current needs.
Item 2. Properties. As of December 31, 2024, we have various operating leases in the United States and India for office space, one of which is listed in the table below. We believe that our facilities are adequate for our current needs. 41 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+2 added−19 removed1 unchanged
Biggest changeIn addition to the foregoing, we are currently and have in the past been subject to legal proceedings and regulatory actions in the ordinary course of business. We do not anticipate that the ultimate liability, if any, arising out of any such matters will have a material effect on our financial condition, results of operations or cash flows.
Biggest changeWe do not anticipate that the ultimate liability, if any, arising out of any such matters will have a material effect on our financial condition, results of operations or cash flows.
Removed
Item 3. Legal Proceedings. On October 7, 2022 and November 22, 2022, purported securities class action lawsuits were filed in the United States District Court for the District of Arizona, captioned Alich v. Opendoor Technologies Inc., et al. (Case No. 2:22-cv-01717-JFM) (“Alich”) and Oakland County Voluntary Employee’s Beneficiary Association, et al. v. Opendoor Technologies Inc., et al.
Added
Item 3. Legal Proceedings. The information required by this Item 3 is incorporated herein by reference to the discussion in Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 19. Commitments and Contingencies – Legal Matters.
Removed
(Case No. 2:22-cv-01987-GMS) (“Oakland County”), respectively. The lawsuits were consolidated into a single action, captioned In re Opendoor Technologies Inc. Securities Litigation (Case No. 2:22-CV-01717-MTL). The consolidated amended complaint names as defendants the Company, Social Capital Hedosophia Holdings Corp.
Added
In addition to the legal matters referenced above, we are currently and have in the past been subject to legal proceedings and regulatory actions in the ordinary course of business.
Removed
II (“SCH”), certain of the Company’s current and former officers and directors and the underwriters of a securities offering the Company made in February 2021.
Removed
The complaint alleges that the Company and certain officers violated Section 10(b) of the Exchange Act and SEC Rule 10b-5, and that the Company, SCH, certain officers and directors and the underwriters violated Section 11 of the Securities Act, in each case by making materially false or misleading statements related to the effectiveness of the Company’s pricing algorithm.
Removed
The plaintiffs also allege that certain defendants violated Section 20(a) of the Exchange Act and Section 15 of the Securities Act, respectively, which provide for control person liability.
Removed
The complaint asserts claims on behalf of all persons and entities that purchased, or otherwise acquired, Company common stock between December 21, 2020 and November 3, 2022 or pursuant to offering documents issued in connection with our business combination with SCH and the secondary public offering conducted by the Company in February 2021.
Removed
The plaintiffs seek class certification, an award of unspecified compensatory damages, an award of interest and reasonable costs and expenses, including attorneys’ fees and expert fees, and other and further relief as the court may deem just and proper. The defendants filed motions to dismiss on June 30, 2023, which are pending before the court.
Removed
We believe that the allegations in the complaint are without merit and we intend to vigorously defend ourselves in the matter. On March 1, 2023 and March 15, 2023, shareholder derivative lawsuits were filed in the United States District Court for the District of Arizona, captioned Carlson v. Rice, et al. (Case No. 2:23-cv-00367-GMS) and Van Dorn v.
Removed
Wu, et al. (Case No. 2:23-cv-00455-DMF), respectively, which were subsequently consolidated into a single action, captioned Carlson v. Rice (Case No. 2:23-CV-00367-GMS). Plaintiffs voluntarily dismissed the matter on June 22, 2023, and thereafter re-filed complaints in the Court of Chancery of the State of Delaware, captioned Carlson v. Rice, et al. (Case No. 2023-0642) and Van Dorn v.
Removed
Rice, et al. (Case No. 2023-0643).The cases have been consolidated into a single action, captioned Opendoor Technologies Inc. Stockholder Derivative Litigation (Case No. 2023-0642). On June 29, 2023, a shareholder derivative lawsuit was filed in the United States District Court for the District of Delaware, captioned Juul v. Wu, et al. (Case No. 1:23-cv-00705-UNA).
Removed
The complaints in each matter are based on the same facts and circumstances as In re Opendoor Technologies Inc. Securities Litigation and name certain officers and directors of the Company as defendants. The defendants are alleged to have violated Section 10(b) of the Exchange Act and SEC Rule 10b-5 and breached fiduciary duties.
Removed
The plaintiffs seek to maintain the derivative actions on behalf of the Company, an award of unspecified compensatory damages, an order directing the Company to reform its corporate governance and internal procedures, restitutionary relief, an award of interest and expenses, including attorneys’ fees and expert fees, and other and further relief as the court may deem just and proper.
Removed
These derivative actions have been stayed pending further developments in In re Opendoor Technologies Inc. Securities Litigation . On October 13, 2023, a shareholder derivative lawsuit was filed in the United States District Court for the District of Delaware, captioned Woods, et al. v. Bain, et al . (Case No. 1:23-cv-01158-UNA).
Removed
The complaint is based on facts and circumstances related to In re Opendoor Technologies Inc. Securities Litigation .
Removed
The plaintiffs have brought claims against certain current and former directors and officers of the Company for breaches of fiduciary duty, contribution under Sections 10(b) and 21D of the Exchange Act, and violations of Section 14(a) of the Exchange Act and SEC Rule 14a-9 promulgated thereunder.
Removed
The plaintiffs seek to maintain the derivative action on behalf of the Company, an award of unspecified compensatory damages, an order directing one of the defendants to disgorge monies allegedly obtained from certain personal sales of Company stock, equitable relief, an award of interest and expenses, including attorneys’ fees and expert fees, and other and further relief as the court may deem just and proper.
Removed
This derivative action has been stayed pending further developments in In re Opendoor Technologies Inc. Securities Litigation. On October 18, 2023, a shareholder derivative lawsuit was filed in the United States District Court for the District of Arizona, captioned Gera v. Palihapitiya, et al . (Case No. 2:23-cv-02164-SMB).
Removed
The complaint is based on facts and circumstances related to In re Opendoor Technologies Inc. Securities Litigation , and names as defendants certain current and former officers and directors of the Company and SCH Sponsor II LLC. The complaint alleges that the defendants violated Section 14(a) of the Exchange Act and SEC Rule 14a-9 promulgated thereunder.
Removed
The plaintiff seeks to maintain the derivative action on behalf of the Company, an award of unspecified compensatory damages, an order directing the Company to reform certain corporate governance and internal procedures, restitution, an award of cost and expenses, including attorneys’ fees and expert fees, and other and further relief as the court may deem just and proper. 39 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−0 removed3 unchanged
Biggest changeAny future determination as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors, subject to compliance with contractual restrictions and covenants in the agreements governing our current and future indebtedness.
Biggest changeAny future determination as to the declaration and payment of dividends, if any, will be at the discretion of our Board, subject to compliance with contractual restrictions and covenants in the agreements governing our current and future indebtedness.
Any such determination will also depend upon our business prospects, results of operations, financial condition, cash requirements and availability and other factors that our board of directors may deem relevant. Sales of Unregistered Equity Securities None. Issuer Purchases of Equity Securities None.
Any such determination will also depend upon our business prospects, results of operations, financial condition, cash requirements and availability and other factors that our Board may deem relevant. Sales of Unregistered Equity Securities None. Issuer Purchases of Equity Securities None.
This graph assumes that 41 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. the value of the investment in the Company’s common stock and each index (including reinvestment of dividends) was $100 on December 21, 2020.
This graph assumes that 43 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC. the value of the investment in the Company’s common stock and each index (including reinvestment of dividends) was $100 on December 21, 2020.
This graph covers the period from December 21, 2020, which was the first day our common stock began trading after the closing of the Business Combination, through December 31, 2023 for the Company’s common stock.
This graph covers the period from December 21, 2020, which was the first day our common stock began trading after the closing of the Business Combination, through December 31, 2024 for the Company’s common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information for Common Stock Our common stock is listed on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “OPEN.” Holders of Record As of February 8, 2024, there were approximately 61 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information for Common Stock Our common stock is listed on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “OPEN.” Holders of Record As of February 20, 2025, there were approximately 58 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

103 edited+35 added−73 removed84 unchanged
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios,or as noted) The following table summarizes the assets and liabilities related to the VIEs consolidated by the Company as well as the assets, liabilities and equity related to Opendoor Technologies Inc (Parent Company Only) (“Parent Company”) and subsidiaries that are not VIEs, as of December 31, 2023 (in millions): VIE Non-VIE Total CURRENT ASSETS: Cash and cash equivalents $ — $ 999 $ 999 Restricted cash 530 11 541 Marketable securities — 69 69 Escrow receivable 8 1 9 Real estate inventory 1,758 44 1,802 Inventory valuation adjustment (23) (4) (27) Real estate inventory, net 1,735 40 1,775 Other current assets 10 42 52 Total current assets 2,283 1,162 3,445 OTHER ASSETS (1) — 122 122 TOTAL ASSETS $ 2,283 $ 1,284 $ 3,567 CURRENT LIABILITIES: Other current liabilities (2) $ 29 $ 41 $ 70 Total current liabilities 29 41 70 Non-current asset-backed mezzanine term debt 746 — 746 Non-current asset-backed senior term debt 1,388 — 1,388 CONVERTIBLE SENIOR NOTES — 376 376 LEASE LIABILITIES – Net of current portion — 19 19 OTHER LIABILITIES — 1 1 TOTAL LIABILITIES $ 2,163 $ 437 $ 2,600 SHAREHOLDERS’ EQUITY: $ 120 $ 847 $ 967 ________________ (1) The Company’s consolidated Other Assets include the following assets as shown in the Consolidated Balance Sheets: Property and Equipment - Net, $66 million; Right of Use Assets, $25 million; Goodwill, $4 million; Intangibles - Net, $5 million; and Other Assets, $22 million.
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) The following table summarizes the assets and liabilities related to the VIEs consolidated by the Company as well as the assets, liabilities and equity related to Opendoor Technologies Inc (Parent Company Only) (“Parent Company”) and subsidiaries that are not VIEs, as of December 31, 2024 (in millions): VIE Non-VIE Total CURRENT ASSETS: Cash and cash equivalents $ — $ 671 $ 671 Restricted cash 81 11 92 Marketable securities — 8 8 Escrow receivable 6 — 6 Real estate inventory 2,166 19 2,185 Inventory valuation adjustment (25) (1) (26) Real estate inventory, net 2,141 18 2,159 Other current assets 8 53 61 Total current assets 2,236 761 2,997 OTHER ASSETS (1) — 129 129 TOTAL ASSETS $ 2,236 $ 890 $ 3,126 CURRENT LIABILITIES: Current asset-backed senior revolving credit $ 182 $ — $ 182 Current asset-backed senior term debt 250 — 250 Other current liabilities (2) 24 73 97 Total current liabilities 456 73 529 Non-current asset-backed mezzanine term debt 349 — 349 Non-current asset-backed senior term debt 1,143 — 1,143 CONVERTIBLE SENIOR NOTES — 378 378 LEASE LIABILITIES – Net of current portion — 13 13 OTHER LIABILITIES — 1 1 TOTAL LIABILITIES $ 1,948 $ 465 $ 2,413 SHAREHOLDERS’ EQUITY: $ 288 $ 425 $ 713 ________________ (1) The Company’s consolidated Other Assets include the following assets as shown in the Consolidated Balance Sheets: Property and Equipment – Net, $48 million; Right of Use Assets, $18 million; Goodwill, $3 million; and Other Assets, $60 million.
It excludes (gain) loss on extinguishment of debt as these expenses or gains were incurred as a result of decisions made by management to repay portions of our outstanding credit facilities and the 0.25% convertible senior notes due in 2026 (the "2026 Notes") early; these expenses are not reflective of ongoing operating results and vary in frequency and amount.
It excludes loss (gain) on extinguishment of debt as these expenses or gains were incurred as a result of decisions made by management to repay portions of our outstanding credit facilities and the 0.25% convertible senior notes due in 2026 (the "2026 Notes") early; these expenses are not reflective of ongoing operating results and vary in frequency and amount.
Gain (Loss) on Extinguishment of Debt Gain (loss) on extinguishment of debt is primarily related to the Company’s partial repurchase of the 2026 Notes at a discount net of unamortized deferred costs associated with the 2026 Notes.
(Loss) Gain on Extinguishment of Debt (Loss) gain on extinguishment of debt is primarily related to the Company’s partial repurchase of the 2026 Notes at a discount net of unamortized deferred costs associated with the 2026 Notes.
We include a reconciliation of these measures to the most directly comparable GAAP financial measure, which is net loss. Adjusted Net Loss We calculate Adjusted Net Loss as GAAP net loss adjusted to exclude non-cash expenses of stock-based compensation, equity securities fair value adjustment, warrant fair value adjustment, and intangibles amortization expense.
We include a reconciliation of these measures to the most directly comparable GAAP financial measure, which is net loss. Adjusted Net Loss We calculate Adjusted Net Loss as GAAP net loss adjusted to exclude non-cash expenses of stock-based compensation, equity securities fair value adjustment, and intangibles amortization expense.
In general, we expect our financial results and working capital requirements to reflect seasonal variations over time. However, other factors, including growth, market expansion and changes in macroeconomic conditions, such as rising inflation and interest rate increases as recently observed, have obscured the impact of seasonality in our historical financials and we expect may continue to do so.
In general, we expect our financial results and working capital requirements to reflect seasonal variations over time. However, other factors, including growth, market expansion and changes in macroeconomic conditions, such as rising inflation and interest rate increases, have obscured the impact of seasonality in our historical financials and we expect may continue to do so.
The gain on extinguishment of debt of $216 million in December 31, 2023 resulted from the Company’s partial repurchase of its 2026 Notes in 2023 at a discount net of unamortized deferred costs associated with the 2026 Notes, partially offset by expenses related to partial debt extinguishments during the year ended December 31, 2023. 53 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
The gain on extinguishment of debt of $216 million in December 31, 2023 resulted from the Company’s partial repurchase of its 2026 Notes in 2023 at a discount net of unamortized deferred costs associated with the 2026 Notes, partially offset by expenses related to partial debt extinguishments during the year ended December 31, 2023. 57 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
Our long-term financial performance depends, in part, on continuing to maintain and expand unit margins through the following initiatives: • Optimization and enhancements of our pricing engine; • Platform efficiency improvements through greater automation and self-service; • Incremental attach of services, which supplement the core transaction margin profile; and • Expansion of our listing and marketplace product offerings, which will reduce our inventory exposure and capital intensity, and eliminate the holding and selling costs associated with taking ownership of the home.
Our long-term financial performance depends, in part, on continuing to maintain and expand unit margins through the following initiatives: • Optimization and enhancements of our pricing engine; • Platform efficiency improvements through greater automation and self-service; • Incremental attach of services, which supplement the core transaction margin profile; and • Expansion of our List with Opendoor and Opendoor Marketplace product offerings, which will reduce our inventory exposure and capital intensity, and eliminate the holding and selling costs associated with taking ownership of the home.
Based on this definition, we have identified the critical accounting policies and estimates addressed below. In addition, we have other key accounting policies and estimates that are described in “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 1. Description of Business and Accounting Policies” .
Based on this definition, we have identified the critical accounting policy and estimate addressed below. In addition, we have other key accounting policies and estimates that are described in “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 1. Description of Business and Accounting Policies” .
Residential real estate is a trillion-dollar industry underpinned by a process that is complicated, time-consuming, stressful, and offline. We believe all consumers deserve to buy, sell, and move between homes with simplicity and confidence, and we have dedicated almost a decade to delivering on this vision.
Residential real estate is a trillion-dollar industry underpinned by a process that is complicated, time-consuming, stressful, and offline. We believe all consumers deserve to buy, sell, and move between homes with simplicity and confidence, and we have dedicated over a decade to delivering on this vision.
We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance. 51 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance. 53 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
We have built unique pricing and operations capabilities to become one of the largest buyers and sellers of homes in the United States. Since our founding, we have helped customers to buy or sell homes in over 246,000 transactions and have expanded our footprint to 50 markets across the country.
We have built unique pricing and operations capabilities to become one of the largest buyers and sellers of homes in the United States. Since our founding, we have helped customers to buy or sell homes in over 274,000 transactions and have expanded our footprint to 50 markets across the country.
The terms of our inventory financing facilities require an Opendoor subsidiary to comply with customary financial covenants, such as maintaining certain levels of liquidity, tangible net worth or leverage (ratio of debt to tangible net worth). As of December 31, 2023, the Company was in compliance with all financial covenants.
The terms of our inventory financing facilities require an Opendoor subsidiary to comply with customary financial covenants, such as maintaining certain levels of liquidity, tangible net worth or leverage (ratio of debt to tangible net worth). As of December 31, 2024, the Company was in compliance with all financial covenants.
The discussion should be read together with the historical audited annual consolidated financial statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022, and 2021. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties.
The discussion should be read together with the historical audited annual consolidated financial statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023, and 2022. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties.
Factors Affecting our Business Performance Market Penetration in Existing Markets Residential real estate is one of the largest consumer markets in the United States, of which less than 1% of the estimated $1.6 trillion of home value transacted annually is conducted online.
Factors Affecting our Business Performance Market Penetration in Existing Markets Residential real estate is one of the largest consumer markets in the United States, of which less than 1% of the estimated $1.7 trillion of home value transacted annually is conducted online.
In the last ten years, we have sent millions of offers and, while not everyone is ready to act when they request an offer, we treat everyone as a potential future seller. We perpetually iterate on our reengagement strategies and believe that our registered customer base will continue to be an important source of home acquisition volumes.
In the last ten years, we have sent millions of offers and, while not everyone is ready to act when they request an offer, we treat everyone as a potential future seller. We perpetually iterate on our re-engagement strategies and believe that our registered customer base will continue to be an important source of home acquisition volumes.
Other Income (Loss) — Net Other income (loss) – net consists primarily of interest income on our Cash and Restricted cash balances and from our investment in money market funds, time deposits, and debt securities as well as changes in fair value of, and dividend income, from our investment in equity securities.
Other Income (Loss) — Net Other income (loss) – net consists primarily of interest income on our Cash and Restricted cash balances and from our investment in money market funds, time deposits, and debt securities as well as changes in fair value of, and dividend income, from our investment in equity securities, and gains from deconsolidation.
Adjusted EBITDA is a supplemental performance measure that our management uses to assess our operating performance and the operating leverage in our business. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue. 48 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
Adjusted EBITDA is a supplemental performance measure that our management uses to assess our operating performance and the operating leverage in our business. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue. 50 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
A continued source of growth is re-engagement with our base of registered sellers, meaning sellers that have received an offer from Opendoor but have not yet sold their home.
A continued source of opportunity is re-engagement with our base of registered sellers, meaning sellers that have received an offer from Opendoor but have not yet sold their home.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 4. Variable Interest Entities ” for additional information regarding our VIEs. 59 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 4. Variable Interest Entities ” for additional information regarding our VIEs. 61 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
In some cases, the borrowing capacity amounts under the asset-backed senior revolving credit facilities as reflected in the table are not fully committed and any borrowings above the committed amounts are subject to the applicable lender’s discretion. As of December 31, 2023, we had committed borrowing capacity with respect to asset-backed senior revolving credit facilities of $650 million.
In some cases, the borrowing capacity amounts under the asset-backed senior revolving credit facilities as reflected in the table are not fully committed and any borrowings above the committed amounts are subject to the applicable lender’s discretion. As of December 31, 2024, we had committed borrowing capacity with respect to asset-backed senior revolving credit facilities of $400 million.
The borrowing capacity amounts under the asset-backed mezzanine term debt facilities as reflected in the table are not fully committed and any borrowing above the committed amounts are subject to the applicable lender’s discretion. As of December 31, 2023, we had committed borrowing capacity with respect to asset-backed mezzanine term debt facilities of $750 million.
The borrowing capacity amounts under the asset-backed mezzanine term debt facilities as reflected in the table are not fully committed and any borrowing above the committed amounts are subject to the applicable lender’s discretion. As of December 31, 2024, we had committed borrowing capacity with respect to asset-backed mezzanine term debt facilities of $350 million.
See “— Non-GAAP Financial Measures ” for further details and a reconciliation of Contribution Margin to Gross Margin.
Contribution Margin is a non-GAAP financial measure. See “— Non-GAAP Financial Measures ” for further details and a reconciliation of Contribution Margin to gross margin.
Income Tax Expense Income tax expense increased by a nominal amount for the year ended December 31, 2022 compared to the year ended December 31, 2021. Liquidity and Capital Resources Overview Our principal sources of liquidity have historically consisted of cash generated from our operations and from financing activities.
Income Tax Expense Income tax expense decreased by a nominal amount for the year ended December 31, 2023 compared to the year ended December 31, 2022. Liquidity and Capital Resources Overview Our principal sources of liquidity have historically consisted of cash generated from our operations and from financing activities.
The increase is primarily related to an $84 million increase in interest income due to an increase in interest rates and a $4 million unrealized gain versus a $35 million unrealized loss on marketable equity securities during the year ended December 31, 2023 and December 31, 2022, respectively.
The increase was primarily related to an $84 million increase in interest income due to an increase in interest rates and a $4 million unrealized gain versus a $35 million unrealized loss on marketable equity securities during the years ended December 31, 2023 and December 31, 2022, respectively.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) Results of Operations Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following table sets forth our results of operations for the years ended December 31, 2023 and 2022: Year Ended December 31, Change in (in millions, except percentages) 2023 2022 $ % Revenue $ 6,946 $ 15,567 $ (8,621) (55) % Cost of revenue 6,459 14,900 (8,441) (57) % Gross profit 487 667 (180) (27) % Operating expenses: Sales, marketing and operations 486 1,006 (520) (52) % General and administrative 206 346 (140) (40) % Technology and development 167 169 (2) (1) % Goodwill impairment — 60 (60) N/M Restructuring 14 17 (3) (18) % Total operating expenses 873 1,598 (725) (45) % Net operating loss (386) (931) 545 (59) % Gain (loss) on extinguishment of debt 216 (25) 241 N/M Interest expense (211) (385) 174 (45) % Other income (loss)-net 107 (10) 117 N/M Loss before income taxes (274) (1,351) 1,077 (80) % Income tax expense (1) (2) 1 (50) % Net loss $ (275) $ (1,353) $ 1,078 (80) % N/M - Not meaningful.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following table sets forth our results of operations for the years ended December 31, 2023 and 2022: Year Ended December 31, Change in (in millions, except percentages) 2023 2022 $ % Revenue $ 6,946 $ 15,567 $ (8,621) (55) % Cost of revenue 6,459 14,900 (8,441) (57) % Gross profit 487 667 (180) (27) % Operating expenses: Sales, marketing and operations 486 1,006 (520) (52) % General and administrative 206 346 (140) (40) % Technology and development 167 169 (2) (1) % Goodwill impairment — 60 (60) N/M Restructuring 14 17 (3) (18) % Total operating expenses 873 1,598 (725) (45) % Loss from operations (386) (931) 545 (59) % Gain (loss) on extinguishment of debt 216 (25) 241 N/M Interest expense (211) (385) 174 (45) % Other income (loss)-net 107 (10) 117 N/M Loss before income taxes (274) (1,351) 1,077 (80) % Income tax expense (1) (2) 1 (50) % Net loss $ (275) $ (1,353) $ 1,078 (80) % N/M - Not meaningful.
(3) Inventory valuation adjustment — Prior Periods is the inventory valuation adjustments recorded in prior periods associated with homes that sold in the period presented. (4) Represents selling costs incurred related to homes sold in the relevant period. This primarily includes broker commissions, external title and escrow-related fees and transfer taxes.
(3) Inventory valuation adjustment — Prior Periods is the inventory valuation adjustments recorded in prior periods associated with homes that sold in the period presented. (4) Represents selling costs incurred related to homes sold in the relevant period. This primarily includes broker commissions, external title and escrow-related fees and transfer taxes and are included in Sales, marketing and operations.
Our ability to service our debt and fund working capital, business operations and capital expenditures will depend on our ability to generate cash from operating activities, which is subject to our future operating success, and ability to obtain inventory acquisition financing on reasonable terms, which is subject to factors beyond our control, including potential economic recession, rising interest rates, inflation and general economic, political and financial market conditions.
Our ability to service our debt and fund working capital, business operations and capital expenditures will depend on our ability to generate cash from operating activities, which is subject to our future operating success, and ability to obtain inventory acquisition financing on reasonable terms, which is subject to factors beyond our control, including potential economic recession, rising interest rates, inflation and general economic, political and financial market conditions. 58 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) The following table presents a reconciliation of our Adjusted Net Loss and Adjusted EBITDA to our net loss, which is the most directly comparable GAAP measure, for the periods indicated: Year Ended December 31, (in millions, except percentages) 2023 2022 2021 Revenue (GAAP) $ 6,946 $ 15,567 $ 8,021 Net loss (GAAP) $ (275) $ (1,353) $ (662) Adjustments: Stock-based compensation 126 171 536 Equity securities fair value adjustment (1) 1 35 (35) Warrant fair value adjustment (1) — — (12) Intangibles amortization expense (2) 7 9 4 Inventory valuation adjustment – Current Period (3)(4) 23 458 39 Inventory valuation adjustment – Prior Periods (3)(5) (455) (39) — Restructuring (6) 14 17 — (Gain) loss on extinguishment of debt (216) 25 — Goodwill impairment — 60 — Payroll tax on initial RSU release — — 5 Legal contingency accrual and related expenses — 46 14 Other (7) (3) (3) (5) Adjusted Net Loss $ (778) $ (574) $ (116) Adjustments: Depreciation and amortization, excluding amortization of intangibles 45 41 33 Property financing (8) 174 329 119 Other interest expense (9) 37 56 24 Interest income (10) (106) (22) (3) Income tax expense 1 2 1 Adjusted EBITDA $ (627) $ (168) $ 58 Adjusted EBITDA Margin (9.0) % (1.1) % 0.7 % ________________ (1) Represents the gains and losses on certain financial instruments, which are marked to fair value at the end of each period.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) The following table presents a reconciliation of our Adjusted Net Loss and Adjusted EBITDA to our net loss, which is the most directly comparable GAAP measure, for the periods indicated: Year Ended December 31, (in millions, except percentages) 2024 2023 2022 Revenue (GAAP) $ 5,153 $ 6,946 $ 15,567 Net loss (GAAP) $ (392) $ (275) $ (1,353) Adjustments: Stock-based compensation 114 126 171 Equity securities fair value adjustment (1) 7 1 35 Intangibles amortization expense (2) 4 7 9 Inventory valuation adjustment – Current Period (3)(4) 25 23 458 Inventory valuation adjustment – Prior Periods (3)(5) (26) (455) (39) Restructuring (6) 17 14 17 Loss (gain) on extinguishment of debt 2 (216) 25 Goodwill impairment — — 60 Legal contingency accrual and related expenses 5 — 46 Other (7) (14) (3) (3) Adjusted Net Loss $ (258) $ (778) $ (574) Adjustments: Depreciation and amortization, excluding amortization of intangibles 35 45 41 Property financing (8) 116 174 329 Other interest expense (9) 17 37 56 Interest income (10) (53) (106) (22) Income tax expense 1 1 2 Adjusted EBITDA $ (142) $ (627) $ (168) Adjusted EBITDA Margin (2.8) % (9.0) % (1.1) % ________________ (1) Represents the gains and losses on certain financial instruments, which are marked to fair value at the end of each period.
The table below summarizes certain details related to our 2026 Notes (in millions), as of December 31, 2023, which includes certain repurchases: December 31, 2023 Remaining Aggregate Principal Amount Unamortized Debt Issuance Costs Net Carrying Amount 2026 Notes $ 381 $ (5) $ 376 See “ Part II – Item 8.
The table below summarizes certain details related to our 2026 Notes (in millions), as of December 31, 2024, which includes certain repurchases: December 31, 2024 Remaining Aggregate Principal Amount Unamortized Debt Issuance Costs Net Carrying Amount 2026 Notes $ 381 $ (3) $ 378 See “ Part II – Item 8.
(5) Holding costs include mainly property taxes, insurance, utilities, homeowners association dues, cleaning and maintenance costs. Holding costs are included in Sales, marketing, and operations on the Consolidated Statements of Operations. (6) Represents holding costs incurred in the period presented on homes sold in the period presented. 47 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
(5) Holding costs include mainly property taxes, insurance, utilities, homeowners association dues, cleaning and maintenance costs. Holding costs are included in Sales, marketing, and operations on the Consolidated Statements of Operations. (6) Represents holding costs incurred in the period presented on homes sold in the period presented.
Description of Business and Accounting Policies” . 64 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
Description of Business and Accounting Policies” . 65 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
The following table presents a reconciliation of our Adjusted Gross Profit and Contribution Profit to our gross profit, which is the most directly comparable GAAP measure, for the periods indicated: Year Ended December 31, (in millions, except percentages) 2023 2022 2021 Revenue (GAAP) $ 6,946 $ 15,567 $ 8,021 Gross profit (GAAP) $ 487 $ 667 $ 730 Gross Margin 7.0 % 4.3 % 9.1 % Adjustments: Inventory valuation adjustment – Current Period (1)(2) 23 458 39 Inventory valuation adjustment – Prior Periods (1)(3) (455) (39) — Adjusted Gross Profit $ 55 $ 1,086 $ 769 Adjusted Gross Margin 0.8 % 7.0 % 9.6 % Adjustments: Direct selling costs (4) (197) (414) (195) Holding costs on sales – Current Period (5)(6) (50) (109) (47) Holding costs on sales – Prior Periods (5)(7) (66) (38) (2) Contribution Profit (Loss) $ (258) $ 525 $ 525 Contribution Margin (3.7) % 3.4 % 6.5 % ________________ (1) Inventory valuation adjustment includes adjustments to record real estate inventory at the lower of its carrying amount or its net realizable value.
The following table presents a reconciliation of our Adjusted Gross Profit and Contribution Profit to our gross profit, which is the most directly comparable GAAP measure, for the periods indicated: Year Ended December 31, (in millions, except percentages) 2024 2023 2022 Revenue (GAAP) $ 5,153 $ 6,946 $ 15,567 Gross profit (GAAP) $ 433 $ 487 $ 667 Gross Margin 8.4 % 7.0 % 4.3 % Adjustments: Inventory valuation adjustment – Current Period (1)(2) 25 23 458 Inventory valuation adjustment – Prior Periods (1)(3) (26) (455) (39) Adjusted Gross Profit $ 432 $ 55 $ 1,086 Adjusted Gross Margin 8.4 % 0.8 % 7.0 % Adjustments: Direct selling costs (4) (132) (197) (414) Holding costs on sales – Current Period (5)(6) (44) (50) (109) Holding costs on sales – Prior Periods (5)(7) (14) (66) (38) Contribution Profit (Loss) $ 242 $ (258) $ 525 Contribution Margin 4.7 % (3.7) % 3.4 % ________________ (1) Inventory valuation adjustment includes adjustments to record real estate inventory at the lower of its carrying amount or its net realizable value.
The maximum initial advance rates vary by facility and generally decrease on a fixed timeline that varies by facility based on the length of time a given property has been financed and other facility-specific adjustments, including adjustments based on collateral performance. 57 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
The maximum initial advance rates vary by facility and generally decrease on a fixed timeline that varies by facility based on the length of time a given property has been financed and other facility-specific adjustments, including adjustments based on collateral performance.
(2) Represents amortization of acquisition-related intangible assets. The acquired intangible assets have useful lives ranging from 1 to 5 years and amortization is expected until the intangible assets are fully amortized. (3) Inventory valuation adjustment includes adjustments to record real estate inventory at the lower of its carrying amount or its net realizable value.
(2) Represents amortization of acquisition-related intangible assets. The acquired intangible assets had useful lives ranging from 1 to 5 years and amortization was expected until the intangible assets were fully amortized in 2024. (3) Inventory valuation adjustment includes adjustments to record real estate inventory at the lower of its carrying amount or its net realizable value.
It also excludes non-recurring payroll tax on initial RSU release, and goodwill impairment. Adjusted Net Loss also aligns the timing of inventory valuation adjustments recorded under GAAP to the period in which the related revenue is recorded in order to improve the comparability of this measure to our non-GAAP financial measures of unit economics, as described above.
It also excludes goodwill impairment. Adjusted Net Loss also aligns the timing of inventory valuation adjustments recorded under GAAP to the period in which the related revenue is recorded in order to improve the comparability of this measure to our non-GAAP financial measures of unit economics, as described above.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios,or as noted) Cash Flows The following table summarizes our cash flows for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, (in millions) 2023 2022 2021 Net cash provided by (used in) operating activities $ 2,344 $ 730 $ (5,794) Net cash provided by (used in) investing activities $ 44 $ 234 $ (476) Net cash (used in) provided by financing activities $ (2,639) $ (1,751) $ 7,342 Net (decrease) increase in cash, cash equivalents, and restricted cash $ (251) $ (787) $ 1,072 Net Cash Provided by (Used in) Operating Activities Net cash provided by (used in) operating activities was $2.3 billion, $730 million and $(5.8) billion for the years ended December 31, 2023, 2022 and 2021, respectively.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) Cash Flows The following table summarizes our cash flows for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, (in millions) 2024 2023 2022 Net cash (used in) provided by operating activities $ (595) $ 2,344 $ 730 Net cash provided by investing activities $ 28 $ 44 $ 234 Net cash used in financing activities $ (210) $ (2,639) $ (1,751) Net decrease in cash, cash equivalents, and restricted cash $ (777) $ (251) $ (787) Net Cash (Used in) Provided by Operating Activities Net cash (used in) provided by operating activities was $(595) million, $2.3 billion and $730 million for the years ended December 31, 2024, 2023 and 2022, respectively.
These amounts may fluctuate due to seasonality, timing of property acquisitions and resales, and the outstanding loan balances under our asset-backed term debt facilities.
These amounts may fluctuate due to seasonality, timing of property acquisitions and resales, and the outstanding loan balances under our asset-backed term debt facilities. 59 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
For the year ended December 31, 2022, cash used in financing activities was primarily attributable to $1.7 billion net principal payments on non-recourse asset-backed debt.
For the year ended December 31, 2022, cash used in financing activities was primarily attributable to $1.7 billion net principal payments on non-recourse asset-backed debt. 63 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
(2) The Company’s consolidated Other Current Liabilities include the following liabilities as shown in the Consolidated Balance Sheets: Accounts Payable and Other Accrued Liabilities, $64 million; Interest Payable, $1 million; and Lease Liabilities - Current, $5 million. 60 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
(2) The Company’s consolidated Other Current Liabilities include the following liabilities as shown in the Consolidated Balance Sheets: Accounts Payable and Other Accrued Liabilities, $92 million; Interest Payable, $3 million; and Lease Liabilities – Current, $2 million. 62 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
Technology and Development Expense Technology and development expense consists primarily of headcount expenses, including salaries, benefits and stock-based compensation for employees in the design, development, testing, maintenance and operation of our mobile applications, websites, tools, applications, and mobile apps that support our products.
Technology and Development Expense Technology and development expense consists primarily of headcount expenses, including salaries, benefits and stock-based compensation for employees in the design, development, testing, maintenance and operation of our websites, tools, applications, and mobile apps that support our products. Technology and development expense also includes amortization of capitalized software development costs and third-party software and hosting costs.
Interest expense varies period over period, primarily due to fluctuations in our inventory volumes and changes in the floating benchmark interest rates (“Benchmark Rates”), based on a London Interbank Offered Rate (“LIBOR”) for certain periods prior to December 31, 2022 or the secured overnight financing rate (“SOFR”), plus an applicable margin, which impact the interest incurred on our senior revolving credit facilities (see “— Liquidity and Capital Resources — Debt and Financing Arrangements ”).
Interest expense varies period over period, primarily due to fluctuations in our inventory volumes and changes in the floating benchmark interest rates (“Benchmark Rates”), based on the secured overnight financing rate (“SOFR”), plus an applicable margin, which impact the interest incurred on our senior revolving credit facilities (see “— Liquidity and Capital Resources — Debt and Financing Arrangements ”).
Advertising expense decreased by $125 million, from $200 million for the year ended December 31, 2022 to $75 million for the year ended December 31, 2023 as we decreased marketing in both existing and new markets.
Property holding costs decreased by $116 million, consistent with decreased inventory levels. Advertising expense decreased by $125 million, from $200 million for the year ended December 31, 2022 to $75 million for the year ended December 31, 2023 as we decreased marketing in both existing and new markets.
For homes under resale contract, the net realizable value is the contract price less expected selling costs and any expected concessions. For all other homes, the net realizable value is our internal projection price less expected selling 62 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
For homes under resale contract, the net realizable value is the contract price less expected selling costs and any expected concessions. For all other homes, the net realizable value is our internal projection price less expected selling costs.
Asset-backed Senior Term Debt Facilities We classify our senior term debt facilities as non-current liabilities in our consolidated balance sheets. The carrying value of the non-current liabilities is reduced by issuance costs of $12 million.
Asset-backed Senior Term Debt Facilities We classify our senior term debt facilities as current or non-current liabilities in our consolidated balance sheets based on the applicable final maturity date. The carrying value of the non-current liabilities is reduced by issuance costs of $7 million.
Market Footprint The following table represents the number of markets we operated in as of the periods presented: Year Ended December 31, (in whole numbers) 2023 2022 2021 Number of markets (at period end) 50 53 44 Due to the deteriorating macro environment in 2022 and 2023, we slowed down our new market expansion plans.
Market Footprint The following table represents the number of markets we operated in as of the periods presented: Year Ended December 31, (in whole numbers) 2024 2023 2022 Number of markets (at period end) 50 50 53 Due to the deteriorating macro environment in 2022, 2023, and 2024, we paused our new market expansion plans and are continually assessing areas within our existing markets to expand.
The property purchase price is net of our service fee and represents the cash proceeds paid to the home seller. Real estate inventory is reviewed for valuation adjustments on a quarterly basis.
The property purchase price is net of our service fee and represents the cash proceeds paid to the home seller. Real estate inventory is reviewed for valuation adjustments 64 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
Financial Highlights and Operating Metrics Year Ended December 31, (in millions, except percentages, homes purchased, homes sold, number of markets, and homes in inventory) 2023 2022 2021 2022 to 2023 Change 2021 to 2022 Change Revenue $ 6,946 $ 15,567 $ 8,021 $ (8,621) $ 7,546 Gross profit $ 487 $ 667 $ 730 $ (180) $ (63) Gross margin 7.0 % 4.3 % 9.1 % Net loss $ (275) $ (1,353) $ (662) $ 1,078 $ (691) Number of markets (at period end) 50 53 44 (3) 9 Homes sold 18,708 39,183 21,725 (20,475) 17,458 Homes purchased 11,246 34,962 36,908 (23,716) (1,946) Homes in inventory (at period end) 5,326 12,788 17,009 (7,462) (4,221) Inventory (at period end) $ 1,775 $ 4,460 $ 6,096 $ (2,685) $ (1,636) Percentage of homes “on the market” for greater than 120 days (at period end) 18 % 55 % 8 % Non-GAAP Financial Highlights (1) Contribution (Loss) Profit $ (258) $ 525 $ 525 $ (783) $ — Contribution Margin (3.7) % 3.4 % 6.5 % Adjusted EBITDA $ (627) $ (168) $ 58 $ (459) $ (226) Adjusted EBITDA Margin (9.0) % (1.1) % 0.7 % Adjusted Net Loss $ (778) $ (574) $ (116) $ (204) $ (458) ________________ (1) See “— Non-GAAP Financial Measures ” for further details and a reconciliation of such non-GAAP measures to their nearest comparable GAAP measures.
Financial Highlights and Operating Metrics Year Ended December 31, (in millions, except percentages, homes purchased, homes sold, number of markets, and homes in inventory) 2024 2023 2022 2023 to 2024 Change 2022 to 2023 Change Revenue $ 5,153 $ 6,946 $ 15,567 $ (1,793) $ (8,621) Gross profit $ 433 $ 487 $ 667 $ (54) $ (180) Gross margin 8.4 % 7.0 % 4.3 % Net loss $ (392) $ (275) $ (1,353) $ (117) $ 1,078 Number of markets (at period end) 50 50 53 — (3) Homes sold 13,593 18,708 39,183 (5,115) (20,475) Homes purchased 14,684 11,246 34,962 3,438 (23,716) Homes in inventory (at period end) 6,417 5,326 12,788 1,091 (7,462) Inventory (at period end) $ 2,159 $ 1,775 $ 4,460 $ 384 $ (2,685) Percentage of homes “on the market” for greater than 120 days (at period end) 46 % 18 % 55 % Non-GAAP Financial Highlights (1) Contribution Profit (Loss) $ 242 $ (258) $ 525 $ 500 $ (783) Contribution Margin 4.7 % (3.7) % 3.4 % Adjusted EBITDA $ (142) $ (627) $ (168) $ 485 $ (459) Adjusted EBITDA Margin (2.8) % (9.0) % (1.1) % Adjusted Net Loss $ (258) $ (778) $ (574) $ 520 $ (204) ________________ (1) See “— Non-GAAP Financial Measures ” for further details and a reconciliation of such non-GAAP measures to their nearest comparable GAAP measures.
The following table summarizes certain details related to our non-recourse asset-backed debt and other secured borrowings as of December 31, 2023 (in millions, except interest rates): Outstanding Amount December 31, 2023 Borrowing Capacity Current Non-Current Weighted Average Interest Rate End of Revolving / Withdrawal Period Final Maturity Date Non-Recourse Asset-backed Debt: Asset-backed Senior Revolving Credit Facilities Revolving Facility 2018-2 $ 1,000 $ — $ — 7.49 % June 30, 2025 June 30, 2025 Revolving Facility 2018-3 1,000 — — 6.82 % September 29, 2026 September 29, 2026 Revolving Facility 2019-1 300 — — 7.34 % August 15, 2025 August 15, 2025 Revolving Facility 2019-2 550 — — 6.83 % October 3, 2025 October 2, 2026 Revolving Facility 2019-3 925 — — — % April 5, 2024 April 4, 2025 Asset-backed Senior Term Debt Facilities Term Debt Facility 2021-S1 100 — 100 3.48 % January 2, 2025 April 1, 2025 Term Debt Facility 2021-S2 400 — 300 3.20 % September 10, 2025 March 10, 2026 Term Debt Facility 2021-S3 1,000 — 750 3.75 % January 31, 2027 July 31, 2027 Term Debt Facility 2022-S1 250 — 250 4.07 % March 1, 2025 September 1, 2025 Total $ 5,525 $ — $ 1,400 Issuance Costs — (12) Carrying Value $ — $ 1,388 Asset-backed Mezzanine Term Debt Facilities Term Debt Facility 2020-M1 $ 2,100 $ — $ 600 10.00 % April 1, 2025 April 1, 2026 Term Debt Facility 2022-M1 $ 500 $ — $ 150 10.00 % September 15, 2025 September 15, 2026 Total $ 2,600 $ — $ 750 Issuance Costs (4) Carrying Value $ 746 Total Non-Recourse Asset-backed Debt $ 8,125 $ — $ 2,134 Asset-backed Senior Revolving Credit Facilities We classify the senior revolving credit facilities as current liabilities on our consolidated balance sheets.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) The following table summarizes certain details related to our non-recourse asset-backed debt and other secured borrowings as of December 31, 2024 (in millions, except interest rates): Outstanding Amount December 31, 2024 Borrowing Capacity Current Non-Current Weighted Average Interest Rate End of Revolving / Withdrawal Period Final Maturity Date Non-Recourse Asset-backed Debt: Asset-backed Senior Revolving Credit Facilities Revolving Facility 2018-2 $ 1,000 $ — $ — — % June 24, 2026 June 24, 2026 Revolving Facility 2018-3 1,000 182 — 8.00 % September 29, 2026 September 29, 2026 Revolving Facility 2019-1 300 — — — % August 15, 2025 August 15, 2025 Revolving Facility 2019-2 550 — — — % October 3, 2025 October 2, 2026 Revolving Facility 2019-3 100 — — 8.13 % April 4, 2025 April 3, 2026 Asset-backed Senior Term Debt Facilities Term Debt Facility 2021-S1 100 — 100 3.48 % February 24, 2026 August 24, 2026 Term Debt Facility 2021-S2 400 — 300 3.31 % September 10, 2025 March 10, 2026 Term Debt Facility 2021-S3 1,000 — 750 3.75 % January 31, 2027 July 31, 2027 Term Debt Facility 2022-S1 250 250 — 4.07 % March 1, 2025 September 1, 2025 Total $ 4,700 $ 432 $ 1,150 Issuance Costs — (7) Carrying Value $ 432 $ 1,143 Asset-backed Mezzanine Term Debt Facilities Term Debt Facility 2020-M1 $ 1,700 $ — $ 200 10.00 % April 1, 2025 April 1, 2026 Term Debt Facility 2022-M1 $ 500 $ — $ 150 10.00 % September 15, 2025 September 15, 2026 Total $ 2,200 $ — $ 350 Issuance Costs (1) Carrying Value $ 349 Total Non-Recourse Asset-backed Debt $ 6,900 $ 432 $ 1,492 Asset-backed Senior Revolving Credit Facilities We classify the senior revolving credit facilities as current liabilities on our consolidated balance sheets.
The final maturity dates of the senior and mezzanine term debt facilities vary, as discussed above. (2) Represents the principal amounts outstanding as of December 31, 2023 and interest payments assuming the principal balances remain outstanding until maturity. (3) Represents future payments for long-term operating leases that have commenced as of December 31, 2023.
(2) Represents the principal amounts outstanding as of December 31, 2024 and estimated interest payments assuming the principal balances remain outstanding until maturity. The final maturity dates of the senior and mezzanine term debt facilities vary, as discussed above.
For the same periods, Adjusted Gross Margin, which aligns the timing of inventory valuation adjustments to the period in which the home is sold, decreased from 7.0% to 0.8%.
This included $458 million of inventory valuation adjustments on homes remaining in inventory at December 31, 2022. For the same periods, Adjusted Gross Margin, which aligns the timing of inventory valuation adjustments to the period in which the home is sold, decreased from 7.0% to 0.8%.
In some cases, the borrowing capacity amounts under the asset-backed senior term debt facilities as reflected in the table are not fully committed and any borrowings above the 58 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
In some cases, the borrowing capacity amounts under the asset-backed senior term debt facilities as reflected in the table are not fully committed and any borrowings above the committed amounts are subject to the applicable lender’s discretion.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) following the rapid downturn in the U.S. housing market, beginning primarily in the second half of 2022. This included $458 million of inventory valuation adjustments on homes remaining in inventory at December 31, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) ended December 31, 2023 compared to the year ended December 31, 2022 is attributable to $737 million in inventory valuation adjustments recorded during the year ended December 31, 2022 to reduce homes in inventory to their net realizable value following the rapid downturn in the U.S. housing market, beginning primarily in the second half of 2022.
In addition, we generate revenue from additional services we provide to both home sellers and buyers, which consists primarily of title insurance and escrow services and brokerage services.
Components of Our Results of Operations Revenue We generate the majority of our revenue from the sale of homes that we previously acquired from homeowners. In addition, we generate revenue from additional services we provide to both home sellers and buyers, which consists primarily of title insurance and escrow services and brokerage services.
The withdrawal period end dates and final maturity dates reflected in the table above are inclusive of any extensions that are at the sole discretion of the Company. Certain of our asset-backed senior term debt facilities also have additional extension options that are subject to lender approval that are not reflected in the table above.
Certain of our asset-backed senior term debt facilities also have additional extension options that are subject to lender approval that are not reflected in the table above.
The composition of our holding costs is described in the footnotes to the reconciliation table below. Contribution Margin is Contribution Profit (Loss) as a percentage of revenue. We view this metric as an important measure of business performance as it captures the unit level performance isolated to homes sold in a given period and provides comparability across reporting periods.
Contribution Margin is Contribution Profit (Loss) as a percentage of revenue. We view this metric as an important measure of business performance as it captures the unit level performance isolated to homes sold in a given period and provides comparability across reporting periods. Contribution Profit (Loss) helps management assess inflows and outflows directly associated with a specific resale cohort.
For the year ended December 31, 2022, cash provided by operating activities was primarily driven by a $896 million decrease in real estate inventory.
For the year ended December 31, 2022, cash provided by operating activities was primarily driven by an $896 million decrease in real estate inventory. Net Cash Provided by Investing Activities Net cash provided by investing activities was $28 million, $44 million and $234 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Contribution Profit / Margin We calculate Contribution Profit (Loss) as Adjusted Gross Profit, minus certain costs incurred on homes sold during the current period including: (1) holding costs incurred in the current period, (2) holding costs incurred in prior periods, and (3) direct selling costs.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) Contribution Profit / Margin We calculate Contribution Profit (Loss) as Adjusted Gross Profit, minus certain costs incurred on homes sold during the current period including: (1) holding costs incurred in the current period, (2) holding costs incurred in prior periods, and (3) direct selling costs.
Operating Expenses Sales, Marketing and Operations . Sales, marketing and operations increased by $462 million, or 85%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase was primarily attributable to a $219 million increase in resale transaction costs and broker commissions, consistent with the 94% increase in revenue.
Sales, marketing and operations decreased by $520 million, or 52%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. The decrease was primarily attributable to a $217 million decrease in resale transaction costs and broker commissions, consistent with the 55% decrease in revenue during the same period.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios,or as noted) At times, we may be required to keep amounts in restricted cash accounts to collateralize our asset-backed term debt facilities if the property borrowing base is insufficient to satisfy the borrowing base requirements.
At times, we may be required to keep amounts in restricted cash accounts to collateralize our asset-backed term debt facilities if the property borrowing base is insufficient to satisfy the borrowing base requirements.
In addition, we prioritized risk management and resale clearance at the expense of resale margin performance in order to clear the old book inventory, which composed a majority of the resale cohort for the year ended December 31, 2023.
In addition, we prioritized risk management and resale clearance at the expense of resale margin performance in order to clear the old book inventory, which composed a majority of the resale cohort for the year ended December 31, 2023.Contribution Margin decreased from 3.4% to (3.7)% for the years ended December 31, 2022 and December 31, 2023, respectively, due to the reasons noted above as well as increased holding costs due to longer average inventory holding periods.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) Cost of Revenue and Gross Profit Cost of revenue increased by $7.6 billion, or 104%, for the year ended December 31, 2022 compared to the year ended December 31, 2021.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) Income Tax Expense Income tax expense changed by a nominal amount for the year ended December 31, 2024 compared to the year ended December 31, 2023.
We believe these measures provide investors with meaningful period over period comparisons of our underlying performance, adjusted for certain charges that are non-recurring, non-cash, not directly related to our revenue-generating operations, not aligned to related revenue, or not reflective of ongoing operating results that vary in frequency and amount.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) meaningful period over period comparisons of our underlying performance, adjusted for certain charges that are non-cash, not directly related to our revenue-generating operations, not aligned to related revenue, or not reflective of ongoing operating results that vary in frequency and amount.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) (7) Represents holding costs incurred in prior periods on homes sold in the period presented.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) on a quarterly basis.
As of December 31, 2023, the Company had total outstanding balances on our asset-backed debt of $2.2 billion and aggregate principal outstanding from convertible senior notes of $381 million. In addition, we had undrawn borrowing capacity 56 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
As of December 31, 2024, the Company had total outstanding balances on our asset-backed debt of $1.9 billion and aggregate principal outstanding from convertible senior notes of $381 million. In addition, we had undrawn borrowing capacity of $5 billion under our non-recourse asset-backed debt facilities (as described further below), of which $218 million was committed.
As part of our overall risk management framework, we consider both individual market and aggregate portfolio exposures. We typically seek to maximize the resale margin performance of our inventory in the context of managing overall risk and inventory health through monitoring sell-through rates, holding periods, and portfolio aging.
We typically seek to maximize the resale margin performance of our inventory in the context of managing overall risk and inventory health through monitoring sell-through rates, holding periods, and portfolio aging, and we will adjust down listed prices on our inventory when appropriate to stay in-line with market sell-through rates and drive resale clearance.
Below is a table that shows our contractual obligations as of December 31, 2023: Payment Due by Year (in millions) Total Less than 1 year 1 – 3 years 4 – 5 years More than 5 years Senior and mezzanine term debt facilities (1) 2,468 126 1,576 766 — Convertible senior notes (2) 384 1 383 — — Operating leases (3) 34 8 9 9 8 Purchase commitments (4) 653 653 — — — Total $ 3,539 $ 788 $ 1,968 $ 775 $ 8 ________________ (1) Represents the principal amounts outstanding as of December 31, 2023 and estimated interest payments assuming the principal balances remain outstanding until maturity.
Below is a table that shows our material contractual obligations as of December 31, 2024: Payment Due by Year (in millions) Total Less than 1 year 1 – 3 years 4 – 5 years More than 5 years Senior revolving credit facilities (1) $ 186 $ 186 $ — $ — $ — Senior and mezzanine term debt facilities (2) 1,903 337 1,566 — Convertible senior notes (3) 383 1 382 — — Operating leases (4) 21 4 7 7 3 Purchase commitments (5) 589 589 — — — Total $ 3,082 $ 1,117 $ 1,955 $ 7 $ 3 ________________ (1) Represents the principal amounts outstanding as of December 31, 2024.
(4) As of December 31, 2023, we were under contract to purchase 2,114 homes for an aggregate purchase price of $653 million. Critical Accounting Policies and Estimates Discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with GAAP.
Critical Accounting Policies and Estimates Discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with GAAP.
One such metric is our percentage of homes “on the market” for greater than 120 days as measured from initial listing date.
As one key measure of inventory management performance, we evaluate our portfolio metrics relative to the broader market (as observed on the multiple listing services (“MLS”)). One such metric is our percentage of homes “on the market” for greater than 120 days as measured from initial listing date.
See “— Non-GAAP Financial Measures ” for further details and a reconciliation of such non-GAAP measures to their nearest comparable GAAP measures. Operating Expenses Sales, Marketing and Operations . Sales, marketing and operations decreased by $520 million, or 52%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Adjusted Gross Margin and Contribution Margin are non-GAAP financial measures. See “— Non-GAAP Financial Measures ” for further details and a reconciliation of such non-GAAP measures to their nearest comparable GAAP measures. Operating Expenses Sales, Marketing and Operations .
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) (9) Includes amortization of debt issuance costs and loan origination fees, commitment fees, unused fees, other interest related costs on our asset-backed debt facilities, interest expense related to the 2026 Notes outstanding, and interest expense on other secured borrowings.
(9) Includes amortization of debt issuance costs and loan origination fees, commitment fees, unused fees, other interest related costs on our asset-backed debt facilities, interest expense related to the 2026 Notes outstanding, and interest expense on other secured borrowings. 51 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
We will continue to evaluate new ways to improve our end-to-end solution and expect to invest in additional adjacent products and services over time with the expectation that these adjacent services will continue to improve our unit economics. Unit Economics We view Contribution Margin as a key measure of unit economic performance. Contribution Margin is a non-GAAP financial measure.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) adjacent products and services over time with the expectation that these adjacent services will continue to improve our unit economics. Unit Economics We view Contribution Margin as a key measure of unit economic performance.
Adjusted Net Loss and Adjusted EBITDA We also present Adjusted Net Loss and Adjusted EBITDA, which are non-GAAP financial measures that management uses to assess our underlying financial performance. These measures are also commonly used by investors and analysts to compare the underlying performance of companies in our industry.
(7) Represents holding costs incurred in prior periods on homes sold in the period presented. Adjusted Net Loss and Adjusted EBITDA We also present Adjusted Net Loss and Adjusted EBITDA, which are non-GAAP financial measures that management uses to assess our underlying financial performance.
Income Tax Expense Income tax expense decreased by a nominal amount for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Other Income — Net Other income – net decreased by $43 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios,or as noted) of $6.0 billion under our non-recourse asset-backed debt facilities (as described further below), of which $650 million was committed.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) mezzanine term debt facilities, to finance our home acquisitions.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios,or as noted) costs. Changes in our pricing assumptions may lead to a change in the outcome of our inventory valuation adjustment, and actual results may also differ from our assumptions.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) Our working capital requirements may increase should our inventory balance increase.
Net Cash (Used in) Provided by Financing Activities Net cash (used in) provided by financing activities was $(2.6) billion, $(1.8) billion and $7.3 billion for the years ended December 31, 2023, 2022 and 2021, respectively.
Net Cash Used in Financing Activities Net cash used in financing activities was $(210) million, $(2.6) billion and $(1.8) billion for the years ended December 31, 2024, 2023 and 2022, respectively. For the year ended December 31, 2024, cash used in financing activities was primarily attributable to $217 million net principal payments on non-recourse asset-backed debt.
General and administrative decreased by $274 million, or 44%, for the year ended December 31, 2022 compared to the year ended December 31, 2021.
Advertising expense increased by $11 million, from $75 million for the year ended December 31, 2023 to $86 million for the year ended December 31, 2024. General and Administrative . General and administrative decreased by $24 million, or 12%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 12. Share-Based Awards” . Recent Accounting Pronouncements For information on recent accounting standards, see “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 1.
Changes in our pricing assumptions may lead to a change in the outcome of our inventory valuation adjustment, and actual results may also differ from our assumptions. Recent Accounting Pronouncements For information on recent accounting standards, see “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 1.
For the year ended December 31, 2021, cash used in operating activities was primarily driven by an $5.7 billion increase in real estate inventory and an $83 million increase in escrow receivables correlated to the increase in revenue during the year.
For the year ended December 31, 2024, cash used in operating activities was primarily driven by a $449 million increase in real estate inventory and our net loss, net of non-cash items, of $168 million.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) Restructuring Expense Restructuring expense consists primarily of severance and other termination benefits for employees whose roles have been eliminated.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular amounts in millions, except share and per share data and ratios, or as noted) (10) Consists mainly of interest earned on cash, cash equivalents, restricted cash and marketable securities.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInflation Risk We believe the inflation experienced in 2022, which is still ongoing, has impacted the cost of goods and services that we consume, such as labor and materials costs for home repairs. We endeavor to offset these impacts in our business through appropriately considering them in our pricing and operational models.
Biggest changeAs of December 31, 2023, 100% of our outstanding borrowings were at a fixed rate and did not utilize floating benchmark reference rates. Inflation Risk We believe the inflation experienced in recent years has impacted the cost of goods and services that we consume, such as labor and materials costs for home repairs.
Assuming no change in the outstanding borrowings on our credit facilities as of December 31, 2022, we estimate that a one percentage point increase in the applicable benchmark rate would have increased our annual interest expense by approximately $14 million.
Assuming no change in the outstanding borrowings on our credit facilities, we estimate that a one percentage point increase in applicable benchmark rates would increase our annual interest expense by approximately $2 million as of December 31, 2024.
Accordingly, fluctuations in market interest rates may increase or decrease our interest expense. We may use interest rate cap derivatives, interest rate swaps, or other interest rate hedging instruments to economically hedge and manage interest rate risk with respect to our variable floating rate debt. Many of our floating rate debt facilities also had benchmark rate floors.
We may use interest rate cap derivatives, interest rate swaps, or other interest rate hedging instruments to economically hedge and manage interest rate risk with respect to our variable floating rate debt. Many of our floating rate debt facilities also have benchmark rate floors.
However, if our costs were to become subject to significant incremental inflationary pressure, we may not be able to fully offset such higher costs by adjusting our operational model or our pricing methodology. Our inability to do so could harm our business, results of operations, and financial condition. 65 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.
We endeavor to offset these impacts in our business by appropriately considering them in our pricing and operational models. However, if our costs were to become subject to significant incremental inflationary pressure, we may not be able to fully offset such higher costs by adjusting our operational model or our pricing methodology.
As of December 31, 2023, the Company had total outstanding balances on our asset-backed debt of $2.2 billion, with an average duration of 2.6 years. Total interest expense for the year ended December 31, 2023 was $174 million, of which $156 million was fixed and $18 million was floating.
As of December 31, 2024, we had total outstanding balances on our asset-backed debt of $1.9 billion, 91% of which was based on a fixed rate with an average duration of 1.8 years and the remaining 9% of which was based on a floating rate.
Removed
As of December 31, 2023, 100% of our outstanding borrowings were at a fixed rate and did not utilize floating benchmark reference rates. As of December 31, 2022, we had outstanding borrowings of $1.4 billion, which bore interest at floating benchmark reference rates based on the secured overnight financing rate (“SOFR”), plus an applicable margin.
Added
Total property financing interest expense for the year ended December 31, 2024 was $116 million, of which $105 million was fixed and $11 million was floating. Accordingly, fluctuations in market interest rates may increase or decrease our interest expense.
Removed
Assuming no change in the outstanding borrowings on our credit facilities as of December 31, 2023, we estimate that a one percentage point increase in applicable benchmark rates would not have resulted in an impact on our annual interest expense.
Added
Moreover, the current U.S. presidential administration has implemented tariffs on imports from Canada, Mexico, and China, and has promoted plans for potential tariffs on goods from other countries and to pursue other trade policies intended to restrict imports, which may further increase the cost of materials for home repairs.
Removed
However, we would be subject to fluctuation in interest rates in the future if we draw down under our senior revolving credit facilities.
Added
Our inability to do so could harm our business, results of operations, and financial condition.
Added
In response to ongoing inflationary pressures in the U.S., the Federal Reserve implemented a number of increases to the federal funds rate since 2022, which, despite the Federal Reserve’s 50 basis point cut in September 2024 and 25 basis point cuts in November and December 2024, remains elevated compared to historical levels. See “Part I – Item 2.
Added
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Current Housing Environment” for a discussion of the impact of the increased federal funds rate on mortgage interest rates and our business. 66 TABLE OF CONTENTS OPENDOOR TECHNOLOGIES INC.

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