Expands to four new markets; grows home
sales 123% over 3Q 2020
Third Quarter 2021 Highlights – compared with
the prior-year third quarter:
- Revenue increased 190% to $540.3 million
- Gross profit increased 169% to $53.1 million
- Sold a record 1,673 homes, up from 749 homes
- Over 99% of inventory owned less than 180 days
Offerpad Solutions Inc. (“Offerpad”) (NYSE: OPAD), a leading
tech-enabled platform for buying and selling residential real
estate, today reported financial results for its third quarter
ended September 30, 2021.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20211110006327/en/
Offerpad is increasing its penetration in
existing markets, expanding into new markets and adding new
services to its full-service Solutions Center mix, providing more
customers with individualized solutions. We also added to our mix
of ancillary services in certain markets to include a customer
rewards program. (Graphic: Business Wire)
“We are proud that our first quarter as a public company has
highlighted key outcomes of our strategy: high customer
satisfaction, operational efficiency and strong revenue growth, all
supporting our path to sustained long-term profitability,” said
Brian Bair, Chairman and CEO of Offerpad. “The backbone of our
approach is combining our team’s deep local industry expertise with
technology, working to make the customer experience simple and
convenient. This approach has led to rigorous underwriting and a
strong track record of accurately estimating what our homes will
ultimately sell for. I’m very proud that from the time we launched
Offerpad in 2015 through the first half of this year, we’ve
achieved a less than 1% variance between our aggregate estimated
and actual sales prices.”
Offerpad is increasing its penetration in existing markets,
expanding into new markets and adding new services to its
full-service Solutions Center mix, providing more customers with
individualized solutions. We also added to our mix of ancillary
services in certain markets to include a customer rewards program.
Offerpad Bundle Rewards allows customers to receive multiple
discounts when both buying and selling a home with Offerpad and by
obtaining a home loan through Offerpad Home Loans. Since launching
in the third quarter, customers in 10 out of our 21 markets have
utilized this program. By bundling services, customers save money,
and we increase our engagement with those customers.
Highlights for this quarter include a customer satisfaction
rating of 94%1 year-to-date through September 30th and expansion
into the Midwest with four new market launches. By utilizing local
industry expertise, benefitting from integration of technology, and
executing a customer focused strategy, Offerpad’s platform is
designed to meet customer needs through a simpler way to buy and
sell homes in any real estate cycle.
_______________
1 Survey of approximately 2,500 customers
who sold their home to Offerpad.
Q3 Financial Highlights
Q3 2021
Q3 2020
Percentage Change
Homes acquired
2,753
769
258%
Homes sold
1,673
749
123%
Revenue
$540.3 million
$186.4 million
190%
Gross profit
$53.1 million
$19.8 million
169%
Net loss (reported)2
($15.3) million
($2.9) million
(420%)
Adjusted Net loss
($2.1) million
($2.9) million
28%
Adjusted EBITDA
$6.1 million
($0.8) million
N.A.
Contribution profit after interest per
home sold
$22,700
$15,400
48%
2 Includes $13.2 million non-cash charge
in 3Q 2021 to mark to market the Warrant Liability.
“With a record number of homes sales driving record revenue of
$540 million in the third quarter, Offerpad continues to
demonstrate a combination of strong, sustainable growth and
efficiency,” said Mike Burnett, CFO of Offerpad. “Bringing together
our leading technology with our residential real estate and home
renovation expertise has enabled us to continue to navigate through
some of the most challenging and rapidly changing market conditions
over the past 18 months. Our results this quarter have enabled us
to once again raise our outlook for the remainder of the year,
giving us positive momentum heading into 2022.”
Additional information regarding Offerpad’s third quarter 2021
financial results and management commentary can be found by
accessing the Company’s Quarterly Letter to Shareholders on the
Offerpad investor relations website.
Full Year 2021 Outlook
Based on the favorable results in the first three quarters of
the year, Offerpad is raising its full year outlook for 2021 as
follows:
New 2021 Outlook
Prior 2021 Outlook
Change
Homes Sold
5,800 - 6,000
5,612 - 6,000
Midpoint up ~100
Revenue
$1.85B - $1.90B
$1.7B - $1.85B
Midpoint up $100M
Gross Profit
$175M - $185M
$170M - $180M
Midpoint up $5M
Adjusted EBITDA
$0M - $10M
($15)M - ($6)M
Midpoint up $15.5M
Conference Call and Webcast Details
Offerpad Chairman and CEO Brian Bair and CFO Mike Burnett will
host a conference call and accompanying webcast on November 10,
2021, at 5 p.m. EST. The webcast can be accessed on Offerpad’s
Investor Relations website at
https://investor.offerpad.com/events-and-presentations.
Participants can register here to receive a personalized dial in
number and PIN. Access to a replay of the webcast will be available
from the same website address shortly after the live webcast
concludes.
About Offerpad
Offerpad’s mission is to provide your best way to buy and sell a
home. Period. We use technology-enabled solutions to remake the
home selling and buying experience by offering customers the
convenience, control and certainty to solve their housing needs. We
combine our fundamental real estate expertise with our data-driven
digital “Solutions Center” platform to give users a holistic,
customer-centric experience, enabling them to efficiently sell and
buy their homes online with streamlined access to other services
including mortgage, listing, and buyer representation services.
Visit Offerpad.com for more information.
Forward-Looking Statements
Certain statements in this press release may be considered
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements generally relate to future events or Offerpad’s future
financial or operating performance. For example, statements
regarding Offerpad’s financial outlook for full year 2021 and
anticipated growth in the industry in which Offerpad operates are
forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as “pro forma,”
“may,” “should,” “could,” “might,” “plan,” “possible,” “project,”
“strive,” “budget,” “forecast,” “expect,” “intend,” “will,”
“estimate,” “anticipate,” “believe,” “predict,” “potential” or
“continue,” or the negatives of these terms or variations of them
or similar terminology. Such forward-looking statements are subject
to risks, uncertainties, and other important factors that could
cause actual results to differ materially from those expressed or
implied by such forward-looking statements. Factors that may impact
such forward-looking statements include, but are not limited to,
Offerpad’s ability to respond to general economic conditions; the
health of the U.S. residential real estate industry; Offerpad’s
ability to grow market share in its existing markets or any new
markets it may enter; the impact of the COVID-19 pandemic;
Offerpad’s ability to manage its growth effectively; Offerpad’s
ability to accurately value and manage inventory, and to maintain
an adequate and desirable supply of inventory; Offerpad’s ability
to successfully launch new product and service offerings, and to
manage, develop and refine its technology platform; Offerpad’s
ability to maintain and enhance its products and brand, and to
attract customers; Offerpad’s ability to achieve and maintain
profitability in the future; and the success of strategic
relationships with third parties. These and other important factors
discussed under the caption "Risk Factors" in our Quarterly Report
on Form 10-Q for the three months ended September 30, 2021 to be
filed with the Securities and Exchange Commission on or about
November 10, 2021, and our other reports filed with the Securities
and Exchange Commission could cause actual results to differ
materially from those indicated by the forward-looking statements
made in this press release. These forward-looking statements are
based upon estimates and assumptions that, while considered
reasonable by Offerpad and its management, are inherently
uncertain. Nothing in this press release should be regarded as a
representation by any person that the forward-looking statements
set forth herein will be achieved or that any of the contemplated
results of such forward-looking statements will be achieved. You
should not place undue reliance on forward-looking statements,
which speak only as of the date they are made. Offerpad undertakes
no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.
OFFERPAD SOLUTIONS
INC.
Condensed Consolidated
Statements of Operations
(in thousands, except per share
data, unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Revenue
$
540,287
$
186,365
$
1,202,906
$
841,027
Cost of revenue
487,165
166,600
1,065,383
778,503
Gross profit
53,122
19,765
137,523
62,524
Operating expenses:
Sales, marketing and operating
38,727
16,072
95,398
59,048
General and administrative
8,160
3,981
18,031
12,204
Technology and development
2,777
1,633
7,663
5,454
Total operating expenses
49,664
21,686
121,092
76,706
Income (loss) from operations
3,458
(1,921
)
16,431
(14,182
)
Other income (expense):
Change in fair value of warrant
liabilities
(13,185
)
—
(13,185
)
—
Interest expense
(5,495
)
(1,312
)
(9,670
)
(8,404
)
Other income, net
—
289
248
787
Total other expense
(18,680
)
(1,023
)
(22,607
)
(7,617
)
Loss before income taxes
(15,222
)
(2,944
)
(6,176
)
(21,799
)
Income tax expense
(81
)
—
(170
)
—
Net loss
$
(15,303
)
$
(2,944
)
$
(6,346
)
$
(21,799
)
Net loss per share, basic
$
(0.13
)
$
(0.05
)
$
(0.08
)
$
(0.38
)
Net loss per share, diluted
$
(0.13
)
$
(0.05
)
$
(0.08
)
$
(0.38
)
Weighted average common shares
outstanding, basic
115,985
57,865
78,191
57,865
Weighted average common shares
outstanding, diluted
115,985
57,865
78,191
57,865
OFFERPAD SOLUTIONS
INC.
Condensed Consolidated Balance
Sheets
(in thousands, except par value
per share, unaudited)
September 30,
December 31,
2021
2020
ASSETS
Current assets:
Cash and cash equivalents
$
116,634
$
43,938
Restricted cash
20,024
6,804
Accounts receivable
10,038
2,309
Inventory
902,062
171,359
Prepaid expenses and other current
assets
10,453
2,880
Total current assets
1,059,211
227,290
Property and equipment, net
9,556
8,231
Other non-current assets
193
352
TOTAL ASSETS
(1)
$
1,068,960
$
235,873
LIABILITIES, TEMPORARY EQUITY, AND
STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable
$
6,126
$
2,149
Accrued liabilities
28,354
11,181
Secured credit facilities and notes
payable
509,833
50,143
Secured credit facilities and notes
payable, net - related party
241,208
126,825
Total current liabilities
785,521
190,298
Secured credit facilities and notes
payable, net of current portion
—
4,710
Warrant liabilities
39,711
—
Total liabilities
(2)
825,232
195,008
Commitments and contingencies
Temporary equity:
Series A convertible preferred stock, zero
and 21,011 shares authorized, respectively; zero and 20,907 shares
issued and outstanding, respectively; liquidation preference of $0
and $15,099, respectively
—
14,921
Series A-1 convertible preferred stock,
zero and 10,905 shares authorized, issued and outstanding,
respectively; liquidation preference of $0 and $7,500,
respectively
—
7,470
Series A-2 convertible preferred stock,
zero and 8,322 shares authorized, issued and outstanding,
respectively; liquidation preference of $0 and $7,500,
respectively
—
7,463
Series B convertible preferred stock, zero
and 58,390 shares authorized, issued and outstanding, respectively;
liquidation preference of $0 and $50,000, respectively
—
49,845
Series C convertible preferred stock, zero
and 56,716 shares authorized, respectively; zero and 39,985 shares
issued and outstanding, respectively; liquidation preference of $0
and $105,750, respectively
—
104,424
Total temporary equity
—
184,123
Stockholders’ equity (deficit):
Class A common stock, $0.0001 and $0.00001
par value, respectively; 2,000,000 and 256,694 shares authorized,
respectively; 223,529 and 57,865 shares issued and outstanding,
respectively
22
—
Class B common stock, $0.0001 and zero par
value, respectively; 20,000 and zero shares authorized,
respectively; 14,816 and zero shares issued and outstanding,
respectively
2
—
Additional paid in capital
388,566
5,908
Accumulated deficit
(144,862
)
(138,516
)
Treasury stock
—
(10,650
)
Total stockholders’ equity
(deficit)
243,728
(143,258
)
TOTAL LIABILITIES, TEMPORARY EQUITY,
AND STOCKHOLDERS’ EQUITY (DEFICIT)
$
1,068,960
$
235,873
_______________
(1) Our consolidated assets as of
September 30, 2021 and December 31, 2020 include the following
assets of certain variable interest entities (“VIEs”) that can only
be used to settle the liabilities of those VIEs: Restricted cash,
$20,024 and $6,804; Accounts receivable, $8,345 and $1,638;
Inventory, $900,283 and $171,212; Prepaid expenses and other
current assets, $2,879 and $1,036; Property and equipment, net,
$4,377 and $2,772; Total assets of $935,908 and $183,462,
respectively.
(2) Our consolidated liabilities as of
September 30, 2021 and December 31, 2020 include the following
liabilities for which the VIE creditors do not have recourse to
Offerpad: Accounts payable, $4,561 and $716; Accrued liabilities,
$2,442 and $575; Current portion of secured credit facilities and
notes payable, net, $751,041 and $173,539; Noncurrent portion of
secured credit facilities and notes payable, net, $0 and $653;
Total liabilities, $758,044 and $175,483, respectively.
OFFERPAD SOLUTIONS
INC.
Condensed Consolidated
Statements of Cash Flows
(in thousands, unaudited)
Nine Months Ended
September 30,
2021
2020
Cash flows from operating
activities:
Net loss
$
(6,346
)
$
(21,799
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation
433
308
Gain on sale of equipment
(246
)
—
Amortization of debt financing costs
454
304
Impairment of inventory
1,342
2,971
Stock-based compensation
2,316
875
Change in fair value of warrant
liabilities
13,185
—
Changes in operating assets and
liabilities:
Accounts receivable
(7,717
)
(1,472
)
Inventory
(721,979
)
214,080
Prepaid expenses and other assets
(7,174
)
(555
)
Accounts payable
3,857
439
Accrued liabilities
17,063
685
Net cash (used in) provided by
operating activities
(704,812
)
195,836
Cash flows from investing
activities:
Purchases of property and equipment
(13,609
)
(67
)
Proceeds from sales of property and
equipment
2,032
—
Net cash used in investing
activities
(11,577
)
(67
)
Cash flows from financing
activities:
Proceeds from Business Combination
284,011
—
Issuance cost of common stock
(51,249
)
—
Borrowings from credit facilities and
notes payable
1,702,702
556,627
Repayments of credit facilities and notes
payable
(1,130,563
)
(772,021
)
Payment of debt financing costs
(3,229
)
(598
)
Proceeds from issuance of Class C
preferred stock, net
—
29,823
Proceeds from exercise of stock
options
633
—
Net cash provided by (used in)
financing activities
802,305
(186,169
)
Net change in cash, cash equivalents
and restricted cash
85,916
9,600
Cash, cash equivalents and restricted
cash, beginning of period
50,742
29,883
Cash, cash equivalents and restricted
cash, end of period
$
136,658
$
39,483
Reconciliation of cash, cash
equivalents and restricted cash to the condensed consolidated
balance sheet:
Cash and cash equivalents
$
116,634
$
35,948
Restricted cash
20,024
3,535
Total cash, cash equivalents and
restricted cash
$
136,658
$
39,483
Supplemental disclosure of cash flow
information:
Cash payments for interest
$
9,630
$
11,890
Supplemental disclosure of non-cash
investing and financing activities:
Transfer of property and equipment, net to
inventory
$
10,065
$
—
Acquisition of warrant liabilities
$
26,525
$
—
Conversion of preferred stock to common
stock
$
184,123
$
—
Conversion of treasury stock
$
10,650
$
—
Non-GAAP Financial Measures
In addition to Offerpad’s results of operations above,
Offerpad’s management utilizes certain financial measures that are
not required by, or presented in accordance with, U.S. generally
accepted accounting principles (“GAAP”). These measures have
limitations as analytical tools when assessing Offerpad’s operating
performance and should not be considered in isolation or as a
substitute for GAAP measures, including gross profit and net
income.
Offerpad may calculate or present its non-GAAP financial
measures differently than other companies who report measures with
similar titles and, as a result, the non-GAAP financial measures
Offerpad reports may not be comparable with those of companies in
its industry or in other industries. Offerpad has not provided a
quantitative reconciliation of forecasted Adjusted EBITDA to
forecasted net income (loss) within this press release because
Offerpad is unable to calculate certain reconciling items without
making unreasonable efforts. These items, which include, but are
not limited to, stock-based compensation with respect to future
grants and forfeitures, could materially affect the computation of
forward-looking net income (loss), are inherently uncertain and
depend on various factors, some of which are outside of Offerpad’s
control.
Adjusted gross profit, contribution profit, and contribution
profit after interest (and related margins)
Offerpad believes that adjusted gross profit, contribution
profit, and contribution profit after interest are useful financial
measures for investors as they are used by management in evaluating
unit level economics and operating performance across its markets.
Each of these measures is intended to present the economics related
to homes sold during a given period. Offerpad does so by including
revenue generated from homes sold (and ancillary services) in the
period and only the expenses that are directly attributable to such
home sales, even if such expenses were recognized in prior periods,
and excluding expenses related to homes that remain in inventory as
of the end of the period presented. Contribution profit provides
investors a measure to assess Offerpad’s ability to generate
returns on homes sold during a reporting period after considering
home acquisition costs, renovation and repair costs, and adjusting
for holding costs and selling costs. Contribution profit after
interest further impacts gross profit by including interest costs
(including senior and mezzanine secured credit facilities)
attributable to homes sold during a reporting period. Offerpad
believes these measures facilitate meaningful period over period
comparisons and illustrate 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 Offerpad’s operating
performance and have limitations as analytical tools. For example,
these measures include costs that were recorded in prior periods
under GAAP and exclude, in connection with homes held in inventory
at the end of the period, costs required to be recorded under GAAP
in the same period. Accordingly, these measures should not be
considered in isolation or as a substitute for analysis of
Offerpad’s results as reported under GAAP. Offerpad includes a
reconciliation of these measures to the most directly comparable
GAAP financial measure, which is gross profit.
Adjusted gross profit / margin
Offerpad calculates adjusted gross profit as gross profit under
GAAP adjusted for (1) net inventory impairment plus (2) interest
expense associated with homes sold in the presented period and
recorded in cost of revenue. Net inventory impairment is calculated
by adding back the inventory impairment charges recorded during the
period on homes that remain in inventory at period end and
subtracting the inventory impairment charges recorded in prior
periods on homes sold in the current period. Offerpad defines
adjusted gross margin as adjusted gross profit as a percentage of
revenue. Offerpad views this metric as an important measure of
business performance, as it captures gross margin performance
isolated to homes sold in a given period and provides comparability
across reporting periods. Adjusted gross profit helps management
assess performance across the key phases of processing a home
(acquisitions, renovations, and resale) for a specific resale
cohort.
Contribution profit / margin
Offerpad calculates contribution profit as adjusted gross
profit, minus (1) direct selling costs incurred on homes sold
during the presented period, minus (2) holding costs incurred in
the current period on homes sold during the period recorded in
sales, marketing, and operating, minus (3) holding costs incurred
in prior periods on homes sold in the current period recorded in
sales, marketing, and operating, plus (4) other income which
historically is primarily comprised of net income to us from the
investment related to Offerpad’s Home Loans operations. The
composition of Offerpad’s holding costs is described in the
footnotes to the reconciliation table below. Offerpad defines
contribution margin as contribution profit as a percentage of
revenue.
Offerpad views this metric as an important measure of business
performance as it captures the unit level performance isolated to
homes sold in a given period and provides comparability across
reporting periods. Contribution profit helps management assess
inflows and outflow directly associated with a specific resale
cohort.
Contribution profit / margin after interest
Offerpad defines contribution profit after interest as
contribution profit, minus (1) interest expense associated with
homes sold in the presented period and recorded in cost of revenue,
minus (2) interest expense associated with homes sold in the
presented period, recorded in costs of sales, and previously
excluded from adjusted gross profit, and minus (3) interest expense
under Offerpad’s senior and mezzanine secured credit facilities
incurred on homes sold during the period. This includes interest
expense recorded in prior periods in which the sale occurred.
Offerpad’s senior and mezzanine secured credit facilities are
secured by its homes in inventory and drawdowns are made on a
per-home basis at the time of purchase and are required to be
repaid at the time the homes are sold. Offerpad defines
contribution margin after interest as contribution profit after
interest as a percentage of revenue.
Offerpad views this metric as an important measure of business
performance. Contribution profit after interest helps management
assess contribution margin performance, per above, when fully
burdened with costs of financing.
The following table presents a reconciliation of Offerpad’s
adjusted gross profit, contribution profit and contribution profit
after interest to its gross profit, which is the most directly
comparable GAAP measure, for the periods indicated:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands, except percentages and
homes sold, unaudited)
2021
2020
2021
2020
Gross profit (GAAP)
$
53,122
$
19,765
$
137,523
$
62,524
Gross margin
9.8
%
10.6
%
11.4
%
7.4
%
Homes sold
1,673
749
3,950
3,432
Gross profit per home sold
31.8
26.4
34.8
18.2
Adjustments:
Inventory impairment - current period
(1)
676
28
713
61
Inventory impairment - prior period
(2)
(152
)
(398
)
(142
)
(842
)
Interest expense capitalized (3)
1,410
426
2,783
2,565
Adjusted gross profit
55,056
19,821
140,877
64,308
Adjusted gross margin
10.2
%
10.6
%
11.7
%
7.6
%
Adjustments:
Direct selling costs (4)
(11,350
)
(5,599
)
(28,172
)
(24,897
)
Holding costs on sales - current period
(5)(6)
(910
)
(489
)
(2,365
)
(3,827
)
Holding costs on sales - prior period
(5)(7)
(295
)
(424
)
(214
)
(1,392
)
Other income (8)
—
289
248
787
Contribution profit
42,501
13,598
110,374
34,979
Contribution margin
7.9
%
7.3
%
9.2
%
4.2
%
Homes sold
1,673
749
3,950
3,432
Contribution profit per home
sold
25.4
18.2
27.9
10.2
Adjustments:
Interest expense capitalized (3)
(1,410
)
(426
)
(2,783
)
(2,565
)
Interest expense on homes sold - current
period (9)
(2,381
)
(742
)
(5,904
)
(7,250
)
Interest expense on homes sold - prior
period (10)
(697
)
(899
)
(468
)
(4,167
)
Contribution profit after
interest
38,013
11,531
101,219
20,997
Contribution margin after interest
7.0
%
6.2
%
8.4
%
2.5
%
Homes sold
1,673
749
3,950
3,432
Contribution profit after interest per
home sold
22.7
15.4
25.6
6.1
(1)
Inventory impairment – current period is
the inventory valuation adjustments recorded during the period
presented associated with homes that remain in inventory at period
end
(2)
Inventory impairment – prior period is the
inventory valuation adjustments recorded in prior periods
associated with homes that sold in the period presented.
(3)
Interest expense capitalized represents
all interest related costs, including senior and mezzanine secured
credit facilities, incurred on homes sold in the period presented
that were capitalized and expensed in cost of sales at the time of
sale
(4)
Direct selling costs represents selling
costs incurred related to homes sold in the period presented. This
primarily includes broker commissions and title and escrow closing
fees.
(5)
Holding costs primarily include property
taxes, insurance, utilities, homeowners association dues, cleaning
and maintenance costs.
(6)
Represents holding costs incurred on homes
sold in the period presented and expensed to Sales, marketing, and
operating on the Condensed Consolidated Statements of
Operations
(7)
Represents holding costs incurred in prior
periods on homes sold in the period presented and expensed to
Sales, marketing, and operating on the Condensed Consolidated
Statements of Operations.
(8)
Other income in 2020 primarily consists of
net income to Offerpad from our historical investment in Offerpad
Home Loans. In 2021, other income was earned from the sale of
certain fixed assets.
(9)
Represents both senior and mezzanine
interest expense incurred on homes sold in the period presented and
expensed to interest expense on the Condensed Consolidated
Statements of Operations.
(10)
Represents both senior and mezzanine
secured credit facilities interest expense incurred in prior
periods on homes sold in the period presented and expensed to
Interest expense on the Condensed Consolidated Statements of
Operations.
Adjusted Net (Loss) Income and Adjusted EBITDA
We also present Adjusted Net (Loss) Income 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 (Loss) Income as GAAP net income
(loss) adjusted for the change in fair value of warrant
liabilities. We define Adjusted Net (Loss) Income Margin as
Adjusted Net (Loss) Income as a percentage of revenue.
We calculate Adjusted EBITDA as Adjusted Net (Loss) Income
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 (Loss) Income and Adjusted EBITDA are supplemental
to our operating performance measures calculated in accordance with
GAAP and have important limitations. For example, Adjusted Net
(Loss) Income 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 (Loss) Income and Adjusted EBITDA to our GAAP net income
(loss), which is the most directly comparable GAAP measure, for the
periods indicated:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands, except percentages,
unaudited)
2021
2020
2021
2020
Net loss (GAAP)
$
(15,303
)
$
(2,944
)
$
(6,346
)
$
(21,799
)
Change in fair value of warrant
liabilities
13,185
—
13,185
—
Adjusted net (loss) income
(2,118
)
(2,944
)
6,839
(21,799
)
Adjusted net (loss) income margin
(0.4
)%
(1.6
)%
0.6
%
(2.6
)%
Adjustments:
Interest expense
5,495
1,312
9,670
8,404
Amortization of capitalized interest
(1)
1,410
426
2,783
2,565
Income tax expense
81
—
170
—
Depreciation and amortization
156
104
433
308
Amortization of stock-based
compensation
1,053
337
2,316
875
Adjusted EBITDA
6,077
(765
)
22,211
(9,647
)
Adjusted EBITDA margin
1.1
%
(0.4
)%
1.8
%
(1.1
)%
(1)
Amortization of capitalized interest
represents all interest related costs, including senior and
mezzanine interest related costs, incurred on homes sold in the
period presented that were capitalized and expensed in cost of
sales at the time of sale.
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version on businesswire.com: https://www.businesswire.com/news/home/20211110006327/en/
Investors Stefanie Layton Investors@offerpad.com
602-706-4905
Media Laura Collins 480-220-0021 David Stephan 951-970-6336
Press@Offerpad.com
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