Offerpad Solutions (OPAD) - 2024 Q2 - Quarterly Report

Financial Performance - Total revenue for Q2 2024 was $251.1 million, an increase of 9.4% compared to$ 230.1 million in Q2 2023[5] - Gross profit for Q2 2024 was $21.9 million, a decrease of 1.6% from$ 22.2 million in Q2 2023[5] - Net loss for Q2 2024 was $13.8 million, compared to a net loss of$ 22.3 million in Q2 2023, representing a 38.5% improvement[5] - For Q2 2024, Offerpad reported a net loss of $31.3 million, a significant improvement compared to a net loss of$ 81.8 million in Q2 2023, reflecting a 61.7% reduction in losses year-over-year[10] - The company achieved year-over-year improvements in revenue and net loss during Q2 2024, with a gross profit margin improvement for the second consecutive quarter[67] - Adjusted Gross Profit for Q2 2024 was $23,295,000, compared to$ 10,079,000 in Q2 2023, reflecting a significant increase[83] - Contribution Profit for Q2 2024 was $16,384,000, up from$ 4,465,000 in Q2 2023, indicating improved profitability[83] - Adjusted Net Loss for Q2 2024 was $(13,773,000), an improvement from$ (22,779,000) in Q2 2023[85] - Adjusted EBITDA for Q2 2024 was $(4,429,000), compared to$ (17,278,000) in Q2 2023, indicating a reduction in losses[85] Assets and Liabilities - Total current assets rose to $391.0 million as of June 30, 2024, compared to$ 371.6 million at the end of 2023, marking a 5.2% increase[4] - Total liabilities increased to $329.1 million as of June 30, 2024, up from$ 277.9 million at the end of 2023, indicating an 18.5% rise[4] - Offerpad's total stockholders' equity decreased to $77.6 million as of June 30, 2024, down from$ 133.2 million a year earlier, indicating a decline of approximately 42%[8] - The total assets of the Company as of June 30, 2024, were $327,452 thousand, an increase from$ 288,737 thousand as of December 31, 2023[53] - The total liabilities of the Company as of June 30, 2024, were $307,446 thousand, compared to$ 261,049 thousand as of December 31, 2023[53] Cash Flow - The company experienced a cash outflow from operating activities of $52.0 million in Q2 2024, compared to a cash inflow of$ 371.5 million in Q2 2023, indicating a substantial change in cash flow dynamics[10] - Cash and cash equivalents decreased to $56.9 million as of June 30, 2024, down from$ 76.0 million at the end of 2023, a decline of 25.0%[4] - The company had cash, cash equivalents, and restricted cash of $73.0 million at the end of Q2 2024, down from$ 122.3 million at the end of Q2 2023, representing a decrease of about 40%[10] - Net cash used in operating activities was ( $52.0) million for the six months ended June 30, 2024, compared to$ 371.5 million provided in the same period of 2023, primarily due to a $32.4 million increase in real estate inventory[112] - Net cash provided by financing activities was$ 45.4 million for the six months ended June 30, 2024, primarily from $495.9 million of borrowings, offset by$ 450.5 million of repayments[113] Market Presence and Strategy - Offerpad operates in over 1,800 cities and towns across 27 metropolitan markets in 17 states as of June 30, 2024, highlighting its extensive market presence[11] - Offerpad aims to enhance its technology platform and expand market share in existing and new markets, focusing on strategic growth initiatives[3] - The company expanded into two additional markets during the first half of 2024, bringing its total to 27 markets served[70] - Offerpad captured approximately 0.5% market share of real estate transactions across its 25 active markets as of December 31, 2023[69] Inventory and Sales - Real estate inventory increased to $307.8 million as of June 30, 2024, up from$ 276.5 million at the end of 2023, reflecting a 11.3% growth[4] - Homes sold in Q2 2024 totaled 742, an increase from 650 homes sold in Q2 2023[83] - The average holding period of homes sold decreased to 106 days in Q2 2024, reflecting an increase in home acquisition pace[77] - Renovation services represented approximately 2% of Offerpad's total consolidated revenue during the three and six months ended June 30, 2024[71] - Ancillary products and services accounted for less than 1% of total consolidated revenue during the same period[73] Expenses and Costs - Operating expenses for Q2 2024 were $31.7 million, down from$ 44.1 million in Q2 2023, a reduction of 28.0%[5] - The company incurred advertising expenses of $3.5 million during the three months ended June 30, 2024, compared to$ 10.9 million in the same period of 2023, indicating a decrease of 67.9%[26] - Interest expense increased by $2.7 million, or 145.4%, to$ 4.6 million for the three months ended June 30, 2024, due to a higher average outstanding balance of credit facilities[91] - Cost of revenue increased by $21.3 million, or 10.3%, to$ 229.3 million for the three months ended June 30, 2024, primarily due to higher sales volumes[88] Stock and Equity - The Company is authorized to issue 2.1 billion shares of capital stock, including 2 billion shares of Class A common stock[40] - As of June 30, 2024, there were 27,329,264 shares of Class A common stock issued and outstanding[41] - The Company had 286,802 shares reserved for issuance under the Employee Stock Purchase Plan (ESPP) as of June 30, 2024, after an increase of 111,248 shares on January 1, 2024[45] - The fair value of RSUs that vested and settled during the six months ended June 30, 2024, was $1.8 million, compared to$ 2.5 million for the same period in 2023[46] Compliance and Governance - The Company was in compliance with all covenants as of June 30, 2024, with no events of default occurring[33] - The company has not paid any cash dividends on common stock to date and has no current plans to do so for the foreseeable future[43] - The company is not currently involved in any legal proceedings that would have a material adverse effect on its business or financial condition[119] - There were no changes in the internal control over financial reporting during the three months ended June 30, 2024, that materially affected the internal control[119]