Technology real estate company Offerpad (NYSE: OPAD) fell short of the market’s revenue expectations in Q1 CY2025, with sales falling 43.7% year on year to $160.7 million. Next quarter’s revenue guidance of $175 million underwhelmed, coming in 34.1% below analysts’ estimates. Its GAAP loss of $0.55 per share was 1.9% below analysts’ consensus estimates.
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Offerpad (OPAD) Q1 CY2025 Highlights:
- Revenue: $160.7 million vs analyst estimates of $165.9 million (43.7% year-on-year decline, 3.1% miss)
- EPS (GAAP): -$0.55 vs analyst expectations of -$0.54 (1.9% miss)
- Adjusted EBITDA: -$7.8 million vs analyst estimates of -$8.77 million (-4.9% margin, 11% beat)
- Revenue Guidance for Q2 CY2025 is $175 million at the midpoint, below analyst estimates of $265.4 million
- Operating Margin: -7.2%, down from -4.8% in the same quarter last year
- Free Cash Flow was -$11.17 million, down from $2.03 million in the same quarter last year
- Homes Sold: 460, down 387 year on year
- Market Capitalization: $30.57 million
Company Overview
Known for giving homeowners cash offers within 24 hours, Offerpad (NYSE: OPAD) operates a tech-enabled platform specializing in direct home buying and selling solutions.
Sales Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Offerpad’s demand was weak over the last four years as its sales fell at a 5.1% annual rate. This wasn’t a great result and is a sign of lacking business quality.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Offerpad’s recent performance shows its demand remained suppressed as its revenue has declined by 50.1% annually over the last two years. 
We can better understand the company’s revenue dynamics by analyzing its number of homes sold and homes purchased, which clocked in at 460 and 454 in the latest quarter. Over the last two years, Offerpad’s homes sold averaged 41.2% year-on-year declines while its homes purchased averaged 15.4% year-on-year declines. 
This quarter, Offerpad missed Wall Street’s estimates and reported a rather uninspiring 43.7% year-on-year revenue decline, generating $160.7 million of revenue. Company management is currently guiding for a 30.3% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 29.8% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and implies its newer products and services will spur better top-line performance.
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Operating Margin
Offerpad’s operating margin has risen over the last 12 months, but it still averaged negative 6.2% over the last two years. This is due to its large expense base and inefficient cost structure.
This quarter, Offerpad generated a negative 7.2% operating margin. The company's consistent lack of profits raise a flag.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Although Offerpad’s full-year earnings are still negative, it reduced its losses and improved its EPS by 38.9% annually over the last four years. The next few quarters will be critical for assessing its long-term profitability.
In Q1, Offerpad reported EPS at negative $0.55, up from negative $0.64 in the same quarter last year. Despite growing year on year, this print slightly missed analysts’ estimates. Over the next 12 months, Wall Street expects Offerpad to improve its earnings losses. Analysts forecast its full-year EPS of negative $2.17 will advance to negative $1.40.
Key Takeaways from Offerpad’s Q1 Results
It was encouraging to see Offerpad beat analysts’ EBITDA expectations this quarter. On the other hand, its number of homes sold missed and its revenue guidance for next quarter fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $1.05 immediately after reporting.
So should you invest in Offerpad right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.
