In its first earnings report since going public, Opendoor posted a net loss of $ 286 million in 2020 and a loss of $ 87 million in the fourth quarter alone.
In its first earnings report since its inception as a publicly traded company in December, Opendoor surpassed revenue expectations, posting revenue of $ 248 million ahead of analysts’ forecast of $ 220 million.
However, the numbers show what the toll COVID-19 has taken on the iBuyer business as the early days of the pandemic completely disrupted Opendoor’s home buying businesses. Revenue in the fourth quarter was more than $ 1 billion below the fourth quarter of 2019. Most of Opendoor’s revenue is in the form of home sales.
For the full year 2020, Opendoor achieved sales of 2.5 billion US dollars, compared to 4.7 billion US dollars in the previous year.
The company sold about half the number of homes in 2020 as it did in 2019. The total number of homes sold in 2020 was 9,913 versus 18,799. The company sold just 849 homes in the fourth quarter, compared to 5,013 in the fourth quarter of 2019.
“While 2020 was an unprecedented year, I am proud of our team’s relentless focus on digitizing the transaction and delighting customers,” said Eric Wu, CEO of Opendoor, in a statement. “While we think about ours [fourth quarter] and in 2021 that focus has resulted in increased business momentum. “
“More customers come to us and choose Opendoor than ever before. We see healthy margins and plan to double our presence in 42 markets, ”added Wu.
Opendoor wasn’t alone when he felt the effects of COVID-19. Zillow’s iBuyer business has also slowed. In the fourth quarter of 2020, the company sold just 923 homes.
But Opendoor also increased its buying speed at the end of the year. By the end of the fourth quarter, the company had tripled its inventory from the previous quarter and ended up with 1,827 apartments in its portfolio.
Opendoor is also seeing more interest in its platform in general, Wu said in a call for earnings. The company receives 50 percent more requests for quotations than in the same period last year and is converting sellers at the highest rate in the company’s history.
“We believe this is the future of real estate and it is coming faster than expected,” said Wu.
The company expects the recovery to resume after the hiatus in the first quarter. The expected sales are between 600 and 625 million US dollars.
The hiatus in home buying also slowed the company’s losses, but Opendoor was still a long way from being profitable in 2020. The company posted a net loss of $ 286 million in 2020 and a loss of $ 87 million in the fourth quarter alone, with the large fourth quarter loss likely due to the home buying firm.
For comparison, Opendoor recorded a net loss of $ 339 million in 2019 and a net loss of $ 91 million in the fourth quarter of 2019.