Exceeded Fourth Quarter and Full-Year
Expectations
Fourth-Quarter 2021 Financial Highlights –
compared with the prior-year fourth quarter:
- Revenue increased 289% to $867.5 million
- Gross profit increased 178% to $70.3 million
- Earnings per share increased to $0.05 on Net Income of $12.8
million; includes a $0.06 per share benefit from the mark to market
of warrants
- Adjusted EBITDA increased 420% to $7.7 million
Offerpad Solutions Inc. (“Offerpad,” the “Company,” “we” or
“our”) (NYSE: OPAD), a leading tech-enabled platform for buying and
selling residential real estate, today released financial results
for the three months ended and year ended December 31, 2021.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220223005609/en/
Brian Bair also noted that “Offerpad’s
agility enables a dynamic model that adjusts to changes inherent in
the real estate industry. Our leadership team understands the
market and has decades of experience, creating confidence in the
sustainability of our long-term growth and a path to consistent
profitability.” (Graphic: Business Wire)
“We finished the quarter with record results capping off a
remarkable year,” said Brian Bair, Chairman and CEO of Offerpad.
“We exceeded our growth targets and financial expectations as
demand for our services continues to grow. Our team successfully
delivered a personal and customized experience to thousands of
customers in 2021, earning us a 93%1 customer satisfaction rating.
Customers recognize the benefits Offerpad brings to their real
estate experience, and our exceptional results highlight the value
of our customer-centric approach.”
Operational Highlights for 2021 include:
- Doubling the team to over 1,000 employees, highlighting
Offerpad as a desirable workplace where innovation and creativity
are redefining residential real estate;
- Setting a new record by completing over 8,000 home renovations,
increasing the supply of upgraded and move-in ready homes;
- Increasing acquisitions by 156%; and
- Maintaining an average time from acquisition to sale below its
100-day target.
______________________
1 Based on over 3,600 customer surveys conducted in 2021.
Q4 2021 Financial Highlights
Q4 2021
Q4 2020
Percentage Change
Homes acquired
3,049
1,032
195%
Homes sold
2,423
849
185%
Revenue
$867.5M
$223.2M
289%
Gross profit
$70.3M
$25.3M
178%
Net income/(loss) (reported)1
$12.8M
($1.3M)
N.A.
Adjusted Net loss
($2.8M)
($1.3M)
(115%)
Adjusted EBITDA
$7.7M
$1.5M
420%
Contribution profit after interest per
home sold
$18,400
$20,700
(11%)
1 Includes $15.6 million non-cash credit
in Q4 2021 to mark to market the Warrant Liability.
Full Year 2021 Financial Highlights
2021
2020
Percentage Change
Homes acquired
9,023
3,519
156%
Homes sold
6,373
4,281
49%
Revenue
$2.07B
$1.06B
95%
Gross profit
$207.8M
$87.8M
137%
Net income/(loss) (reported)1
$6.5M
($23.1M)
N.A.
Adjusted Net income/(loss)
$4.0M
($23.1M)
N.A.
Adjusted EBITDA
$29.9M
($8.2M)
N.A.
Contribution profit after interest per
home sold
$22,900
$9,000
154%
1 Includes $2.5 million non-cash credit in
2021 to mark to market the Warrant Liability.
“Our rigorous, analytically driven underwriting practices and
deep industry expertise again demonstrated our ability to provide
attractive offers to homeowners in a fiscally responsible manner,”
said Mike Burnett, CFO of Offerpad. “While nearly doubling our
revenue in 2021 to over $2 billion and generating positive net
income, we demonstrated our ability to effectively adapt and
execute this business model even in a rapidly changing and
unpredictable business climate.”
Brian Bair noted that “Offerpad’s agility enables a dynamic
model that adjusts to changes inherent in the real estate industry.
Our leadership team understands the market and has decades of
experience, creating confidence in the sustainability of our
long-term growth and a path to consistent profitability.”
Additional information regarding Offerpad’s fourth quarter and
full-year 2021 financial results and management commentary can be
found by accessing the Company’s Quarterly Letter to Shareholders
on the Offerpad investor relations website.
First Quarter 2022 Outlook
“We’re excited to build on our positive momentum in 2022 with
the continuing strength of the residential real estate market,
increasing consumer adoption, and our industry leading operational
execution,” said Bair. Offerpad is providing its first quarter
outlook for 2022 as follows:
Q1 2022 Outlook
Homes Sold
3,000 – 3,150
Revenue
$1.1B – $1.15B
Adjusted EBITDA1
$20M – $26M
1 See Non-GAAP financial measures below
for an explanation of why a reconciliation of this guidance cannot
be provided.
Conference Call and Webcast Details
Offerpad Chairman and CEO Brian Bair and CFO Mike Burnett will
host a conference call and accompanying webcast on Feb. 23, 2022,
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.
#OPAD_IR
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 first quarter 2022,
expectations regarding profitability 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
Offerpad’s Quarterly Report on Form 10-Q for the three months ended
September 30, 2021 filed with the Securities and Exchange
Commission on November 10, 2021, and Offerpad’s other reports filed
with the Securities and Exchange Commission could cause actual
results to differ materially from those indicated by the
forward-looking statements made in this press release. These
forward-looking statements are based upon estimates and assumptions
that, while considered reasonable by Offerpad and its management,
are inherently uncertain. Nothing in this press release should be
regarded as a representation by any person that the forward-looking
statements set forth herein will be achieved or that any of the
contemplated results of such forward-looking statements will be
achieved. You should not place undue reliance on forward-looking
statements, which speak only as of the date they are made. Offerpad
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be required under applicable securities
laws.
OFFERPAD SOLUTIONS
INC.
Consolidated Statements of
Operations
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
(in thousands, except per share data)
2021
2020
2021
2020
Revenue
$
867,540
$
223,230
$
2,070,446
$
1,064,257
Cost of revenue
797,248
197,975
1,862,631
976,478
Gross profit
70,292
25,255
207,815
87,779
Operating expenses:
Sales, marketing and operating
51,474
17,738
146,872
76,786
General and administrative
12,286
5,277
30,317
17,481
Technology and development
3,197
1,816
10,860
7,270
Total operating expenses
66,957
24,831
188,049
101,537
Income (loss) from operations
3,335
424
19,766
(13,758
)
Other income (expense):
Change in fair value of warrant
liabilities
15,649
—
2,464
—
Interest expense
(6,178
)
(1,627
)
(15,848
)
(10,031
)
Other income, net
—
47
248
834
Total other income (expense)
9,471
(1,580
)
(13,136
)
(9,197
)
Income (loss) before income
taxes
12,806
(1,156
)
6,630
(22,955
)
Income tax expense
—
(163
)
(170
)
(163
)
Net income (loss)
$
12,806
$
(1,319
)
$
6,460
$
(23,118
)
Net income (loss) per share, basic
$
0.05
$
(0.02
)
$
0.05
$
(0.40
)
Net income (loss) per share, diluted
$
0.05
$
(0.02
)
$
0.05
$
(0.40
)
Weighted average common shares
outstanding, basic
238,395
57,865
118,571
57,865
Weighted average common shares
outstanding, diluted
261,897
57,865
143,220
57,865
OFFERPAD SOLUTIONS
INC.
Consolidated Balance
Sheets
(Unaudited)
As of December 31,
(in thousands, except par value per
share)
2021
2020
ASSETS
Current assets:
Cash and cash equivalents
$
169,817
$
43,938
Restricted cash
24,616
6,804
Accounts receivable
6,165
2,309
Inventory
1,132,571
171,359
Prepaid expenses and other current
assets
9,808
2,880
Total current assets
1,342,977
227,290
Property and equipment, net
5,146
8,231
Other non-current assets
4,959
352
TOTAL ASSETS
$
1,353,082
$
235,873
LIABILITIES, TEMPORARY EQUITY, AND
STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable
$
6,399
$
2,149
Accrued and other current liabilities
35,027
11,181
Secured credit facilities and notes
payable, net
861,762
50,143
Secured credit facilities and notes
payable - related party
164,434
126,825
Total current liabilities
1,067,622
190,298
Secured credit facilities and notes
payable, net of current portion
—
4,710
Warrant liabilities
24,061
—
Other long-term liabilities
3,830
—
Total liabilities
1,095,513
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; 224,154 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
389,601
5,908
Accumulated deficit
(132,056
)
(138,516
)
Treasury stock
—
(10,650
)
Total stockholders’ equity
(deficit)
257,569
(143,258
)
TOTAL LIABILITIES, TEMPORARY EQUITY,
AND STOCKHOLDERS’ EQUITY (DEFICIT)
$
1,353,082
$
235,873
OFFERPAD SOLUTIONS
INC.
Consolidated Statements of
Cash Flows
(Unaudited)
Year Ended December
31,
($ in thousands)
2021
2020
Cash flows from operating
activities:
Net income (loss)
$
6,460
$
(23,118
)
Adjustments to reconcile net income (loss)
to net cash (used in) provided by operating activities:
Depreciation
523
434
Gain on sale of property and equipment
(246
)
—
Amortization of debt financing costs
916
262
Impairment of inventory
2,843
3,170
Stock-based compensation
3,079
1,363
Change in fair value of warrant
liabilities
(2,464
)
—
Changes in operating assets and
liabilities:
Accounts receivable
(3,845
)
937
Inventory
(949,591
)
169,079
Prepaid expenses and other assets
(5,288
)
115
Accounts payable
4,130
841
Accrued and other liabilities
21,563
1,781
Net cash (used in) provided by
operating activities
(921,920
)
154,864
Cash flows from investing
activities:
Purchases of property and equipment
(13,687
)
(2,858
)
Proceeds from sales of property and
equipment
2,032
—
Net cash used in investing
activities
(11,655
)
(2,858
)
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
2,764,071
799,997
Repayments of credit facilities and notes
payable
(1,912,837
)
(960,510
)
Payment of debt financing costs
(7,632
)
(457
)
Proceeds from exercise of stock
options
902
—
Proceeds from issuance of Class C
preferred stock, net
—
29,823
Repurchase of common stock
—
—
Net cash provided by (used in)
financing activities
1,077,266
(131,147
)
Net change in cash, cash equivalents
and restricted cash
143,691
20,859
Cash, cash equivalents and restricted
cash, beginning of period
50,742
29,883
Cash, cash equivalents and restricted
cash, end of period
$
194,433
$
50,742
Reconciliation of cash, cash
equivalents and restricted cash to the consolidated balance
sheet:
Cash and cash equivalents
$
169,817
$
43,938
Restricted cash
24,616
6,804
Total cash, cash equivalents and
restricted cash
$
194,433
$
50,742
Supplemental disclosure of cash flow
information:
Cash payments for interest
$
21,875
$
14,048
Supplemental disclosure of non-cash
investing and financing activities:
Transfer of property and equipment, net to
inventory
$
14,464
$
—
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
reports certain financial measures that are not required by, or
presented in accordance with, U.S. generally accepted accounting
principles (“GAAP”). These measures have limitations as analytical
tools when assessing Offerpad’s operating performance and should
not be considered in isolation or as a substitute for GAAP
measures, including gross profit and net income.
Offerpad may calculate or present their non-GAAP financial
measures differently than other companies who report measures with
similar titles and, as a result, the non-GAAP financial measures
Offerpad reports may not be comparable with those of companies in
Offerpad’s industry or in other industries. Offerpad has not
provided a quantitative reconciliation of forecasted Adjusted
EBITDA to forecasted net income (loss) within this press release
because Offerpad is unable to calculate certain reconciling items
without making unreasonable efforts. These items, which include,
but are not limited to, stock-based compensation with respect to
future grants and forfeitures, could materially affect the
computation of forward-looking net income (loss), are inherently
uncertain and depend on various factors, some of which are outside
of Offerpad’s control.
Adjusted Gross Profit, Contribution Profit, and Contribution
Profit After Interest (and related margins)
To provide investors with additional information regarding
Offerpad’s margins, Offerpad has included Adjusted Gross Profit,
Contribution Profit, and Contribution Profit After Interest (and
related margins), which are non-GAAP financial measures. Offerpad
believes that Adjusted Gross Profit, Contribution Profit, and
Contribution Profit After Interest are useful financial measures
for investors as they are used by management in evaluating unit
level economics and operating performance across Offerpad’s
markets. Each of these measures is intended to present the
economics related to homes sold during a given period. Offerpad
does so by including revenue generated from homes sold (and
ancillary services) in the period and only the expenses that are
directly attributable to such home sales, even if such expenses
were recognized in prior periods, and excluding expenses related to
homes that remain in inventory as of the end of the period
presented. Contribution Profit provides investors a measure to
assess Offerpad’s ability to generate returns on homes sold during
a reporting period after considering home acquisition costs,
renovation and repair costs, and adjusting for holding costs and
selling costs. Contribution Profit After Interest further impacts
gross profit by including interest costs (including senior and
mezzanine secured credit facilities) attributable to homes sold
during a reporting period. Offerpad believes these measures
facilitate meaningful period over period comparisons and illustrate
Offerpad’s ability to generate returns on assets sold after
considering the costs directly related to the assets sold in a
presented period.
Adjusted Gross Profit, Contribution Profit and Contribution
Profit After Interest (and related margins) are supplemental
measures of Offerpad’s operating performance and have limitations
as analytical tools. For example, these measures include costs that
were recorded in prior periods under GAAP and exclude, in
connection with homes held in 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 Home Loans “OPHL” 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 their 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 Offerpad’s gross profit, which is the most
directly comparable GAAP measure, for the periods indicated:
Three Months Ended
December 31,
Year Ended
December 31,
(in thousands, except percentages and homes sold, unaudited)
2021
2020
2021
2020
Gross profit (GAAP)
$
70,292
$
25,254
$
207,815
$
87,779
Gross margin
8.1
%
11.3
%
10.0
%
8.2
%
Homes sold
2,423
849
6,373
4,281
Gross profit per home sold
$
29.0
$
29.7
$
32.6
$
20.5
Adjustments: Inventory impairment - current period (1)
985
144
1,205
160
Inventory impairment - prior period (2)
(511
)
(46
)
(160
)
(842
)
Interest expense capitalized (3)
3,511
396
6,294
2,962
Adjusted gross profit
$
74,277
$
25,748
$
215,154
$
90,059
Adjusted gross margin
8.6
%
11.5
%
10.4
%
8.5
%
Adjustments: Direct selling costs (4)
(19,894
)
(5,981
)
(48,066
)
(30,878
)
Holding costs on sales - current period (5)(6)
(1,339
)
(434
)
(4,262
)
(4,419
)
Holding costs on sales - prior period (5)(7)
(558
)
(158
)
(214
)
(1,393
)
Other income (8)
0
47
248
834
Contribution profit
$
52,486
$
19,221
$
162,860
$
54,203
Contribution margin
6.0
%
8.6
%
7.9
%
5.1
%
Homes sold
2,423
849
6,373
4,281
Contribution profit per home sold
$
21.7
$
22.6
$
25.6
$
12.7
Adjustments: Interest expense capitalized (3)
(3,511
)
(396
)
(6,294
)
(2,962
)
Interest expense on homes sold - current period (9)
(2,575
)
(916
)
(10,228
)
(8,500
)
Interest expense on homes sold - prior period (10)
(1,749
)
(336
)
(468
)
(4,169
)
Contribution profit after interest
$
44,651
$
17,574
$
145,870
$
38,572
Contribution margin after interest
5.1
%
7.9
%
7.0
%
3.6
%
Homes sold
2,423
849
6,373
4,281
Contribution profit after interest per home sold
$
18.4
$
20.7
$
22.9
$
9.0
(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 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 Consolidated Statements of
Operations.
(8)
Other income in 2021 was earned from the
sale of certain fixed assets. In 2020, other income primarily
consists of net income to Offerpad from Offerpad’s historical
investment in OPHL.
(9)
Represents both senior and mezzanine
interest expense incurred on homes sold in the period presented and
expensed to Interest expense on the 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 Consolidated Statements of Operations.
Adjusted Net Income (Loss) and Adjusted EBITDA
Offerpad also presents Adjusted Net Income (Loss) and Adjusted
EBITDA, which are non-GAAP financial measures, which the management
team uses to assess Offerpad’s underlying financial performance.
Offerpad believes these measures provide insight into period over
period performance, adjusted for non-recurring or non-cash
items.
Offerpad calculates Adjusted Net Income (Loss) as GAAP net
income (loss) adjusted for the change in fair value of warrant
liabilities. Offerpad defines Adjusted Net Income (Loss) Margin as
Adjusted Net Income (Loss) as a percentage of revenue.
Offerpad calculates Adjusted EBITDA as Adjusted Net Income
(Loss) adjusted for interest expense, amortization of capitalized
interest, taxes, depreciation and amortization and stock-based
compensation expense. Offerpad defines Adjusted EBITDA Margin as
Adjusted EBITDA as a percentage of revenue.
Adjusted Net Income (Loss) and Adjusted EBITDA are supplemental
to Offerpad’s operating performance measures calculated in
accordance with GAAP and have important limitations. For example,
Adjusted Net Income (Loss) and Adjusted EBITDA exclude the impact
of certain costs required to be recorded under GAAP and could
differ substantially from similarly titled measures presented by
other companies in Offerpad’s industry or companies in other
industries. Accordingly, these measures should not be considered in
isolation or as a substitute for analysis of Offerpad’s results as
reported under GAAP.
The following table presents a reconciliation of Offerpad’s
Adjusted Net Income (Loss) and Adjusted EBITDA to their GAAP net
income (loss), which is the most directly comparable GAAP measure,
for the periods indicated:
Three Months Ended
December 31,
Year Ended
December 31,
(in thousands, except percentages, unaudited)
2021
2020
2021
2020
Net income (loss) (GAAP)
$
12,806
$
(1,319
)
$
6,460
$
(23,118
)
Change in fair value of warrant liability
(15,649
)
-
(2,464
)
-
Adjusted net (loss) income
$
(2,843
)
$
(1,319
)
$
3,996
$
(23,118
)
Adjusted net income margin
(0.3
%)
(0.6
%)
0.2
%
(2.2
%)
Adjustments: Interest expense
6,178
1,627
15,848
10,031
Amortization of capitalized interest (1)
3,511
396
6,294
2,962
Income tax expense
-
163
170
163
Depreciation and amortization
90
126
523
434
Amortization of share based compensation
763
488
3,079
1,363
Adjusted EBITDA
7,699
1,482
29,910
(8,165
)
Adjusted EBITDA margin
0.9
%
0.7
%
1.4
%
(0.8
%)
(1)
Amortization of capitalized interest
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220223005609/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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