[10-Q] Offerpad Solutions Inc. Quarterly Earnings Report
Kinder Morgan (KMI) 鈥� Form 4 insider activity
On 07/31/2025, VP & COO James E. Holland converted 108,319 restricted stock units into Class P common shares at a stated price of $0.00. To satisfy tax-withholding obligations, the company retained 42,053 shares at the 07/31/2025 closing price of $28.06, resulting in a net addition of 66,266 shares to Holland鈥檚 direct holdings.
- Gross shares acquired: 108,319
- Shares withheld (tax): 42,053
- Net change in ownership: +66,266 shares
- Total direct ownership after event: 535,477 shares
- Derivative RSUs outstanding: 0 (all settled)
The transaction was a scheduled RSU vesting (Code M) rather than an open-market purchase, and therefore carries limited signaling value for future company fundamentals.
Kinder Morgan (KMI) 鈥� Attivit脿 insider Form 4
Il 31/07/2025, il VP e COO James E. Holland ha convertito 108.319 unit脿 azionarie vincolate in azioni ordinarie di Classe P a un prezzo nominale di 0,00$. Per adempiere agli obblighi fiscali, la societ脿 ha trattenuto 42.053 azioni al prezzo di chiusura del 31/07/2025 di 28,06$, determinando un incremento netto di 66.266 azioni nella partecipazione diretta di Holland.
- Azioni lorde acquisite: 108.319
- Azioni trattenute (tasse): 42.053
- Variazione netta della propriet脿: +66.266 azioni
- Partecipazione diretta totale dopo l鈥檈vento: 535.477 azioni
- RSU derivati in circolazione: 0 (tutti liquidati)
La transazione 猫 stata un consolidamento programmato di RSU (Codice M) e non un acquisto sul mercato aperto, pertanto ha un valore segnaletico limitato sui fondamentali futuri dell鈥檃zienda.
Kinder Morgan (KMI) 鈥� Actividad insider Formulario 4
El 31/07/2025, el VP y COO James E. Holland convirti贸 108,319 unidades restringidas en acciones ordinarias Clase P a un precio declarado de $0.00. Para cumplir con las obligaciones fiscales, la compa帽铆a retuvo 42,053 acciones al precio de cierre del 31/07/2025 de $28.06, resultando en una adici贸n neta de 66,266 acciones a la participaci贸n directa de Holland.
- Acciones brutas adquiridas: 108,319
- Acciones retenidas (impuestos): 42,053
- Cambio neto en propiedad: +66,266 acciones
- Propiedad directa total despu茅s del evento: 535,477 acciones
- RSU derivados pendientes: 0 (todos liquidados)
La transacci贸n fue una consolidaci贸n programada de RSU (C贸digo M) y no una compra en mercado abierto, por lo que tiene un valor limitado como se帽al para los fundamentos futuros de la empresa.
Kinder Morgan (KMI) 鈥� Form 4 雮措秬鞛� 瓯半灅 頇滊彊
2025雲� 7鞗� 31鞚�, 攵�靷灔 瓴� COO James E. Holland臧� 108,319臧滌潣 鞝滍暅 欤检嫕 雼渼毳� 氇呺臧� $0.00搿� Class P 氤错喌欤茧 鞝勴櫂頄堨姷雼堧嫟. 靹戈笀 鞗愳矞歆曥垬 鞚橂毳� 於╈”頃橁赴 鞙勴暣 須岇偓電� 2025雲� 7鞗� 31鞚� 膦呹皜 $28.06 旮办鞙茧 42,053欤茧ゼ 氤挫湢頃橃棳 Holland鞚� 歆侅爲 氤挫湢 欤检嫕鞚� 靾滌臧� 66,266欤缄皜 霅橃棃鞀惦媹雼�.
- 齑� 旆摑 欤检嫕 靾�: 108,319欤�
- 鞗愳矞歆曥垬 欤检嫕 靾� (靹戈笀): 42,053欤�
- 靾� 氤挫湢 氤�霃�: +66,266欤�
- 靷贝 頉� 齑� 歆侅爲 氤挫湢 欤检嫕: 535,477欤�
- 氙戈舶鞝� 韺岇儩 RSU: 0 (氇憪 鞝曥偘霅�)
鞚措矆 瓯半灅電� 瓿店皽 鞁滌灔 毵れ垬臧� 鞎勲媽 鞓堨爼霅� RSU 氩犾姢韺�(旖旊摐 M)鞙茧, 須岇偓鞚� 氙鸽灅 韼�雿旊韯胳棎 雽�頃� 鞁犿樃 臧�旃橂姅 鞝滍暅鞝侅瀰雼堧嫟.
Kinder Morgan (KMI) 鈥� Activit茅 d鈥檌niti茅 Formulaire 4
Le 31/07/2025, le VP et COO James E. Holland a converti 108 319 unit茅s d鈥檃ctions restreintes en actions ordinaires de Classe P 脿 un prix d茅clar茅 de 0,00 $. Pour satisfaire les obligations fiscales, la soci茅t茅 a retenu 42 053 actions au cours de cl么ture du 31/07/2025 de 28,06 $, ce qui a entra卯n茅 une augmentation nette de 66 266 actions dans la d茅tention directe de Holland.
- Actions brutes acquises : 108 319
- Actions retenues (imp么ts) : 42 053
- Variation nette de la propri茅t茅 : +66 266 actions
- Participation directe totale apr猫s l鈥櫭﹙茅nement : 535 477 actions
- RSU d茅riv茅s en circulation : 0 (tous r茅gl茅s)
La transaction 茅tait une acquisition programm茅e d鈥檜nit茅s d鈥檃ctions restreintes (Code M) et non un achat sur le march茅 libre, elle a donc une valeur indicative limit茅e quant aux fondamentaux futurs de l鈥檈ntreprise.
Kinder Morgan (KMI) 鈥� Insider-Aktivit盲t Form 4
Am 31.07.2025 wandelte VP & COO James E. Holland 108.319 eingeschr盲nkte Aktienanteile in Class P Stammaktien zu einem Nennpreis von 0,00 $ um. Um steuerliche Verpflichtungen zu erf眉llen, behielt das Unternehmen 42.053 Aktien zum Schlusskurs vom 31.07.2025 von 28,06 $ ein, was zu einer Nettoerh枚hung von 66.266 Aktien im direkten Besitz von Holland f眉hrte.
- Brutto erworbene Aktien: 108.319
- Einbehaltene Aktien (Steuern): 42.053
- Netto盲nderung im Besitz: +66.266 Aktien
- Gesamtdirektbesitz nach dem Ereignis: 535.477 Aktien
- Ausstehende derivative RSUs: 0 (alle abgewickelt)
Die Transaktion war eine planm盲脽ige RSU-Vesting (Code M) und kein Kauf am freien Markt, daher hat sie nur begrenzte Signalkraft f眉r die zuk眉nftigen Fundamentaldaten des Unternehmens.
- None.
- None.
Insights
TL;DR: Routine RSU vesting; insider keeps ~62% of vested shares, neutral impact on investment thesis.
The filing shows a standard equity-compensation event, not discretionary buying. While Holland鈥檚 net retention of 66k shares marginally increases alignment with shareholders, there was an automatic disposition of 42k shares for tax, limiting any bullish signal. No derivatives remain, reducing potential future dilution from this grant. Share count involved is immaterial to KMI鈥檚 2.3 bn shares outstanding, so portfolio managers are unlikely to alter positions based solely on this filing.
Kinder Morgan (KMI) 鈥� Attivit脿 insider Form 4
Il 31/07/2025, il VP e COO James E. Holland ha convertito 108.319 unit脿 azionarie vincolate in azioni ordinarie di Classe P a un prezzo nominale di 0,00$. Per adempiere agli obblighi fiscali, la societ脿 ha trattenuto 42.053 azioni al prezzo di chiusura del 31/07/2025 di 28,06$, determinando un incremento netto di 66.266 azioni nella partecipazione diretta di Holland.
- Azioni lorde acquisite: 108.319
- Azioni trattenute (tasse): 42.053
- Variazione netta della propriet脿: +66.266 azioni
- Partecipazione diretta totale dopo l鈥檈vento: 535.477 azioni
- RSU derivati in circolazione: 0 (tutti liquidati)
La transazione 猫 stata un consolidamento programmato di RSU (Codice M) e non un acquisto sul mercato aperto, pertanto ha un valore segnaletico limitato sui fondamentali futuri dell鈥檃zienda.
Kinder Morgan (KMI) 鈥� Actividad insider Formulario 4
El 31/07/2025, el VP y COO James E. Holland convirti贸 108,319 unidades restringidas en acciones ordinarias Clase P a un precio declarado de $0.00. Para cumplir con las obligaciones fiscales, la compa帽铆a retuvo 42,053 acciones al precio de cierre del 31/07/2025 de $28.06, resultando en una adici贸n neta de 66,266 acciones a la participaci贸n directa de Holland.
- Acciones brutas adquiridas: 108,319
- Acciones retenidas (impuestos): 42,053
- Cambio neto en propiedad: +66,266 acciones
- Propiedad directa total despu茅s del evento: 535,477 acciones
- RSU derivados pendientes: 0 (todos liquidados)
La transacci贸n fue una consolidaci贸n programada de RSU (C贸digo M) y no una compra en mercado abierto, por lo que tiene un valor limitado como se帽al para los fundamentos futuros de la empresa.
Kinder Morgan (KMI) 鈥� Form 4 雮措秬鞛� 瓯半灅 頇滊彊
2025雲� 7鞗� 31鞚�, 攵�靷灔 瓴� COO James E. Holland臧� 108,319臧滌潣 鞝滍暅 欤检嫕 雼渼毳� 氇呺臧� $0.00搿� Class P 氤错喌欤茧 鞝勴櫂頄堨姷雼堧嫟. 靹戈笀 鞗愳矞歆曥垬 鞚橂毳� 於╈”頃橁赴 鞙勴暣 須岇偓電� 2025雲� 7鞗� 31鞚� 膦呹皜 $28.06 旮办鞙茧 42,053欤茧ゼ 氤挫湢頃橃棳 Holland鞚� 歆侅爲 氤挫湢 欤检嫕鞚� 靾滌臧� 66,266欤缄皜 霅橃棃鞀惦媹雼�.
- 齑� 旆摑 欤检嫕 靾�: 108,319欤�
- 鞗愳矞歆曥垬 欤检嫕 靾� (靹戈笀): 42,053欤�
- 靾� 氤挫湢 氤�霃�: +66,266欤�
- 靷贝 頉� 齑� 歆侅爲 氤挫湢 欤检嫕: 535,477欤�
- 氙戈舶鞝� 韺岇儩 RSU: 0 (氇憪 鞝曥偘霅�)
鞚措矆 瓯半灅電� 瓿店皽 鞁滌灔 毵れ垬臧� 鞎勲媽 鞓堨爼霅� RSU 氩犾姢韺�(旖旊摐 M)鞙茧, 須岇偓鞚� 氙鸽灅 韼�雿旊韯胳棎 雽�頃� 鞁犿樃 臧�旃橂姅 鞝滍暅鞝侅瀰雼堧嫟.
Kinder Morgan (KMI) 鈥� Activit茅 d鈥檌niti茅 Formulaire 4
Le 31/07/2025, le VP et COO James E. Holland a converti 108 319 unit茅s d鈥檃ctions restreintes en actions ordinaires de Classe P 脿 un prix d茅clar茅 de 0,00 $. Pour satisfaire les obligations fiscales, la soci茅t茅 a retenu 42 053 actions au cours de cl么ture du 31/07/2025 de 28,06 $, ce qui a entra卯n茅 une augmentation nette de 66 266 actions dans la d茅tention directe de Holland.
- Actions brutes acquises : 108 319
- Actions retenues (imp么ts) : 42 053
- Variation nette de la propri茅t茅 : +66 266 actions
- Participation directe totale apr猫s l鈥櫭﹙茅nement : 535 477 actions
- RSU d茅riv茅s en circulation : 0 (tous r茅gl茅s)
La transaction 茅tait une acquisition programm茅e d鈥檜nit茅s d鈥檃ctions restreintes (Code M) et non un achat sur le march茅 libre, elle a donc une valeur indicative limit茅e quant aux fondamentaux futurs de l鈥檈ntreprise.
Kinder Morgan (KMI) 鈥� Insider-Aktivit盲t Form 4
Am 31.07.2025 wandelte VP & COO James E. Holland 108.319 eingeschr盲nkte Aktienanteile in Class P Stammaktien zu einem Nennpreis von 0,00 $ um. Um steuerliche Verpflichtungen zu erf眉llen, behielt das Unternehmen 42.053 Aktien zum Schlusskurs vom 31.07.2025 von 28,06 $ ein, was zu einer Nettoerh枚hung von 66.266 Aktien im direkten Besitz von Holland f眉hrte.
- Brutto erworbene Aktien: 108.319
- Einbehaltene Aktien (Steuern): 42.053
- Netto盲nderung im Besitz: +66.266 Aktien
- Gesamtdirektbesitz nach dem Ereignis: 535.477 Aktien
- Ausstehende derivative RSUs: 0 (alle abgewickelt)
Die Transaktion war eine planm盲脽ige RSU-Vesting (Code M) und kein Kauf am freien Markt, daher hat sie nur begrenzte Signalkraft f眉r die zuk眉nftigen Fundamentaldaten des Unternehmens.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______ to ______
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of July 28, 2025, there were
OFFERPAD SOLUTIONS INC.
FORM 10-Q
FOR THE QUARTER ENDED June 30, 2025
TABLE OF CONTENTS
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Cautionary Note Regarding Forward-Looking Statements |
3 |
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PART I. |
FINANCIAL INFORMATION |
4 |
Item 1. |
Financial Statements |
4 |
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Condensed Consolidated Balance Sheets |
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Condensed Consolidated Statements of Operations |
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Condensed Consolidated Statements of Changes in Stockholders’ Equity |
6 |
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Condensed Consolidated Statements of Cash Flows |
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Notes to Condensed Consolidated Financial Statements |
9 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
25 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
41 |
Item 4. |
Controls and Procedures |
41 |
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PART II. |
OTHER INFORMATION |
42 |
Item 1. |
Legal Proceedings |
42 |
Item 1A. |
Risk Factors |
42 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
42 |
Item 3. |
Defaults Upon Senior Securities |
42 |
Item 4. |
Mine Safety Disclosures |
42 |
Item 5. |
Other Information |
42 |
Item 6. |
Exhibits |
44 |
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SIGNATURES |
45 |
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Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes statements that express Offerpad Solutions Inc.’s (“Offerpad,” the “Company,” “we,” “us,” and “our,” and similar references) opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “potentially,” “may,” “should,” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They may appear in a number of places throughout this Quarterly Report on Form 10-Q, including Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our future results of operations, financial condition and liquidity, real estate inventory and home acquisition strategy and pace, mortgage rates, cash requirements and financing plans, our intended use of net proceeds from the July 2025 Offering (as defined below) and the Revolving Credit Facility (as defined below), our prospects, optimized returns, potential growth or expansion evaluations, strategies, including without limitation, product and service offerings and their expected impacts, compliance with applicable laws, regulations and New York Stock Exchange continued listing rules, macroeconomic trends, potential tariffs or retaliations against such tariffs, geopolitical concerns, and the markets in which Offerpad operates.
The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to:
The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and other risks and uncertainties discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 3
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
OFFERPAD SOLUTIONS INC.
Condensed Consolidated Balance Sheets
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December 31, |
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(in thousands, except par value per share) (Unaudited) |
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2025 |
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2024 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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Accounts receivable |
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AG真人官方 estate inventory |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Other non-current assets |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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Accrued and other current liabilities |
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Secured credit facilities and other debt, net |
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Secured credit facilities and other debt - related party |
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Total current liabilities |
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Warrant liabilities |
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Other long-term liabilities |
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Total liabilities |
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Stockholders’ equity: |
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Class A common stock, $ |
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Additional paid in capital |
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Accumulated deficit |
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Total stockholders’ equity |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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$ |
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$ |
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________________
The accompanying notes are an integral part of these condensed consolidated financial statements.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 4
OFFERPAD SOLUTIONS INC.
Condensed Consolidated Statements of Operations
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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(in thousands, except per share data) (Unaudited) |
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2024 |
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2024 |
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Revenue |
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Cost of revenue |
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Gross profit |
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Operating expenses: |
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Sales, marketing and operating |
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General and administrative |
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Technology and development |
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Total operating expenses |
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Loss from operations |
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|
( |
) |
|
|
( |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in fair value of warrant liabilities |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other income, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total other expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Loss before income taxes |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income tax (expense) benefit |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Net loss per share, basic |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Net loss per share, diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Weighted average common shares outstanding, basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding, diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 5
OFFERPAD SOLUTIONS INC.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
|
|
Common Stock |
|
|
Additional |
|
|
Accumulated |
|
|
Total |
|
||||||||
(in thousands) (Unaudited) |
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Equity |
|
|||||
Balance at March 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Issuance of common stock upon vesting of restricted stock units |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
|
|
Common Stock |
|
|
Additional |
|
|
Accumulated |
|
|
Total |
|
||||||||
(in thousands) (Unaudited) |
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Equity |
|
|||||
Balance at March 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Issuance of common stock upon vesting of restricted stock units |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 6
OFFERPAD SOLUTIONS INC.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
|
|
Common Stock |
|
|
Additional |
|
|
Accumulated |
|
|
Total |
|
||||||||
(in thousands) (Unaudited) |
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Equity |
|
|||||
Balance at December 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Issuance of common stock upon vesting of restricted stock units |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
|
|
Common Stock |
|
|
Additional |
|
|
Accumulated |
|
|
Total |
|
||||||||
(in thousands) (Unaudited) |
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Equity |
|
|||||
Balance at December 31, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Issuance of common stock upon exercise of stock options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of common stock upon vesting of restricted stock units |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 7
OFFERPAD SOLUTIONS INC.
Condensed Consolidated Statements of Cash Flows
|
|
Six Months Ended |
|
|||||
|
|
June 30, |
|
|||||
($ in thousands) (Unaudited) |
|
2025 |
|
|
2024 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation |
|
|
|
|
|
|
||
Amortization of debt financing costs |
|
|
|
|
|
|
||
AG真人官方 estate inventory valuation adjustment |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Change in fair value of warrant liabilities |
|
|
( |
) |
|
|
( |
) |
Loss on disposal of property and equipment |
|
|
|
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
|
|
AG真人官方 estate inventory |
|
|
( |
) |
|
|
( |
) |
Prepaid expenses and other assets |
|
|
|
|
|
|
||
Accounts payable |
|
|
( |
) |
|
|
( |
) |
Accrued and other liabilities |
|
|
|
|
|
( |
) |
|
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of property and equipment |
|
|
|
|
|
|
||
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Borrowings from credit facilities and other debt |
|
|
|
|
|
|
||
Repayments of credit facilities and other debt |
|
|
( |
) |
|
|
( |
) |
Proceeds from exercise of stock options |
|
|
|
|
|
|
||
Payments for taxes related to stock-based awards |
|
|
( |
) |
|
|
( |
) |
Net cash (used in) provided by financing activities |
|
|
( |
) |
|
|
|
|
Net change in cash, cash equivalents and restricted cash |
|
|
( |
) |
|
|
( |
) |
Cash, cash equivalents and restricted cash, beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash, end of period |
|
$ |
|
|
$ |
|
||
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
|
||
Total cash, cash equivalents and restricted cash |
|
$ |
|
|
$ |
|
||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Cash payments for interest |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 8
OFFERPAD SOLUTIONS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1. Nature of Operations and Significant Accounting Policies
Description of Business
Offerpad, dedicated to simplifying the process of buying and selling homes, is committed to providing comprehensive solutions that remove the friction from real estate. Our advanced real estate platform offers a range of services, from consumer cash offers to business-to-business (“B2B”) renovation solutions and industry partnership programs, all tailored to meet the unique needs of our clients. Since 2015, we have leveraged local expertise in residential real estate alongside proprietary technology to guide homeowners at every step.
The Company is headquartered in Tempe, Arizona and operates in over 1,900 cities and towns in 27 metropolitan markets across 18 states as of June 30, 2025.
Basis of Presentation and Interim Financial Information
The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and note disclosures required for annual financial statements have been condensed or excluded pursuant to GAAP and SEC rules and regulations. Accordingly, the unaudited interim condensed consolidated financial statements do not include all of the information and note disclosures required by GAAP for complete financial statements. Therefore, this information should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2024 included in the Company’s 2024 Annual Report on Form 10-K as filed with the SEC on February 25, 2025.
The accompanying financial information reflects all adjustments which are, in the opinion of the Company’s management, of a normal recurring nature and necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).
Use of Estimates
The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements. Significant estimates include those related to the net realizable value of real estate inventory, among others. Actual results could differ from those estimates.
Principles of Consolidation
The Company’s condensed consolidated financial statements include the assets, liabilities, revenues and expenses of the Company, its wholly-owned operating subsidiaries and variable interest entities where the Company is the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation.
AG真人官方 Estate Inventory
AG真人官方 estate inventory consists of acquired homes and is stated at the lower of cost or net realizable value, with cost and net realizable value determined by the specific identification of each home. Costs include initial purchase costs and renovation costs, as well as holding costs and interest incurred during the renovation period, prior to the listing date. Selling costs, including commissions and holding costs incurred after the listing date, are expensed as incurred and included in sales, marketing and operating expenses.
The Company reviews real estate inventory for valuation adjustments on a quarterly basis, or more frequently if events or changes in circumstances indicate that the carrying value of real estate inventory may not be recoverable. The Company evaluates real estate inventory for indicators that net realizable value is lower than cost at the individual home level. The Company generally considers multiple factors in determining net realizable value for each home, including recent comparable home sale transactions in the specific area where the home is located, the residential real estate market conditions in both the local market in which the home is located and in the U.S. in general, the impact of national, regional or local economic conditions and expected selling costs. When evidence exists that the net realizable value of real estate inventory is lower than its cost, the difference is recognized as a real estate inventory valuation adjustment in cost of revenue and the related real estate inventory is adjusted to its net realizable value.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 9
OFFERPAD SOLUTIONS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
For individual homes or portfolios of homes under contract to sell as of the real estate inventory valuation assessment date, if the carrying value exceeds the contract price less expected selling costs, the carrying value of these homes are adjusted to the contract price less expected selling costs. For all other homes, if the carrying value exceeds the expected sale price less expected selling costs, the carrying value of these homes are adjusted to the expected sale price less expected selling costs. Changes in the Company’s pricing assumptions may lead to a change in the outcome of the real estate inventory valuation analysis, and actual results may differ from the Company’s assumptions.
The Company recorded real estate inventory valuation adjustments of $
Recent Accounting Standards
Income Tax Disclosures
In December 2023, the FASB issued a new standard which is intended to improve an entity’s income tax disclosures, primarily through disaggregated information about an entity’s effective income tax rate reconciliation and additional disclosures about income taxes paid. The new standard is effective for annual periods beginning after December 15, 2024. Accordingly, the new standard is effective for the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, using either a prospective or retrospective approach. The Company is currently evaluating the impact that the standard will have on its condensed consolidated financial statements.
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued a new standard which is intended to improve an entity’s expense disclosures, primarily by requiring disclosure of disaggregated information about certain income statement expense line items. The new standard is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. Accordingly, the new standard is effective for the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2027, and subsequent interim periods, using either a prospective or retrospective approach. The Company is currently evaluating the impact that the standard will have on its condensed consolidated financial statements.
Note 2. AG真人官方 Estate Inventory
The components of real estate inventory, net of applicable lower of cost or net realizable value adjustments, consist of the following as of the respective period ends:
|
|
June 30, |
|
|
December 31, |
|
||
($ in thousands) |
|
2025 |
|
|
2024 |
|
||
Homes preparing for and under renovation |
|
$ |
|
|
$ |
|
||
Homes listed for sale |
|
|
|
|
|
|
||
Homes under contract to sell |
|
|
|
|
|
|
||
AG真人官方 estate inventory |
|
$ |
|
|
$ |
|
||
Note 3. Property and Equipment
Property and equipment consist of the following as of the respective period ends:
|
|
June 30, |
|
|
December 31, |
|
||
($ in thousands) |
|
2025 |
|
|
2024 |
|
||
Leasehold improvements |
|
$ |
|
|
$ |
|
||
Rooftop solar panel systems |
|
|
|
|
|
|
||
Office equipment and furniture |
|
|
|
|
|
|
||
Software systems |
|
|
|
|
|
|
||
Computers and equipment |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
Property and equipment, gross |
|
|
|
|
|
|
||
Less: accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
$ |
|
|
$ |
|
||
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 10
OFFERPAD SOLUTIONS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Depreciation expense was $
Note 4. Leases
The Company’s operating lease arrangements consist of its corporate headquarters in Tempe, Arizona, and field office facilities in most of the metropolitan markets in which the Company operates in the United States. These leases typically have original lease terms of
The Company’s operating lease costs are included in operating expenses in the accompanying condensed consolidated statements of operations. During the three months ended June 30, 2025 and 2024, operating lease costs were $
Cash payments for amounts included in the measurement of operating lease liabilities were $
As of June 30, 2025 and December 31, 2024, the Company’s operating leases had a weighted-average remaining lease term of
The Company’s operating lease liability maturities as of June 30, 2025 are as follows:
($ in thousands) |
|
|
|
|
Remainder of 2025 |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total future lease payments |
|
|
|
|
Less: Imputed interest |
|
|
( |
) |
Total lease liabilities |
|
$ |
|
|
The Company’s operating lease right-of-use assets and operating lease liabilities, and the associated financial statement line items, are as follows as of the respective period ends:
|
|
|
|
June 30, |
|
|
December 31, |
|
||
($ in thousands) |
|
Financial Statement Line Items |
|
2025 |
|
|
2024 |
|
||
Right-of-use assets |
|
|
$ |
|
|
$ |
|
|||
Lease liabilities: |
|
|
|
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
|
|
|||
Non-current liabilities |
|
|
|
|
|
|
|
|||
Total lease liabilities |
|
|
|
$ |
|
|
$ |
|
||
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 11
OFFERPAD SOLUTIONS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 5. Accrued and Other Liabilities
Accrued and other current liabilities consist of the following as of the respective period ends:
|
|
June 30, |
|
|
December 31, |
|
||
($ in thousands) |
|
2025 |
|
|
2024 |
|
||
Home renovation |
|
$ |
|
|
$ |
|
||
Interest |
|
|
|
|
|
|
||
Legal and professional obligations |
|
|
|
|
|
|
||
Payroll and other employee related expenses |
|
|
|
|
|
|
||
Operating lease liabilities |
|
|
|
|
|
|
||
Marketing |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Accrued and other current liabilities |
|
$ |
|
|
$ |
|
||
The Company incurred advertising expenses of $
Other long-term liabilities consists of the non-current portion of our operating lease liabilities as of June 30, 2025 and December 31, 2024.
Note 6. Credit Facilities and Other Debt
The carrying value of the Company’s credit facilities and other debt consists of the following as of the respective period ends:
|
June 30, |
|
|
December 31, |
|
||
($ in thousands) |
2025 |
|
|
2024 |
|
||
Credit facilities and other debt, net |
|
|
|
|
|
||
Senior secured credit facilities with financial institutions |
$ |
|
|
$ |
|
||
Senior secured credit facility with a related party |
|
|
|
|
|
||
Senior secured debt - other |
|
|
|
|
|
||
Mezzanine secured credit facilities with financial institutions |
|
|
|
|
|
||
Mezzanine secured credit facilities with a related party |
|
|
|
|
|
||
Debt issuance costs |
|
( |
) |
|
|
( |
) |
Total credit facilities and other debt, net |
|
|
|
|
|
||
Current portion - credit facilities and other debt, net |
|
|
|
|
|
||
Total credit facilities and other debt, net |
|
|
|
|
|
||
Total credit facilities and other debt - related party |
|
|
|
|
|
||
Total credit facilities and other debt, net |
$ |
|
|
$ |
|
||
The Company utilizes financing facilities consisting of senior secured credit facilities, mezzanine secured credit facilities and other senior secured borrowing arrangements to provide financing for the Company’s real estate inventory purchases and renovation. Borrowings under the Company’s credit facilities and other debt are classified as current liabilities on the accompanying condensed consolidated balance sheets as amounts drawn to purchase and renovate homes are required to be repaid as the related real estate inventory is sold, which is expected to be within 12 months.
As of June 30, 2025, the Company had a total borrowing capacity of $
Under the Company’s senior secured credit facilities and mezzanine secured credit facilities, amounts can be borrowed, repaid and borrowed again during the revolving period. The borrowing capacity is generally available until the end of the applicable revolving period as reflected in the tables below. Outstanding amounts drawn under each senior secured credit facility and
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 12
OFFERPAD SOLUTIONS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
mezzanine secured credit facility are required to be repaid on the facility maturity date or earlier if accelerated due to an event of default or other mandatory repayment event.
The Company’s senior secured credit facilities and mezzanine secured credit facilities have aggregated borrowing bases, which increase or decrease based on the cost and value of the properties financed under a given facility and the time that those properties are in the Company’s possession. When the Company resells a home, the proceeds are used to reduce the corresponding outstanding balance under the related senior and mezzanine secured revolving credit facilities. The borrowing base for a given facility may be reduced as properties age beyond certain thresholds or the performance of the properties financed under that facility declines, and any borrowing base deficiencies may be satisfied through contributions of additional properties or partial repayment of the facility.
Senior Secured Credit Facilities
The following summarizes certain details related to the Company’s senior secured credit facilities (in thousands, except interest rates):
|
Borrowing Capacity |
|
Outstanding |
|
Weighted- |
|
End of |
|
Final |
||||
As of June 30, 2025 |
Committed |
|
Uncommitted |
|
Total |
|
Amount |
|
Rate |
|
Period |
|
Date |
Senior financial institution 1 |
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|||
Senior financial institution 2 |
|
|
|
|
|
|
|||||||
Senior financial institution 3 |
|
|
|
|
|
|
|||||||
Related party |
|
|
|
|
|
|
|||||||
Senior financial institution 4 |
|
|
|
|
|
|
|||||||
Senior secured credit facilities |
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
|
Borrowing Capacity |
|
|
Outstanding |
|
|
Weighted- |
|
|
|
|
|
|||||||||||
As of December 31, 2024 |
Committed |
|
|
Uncommitted |
|
|
Total |
|
|
Amount |
|
|
Rate |
|
|
|
|
|
|||||
Senior financial institution 1 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
% |
|
|
|
|
|||||
Senior financial institution 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
|
|
|
|||||
Senior financial institution 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
|
|
|
|||||
Related party |
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
|
|
|
|||||
Senior financial institution 4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
|
|
|
|||||
Senior secured credit facilities |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|||||
As of June 30, 2025, the Company had
Borrowings under the Company’s senior secured credit facilities are collateralized by the real estate inventory financed by the senior secured credit facility. The lenders have legal recourse only to the assets securing the debt and do not have general recourse against the Company with limited exceptions. The Company has, however, provided limited non-recourse carve-out guarantees under its senior and mezzanine secured credit facilities for certain of the SPEs’ obligations. Each senior secured credit facility contains eligibility requirements that govern whether a property can be financed.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 13
OFFERPAD SOLUTIONS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Mezzanine Secured Credit Facilities
The following summarizes certain details related to the Company’s mezzanine secured credit facilities (in thousands, except interest rates):
|
Borrowing Capacity |
|
Outstanding |
|
Weighted- |
|
End of |
|
Final |
||||
As of June 30, 2025 |
Committed |
|
Uncommitted |
|
Total |
|
Amount |
|
Rate |
|
Period |
|
Date |
Related party facility 1 |
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|||
Mezzanine financial institution 1 |
|
|
|
|
|
|
|||||||
Mezzanine financial institution 2 |
|
|
|
|
|
|
|||||||
Related party facility 2 |
|
|
|
|
|
|
|||||||
Mezzanine secured credit facilities |
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
|
Borrowing Capacity |
|
Outstanding |
|
Weighted- |
|
|
|
|
||||
As of December 31, 2024 |
Committed |
|
Uncommitted |
|
Total |
|
Amount |
|
Rate |
|
|
|
|
Related party facility 1 |
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
Mezzanine financial institution 1 |
|
|
|
|
|
|
|
|
|||||
Mezzanine financial institution 2 |
|
|
|
|
|
|
|
|
|||||
Related party facility 2 |
|
|
|
|
|
|
|
|
|||||
Mezzanine secured credit facilities |
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
As of June 30, 2025, the Company had
Borrowings under the Company’s mezzanine secured credit facilities are collateralized by a second lien on the real estate inventory financed by the relevant credit facility. The lenders have legal recourse only to the assets securing the debt, and do not have general recourse to Offerpad with limited exceptions.
The Company’s mezzanine secured credit facilities are structurally and contractually subordinated to the related senior secured credit facilities.
Maturities
Certain of the Company’s secured credit facilities mature within the next twelve months following the date these condensed consolidated financial statements are issued. The Company expects to enter into new financing arrangements or amend existing arrangements to meet its obligations as they come due, which the Company believes is probable based on its history of prior credit facility renewals. The Company believes cash on hand, together with proceeds from the resale of homes, fees and commissions earned from asset-light platform offerings, the net proceeds from the July 2025 Offering (as defined below) and Revolving Credit Facility (as defined below), and cash from future borrowings available under each of the Company’s existing credit facilities, or the entry into new debt financing arrangements or the issuance of equity instruments, will be sufficient to meet its obligations as they become due in the ordinary course of business for at least 12 months following the date these condensed consolidated financial statements are issued.
Covenants for Senior Secured Credit Facilities and Mezzanine Secured Credit Facilities
The Company’s secured credit facilities include customary representations and warranties, covenants and events of default. Financed properties are subject to customary eligibility criteria and concentration limits. The terms of these facilities and related financing documents require the Company to comply with a number of customary financial and other covenants, such as maintaining certain levels of liquidity, tangible net worth or leverage (ratio of debt to tangible net worth).
As of June 30, 2025, the Company was in compliance with all covenants and no event of default had occurred. In July 2025, the Company obtained a temporary waiver of minimum liquidity and tangible net worth covenants under the related party
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 14
OFFERPAD SOLUTIONS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
facilities described above. In connection with this waiver, the associated revolving/withdrawal periods for each facility, as applicable, have expired.
Senior Secured Debt - Other
The Company has a borrowing arrangement with a financial institution to support purchases of real estate inventory. Borrowings under this arrangement accrue interest at a rate based on a SOFR reference rate, plus a margin. As of June 30, 2025 and December 31, 2024, the weighted-average interest rate under the Company’s other senior secured debt was
Revolving Credit Facility
On July 31, 2025, the Company entered into a $
Note 7. Warrant Liabilities
As of June 30, 2025, the Company had
Public Warrants
A holder may exercise its public warrants only for a whole number of shares of Class A common stock. The public warrants will expire on
Private Placement Warrants
The private placement warrants have terms and provisions that are substantially identical to those of the public warrants, with the exception of certain redemption rights, options to exercise and registration rights when the private placement warrants are owned by specified holders.
2025 Warrants
On July 25, 2025, the Company issued and sold warrants to purchase up to
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 15
OFFERPAD SOLUTIONS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 8. Fair Value Measurements
The fair values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and certain prepaid and other current assets and accrued expenses approximate carrying values because of their short-term nature. The Company’s credit facilities are carried at amortized cost and the carrying value approximates fair value because of their short-term nature.
The Company’s liabilities that are measured at fair value on a recurring basis consist of the following (in thousands):
As of June 30, 2025 |
|
Quoted Prices in |
|
|
Significant Other |
|
|
Significant |
|
|||
Public warrant liabilities |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
Private placement warrant liabilities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
As of December 31, 2024 |
|
Quoted Prices in |
|
|
Significant Other |
|
|
Significant |
|
|||
Public warrant liabilities |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
Private placement warrant liabilities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
Public Warrants
The public warrants are traded on an over-the-counter market. The fair value of the public warrants is estimated based on the quoted market price of such warrants on the valuation date. The Company recorded changes in the fair value of the public warrants of $(
Private Placement Warrants
The following summarizes the changes in the Company’s private placement warrant liabilities, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the respective periods:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
($ in thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Beginning balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Change in fair value of private placement warrants included in net loss |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Ending balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Company generally uses the Black-Scholes-Merton option-pricing model to determine the fair value of the private placement warrants, with assumptions including expected volatility, expected life of the warrants, associated risk-free interest rate, and expected dividend yield.
There were
The foregoing discussion in this Note 8. Fair Value Measurements excludes the 2025 Warrants that were issued after June 30, 2025.
Note 9. Stockholders’ Equity
Authorized Capital Stock
The Company is authorized to issue
Class A Common Stock
Our Class A common stock trades on the New York Stock Exchange under the symbol “OPAD” and our public warrants trade on the OTC Markets Group Pink Market under the symbol “OPADW.”
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 16
OFFERPAD SOLUTIONS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
As of June 30, 2025, we had
We also have outstanding warrants to purchase shares of our Class A common stock. Refer to Note 7. Warrant Liabilities for further details.
July 2025 Offering
On July 25, 2025, we issued and sold
Refer to Note 7. Warrant Liabilities for further details regarding the terms of the 2025 Warrants.
Preferred Stock
As of June 30, 2025, there were
Dividends
Our Class A common stock is entitled to dividends if and when any dividend is declared by our Board of Directors (“Board”), subject to the rights of all classes of stock outstanding having priority rights to dividends. We have not paid any cash dividends on common stock to date. We may retain future earnings, if any, for the further development and expansion of our business and have no current plans to pay cash dividends for the foreseeable future. Any future determination to pay dividends will be made at the discretion of our Board and will depend on, among other things, our financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as our Board may deem relevant.
Note 10. Stock-Based Awards
2021 Equity Incentive Plans
Incentive Award Plan
Pursuant to the terms of the Offerpad Solutions Inc. 2021 Incentive Award Plan (the “2021 Plan”), the number of shares of the Company’s Class A common stock available for issuance under the 2021 Plan increases annually on the first day of each calendar year through January 1, 2031. Pursuant to the annual increase, the overall share limit was automatically increased on January 1, 2025 by
On June 17, 2025, the Board adopted an amendment to the 2021 Plan which increases the aggregate number of shares reserved for issuance under the 2021 Plan by
As of June 30, 2025, the Company has outstanding stock options, restricted stock units (“RSUs”) and other stock or cash-based awards that have been granted under the 2021 Plan.
Employee Stock Purchase Plan
Pursuant to the terms of the Offerpad Solutions Inc. 2021 Employee Stock Purchase Plan (“ESPP”), the number of shares of the Company’s Class A common stock available for issuance under the ESPP increases annually on the first day of each calendar year through January 1, 2031. As of June 30, 2025, there were
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 17
OFFERPAD SOLUTIONS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Restricted Stock Units
The following summarizes RSU award activity during the six months ended June 30, 2025:
|
Number of |
|
|
Weighted Average |
|
||
Outstanding as of December 31, 2024 |
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
||
Vested and settled |
|
( |
) |
|
|
|
|
Forfeited |
|
( |
) |
|
|
|
|
Outstanding as of June 30, 2025 |
|
|
|
|
|
||
As of June 30, 2025,
As of June 30, 2025, the Company had $
Other Cash or Stock-Based Awards
The Company did
As of June 30, 2025, the Company had $
Stock Options
The following summarizes stock option activity during the six months ended June 30, 2025:
|
|
Number of |
|
|
Weighted- |
|
|
Weighted Average |
|
|
Aggregate |
|
||||
Outstanding as of December 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exercised |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Forfeited, canceled or expired |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Outstanding as of June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exercisable as of June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Vested and expected to vest as of June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
No stock options were exercised during six months ended June 30, 2025. The total intrinsic value of stock options exercised during the six months ended June 30, 2024 was less than $
As of June 30, 2025, the Company had unrecognized stock-based compensation expense related to unvested stock options of $
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 18
OFFERPAD SOLUTIONS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Performance-Based Restricted Stock Units
The following summarizes performance-based RSU (“PSU”) award activity during the six months ended June 30, 2025:
|
Number of |
|
|
Weighted Average |
|
||
Outstanding as of December 31, 2024 |
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
||
Vested |
|
|
|
|
|
||
Forfeited |
|
( |
) |
|
|
|
|
Outstanding as of June 30, 2025 |
|
|
|
|
|
||
The PSU performance period ended during the first quarter of 2025, with none of the pre-determined price per share goals being achieved. Accordingly, the PSUs were automatically forfeited and terminated without consideration.
Stock-based Compensation Expense
The following details stock-based compensation expense for the respective periods:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
($ in thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Sales, marketing and operating |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Technology and development |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock-based compensation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Note 11. Variable Interest Entities
The Company formed certain special purpose entities (each, an “SPE”) to purchase and sell residential properties. Each SPE is a wholly-owned subsidiary of the Company and a separate legal entity, and neither the assets nor credit of any such SPE are available to satisfy the debts and other obligations of any affiliate or other entity. The credit facilities are secured by the assets and equity of one or more SPEs. These SPEs are variable interest entities, and the Company is the primary beneficiary as it has the power to control the activities that most significantly impact the SPEs’ economic performance and the obligation to absorb losses of the SPEs or the right to receive benefits from the SPEs that could potentially be significant to the SPEs. The SPEs are consolidated within the Company’s condensed consolidated financial statements.
The following summarizes the assets and liabilities related to the VIEs as of the respective period ends:
|
|
June 30, |
|
|
December 31, |
|
||
($ in thousands) |
|
2025 |
|
|
2024 |
|
||
Assets |
|
|
|
|
|
|
||
Restricted cash |
|
$ |
|
|
$ |
|
||
Accounts receivable |
|
|
|
|
|
|
||
AG真人官方 estate inventory |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
Liabilities |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
|
|
$ |
|
||
Accrued and other current liabilities |
|
|
|
|
|
|
||
Secured credit facilities and other debt, net |
|
|
|
|
|
|
||
Total liabilities |
|
$ |
|
|
$ |
|
||
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 19
OFFERPAD SOLUTIONS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 12. Earnings Per Share
Basic earnings per share is calculated based on the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated based on the weighted average number of common shares plus the incremental effect of dilutive potential common shares outstanding during the period. In periods when losses are reported, the weighted average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.
The components of basic and diluted earnings per share are as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(In thousands, except per share data) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding, basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of stock options (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of restricted stock units (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding, diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share, basic |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Net loss per share, diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Anti-dilutive securities excluded from diluted loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Anti-dilutive stock options (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Anti-dilutive restricted stock units (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Anti-dilutive warrants |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Anti-dilutive performance-based restricted stock units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
(1) Due to the net loss during each of the three and six months ended June 30, 2025 and 2024,
Note 13. Income Taxes
The Company determines its interim tax provision by applying the estimated effective income tax rate expected to be applicable for the full fiscal year to its income (loss) before income taxes for the period. The Company’s effective tax rate is dependent on several factors, such as tax rates in state jurisdictions and the relative amount of income the Company earns in the respective jurisdiction.
The Company recorded income tax expense of less than $
As of June 30, 2025, we continue to have a full valuation allowance recorded against our net deferred tax assets and will continue to evaluate our valuation allowance in future periods for any change in circumstances that causes a change in judgment about the realizability of the deferred tax assets. The amount of the deferred tax assets considered realizable, however, could be adjusted in future periods if estimates of future taxable income during the carryforward period are increased, if objective negative evidence in the form of cumulative losses is no longer present, and if we employ tax planning strategies in the future.
The Internal Revenue Code contains provisions that limit the utilization of net operating loss carryforwards and tax credit carryforwards if there has been an ownership change. Such ownership change, as described in Section 382 of the Internal Revenue Code, may limit the Company’s ability to utilize its net operating loss carryforwards and tax credit carryforwards on a yearly basis. To the extent that any single-year limitation is not utilized to the full amount of the limitation, such unused amounts are carried over to subsequent years until the earlier of utilization or the expiration of the relevant carryforward period. The Company determined that an ownership change occurred on February 10, 2017. An analysis was performed and while utilization of net operating losses would be limited in years prior to December 31, 2020, subsequent to that date, there is
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 20
OFFERPAD SOLUTIONS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
no limitation on the Company’s ability to utilize its net operating losses. As such, the ownership change has no impact to the carrying value of the Company’s net operating loss carryforwards or ability to use them in future years.
Note 14. Related-Party Transactions
LL Credit Facilities
As of June 30, 2025, we have
|
|
As of June 30, 2025 |
|
|
As of December 31, 2024 |
|
||||||||||
($ in thousands) |
|
Borrowing |
|
|
Outstanding |
|
|
Borrowing |
|
|
Outstanding |
|
||||
Senior secured credit facility with a related party |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Mezzanine secured credit facilities with a related party |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Since October 2016, we have been party to a loan and security agreement (the “LL Funds Loan Agreement”), with LL Private Lending Fund, L.P. and LL Private Lending Fund II, L.P., both of which are affiliates of LL Capital Partners I, L.P., which holds more than
Since March 2020, we have also been party to a mezzanine loan and security agreement (the “LL Mezz Loan Agreement”), with LL Private Lending Fund II, L.P., which is an affiliate of LL Capital Partners I, L.P. Under the LL Mezz Loan Agreement, we may borrow funds up to a maximum principal amount of $
In July 2025, we obtained a temporary waiver of minimum liquidity and tangible net worth covenants under the related party facilities described above. In connection with this waiver, the associated revolving/withdrawal periods for each facility, as applicable, have expired.
We paid interest for borrowings under the LL credit facilities of $
Use of First American Financial Corporation’s Services
First American Financial Corporation (“First American”), which holds more than
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 21
OFFERPAD SOLUTIONS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Compensation of Immediate Family Members of Brian Bair
Offerpad has historically employed Brian Bair’s brothers, Mr. Vaughn Bair and Mr. Casey Bair, and Mr. Brian Bair’s sister-in-law, Ms. Katie Bullard.
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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($ in thousands) |
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2025 |
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2024 |
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2025 |
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2024 |
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||||
Mr. Vaughn Bair (1) |
|
$ |
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$ |
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$ |
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$ |
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Mr. Casey Bair (2) |
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Ms. Katie Bullard (1) |
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$ |
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$ |
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$ |
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$ |
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||||
(1)
(2)
The following details the restricted stock units granted to Mr. Vaughn Bair, Mr. Casey Bair, and Ms. Katie Bullard, during the respective periods:
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2025 |
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2024 |
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2025 |
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2024 |
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Mr. Vaughn Bair (1) |
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Mr. Casey Bair (2) |
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Ms. Katie Bullard |
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(1) During June 2025, the Compensation Committee of the Board approved a restricted stock unit grant of
(2) This RSU award was forfeited by Mr. Casey Bair in connection with his separation from service in August 2024.
During the six months ended June 30, 2024, the Company amended certain terms and conditions associated with the
LTI Awards granted to Mr. Bair’s brothers and Mr. Bair’s sister-in-law in 2023, including the performance period, price per
share goals and sharing rates. In connection with Mr. Casey Bair’s separation from service, all unvested equity awards,
including the LTI Award, were forfeited.
Note 15. Commitments and Contingencies
Homes Purchase Commitments
As of June 30, 2025, the Company was under contract to purchase
Lease Commitments
The Company has entered into operating lease agreements for its corporate headquarters in Tempe, Arizona and field office facilities in most of the metropolitan markets in which the Company operates in the United States. Refer to Note 4. Leases, for further details.
Legal and Other Matters
The Company is subject to various actions, claims, suits and other legal proceedings that arise in the ordinary course of business, including, without limitation, assertions by third parties relating to intellectual property infringement, breaches of contract or warranties or employment-related matters. The Company records accruals for loss contingencies when it is probable that a loss will occur, and the amount of such loss can be reasonably estimated. The Company is not currently a party to any actions, claims, suits or other legal proceedings arising in the ordinary course of business, the outcome of which, if determined
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 22
OFFERPAD SOLUTIONS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
adversely to the Company, would individually or in the aggregate have a material adverse effect on the Company’s condensed consolidated financial statements.
The following is a description of pending litigation that falls outside the scope of ordinary and routine litigation incidental to the Company’s business.
Class Action Alleging Breach of Fiduciary Duties
On August 26, 2024, a purported stockholder of Offerpad (the “Plaintiff”) filed a complaint against Alexander Klabin, Spencer Rascoff, Ken Fox, Jim Lanzone, Gregg Renfrew, Rajeev Singh, Robert Reid, Michael Clifton, Supernova Partners, LLC (the “Supernova Defendants”), Brian Bair, and Michael Burnett (the “Offerpad Defendants”). The case is captioned In re Supernova Partners Acquisition Co. SPAC Litigation, C.A. No. 2024-0887 (Del. Ch.) (the “Complaint”). The Complaint generally alleges that the Supernova Defendants breached their fiduciary duties, with the Offerpad Defendants aiding and abetting these breaches, in connection with the merger between OfferPad, Inc. and Supernova Partners Acquisition Company, Inc. on September 1, 2021. The Complaint seeks, among other things, monetary damages, disgorgement of any unjust enrichment, rescissory damages, pre-judgment and post-judgment interest, and reasonable attorneys’ fees and costs. On September 19, 2024, proceedings related to the Complaint were temporarily stayed. On February 24, 2025, the court dismissed the Offerpad Defendants and Supernova Partners, LLC from the Complaint without prejudice, which terminated the case as to the Offerpad Defendants. On June 30, 2025, Plaintiff filed a notice lifting the stay, which became effective immediately. In regard to the remaining allegations against the remaining Supernova Defendants, because of the many questions of fact and law that may arise, the outcome of this legal proceeding is uncertain at this point. Based on the information available to the Company at present, the Company is unable to reasonably estimate a range of loss associated with its indemnification obligations in connection with this matter in excess of its accrual as of June 30, 2025.
Note 16. Segment Reporting
We operate in the U.S. residential real estate industry and our operating segments have been determined based on the method by which our Chief Executive Officer, who is our chief operating decision maker (“CODM”), evaluates performance and allocates resources. We have five operating segments, none of which have been aggregated, and one reportable segment. The following segment reporting presentation includes our Cash Offer reportable segment and Other, which includes our four remaining operating segments, along with Offerpad corporate activities:
During 2024, we revised the internal management reporting deliverables provided to our CODM and determined Cash Offer, B2B Renovate business, Direct+ institutional buyer program and Agent Partnership Program are separate operating segments. Accordingly, we have changed our presentation of the three and six months ended June 30, 2024 to reflect our revised segment reporting. Further, we launched HomePro, a new asset-light platform offering, during the second quarter of 2025 and it is included within Other in our segment reporting presentation from the date it was launched.
Our CODM evaluates performance based on operating segment gross profit and uses this measure when making decisions about the allocation of operating resources to each segment, including through the annual budget and forecasting process, along with regular budget-to-actual variance analyses.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 23
OFFERPAD SOLUTIONS INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
No individual customer accounted for more than
The following details segment financial information for the respective periods:
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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($ in thousands) |
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Revenue: |
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Cash Offer |
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$ |
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$ |
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$ |
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Other |
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Total revenue |
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Cost of revenue: |
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Cash Offer (1) |
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Other |
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Total cost of revenue |
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Gross profit: |
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Cash Offer |
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Other |
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Total gross profit |
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Operating expenses: |
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Sales, marketing and operating |
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General and administrative |
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Total operating expenses |
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Loss from operations |
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Other income (expense): |
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Change in fair value of warrant liabilities |
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Interest expense |
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( |
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( |
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( |
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( |
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Other income, net |
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Total other expense |
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Loss before income taxes |
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( |
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$ |
( |
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$ |
( |
) |
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$ |
( |
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(1) Includes real estate inventory valuation adjustments of $
Our CODM is not provided with, and does not review, segment assets when evaluating performance and allocating resources to our operating segments. Accordingly, segment asset information has not been provided.
Note 17. Subsequent Events
The Company has determined that there have been no events that have occurred that would require recognition in the condensed consolidated financial statements or additional disclosure herein, except as described elsewhere in the notes to the condensed consolidated financial statements.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 24
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis provides information that Offerpad’s management believes is relevant to an assessment and understanding of Offerpad’s consolidated results of operations and financial condition. The discussion should be read together with the unaudited interim condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q and our audited consolidated financial statements and accompanying notes included in Item 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2025.
This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements” in this Form 10-Q. Offerpad’s actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” in Part I, Item 1A of Offerpad’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Overview
Our Business
Offerpad, dedicated to simplifying the process of buying and selling homes, is committed to providing comprehensive solutions that remove the friction from real estate. Our advanced real estate platform offers a range of services, from consumer cash offers to business-to-business (“B2B”) renovation solutions and industry partnership programs, all tailored to meet the unique needs of our clients. Since 2015, we have leveraged local expertise in residential real estate alongside proprietary technology to guide homeowners at every step, and have transacted on homes representing approximately $12.0 billion of aggregate revenue through June 30, 2025.
We are headquartered in Tempe, Arizona and operated in over 1,900 cities and towns in 27 metropolitan markets across 18 states as of June 30, 2025.
Current Economic Conditions and Health of the U.S. Residential AG真人官方 Estate Industry
Our business and operating results are impacted by the general economic conditions and the health of the U.S. residential real estate industry, particularly the single-family home resale market. Our business model primarily depends on a high volume of residential real estate transactions throughout the markets in which we operate. This transaction volume affects substantially all of the ways that we generate revenue, including our ability to acquire new homes and generate associated fees, and our ability to sell homes that we own.
During the first half of 2025, the uncertain economic outlook and uneven residential real estate market conditions that have challenged our operating results in recent periods persisted, with the average thirty-year fixed mortgage rate continuing to generally remain between 6.5% and 7%. The sustained elevated and volatile mortgage interest rate environment continues to negatively impact housing affordability and velocity, and create uncertainty for home buyers, which has hindered consumer demand for residential real estate for an extended period of time. Compounding this uncertainty, macroeconomic and geopolitical concerns have been heightened by the trade-related tensions resulting from the tariff announcements made by the U.S. and other governments in 2025. The cumulative impact of these conditions, including without limitation future or additional tariffs or retaliatory tariffs, continues to cause uncertainty in the market and challenge consumer confidence, resulting in lower than normal real estate transaction volumes, and may impact the costs of materials and supplies used in our home renovations, which could in turn impact our margins.
Our operating results during the first half of 2025 have been impacted by these uncertain market conditions. Further, our focus on making more intentional offers and our ongoing reduction in home acquisition pace as part of our effort to balance our real estate inventory levels to potentially optimize our return, has resulted in a fewer number of homes in real estate inventory, which is also reflected in our operating results. We sold 452 homes during the second quarter of 2025, a slight decrease compared to the 460 homes sold during the first quarter of 2025. Additionally, we generated approximately $160 million of revenue during each of the first two quarters of 2025, and our gross profit margin was 8.9% during the second quarter of 2025, reflecting the second consecutive quarter-over-quarter improvement. Further, we achieved both quarter-over-quarter and year-over-year improvement in our net loss as we have continued to focus on cost reduction and operational efficiencies throughout the business.
Given the current market conditions, we remain focused on growing our asset-light platform offerings, and within our Cash Offer solution, proactively optimizing our capital allocation across our highest performing and most efficient markets and using pricing adjustments and other incentives in an effort to drive consumer demand. These pricing adjustments have had a negative impact on our operating results over the past few years. Further, there continues to be an increased level of uncertainty regarding the near-term macroeconomic conditions, including the direction of mortgage interest rates, which have continued to
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 25
stay around 7% during the early stages of the third quarter of 2025, and the impact of the global trade conditions. Although it remains difficult to predict the near-term direction of consumer demand for residential real estate due to the many different factors that impact such demand, we anticipate that the sustained elevated and volatile mortgage interest rate environment, economic uncertainties and affordability pressures will continue to impact consumer demand for residential real estate during the third quarter of 2025. As a result of these market dynamics, we may be required to use similar pricing adjustments and incentives in the future, along with reducing our real estate inventory acquisition pace.
New York Stock Exchange Listing Notice
On April 10, 2025, we received written notice (the “NYSE Notification”) from the NYSE that we are not in compliance with Section 802.01B of the NYSE Listed Company Manual because our average global market capitalization over a consecutive 30 trading-day period and, at the same time, our last reported stockholders’ equity were each less than $50 million. The NYSE Notification has no immediate impact on the listing of our Class A common stock.
On April 18, 2025, we notified the NYSE that we intend to submit a plan to cure the deficiency and to return to compliance with the NYSE continued listing standards. On May 27, 2025, we submitted to the NYSE a business plan advising the definitive action(s) we are taking or plan to take that would bring us into compliance with the NYSE continued listing standards within 18 months of receipt of the NYSE Notification (the “Cure Period”).
On July 16, 2025, the NYSE accepted the business plan and, as a result, we will be subject to quarterly monitoring for compliance with the business plan. Our Class A common stock will continue to be listed and traded on the NYSE during the Cure Period, subject to our compliance with the other continued listing standards of the NYSE and continued periodic review by the NYSE of our progress with respect to the business plan.
Revolving Credit Facility
On July 31, 2025, we entered into a $15.0 million revolving credit facility with a lender (the “Revolving Credit Facility”) with a three-year term, to support our continued growth and long-term strategic initiatives. Borrowings under the Revolving Credit Facility accrue interest at 8.50% per annum.
July 2025 Offering
On July 25, 2025, we issued and sold 2,857,143 shares (the “Shares”) of our Class A common stock and warrants to purchase up to 1,428,571 shares (the “2025 Warrants”) of our Class A common stock for aggregate gross proceeds of $6.0 million, before deducting placement agent fees and other offering expenses (the “July 2025 Offering”). The Shares and 2025 Warrants were offered and sold on a combined basis for consideration equating to $2.10 for one share and half of one warrant.
The 2025 Warrants have an exercise price of $2.30 per share and are initially exercisable on January 26, 2026 and will expire on January 26, 2030. The 2025 Warrants contain standard adjustments to the exercise price, including for stock splits, stock dividends, rights offerings and pro rata distributions. The 2025 Warrants also include certain rights upon the occurrence of a “fundamental transaction” (as described in the 2025 Warrants), including the right of the holder thereof to receive from us or a successor entity the same type or form of consideration (and in the same proportion) that is being offered and paid to the holders of our Class A common stock in such fundamental transaction in the amount of the Black Scholes value (as described in the 2025 Warrants) of the unexercised portion of the Warrant on the date of the consummation of such fundamental transaction. The 2025 Warrants also include cashless exercise rights to the extent the resale of the shares of Class A common stock underlying the 2025 Warrants is not registered under the Securities Act.
Factors Affecting Our Performance
We believe that our performance and future success depend on a variety of factors that present significant opportunities for our business but also present risks and challenges that could adversely impact our growth and profitability, including those discussed below.
Market Penetration in Existing Markets
Residential real estate is one of the largest industries, with roughly $1.9 trillion in value of homes transacted in 2024 in the United States, and is highly fragmented with over 100,000 real estate brokerages, according to the National Association of AG真人官方tors (“NAR”). In 2024, we estimate that we captured roughly 0.4% market share of real estate transactions across our 26 active markets as of December 31, 2024. Given this high degree of fragmentation, we believe that bringing a solutions-oriented approach to the market with multiple buying and selling services to meet the unique needs of customers could lead to continued market share growth and accelerated adoption of the digital model. We have demonstrated higher market share in certain markets, providing the backdrop to grow our overall market penetration as our offerings expand and evolve. By providing a consistent, transparent, and unique experience, we expect to continue to build upon our past success and further strengthen our brand and consumer adoption.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 26
Expansion into New Markets
Since our launch in 2015, we have expanded into 26 markets as of December 31, 2024, which covered roughly 23% of the 4.8 million homes sold in the United States in 2024. Given this current coverage, we believe there is significant opportunity to both increase market penetration in our existing markets and to grow our business through new market expansion over the long-term. Also, because of our strategic approach to our asset-light platform offerings, we believe a significant portion of the total addressable market is serviceable with our business model. As we expand our reach through these other service offerings, we expect to continue to serve customers in markets beyond our direct service area. Further, this strategic approach has enabled us to enter into new markets to offer certain of our service offerings, without offering all of our buying and selling services in such markets. In connection with this approach, we began offering renovation services in two additional markets during 2024, followed by one additional market during the first half of 2025.
Although we recently expanded into three new markets, we have decelerated our market expansion plans in recent years given the uncertain economic outlook and uneven residential real estate market conditions, which has included uncertainty regarding the near-term macroeconomic conditions, including the direction of mortgage interest rates and the impact of global trade conditions. We intend to continue evaluating expansion plans on an ongoing basis in order to maintain our flexibility in assessing the overall timing of our expansion plan and appropriate market entry points in the future.
B2B Renovate Business Services
Our B2B Renovate business services represent an important component of our asset-light platform offerings. Through this offering, we are able to leverage our existing logistics, operations, technology and skill-sets to provide renovation services to other businesses, allowing other companies and homeowners to utilize our renovations team to update their portfolio of homes for rent or to sell. When providing renovation services, we receive a renovation project fee, and are also typically compensated with a service fee that is based on a percentage of the overall renovation project fee.
As we have developed and expanded our B2B Renovate business services offering in recent periods, our renovation volumes have increased and these services have become an increasingly larger component of our business, a trend we expect to continue in the future. In furtherance of this, we became a preferred provider of renovation services on Auction.com’s marketplace during the second quarter of 2025. We believe this collaboration with Auction.com will enable buyers to more easily transform acquired properties into high-quality, move-in ready homes, while also providing us with a strategic opportunity to continue growing our B2B Renovate business services.
Direct+ institutional buyer program
Another component of our asset-light platform offerings includes our program that allows investors and single-family rental companies an opportunity to purchase homes from homeowners, matching investors with sellers. These transactions occur in several forms, including assigning the original purchase contract to the end buyer and collecting a fee at closing. We expect this program will allow us to help more homeowners sell their home and expand our ability to reach more customers, while also providing customers with the benefit of receiving an optimized offer for their home.
HomePro
During the second quarter of 2025, we launched HomePro, a model that is designed to increase in-home seller engagement and further our mission to provide comprehensive solutions that remove the friction from real estate. Under the HomePro program, certified, local agents from partner brokerages meet with sellers in their home to evaluate their cash offers and listing options and assist sellers in making informed decisions about the home selling process, giving sellers clarity and control over what works best for their situation. Since the initial launch, the HomePro program has been expanded and is available in all of our markets, with select agents across multiple partner brokerages becoming certified HomePro agents. We expect this comprehensive in-home approach will result in sellers being more likely to move forward with their home selling process, leading to increased transaction volumes over time.
Agent Partnership Program
We have increased our focus on our partner network in recent years, which includes our homebuilder services, our Agent Partnership Program and our agent referral network, to drive growth in our existing markets by expanding our reach and serving a greater number of customers. Our Agent Partnership Program provides referral fees to agents who sell or select our cash offer. This program is designed to enable customers to utilize our services in a way that best suits their home-selling situation, while also serving as a valuable resource for real estate agents.
We also have an integration with AG真人官方tor.com, allowing customers to request a cash offer from Offerpad directly through the AG真人官方tor.com website. We anticipate this integration will further expand our reach and diversify our lead sources.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 27
Ancillary products and services
We aim to deliver other additional products and services tied to the core real estate transaction in a smooth, efficient, digital driven platform, focused on transparency and ease of use. Although further developing these products and services will require significant investment, growing our current offerings and offering additional ancillary products and services, potentially including energy efficiency solutions, smart home technology, insurance, and home warranty services, we believe will strengthen our unit economics and allow us to better optimize pricing. Generally, the revenue and margin profiles of our ancillary products and services are different from our Cash Offer service that accounts for the substantial majority of our revenue, with most ancillary products and services having a smaller average revenue per transaction than our cash offering service, but a higher margin.
While we have offered a variety of ancillary products and services over time, our title and escrow services represent the most notable ancillary service that we currently provide. We have a national relationship with a leading title and escrow company, through which we are able to leverage our size and scale to provide exceptional title and escrow closing services with a favorable economic impact principally in our Cash Offer service.
Unit Economics
We view Contribution Margin and Contribution Margin after Interest (see “—Non-GAAP Financial Measures”) as key performance indicators for unit economic performance, which are currently primarily driven by our cash offer transactions. Future financial performance improvements are expected to be driven by expanding unit level margins through initiatives such as:
Operating Leverage
We utilize our technology and product teams to design systems and workflows to make our operations teams more efficient and able to support and scale with the business. Many positions are considered volume based, and as our business grows, we focus on developing more automation tools to gain additional leverage. Additionally, in periods when our business is growing, we expect to be able to gain operating leverage on portions of our cost structure that are more fixed in nature as opposed to purely variable. These types of costs include general and administrative expenses and certain marketing and information technology expenses, which generally grow at a slower pace than proportional to revenue growth.
AG真人官方 Estate Inventory Financing
Our business model requires significant capital to purchase real estate inventory. AG真人官方 estate inventory financing is a key enabler to our growth and we rely on our non-recourse asset-backed financing facilities, which primarily consist of senior and mezzanine secured credit facilities to finance our home purchases. Though we may from time to time reduce our available capacity under such credit facilities to align with our required usage, the loss of adequate access to these types of facilities, or the inability to maintain these types of facilities on favorable terms, would impair our performance. See “—Liquidity and Capital Resources—Financing Activities.”
Seasonality
The residential real estate market is seasonal and varies from market to market. Typically, the greatest number of transactions occur in the spring and summer, with fewer transactions occurring in the fall and winter. Our financial results, including revenue, margins, real estate inventory, and financing costs, have historically had seasonal characteristics generally consistent with the residential real estate market, a trend we expect to continue in the future, subject to the market conditions discussed above.
Risk Management
Our business model is based upon acquiring homes at a price which will allow us to provide a competitive offer to the consumer, while being able to add value through the renovation process, and relist the home so that it sells at a profit and in a relatively short period of time. We have invested significant resources into our underwriting and asset management systems. Our real estate operations team, including our pricing team, together with our software engineering and data science teams are responsible for underwriting accuracy, portfolio health, and workflow optimization. Our underwriting tools are constantly updated to adjust to the latest market conditions, leveraging inputs from our internal data systems, as well as third-party and other proprietary data sources. This allows us to assess and adjust to changes in the local housing market conditions based on
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 28
our technology, analysis and local real estate experience, in order to mitigate our risk exposure. Further, our listed homes are typically in market-ready and move-in ready condition following the repairs and renovations we conduct.
Historically, we have been able to manage our portfolio risk in part by our ability to manage holding periods for our real estate inventory. Traditionally, resale housing pricing moves gradually through cycles; therefore, shorter real estate inventory holding periods limit pricing exposure.
During 2024, the average holding period of homes sold remained steady at approximately 110 days during the first three quarters of the year, before increasing to 142 days during the fourth quarter of 2024. This increase continued into the first quarter of 2025, when our average real estate inventory holding period was 165 days, reflecting our ongoing intentional reduction in home acquisition pace, along with the normal seasonal increase that occurs in the fall and winter months.
During the second quarter of 2025, the average holding period of homes sold decreased to 133 days as we sold through our aged real estate inventory and our overall real estate inventory mix shifted to include a higher composition of newer acquired homes. Our average real estate inventory holding period is expected to remain generally consistent at around 140 days during the third quarter of 2025. However, as the residential real estate market conditions remain volatile, we intend to continue to make more intentional offers and balance our home acquisition pace to manage our real estate inventory levels, and ultimately, our average real estate inventory holding period.
Non-GAAP Financial Measures
In addition to our results of operations below, we report certain financial measures that are not required by, or presented in accordance with, U.S. generally accepted accounting principles (“GAAP”). These measures have limitations as analytical tools when assessing our operating performance and should not be considered in isolation or as a substitute for GAAP measures, including gross profit and net income. We may calculate or present our non-GAAP financial measures differently than other companies who report measures with similar titles and, as a result, the non-GAAP financial measures we report may not be comparable with those of companies in our industry or in other industries.
Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins)
To provide investors with additional information regarding our margins, we have included Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins), which are non-GAAP financial measures. We believe that Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest are useful financial measures for investors as they are used by management in evaluating unit level economics and operating performance across our markets. Each of these measures is intended to present the economics related to homes sold during a given period. We do so by including revenue generated from homes sold (and ancillary services) in the period and only the expenses that are directly attributable to such home sales, even if such expenses were recognized in prior periods, and excluding expenses related to homes that remain in real estate inventory as of the end of the period presented. Contribution Profit provides investors a measure to assess Offerpad’s ability to generate returns on homes sold during a reporting period after considering home acquisition costs, renovation and repair costs, and adjusting for holding costs and selling costs. Contribution Profit After Interest further impacts gross profit by including interest costs (including senior and mezzanine secured credit facilities) attributable to homes sold during a reporting period. We believe these measures facilitate meaningful period over period comparisons and illustrate our ability to generate returns on assets sold after considering the costs directly related to the assets sold in a presented period.
Adjusted Gross Profit, Contribution Profit and Contribution Profit After Interest (and related margins) are supplemental measures of our operating performance and have limitations as analytical tools. For example, these measures include costs that were recorded in prior periods under GAAP and exclude, in connection with homes held in real estate inventory at the end of the period, costs required to be recorded under GAAP in the same period.
Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. We include a reconciliation of these measures to the most directly comparable GAAP financial measure, which is gross profit.
Adjusted Gross Profit / Margin
We calculate Adjusted Gross Profit as gross profit under GAAP adjusted for (1) net real estate inventory valuation adjustment plus (2) interest expense associated with homes sold in the presented period and recorded in cost of revenue. Net real estate inventory valuation adjustment is calculated by adding back the real estate inventory valuation adjustment charges recorded during the period on homes that remain in real estate inventory at period end and subtracting the real estate inventory valuation adjustment charges recorded in prior periods on homes sold in the current period. We define Adjusted Gross Margin as Adjusted Gross Profit as a percentage of revenue.
We view this metric as an important measure of business performance, as it captures gross margin performance isolated to homes sold in a given period and provides comparability across reporting periods. Adjusted Gross Profit helps management
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 29
assess performance across the key phases of processing a home (acquisitions, renovations, and resale) for a specific resale cohort.
Contribution Profit / Margin
We calculate Contribution Profit as Adjusted Gross Profit, minus (1) direct selling costs incurred on homes sold during the presented period, minus (2) holding costs incurred in the current period on homes sold during the period recorded in sales, marketing, and operating, minus (3) holding costs incurred in prior periods on homes sold in the current period recorded in sales, marketing, and operating, plus (4) other income, net which is primarily composed of interest income earned on our cash and cash equivalents and fair value adjustments of derivative financial instruments. The composition of our holding costs is described in the footnotes to the reconciliation table below. We define Contribution Margin as Contribution Profit 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 helps management assess inflows and outflow directly associated with a specific resale cohort.
Contribution Profit / Margin After Interest
We define Contribution Profit After Interest as Contribution Profit, minus (1) interest expense associated with homes sold in the presented period and recorded in cost of revenue, minus (2) interest expense associated with homes sold in the presented period, recorded in costs of sales, and previously excluded from Adjusted Gross Profit, and minus (3) interest expense under our senior and mezzanine secured credit facilities and other senior secured debt incurred on homes sold during the period. This includes interest expense recorded in prior periods in which the sale occurred. Our senior and mezzanine secured credit facilities and other senior secured debt are secured by our homes in real estate inventory and drawdowns are made on a per-home basis at the time of purchase and are required to be repaid at the time the homes are sold. See “—Liquidity and Capital Resources—Financing Activities.” We define Contribution Margin After Interest as Contribution Profit After Interest as a percentage of revenue.
We view this metric as an important measure of business performance. Contribution Profit After Interest helps management assess Contribution Margin performance, per above, when fully burdened with costs of financing.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 30
The following table presents a reconciliation of our Adjusted Gross Profit, Contribution Profit (Loss) and Contribution Profit (Loss) After Interest to our Gross Profit, which is the most directly comparable GAAP measure, for the periods indicated:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(in thousands, except percentages and homes sold, unaudited) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Gross profit (GAAP) |
|
$ |
14,189 |
|
|
$ |
21,871 |
|
|
$ |
24,696 |
|
|
$ |
44,466 |
|
Gross margin |
|
|
8.9 |
% |
|
|
8.7 |
% |
|
|
7.7 |
% |
|
|
8.3 |
% |
Homes sold |
|
|
452 |
|
|
|
742 |
|
|
|
912 |
|
|
|
1,589 |
|
Gross profit per home sold |
|
$ |
31.4 |
|
|
$ |
29.5 |
|
|
$ |
27.1 |
|
|
$ |
28.0 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
AG真人官方 estate inventory valuation adjustment - current period (1) |
|
|
1,052 |
|
|
|
544 |
|
|
|
1,629 |
|
|
|
683 |
|
AG真人官方 estate inventory valuation adjustment - prior period (2) |
|
|
(1,556 |
) |
|
|
(540 |
) |
|
|
(2,601 |
) |
|
|
(701 |
) |
Interest expense capitalized (3) |
|
|
1,240 |
|
|
|
1,420 |
|
|
|
2,662 |
|
|
|
3,089 |
|
Adjusted gross profit |
|
$ |
14,925 |
|
|
$ |
23,295 |
|
|
$ |
26,386 |
|
|
$ |
47,537 |
|
Adjusted gross margin |
|
|
9.3 |
% |
|
|
9.3 |
% |
|
|
8.2 |
% |
|
|
8.9 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Direct selling costs (4) |
|
|
(4,230 |
) |
|
|
(6,461 |
) |
|
|
(8,618 |
) |
|
|
(13,430 |
) |
Holding costs on sales - current period (5)(6) |
|
|
(361 |
) |
|
|
(622 |
) |
|
|
(1,193 |
) |
|
|
(1,869 |
) |
Holding costs on sales - prior period (5)(7) |
|
|
(507 |
) |
|
|
(443 |
) |
|
|
(900 |
) |
|
|
(566 |
) |
Other income, net (8) |
|
|
244 |
|
|
|
615 |
|
|
|
540 |
|
|
|
1,369 |
|
Contribution profit |
|
$ |
10,071 |
|
|
$ |
16,384 |
|
|
$ |
16,215 |
|
|
$ |
33,041 |
|
Contribution margin |
|
|
6.3 |
% |
|
|
6.5 |
% |
|
|
5.1 |
% |
|
|
6.2 |
% |
Homes sold |
|
|
452 |
|
|
|
742 |
|
|
|
912 |
|
|
|
1,589 |
|
Contribution profit per home sold |
|
$ |
22.3 |
|
|
$ |
22.1 |
|
|
$ |
17.8 |
|
|
$ |
20.8 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense capitalized (3) |
|
|
(1,240 |
) |
|
|
(1,420 |
) |
|
|
(2,662 |
) |
|
|
(3,089 |
) |
Interest expense on homes sold - current period (9) |
|
|
(1,342 |
) |
|
|
(2,103 |
) |
|
|
(3,919 |
) |
|
|
(6,313 |
) |
Interest expense on homes sold - prior period (10) |
|
|
(1,866 |
) |
|
|
(2,133 |
) |
|
|
(3,790 |
) |
|
|
(2,870 |
) |
Contribution profit after interest |
|
$ |
5,623 |
|
|
$ |
10,728 |
|
|
$ |
5,844 |
|
|
$ |
20,769 |
|
Contribution margin after interest |
|
|
3.5 |
% |
|
|
4.3 |
% |
|
|
1.8 |
% |
|
|
3.9 |
% |
Homes sold |
|
|
452 |
|
|
|
742 |
|
|
|
912 |
|
|
|
1,589 |
|
Contribution profit after interest per home sold |
|
$ |
12.4 |
|
|
$ |
14.5 |
|
|
$ |
6.4 |
|
|
$ |
13.1 |
|
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 31
Adjusted Net Income (Loss) and Adjusted EBITDA
We also present Adjusted Net Income (Loss) and Adjusted EBITDA, which are non-GAAP financial measures, which our management team uses to assess our underlying financial performance. We believe these measures provide insight into period over period performance, adjusted for non-recurring or non-cash items.
We calculate Adjusted Net Income (Loss) as GAAP Net Income (Loss) adjusted for the change in fair value of warrant liabilities. We define Adjusted Net Income (Loss) Margin as Adjusted Net Income (Loss) as a percentage of revenue.
We calculate Adjusted EBITDA as Adjusted Net Income (Loss) adjusted for interest expense, amortization of capitalized interest, taxes, depreciation and amortization and stock-based compensation expense. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue.
Adjusted Net Income (Loss) and Adjusted EBITDA are supplemental to our operating performance measures calculated in accordance with GAAP and have important limitations. For example, Adjusted Net Income (Loss) and Adjusted EBITDA exclude the impact of certain costs required to be recorded under GAAP and could differ substantially from similarly titled measures presented by other companies in our industry or companies in other industries. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.
The following table presents a reconciliation of our Adjusted Net Income (Loss) and Adjusted EBITDA to our GAAP Net Income (Loss), which is the most directly comparable GAAP measure, for the periods indicated:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(in thousands, except percentages, unaudited) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net loss (GAAP) |
|
$ |
(10,903 |
) |
|
$ |
(13,782 |
) |
|
$ |
(25,960 |
) |
|
$ |
(31,297 |
) |
Change in fair value of warrant liabilities |
|
|
(329 |
) |
|
|
9 |
|
|
|
(72 |
) |
|
|
(335 |
) |
Adjusted net loss |
|
$ |
(11,232 |
) |
|
$ |
(13,773 |
) |
|
$ |
(26,032 |
) |
|
$ |
(31,632 |
) |
Adjusted net loss margin |
|
|
(7.0 |
)% |
|
|
(5.5 |
)% |
|
|
(8.1 |
)% |
|
|
(5.9 |
)% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
3,665 |
|
|
|
4,581 |
|
|
|
7,187 |
|
|
|
9,486 |
|
Amortization of capitalized interest (1) |
|
|
1,240 |
|
|
|
1,420 |
|
|
|
2,662 |
|
|
|
3,089 |
|
Income tax expense (benefit) |
|
|
30 |
|
|
|
(54 |
) |
|
|
67 |
|
|
|
69 |
|
Depreciation and amortization |
|
|
253 |
|
|
|
148 |
|
|
|
459 |
|
|
|
314 |
|
Amortization of stock-based compensation |
|
|
1,257 |
|
|
|
3,249 |
|
|
|
3,039 |
|
|
|
7,116 |
|
Adjusted EBITDA |
|
$ |
(4,787 |
) |
|
$ |
(4,429 |
) |
|
$ |
(12,618 |
) |
|
$ |
(11,558 |
) |
Adjusted EBITDA margin |
|
|
(3.0 |
)% |
|
|
(1.8 |
)% |
|
|
(3.9 |
)% |
|
|
(2.2 |
)% |
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 32
Results of Operations
The following details our consolidated results of operations and includes a discussion of our operating results and significant items explaining the material changes in our operating results during the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024.
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
|
|
Three Months Ended June 30, |
|
|||||||||||||
(in thousands, except percentages) |
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash Offer |
|
$ |
152,071 |
|
|
$ |
244,880 |
|
|
$ |
(92,809 |
) |
|
|
(37.9 |
)% |
Other |
|
|
8,244 |
|
|
|
6,242 |
|
|
|
2,002 |
|
|
|
32.1 |
% |
Total revenue |
|
|
160,315 |
|
|
|
251,122 |
|
|
|
(90,807 |
) |
|
|
(36.2 |
)% |
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash Offer |
|
|
140,914 |
|
|
|
225,002 |
|
|
|
(84,088 |
) |
|
|
(37.4 |
)% |
Other |
|
|
5,212 |
|
|
|
4,249 |
|
|
|
963 |
|
|
|
22.7 |
% |
Total cost of revenue |
|
|
146,126 |
|
|
|
229,251 |
|
|
|
(83,125 |
) |
|
|
(36.3 |
)% |
Gross profit: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash Offer |
|
|
11,157 |
|
|
|
19,878 |
|
|
|
(8,721 |
) |
|
|
(43.9 |
)% |
Other |
|
|
3,032 |
|
|
|
1,993 |
|
|
|
1,039 |
|
|
|
52.1 |
% |
Gross profit |
|
|
14,189 |
|
|
|
21,871 |
|
|
|
(7,682 |
) |
|
|
(35.1 |
)% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales, marketing and operating |
|
|
13,188 |
|
|
|
20,230 |
|
|
|
(7,042 |
) |
|
|
(34.8 |
)% |
General and administrative |
|
|
7,796 |
|
|
|
10,538 |
|
|
|
(2,742 |
) |
|
|
(26.0 |
)% |
Technology and development |
|
|
986 |
|
|
|
964 |
|
|
|
22 |
|
|
|
2.3 |
% |
Total operating expenses |
|
|
21,970 |
|
|
|
31,732 |
|
|
|
(9,762 |
) |
|
|
(30.8 |
)% |
Loss from operations |
|
|
(7,781 |
) |
|
|
(9,861 |
) |
|
|
2,080 |
|
|
|
(21.1 |
)% |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in fair value of warrant liabilities |
|
|
329 |
|
|
|
(9 |
) |
|
|
338 |
|
|
* |
|
|
Interest expense |
|
|
(3,665 |
) |
|
|
(4,581 |
) |
|
|
916 |
|
|
|
(20.0 |
)% |
Other income, net |
|
|
244 |
|
|
|
615 |
|
|
|
(371 |
) |
|
|
(60.3 |
)% |
Total other expense |
|
|
(3,092 |
) |
|
|
(3,975 |
) |
|
|
883 |
|
|
|
(22.2 |
)% |
Loss before income taxes |
|
|
(10,873 |
) |
|
|
(13,836 |
) |
|
|
2,963 |
|
|
|
(21.4 |
)% |
Income tax (expense) benefit |
|
|
(30 |
) |
|
|
54 |
|
|
|
(84 |
) |
|
|
(155.6 |
)% |
Net loss |
|
$ |
(10,903 |
) |
|
$ |
(13,782 |
) |
|
$ |
2,879 |
|
|
|
(20.9 |
)% |
* Not meaningful
Revenue
Our consolidated revenue decreased by $90.8 million, or 36.2%, to $160.3 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Our Cash Offer solution represents the substantial majority of our business, and generated approximately 95% of our consolidated revenue during each of the three months ended June 30, 2025 and 2024.
Cash Offer revenue decreased by $92.8 million, or 37.9%, to $152.1 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was primarily attributable to lower sales volumes. We sold 452 homes during the three months ended June 30, 2025 compared to 742 homes during the three months ended June 30, 2024, representing a decrease of 39.1%. This decrease in homes sold was primarily due to our ongoing intentional reduction in home acquisition pace beginning in the second half of 2024 as we adjusted our home purchase criteria through more conservative acquisition underwriting, resulting in higher expected internal rates of return based on current residential real estate market conditions. Our focus on making more intentional offers and our ongoing reduction in home acquisition pace resulted in a fewer number of homes in real estate inventory during the first half of 2025. This has allowed us to balance our real estate inventory levels to potentially optimize our return in light of the sustained elevated and volatile mortgage interest rate environment, as the average thirty-year fixed mortgage rate continued to generally remain between 6.5% and 7% during the second quarter of 2025. This sustained elevated and volatile mortgage interest rate environment continues to negatively impact housing affordability and velocity, and create uncertainty for home buyers, which has hindered consumer demand for residential real estate for an extended period of time.
This decrease in homes sold was partially offset by an increase in the average resale home price from $335,000 in the three months ended June 30, 2024 to $344,000 in the three months ended June 30, 2025. This increase was primarily due to a shift in the mix of homes sold in the respective periods, with a greater percentage of homes sold in geographic markets that tend to
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 33
share relatively higher median price points during the three months ended June 30, 2025 as compared to the three months ended June 30, 2024.
Other revenue increased by $2.0 million, or 32.1%, to $8.2 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was primarily attributable to an increase in B2B Renovate revenue due to higher renovation volumes and a higher average renovation transaction value per home during three months ended June 30, 2025 compared to the three months ended June 30, 2024.
Cost of Revenue
Our consolidated cost of revenue decreased by $83.1 million, or 36.3%, to $146.1 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Our asset-light platform offerings included in Other generally earn a smaller average revenue per transaction than our Cash Offer service, but typically generate higher margins.
Cash Offer cost of revenue decreased by $84.1 million, or 37.4%, to $140.9 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This decrease was primarily attributable to lower sales volumes, which was partially offset by an increase in the real estate inventory valuation adjustment.
Other cost of revenue increased by $1.0 million, or 22.7%, to $5.2 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This increase was primarily attributable to an increase in costs associated with our B2B Renovate business due higher renovation volumes and a higher average renovation transaction cost per home during the three months ended June 30, 2025 compared to the three months ended June 30, 2024.
Gross Profit
Our consolidated gross profit margin was 8.9% for the three months ended June 30, 2025 compared to 8.7% for the three months ended June 30, 2024.
Cash Offer gross profit margin was 7.3% for the three months ended June 30, 2025 compared to 8.1% for the three months ended June 30, 2024. The decrease in gross profit margin was primarily due to an increase in the real estate inventory valuation adjustment, from $0.6 million during the three months ended June 30, 2024 to $1.1 million during the three months ended June 30, 2025. The decrease in gross profit margin was also due to a higher average real estate inventory holding period during the first two quarters of 2025 compared to the first two quarters of 2024, along with our increased use of pricing adjustments and other incentives in recent periods as we focused on selling our aged real estate inventory.
Other gross profit margin was 36.8% for the three months ended June 30, 2025 compared to 31.9% for the three months ended June 30, 2024. This increase in gross profit margin was primarily due to a shift in the product mix of the asset-light platform offerings included in Other during the second quarter of 2025 compared to the second quarter of 2024. Our Agent Partnership Program, which generally has higher margins compared to the other offerings included within Other, represented a larger component of Other gross profit during the three months ended June 30, 2025 compared to the three months ended June 30, 2024.
Sales, Marketing and Operating
Sales, marketing and operating expense decreased by $7.0 million, or 34.8%, to $13.2 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was primarily attributable to decreased average employee headcount, a decrease in variable costs associated with the decrease in homes sold, and a $1.4 million decrease in advertising expense as we continued to reposition and optimize our marketing efforts in response to the ongoing uneven residential real estate market conditions.
General and Administrative
General and administrative expense decreased by $2.7 million, or 26.0%, to $7.8 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was primarily attributable to decreased average employee headcount, a decrease in fees associated with our credit facilities and lower insurance costs. This decrease was partially offset by increased legal and other professional fees.
Technology and Development
Technology and development expense increased by less than $0.1 million, or 2.3%, to $1.0 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was primarily attributable to increased third-party consulting fees, which was partially offset by a decreased average employee headcount.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 34
Change in Fair Value of Warrant Liabilities
Change in fair value of warrant liabilities represents a gain of $0.3 million for the three months ended June 30, 2025 and a loss of less than $0.1 million for the three months ended June 30, 2024, as a result of the fair value adjustment of our warrant liabilities.
Interest Expense
Interest expense decreased by $0.9 million, or 20.0%, to $3.7 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was primarily attributable to a $66.8 million decrease in the average outstanding balance of our senior and mezzanine secured credit facilities, from $280.4 million during the three months ended June 30, 2024 to $213.6 million during the three months ended June 30, 2025. The decrease in expense was also due to a 0.9% decrease in the weighted average variable interest rates associated with our secured credit facilities and other debt.
Other Income, Net
Other income, net principally represents interest income earned on our cash and cash equivalents during each of the three months ended June 30, 2025 and 2024.
Income Tax Expense
We recorded income tax expense of less than $0.1 million and an income tax benefit of $0.1 million during the three months ended June 30, 2025 and 2024, respectively, and our effective tax rate was an expense of 0.3% and a benefit 0.4% for the respective periods. Our effective tax rate during the three months ended June 30, 2025 differed from the federal statutory rate of 21% primarily due to net operating loss carryforwards and state taxes.
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
|
|
Six Months Ended June 30, |
|
|||||||||||||
(in thousands, except percentages) |
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash Offer |
|
$ |
305,904 |
|
|
$ |
522,725 |
|
|
$ |
(216,821 |
) |
|
|
(41.5 |
)% |
Other |
|
|
15,109 |
|
|
|
13,755 |
|
|
|
1,354 |
|
|
|
9.8 |
% |
Total revenue |
|
|
321,013 |
|
|
|
536,480 |
|
|
|
(215,467 |
) |
|
|
(40.2 |
)% |
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash Offer |
|
|
286,649 |
|
|
|
482,652 |
|
|
|
(196,003 |
) |
|
|
(40.6 |
)% |
Other |
|
|
9,668 |
|
|
|
9,362 |
|
|
|
306 |
|
|
|
3.3 |
% |
Total cost of revenue |
|
|
296,317 |
|
|
|
492,014 |
|
|
|
(195,697 |
) |
|
|
(39.8 |
)% |
Gross profit: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash Offer |
|
|
19,255 |
|
|
|
40,073 |
|
|
|
(20,818 |
) |
|
|
(52.0 |
)% |
Other |
|
|
5,441 |
|
|
|
4,393 |
|
|
|
1,048 |
|
|
|
23.9 |
% |
Gross profit |
|
|
24,696 |
|
|
|
44,466 |
|
|
|
(19,770 |
) |
|
|
(44.5 |
)% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales, marketing and operating |
|
|
27,016 |
|
|
|
42,682 |
|
|
|
(15,666 |
) |
|
|
(36.7 |
)% |
General and administrative |
|
|
14,992 |
|
|
|
22,493 |
|
|
|
(7,501 |
) |
|
|
(33.3 |
)% |
Technology and development |
|
|
2,006 |
|
|
|
2,737 |
|
|
|
(731 |
) |
|
|
(26.7 |
)% |
Total operating expenses |
|
|
44,014 |
|
|
|
67,912 |
|
|
|
(23,898 |
) |
|
|
(35.2 |
)% |
Loss from operations |
|
|
(19,318 |
) |
|
|
(23,446 |
) |
|
|
4,128 |
|
|
|
(17.6 |
)% |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in fair value of warrant liabilities |
|
|
72 |
|
|
|
335 |
|
|
|
(263 |
) |
|
|
(78.5 |
)% |
Interest expense |
|
|
(7,187 |
) |
|
|
(9,486 |
) |
|
|
2,299 |
|
|
|
(24.2 |
)% |
Other income, net |
|
|
540 |
|
|
|
1,369 |
|
|
|
(829 |
) |
|
|
(60.6 |
)% |
Total other expense |
|
|
(6,575 |
) |
|
|
(7,782 |
) |
|
|
1,207 |
|
|
|
(15.5 |
)% |
Loss before income taxes |
|
|
(25,893 |
) |
|
|
(31,228 |
) |
|
|
5,335 |
|
|
|
(17.1 |
)% |
Income tax expense |
|
|
(67 |
) |
|
|
(69 |
) |
|
|
2 |
|
|
|
(2.9 |
)% |
Net loss |
|
$ |
(25,960 |
) |
|
$ |
(31,297 |
) |
|
$ |
5,337 |
|
|
|
(17.1 |
)% |
Revenue
Our consolidated revenue decreased by $215.5 million, or 40.2%, to $321.0 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. Our Cash Offer solution represents the substantial majority of our business, generating over 95% of our consolidated revenue during each of the six months ended June 30, 2025 and 2024.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 35
Cash Offer revenue decreased by $216.8 million, or 41.5%, to $305.9 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The decrease was primarily attributable to lower sales volumes. We sold 912 homes during the six months ended June 30, 2025 compared to 1,589 homes during the six months ended June 30, 2024, representing a decrease of 42.6%. This decrease in homes sold was primarily due to our ongoing intentional reduction in home acquisition pace beginning in the second half of 2024 as we adjusted our home purchase criteria through more conservative acquisition underwriting, resulting in higher expected internal rates of return based on current residential real estate market conditions. Our focus on making more intentional offers and the ongoing reduction in home acquisition pace resulted in a fewer number of homes in real estate inventory during the first half of 2025. This has allowed us to balance our real estate inventory levels to potentially optimize our return in light of the sustained elevated and volatile mortgage interest rate environment, as the average thirty-year fixed mortgage rate continued to generally remain between 6.5% and 7% during the first half of 2025. This sustained elevated and volatile mortgage interest rate environment continues to negatively impact housing affordability and velocity, and create uncertainty for home buyers, which has hindered consumer demand for residential real estate for an extended period of time.
This decrease in homes sold was partially offset by an increase in the average resale home price from $333,000 in the six months ended June 30, 2024 to $342,000 in the six months ended June 30, 2025. This increase was primarily due to a shift in the mix of homes sold in the respective periods, with a greater percentage of homes sold in geographic markets that tend to share relatively higher median price points during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.
Other revenue increased by $1.4 million, or 9.8%, to $15.1 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was primarily attributable to an increase in B2B Renovate revenue due to a higher average renovation transaction value per home during six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase in revenue was partially offset by a decrease in revenue associated with the transition from our historical listing service offering as we shifted our focus to our referral partner networks, which includes our homebuilder services, our Agent Partnership Program and our agent referral network.
Cost of Revenue
Our consolidated cost of revenue decreased by $195.7 million, or 39.8%, to $296.3 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
Cash Offer cost of revenue decreased by $196.0 million, or 40.6%, to $286.6 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This decrease was primarily attributable to lower sales volumes, which was partially offset by an increase in the real estate inventory valuation adjustment.
Other cost of revenue increased by $0.3 million, or 3.3%, to $9.7 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase was primarily attributable to an increase in costs associated with our B2B Renovate business due to a higher average renovation transaction cost per home during the six months ended June 30, 2025 compared to the six months ended June 30, 2024, which was partially offset by lower volumes associated with our historical listing service offering as we transitioned our focus to our partner network.
Gross Profit
Our consolidated gross profit margin was 7.7% for the six months ended June 30, 2025 compared to 8.3% for the six months ended June 30, 2024.
Cash Offer gross profit margin was 6.3% for the six months ended June 30, 2025 compared to 7.7% for the six months ended June 30, 2024. The decrease in gross profit margin was primarily due to an increase in the real estate inventory valuation adjustment, from $1.2 million during the six months ended June 30, 2024 to $2.8 million during the six months ended June 30, 2025. The decrease in gross profit margin was also due to a higher average real estate inventory holding period during the first two quarters of 2025 compared to the first two quarters of 2024, along with our increased use of pricing adjustments and other incentives in recent periods as we focused on selling our aged real estate inventory.
Other gross profit margin was 36.0% for the six months ended June 30, 2025 compared to 31.9% for the six months ended June 30, 2024. This increase in gross profit margin was primarily due to a shift in the product mix of the asset-light platform offerings included in Other during the six months ended June 30, 2025 compared to the six months ended June 30, 2024. Our Agent Partnership Program, which generally has higher margins compared to the other offerings included within Other, represented a larger component of Other gross profit during the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
Sales, Marketing and Operating
Sales, marketing and operating expense decreased by $15.7 million, or 36.7%, to $27.0 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The decrease in expense was primarily attributable to
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 36
decreased average employee headcount, a decrease in variable costs associated with the decrease in homes sold and a $3.5 million decrease in advertising expense as we repositioned and optimized our marketing efforts in response to the ongoing challenging residential real estate market conditions.
General and Administrative
General and administrative expense decreased by $7.5 million, or 33.3%, to $15.0 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The decrease in expense was primarily attributable to decreased average employee headcount, a decrease in fees associated with our credit facilities and lower insurance costs. This decrease was partially offset by increased legal and other professional fees.
Technology and Development
Technology and development expense decreased by $0.7 million, or 26.7%, to $2.0 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The decrease in expense was primarily attributable to decreased average employee headcount.
Change in Fair Value of Warrant Liabilities
Change in fair value of warrant liabilities for the six months ended June 30, 2025 and 2024 represents gains of $0.1 million and $0.3 million, respectively, as a result of the fair value adjustment of our warrant liabilities.
Interest Expense
Interest expense decreased by $2.3 million, or 24.2%, to $7.2 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The decrease in expense was primarily attributable to a $55.2 million decrease in the average outstanding balance of our senior and mezzanine secured credit facilities, from $282.1 million during the six months ended June 30, 2024 to $226.9 million during the six months ended June 30, 2025. This decrease in expense was also due to a 0.8% decrease in the weighted average variable interest rates associated with our secured credit facilities and other debt.
Other Income, Net
Other income, net during the six months ended June 30, 2025 and 2024 principally represents interest income earned on our cash and cash equivalents. Other income, net also includes gains or losses from the disposal of property and equipment in both periods.
Income Tax Expense
We recorded income tax expense of $0.1 million during each of the six months ended June 30, 2025 and 2024, and our effective tax rate was an expense of 0.3% and 0.2% for the respective periods. Our effective tax rate during the six months ended June 30, 2025 differed from the federal statutory rate of 21% primarily due to net operating loss carryforwards and state taxes.
Liquidity and Capital Resources
Overview
Cash and cash equivalents balances consist of operating cash on deposit with financial institutions. Our principal sources of liquidity have historically consisted of cash generated from our operations and financing activities. As of June 30, 2025, we had cash and cash equivalents of $22.7 million and had a total undrawn borrowing capacity under our senior and mezzanine secured credit facilities of $567.9 million, $17.5 million of which is committed and $550.4 million uncommitted.
On July 31, 2025, we entered into a $15.0 million Revolving Credit Facility. For additional information, refer above to “Overview–Revolving Credit Facility.”
On July 25, 2025, we issued and sold 2,857,143 shares of our Class A common stock and warrants to purchase up to 1,428,571 shares of our Class A common stock in our July 2025 Offering, generating gross proceeds of $6.0 million, before deducting placement agent fees and other offering expenses. We intend to use the net proceeds from the July 2025 Offering for general working capital. For additional information, refer above to “Overview–July 2025 Offering.”
With the exception of the year ended December 31, 2021, during which we generated net income, we have incurred losses each year from inception and during the three and six months ended June 30, 2025, and may incur additional losses in the future. Since our launch in 2015, we have invested in the development and expansion of our operations. These investments include improvements in infrastructure and a continual improvement to our software and technology platform. We have also invested in sales and marketing as we have increased our market penetration in existing markets, and grown our business through new market expansion and the increased offering of asset-light platform services.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 37
While we remain focused on strategically deepening our penetration of existing markets through our asset-light platform offerings, we expect our working capital requirements will continue to increase over the long term as we seek to expand our operations over time. We believe our cash on hand, together with proceeds from the resale of homes, fees and commissions earned from our asset-light platform offerings, the net proceeds from our July 2025 Offering and the Revolving Credit Facility, and cash from future borrowings available under each of our existing credit facilities, or the entry into new debt financing arrangements or the issuance of equity instruments, will be sufficient to meet our short-term working capital and capital expenditure requirements for at least the next twelve months. However, our ability to fund our working capital and capital expenditure requirements depends on the residential real estate market conditions in the markets in which we operate and in the U.S. in general, and various other general economic, financial, competitive, legislative, regulatory, geopolitical and other conditions that may be beyond our control. The uncertain economic outlook and uneven residential real estate market conditions have impacted, and may continue to impact, our business negatively. Based on these and other current market conditions, as described above, we may seek additional financing. Volatility in the credit markets, rising interest rates and softened consumer demand for residential real estate may have an adverse effect on our ability to obtain other debt financing, on favorable terms or at all. If we are not able to obtain necessary capital to meet our business objectives, we may need to further stall, moderate or decelerate our expansion activities, which may include various restructuring alternatives and options, including more significant cost reductions, product and operational changes focused on reductions in working capital requirements, including pausing or reducing real estate inventory acquisitions, and other actions to enhance the preservation of cash. If we are able to raise additional funds through further issuances of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our Class A common stock, or may require us to agree to unfavorable terms, and our existing stockholders may experience significant dilution.
Financing Activities
Our financing activities primarily include borrowings under our senior secured credit facilities, mezzanine secured credit facilities and new issuances of equity. Historically, we have required access to external financing resources in order to fund growth, increase penetration in existing markets, expansion into new markets and other strategic initiatives, and we expect this to continue in the future over the longer term. Our access to capital markets can be impacted by factors outside our control, including economic conditions.
Buying and selling high-valued assets, such as single-family residential homes, is very cash intensive and has a significant impact on our liquidity and capital resources. We use non-recourse secured credit facilities, consisting of both senior secured credit facilities and mezzanine secured credit facilities, to finance a significant portion of our real estate inventory and related home renovations. Our senior and mezzanine secured credit facilities, however, are not fully committed, meaning the applicable lender may not be obligated to advance new loan funds if they choose not to do so. Our ability to obtain and maintain access to these or similar kinds of credit facilities is significant for us to operate the business.
Given the general economic conditions and health of the U.S. residential real estate industry in recent periods, we have increased our focus on growing our asset-light platform offerings, which require lower levels of capital investment as compared to our Cash Offer solution. Additionally, we have reduced our home acquisition pace as part of our effort to balance our real estate inventory levels to potentially optimize our return, resulting in a fewer number of homes in real estate inventory. Given we anticipate lower cash requirements as a result of these strategic changes, we have lowered the borrowing capacities available under our secured credit facilities during the three months ended June 30, 2025 to better align with our anticipated financing requirements. The amount of our reduction in borrowing availability also represents debt capacity under our secured credit facilities that we have not historically utilized or relied upon in full. This reduction in the borrowing capacities has also decreased the fees associated with our credit facilities, a trend we expect to persist in the future as our asset-light platform offerings continue to increase and become a more significant component of our operations.
To support our continued growth and long-term strategic initiatives, we also entered into a $15.0 million Revolving Credit Facility on July 31, 2025. For additional information, refer above to “Overview–Revolving Credit Facility.”
Senior Secured Credit Facilities
The following summarizes certain details related to our senior secured credit facilities (in thousands, except interest rates):
|
Borrowing Capacity |
|
|
Outstanding |
|
|
Weighted- |
|
|
End of |
|
Final |
|||||||||||
As of June 30, 2025 |
Committed |
|
|
Uncommitted |
|
|
Total |
|
|
Amount |
|
|
Rate |
|
|
Period |
|
Date |
|||||
Senior financial institution 1 |
$ |
25,000 |
|
|
$ |
175,000 |
|
|
$ |
200,000 |
|
|
$ |
164,726 |
|
|
|
7.12 |
% |
|
December 2025 |
|
June 2026 |
Senior financial institution 2 |
|
— |
|
|
|
200,000 |
|
|
|
200,000 |
|
|
|
— |
|
|
|
— |
|
|
January 2026 |
|
July 2026 |
Senior financial institution 3 |
|
— |
|
|
|
150,000 |
|
|
|
150,000 |
|
|
|
— |
|
|
|
7.58 |
% |
|
January 2026 |
|
April 2026 |
Related party |
|
25,539 |
|
|
|
24,461 |
|
|
|
50,000 |
|
|
|
11,860 |
|
|
|
9.32 |
% |
|
March 2025 |
|
February 2026 |
Senior financial institution 4 |
|
— |
|
|
|
30,000 |
|
|
|
30,000 |
|
|
|
785 |
|
|
|
10.15 |
% |
|
August 2025 |
|
February 2026 |
Senior secured credit facilities |
$ |
50,539 |
|
|
$ |
579,461 |
|
|
$ |
630,000 |
|
|
$ |
177,371 |
|
|
|
|
|
|
|
|
|
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 38
As of June 30, 2025, we had five senior secured credit facilities that we use to fund the purchase of homes and build our real estate inventory, four with separate financial institutions and one with a related party, which holds more than 5% of our Class A common stock. Borrowings under the senior secured credit facilities accrue interest at a rate based on a SOFR reference rate, plus a margin which varies by facility. Each of our senior secured credit facilities also have interest rate floors. We may also pay fees on our senior secured credit facilities, including a commitment fee and fees on certain unused portions of the committed borrowing capacity under the respective credit agreements.
Borrowings under our senior secured credit facilities are collateralized by the real estate inventory financed by the senior secured credit facility. The lenders have legal recourse only to the assets securing the debt and do not have general recourse against us with limited exceptions. We have, however, provided limited non-recourse carve-out guarantees under our senior and mezzanine secured credit facilities for certain of the SPEs’ obligations. Each senior secured credit facility contains eligibility requirements that govern whether a property can be financed. When we resell a home, the proceeds are used to reduce the corresponding outstanding balance under the related senior and mezzanine secured revolving credit facilities.
Mezzanine Secured Credit Facilities
In addition to the senior secured credit facilities, we use mezzanine secured credit facilities which are structurally and contractually subordinated to the related senior secured credit facilities. The following summarizes certain details related to our mezzanine secured credit facilities (in thousands, except interest rates):
|
Borrowing Capacity |
|
|
Outstanding |
|
|
Weighted- |
|
|
End of |
|
Final |
|||||||||||
As of June 30, 2025 |
Committed |
|
|
Uncommitted |
|
|
Total |
|
|
Amount |
|
|
Rate |
|
|
Period |
|
Date |
|||||
Related party facility 1 |
$ |
13,125 |
|
|
$ |
21,875 |
|
|
$ |
35,000 |
|
|
$ |
23,761 |
|
|
|
13.00 |
% |
|
June 2026 |
|
December 2026 |
Mezzanine financial institution 1 |
|
— |
|
|
|
45,000 |
|
|
|
45,000 |
|
|
|
— |
|
|
|
— |
|
|
January 2026 |
|
July 2026 |
Mezzanine financial institution 2 |
|
— |
|
|
|
40,000 |
|
|
|
40,000 |
|
|
|
— |
|
|
|
11.58 |
% |
|
January 2026 |
|
April 2026 |
Related party facility 2 |
|
6,811 |
|
|
|
15,189 |
|
|
|
22,000 |
|
|
|
2,956 |
|
|
|
13.00 |
% |
|
March 2025 |
|
February 2026 |
Mezzanine secured credit facilities |
$ |
19,936 |
|
|
$ |
122,064 |
|
|
$ |
142,000 |
|
|
$ |
26,717 |
|
|
|
|
|
|
|
|
|
As of June 30, 2025, we had four mezzanine secured credit facilities, two with separate financial institutions and two with a related party, which holds more than 5% of our Class A common stock. Borrowings under the mezzanine secured credit facilities accrue interest at a rate based on a SOFR reference rate, plus a margin which varies by facility. Each of our mezzanine secured credit facilities also have interest rate floors. We may also pay fees on our mezzanine secured credit facilities, including a commitment fee and fees on certain unused portions of the committed borrowing capacity under the respective credit agreements.
Borrowings under our mezzanine secured credit facilities are collateralized by a second lien on the real estate inventory financed by the relevant credit facility. The lenders have legal recourse only to the assets securing the debt, and do not have general recourse against us with limited exceptions. When we resell a home, the proceeds are used to reduce the corresponding outstanding balance under the related senior and mezzanine secured revolving credit facilities.
Covenants for Senior Secured Credit Facilities and Mezzanine Secured Credit Facilities
Our secured credit facilities include customary representations and warranties, covenants and events of default. Financed properties are subject to customary eligibility criteria and concentration limits. The terms of these facilities and related financing documents require the Company to comply with a number of customary financial and other covenants, such as maintaining certain levels of liquidity, tangible net worth or leverage (ratio of debt to tangible net worth).
As of June 30, 2025, we were in compliance with all covenants and no event of default had occurred. In July 2025, we obtained a temporary waiver of minimum liquidity and tangible net worth covenants under the related party facilities described above. In connection with this waiver, the associated revolving/withdrawal periods for each facility, as applicable, have expired.
Senior Secured Debt - Other
We have a borrowing arrangement with a financial institution to support purchases of real estate inventory. Borrowings under this arrangement accrue interest at a rate based on a SOFR reference rate, plus a margin. As of June 30, 2025 and December 31, 2024, the weighted-average interest rate under our other senior secured debt was 9.01% and 9.24%, respectively.
Revolving Credit Facility
On July 31, 2025, we entered into a $15.0 million Revolving Credit Facility with a three-year term, to support our continued growth and long-term strategic initiatives. Borrowings under the Revolving Credit Facility accrue interest at 8.50% per annum.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 39
Cash Flows
The following summarizes our cash flows for the six months ended June 30, 2025 and 2024:
|
|
Six Months Ended June 30, |
|
|||||
($ in thousands) |
|
2025 |
|
|
2024 |
|
||
Net cash used in operating activities |
|
$ |
(23,646 |
) |
|
$ |
(51,999 |
) |
Net cash used in investing activities |
|
|
(1,079 |
) |
|
|
(318 |
) |
Net cash (used in) provided by financing activities |
|
|
(22,155 |
) |
|
|
45,381 |
|
Net change in cash, cash equivalents and restricted cash |
|
$ |
(46,880 |
) |
|
$ |
(6,936 |
) |
Operating Activities
Net cash used in operating activities was $23.6 million and $52.0 million for the six months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025, net cash used in operating activities primarily resulted from the $26.0 million net loss during the period, which included $3.0 million of non-cash stock-based compensation expense and a $2.8 million non-cash real estate inventory valuation adjustment. Net cash used in operating activities during the six months ended June 30, 2025 was also due to a $3.7 million increase in accounts receivable, primarily due to a higher number of home sales pending receipt of cash from the title company as compared to December 31, 2024.
For the six months ended June 30, 2024, net cash used in operating activities primarily resulted from a $32.4 million increase in real estate inventory as a result of home acquisitions increasing at a higher rate compared to sales volumes. Net cash used in operating activities during the six months ended June 30, 2024 was also impacted by the $31.3 million net loss during the period, which included $7.1 million of non-cash stock-based compensation expense.
Investing Activities
Net cash used in investing activities was $1.1 million and $0.3 million during the six months ended June 30, 2025 and 2024, respectively. Net cash used in investing activities during each of the respective periods principally represents purchases of property and equipment.
Financing Activities
Net cash used in financing activities was $22.2 million and $45.4 million during the six months ended June 30, 2025 and 2024, respectively. Net cash used in financing activities during the six months ended June 30, 2025 primarily consisted of $332.9 million of repayments of credit facilities and other debt, which was partially offset by $310.9 million of borrowings from credit facilities and other debt. This net decrease in credit facility funding of $22.0 million was primarily attributable to reduced borrowing levels as a result of certain credit facility lenders advancing new loan funds at a lower rate during the six months ended June 30, 2025.
Net cash provided by financing activities during the six months ended June 30, 2024 primarily consisted of $495.9 million of borrowings from credit facilities and other debt, which was partially offset by $450.5 million of repayments of credit facilities and other debt. This net increase in credit facility funding of $45.4 million was directly related to the increase in financed real estate inventory during the period.
Material Cash Requirements and Other Obligations
Information regarding our material cash requirements and other obligations is provided in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Other than as described above under “Liquidity and Capital Resources”, there have been no material changes in our material cash requirements and other obligations since December 31, 2024.
Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with GAAP. In doing so, we make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the periods presented. Although we believe our estimates, judgments and assumptions are reasonable, actual results may differ from our estimates under different assumptions, judgments or conditions given the inherent uncertainty involved with such matters, which would impact our financial statements. We base our estimates on historical experience and various other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis.
There have been no material changes to the critical accounting estimates included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 40
Our significant accounting policies and methods used in the preparation of our condensed consolidated financial statements are described in Note 1. Nature of Operations and Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, of this Quarterly Report on Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements, refer to Note 1. Nature of Operations and Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, of this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There have been no material changes to our exposure to market risk since December 31, 2024. For a discussion of our exposure to market risk, refer to our market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Item 4. Controls and Procedures.
Limitations on Effectiveness of Disclosure Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of the disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and our principal financial officer have concluded that, as of June 30, 2025, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting, as identified in connection with the evaluation required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that occurred during the three months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 41
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in actions, claims, suits and other legal proceedings arising in the ordinary course of our business, including, without limitation, assertions by third parties relating to intellectual property infringement, breaches of contract or warranties or employment-related matters. We are not currently a party to any actions, claims, suits or other legal proceedings arising in the ordinary course of our business, the outcome of which, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, financial condition, results of operations and cash flows.
The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against us in a reporting period for amounts above management’s expectations, our financial condition, results of operations or cash flows for that reporting period could be adversely impacted, perhaps materially.
Refer to Note 15. Commitments and Contingencies in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, of this Quarterly Report on Form 10-Q for information regarding pending litigation that falls outside the scope of ordinary and routine litigation incidental to our business.
Item 1A. Risk Factors.
The Company’s risk factors are described in Part I, Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. There have been no material changes to the Company’s risk factors since the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Sales of Unregistered Equity Securities
None.
Purchase of Equity Securities
We did not repurchase shares of our Class A common stock during the three months ended June 30, 2025.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
(a) The Company’s board of directors (the “Board”) previously adopted, subject to stockholder approval, an Amendment (the “Amendment”) to the Offerpad Solutions Inc. 2021 Incentive Award Plan (the “Plan”), which was approved by the Company’s stockholders on July 30, 2025 at the Company’s special meeting of stockholders (the “2025 Special Meeting”). The Amendment, among other things, increases the aggregate number of shares of Class A common stock, that may be issued pursuant to awards under the Plan by
A more complete description of the terms of the Amendment can be found in “Proposal 1: Approval of an Amendment to the Company’s 2021 Incentive Award Plan to, Among Other Things, Increase the Number of Shares of the Company’s Class A Common Stock Available for Issuance Thereunder” in the Company’s definitive proxy statement filed with the SEC on June 27, 2025 (the “Proxy Statement”), which description is incorporated herein by reference.
The foregoing description of the Amendment to the Plan and the description incorporated by reference from the Proxy Statement are qualified in their entirety by reference to the text of such Amendment, which is filed with this Quarterly Report on Form 10-Q as Exhibit 10.5, and incorporated herein by reference.
At the Company’s 2025 Special Meeting, held on July 30, 2025, holders of Class A common stock were entitled to one vote per share held as of the close of business on June 20, 2025 (the “Record Date”). The following are the voting results for the proposals considered and voted upon at the 2025 Special Meeting, each of which were described in the Proxy Statement.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 42
Proposal 1 - Approval of an Amendment to the Company’s 2021 Incentive Award Plan to, Among Other Things, Increase the number of Shares of the Company’s Class A Common Stock Available for Issuance Thereunder (“Proposal 1”).
Votes FOR |
|
Votes AGAINST |
|
Votes ABSTAINED |
|
Broker Non-Votes |
13,453,287 |
|
1,407,169 |
|
117 |
|
0 |
Proposal 2 - Approval of an Adjournment of the Special Meeting, if Necessary, to Solicit Additional Proxies if There are not Sufficient Votes in Favor of Proposal 1 (“Proposal 2”).
Votes FOR |
|
Votes AGAINST |
|
Votes ABSTAINED |
|
Broker Non-Votes |
13,436,403 |
|
1,423,907 |
|
263 |
|
0 |
Based on the foregoing votes, the Company’s stockholders approved each of Proposal 1 and Proposal 2.
(b) None.
(c) During the three months ended June 30, 2025, no director or “officer” (as defined in Rule 16a-1(f) of the Exchange Act) of the Company
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 43
Item 6. Exhibits.
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Incorporated by Reference |
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Exhibit Number |
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Exhibit Description |
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Form |
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File No. |
|
Exhibit |
|
Filing Date |
3.1 |
|
Fourth Restated Certificate of Incorporation, dated June 13, 2023 |
|
8-K |
|
001-39641 |
|
3.1 |
|
6/13/23 |
3.2 |
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Amended and Restated Bylaws |
|
8-K |
|
001-39641 |
|
3.3 |
|
6/13/23 |
4.1 |
|
Form of Common Stock Purchase Warrant |
|
8-K |
|
001-39641 |
|
4.1 |
|
7/28/25 |
10.1 |
|
Ninth Amended and Restated Loan and Security Agreement, dated as of May 6, 2025, by and among Offerpad (SVPBORROWER1), LLC, LL Private Lending Fund, L.P., LL Private Lending Fund II, L.P., and LL Funds, LLC. |
|
8-K |
|
001-39641 |
|
10.1 |
|
5/12/25 |
10.2 |
|
Fourth Amended and Restated Mezzanine Loan and Security Agreement, dated as of May 6, 2025, by and among OP SPE Borrower Parent, LLC, OP SPE PHX1, LLC, OP SPE TPA1, LLC and LL Private Lending Fund II, L.P. |
|
8-K |
|
001-39641 |
|
10.2 |
|
5/12/25 |
10.3 |
|
Amendment Number Seven, dated June 10, 2025, to Third Amended and Restated Master Loan and Security Agreement, dated as of June 7, 2022, by and among Citibank, N.A., OP SPE Borrower Parent, LLC, OP SPE PHX1, LLC and OP SPE TPA1, LLC |
|
8-K |
|
001-39641 |
|
10.1 |
|
6/11/25 |
10.4 |
|
Form of Securities Purchase Agreement |
|
8-K |
|
001-39641 |
|
10.1 |
|
7/28/25 |
10.5 |
|
Amendment to the Offerpad Solutions Inc. 2021 Incentive Award Plan |
|
S-8 |
|
333-289102 |
|
99.2 |
|
7/30/25 |
31.1* |
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) |
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|
|
|
|
|
|
|
31.2* |
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) |
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|
|
|
|
|
|
|
32.1** |
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 |
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|
|
|
|
|
|
|
32.2** |
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 |
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|
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|
|
|
101* |
|
Inline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1. Financial Statements of this Quarterly Report on Form 10-Q |
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|
|
|
|
|
|
|
104* |
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Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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|
|
|
|
|
|
|
* Filed herewith.
** Furnished herewith.
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 44
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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OFFERPAD SOLUTIONS INC. |
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Date: August 4, 2025 |
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By: |
/s/ Brian Bair |
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|
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Brian Bair |
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|
|
Chief Executive Officer and Chairman of the Board (Principal Executive Officer) |
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|
Date: August 4, 2025 |
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By: |
/s/ Peter Knag |
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|
|
Peter Knag |
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|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
Offerpad Solutions Inc. | Second Quarter 2025 Form 10-Q | 45
Source:
