Offerpad Revenue Falls 41% to $78.1 Million in Third Quarter
Key Facts
Offerpad reported revenue of $78.1 million in the third quarter of 2026, down 41% from $132.7 million in the same period last year, according to results announced by the company on November 2. The company closed 324 real estate transactions, 32% fewer than the 474 transactions a year earlier. For earnings per share, MarketBeat reported an actual loss of $2.31 per share, compared with a consensus estimate of $1.71, a difference of $0.60.
Activity and revenue continued to decline alongside operating losses, although net loss remained close to its year-earlier level. Net loss was $11.5 million, compared with $11.6 million in the third quarter of 2025. Adjusted EBITDA loss, however, widened to $7.5 million from $4.6 million a year earlier. The comparison shows a gap between the near stability of net loss and the deterioration in this adjusted operating metric during the period. Higher contributions from some channels and improved contribution profit per transaction did not prevent the company from continuing to post losses in the quarter.
Gross margin fell to 8.3% from 9.2% in the second quarter, but remained above the 7.0% recorded in the third quarter of 2025. Contribution profit after interest was about $12,900 per transaction, compared with $6,400 a year earlier. The company said Brokerage Services and Cash Offer Marketplace accounted for about 35% of closings, highlighting the weight of fee-based channels in its business. The company bought 605 homes during the quarter. Older homes accounted for just 2.6% of inventory at the end of the period.
Management attributed slower buyer demand to mortgage rates rising by more than 70 basis points from mid-August to early October, adding pressure on housing affordability. It said the move slowed demand, while the company tightened buying standards and selected homes where it expected higher returns. In the second quarter, the company reported that signed contracts rose from 129 in April to 256 in June, and said about 90% of signed contracts convert to acquisitions based on recent cohorts. But the latest results showed that the contract trend did not lift closings into the target range for the third quarter. The average time to cash receipt was 119 days in June, according to the second-quarter announcement.
Offerpad ended the third quarter with $12.1 million in unrestricted cash and estimated equity in inventory of about $55 million. On October 7, the company expanded its uncommitted borrowing capacity under its revolving facility from $150 million to $200 million. These figures come as annual transaction volume declined and adjusted EBITDA loss widened. Management said in August that about 1,000 transactions in a quarter was the level at which its current cost structure could support breakeven on this metric. The company added that it has removed more than $140 million in annual expenses since 2022.
Management revised the timing of its goal to reach a positive adjusted EBITDA run rate, moving it to the end of the second quarter of 2027 from the previous target of exiting 2026. It said the new timing reflects sales of third-quarter inventory, contributions from higher-return purchases and the phased implementation of cost reductions. Fourth-quarter outlook assumptions include mortgage rates remaining near current levels, with no assumption that they will decline. This puts the company's outlook for the coming period under the assumption that housing finance costs will remain at current levels. The company had previously announced that its third-quarter earnings call would be held on November 2 at 4:30 p.m. Eastern time.