Offerpad Solutions Inc.
For the period ended Mar 31, 2025. Filed May 5, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 5, 2025
OPAD$2.11-7.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-04.
0000950170-24-120899
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-05.
0000950170-25-063692
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 164 previous paragraphs and 159 current paragraphs.
94 unchanged; 38 reworded; 25 added; 30 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 7 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
The uncertain economic outlook and uneven residential real estate market conditions that challenged our operating results during 2024 continued into the first quarter of 2025, with the average thirty-year fixed mortgage rate generally remaining between the mid-6% range and 7%. The sustained elevated and volatile mortgage interest rate environment continues to negatively impact housing affordability and create uncertainty for home buyers, which has hindered consumer demand for residential real estate for an extended period of time. This uncertainty has been further amplified by macroeconomic and geopolitical concerns, which have been heightened by the trade-related tensions resulting from the recent tariff announcements made by the U.S. and other governments. The cumulative impact of these conditions, including without limitation future or additional tariffs or retaliatory tariffs, continues to cause uncertainty in the market and challenge consumer confidence, resulting in lower than normal real estate transaction volumes, and may impact the costs of materials and supplies used in our home renovations, which could in turn impact our margins.
Current report
These uncertain market conditions, combined with the impact of our intentional reduction in home acquisition pace during the second half of 2024 as part of our effort to balance our real estate inventory levels to optimize our return, are reflected in our operating results for the first quarter of 2025. We sold 460 homes during the first quarter of 2025, generating $160.7 million of revenue and $10.5 million of gross profit. Although our transaction volumes were lower during the first quarter of 2025 compared to recent periods, we achieved quarter-over-quarter improvement in our gross profit margin, along with both quarter-over-quarter and year-over-year improvement in our net loss, as we have continued to focus on cost reduction and operational efficiencies throughout the business.
Current report
New York Stock Exchange Listing Notice
Current report
On April 10, 2025, we received written notice (the “NYSE Notification”) from the NYSE that we are not in compliance with Section 802.01B of the NYSE Listed Company Manual because our average global market capitalization over a consecutive 30 trading-day period and, at the same time, our last reported stockholders’ equity were each less than $50 million. The NYSE Notification has no immediate impact on the listing of our Class A common stock.
Current report
On April 18, 2025, we notified the NYSE that we intend to submit a plan to cure the deficiency and to return to compliance with the NYSE continued listing standards. As required by NYSE, within 45 days of our receipt of the NYSE Notification, we plan to submit a business plan advising the NYSE of the definitive action(s) we are taking or plan to take that would bring us into compliance with NYSE continued listing standards within 18 months of receipt of the NYSE Notification (the “Cure Period”). Pursuant to applicable NYSE rules, the NYSE will review the plan and, within 45 days of its receipt, determine whether we have made a reasonable demonstration of an ability to conform to the relevant standards in the Cure Period.
Current report
If the NYSE accepts the plan, our Class A common stock will continue to be listed and traded on the NYSE during the Cure Period, subject to our compliance with the other continued listing standards of the NYSE and continued periodic review by the NYSE of our progress with respect to its plan. If the plan is not submitted on a timely basis or is not accepted by the NYSE, the NYSE could initiate delisting proceedings.
Current report
B2B Renovate Business Services
Current report
Direct+ institutional buyer program
Current report
Agent Partnership Program
Current report
During 2024, the average holding period of homes sold remained steady at approximately 110 days during the first three quarters of the year, before increasing to 142 days during the fourth quarter of 2024. This increase continued into the first quarter of 2025, when our average real estate inventory holding period was 165 days. The increase in our average real estate inventory holding period over the past two quarters reflects our intentional reduction in home acquisition pace during the second half of 2024, along with the normal seasonal increase that occurs in the fall and winter months. The reduction in home acquisition pace allowed us to manage overall real estate inventory growth in light of the sustained elevated and volatile mortgage interest rate environment, which continues to negatively impact housing affordability and velocity, and create uncertainty for home buyers, challenging consumer demand for residential real estate.
Current report
Based on our current expectations, we anticipate our average real estate inventory holding period will decline in the second quarter of 2025 as we sell through our aged real estate inventory and our overall real estate inventory mix shifts and includes a higher composition of newer acquired homes. However, as the residential real estate market conditions remain volatile, we intend to continue balancing our home acquisition pace to manage our real estate inventory levels, and ultimately, our average real estate inventory holding period.
Current report
Other income, net principally represents interest income earned on our cash and cash equivalents during each of the three months ended March 31, 2025 and 2024. Other income, net also includes gains or losses from the disposal of property and equipment in both periods.
Current report
Segment Operating Performance
Current report
Our Cash Offer solution represents the substantial majority of our business, generating over 95% of our consolidated revenue during each of the three months ended March 31, 2025 and 2024.
Current report
Other revenue decreased by $0.6 million, or 8.6%, to $6.9 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily attributable to a decrease in revenue associated with the transition from our historical listing service offering as we shifted our focus to our referral partner networks, which includes our homebuilder services, our agent partnership program and our agent referral network. This decrease in revenue was partially offset by a slight increase in B2B Renovate revenue due to a higher average renovation transaction value per home during three months ended March 31, 2025 compared to the three months ended March 31, 2024.
Current report
Our asset-light platform offerings included in Other generally earn a smaller average revenue per transaction than our Cash Offer service, but typically generate higher margins.
Current report
Cash Offer cost of revenue decreased by $111.9 million, or 43.4%, to $145.7 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This decrease was primarily attributable to lower sales volumes, which was partially offset by an increase in the real estate inventory valuation adjustment.
Current report
Cash Offer gross profit margin was 5.3% for the three months ended March 31, 2025 compared to 7.3% for the three months ended March 31, 2024. The decrease in gross profit margin was primarily due to an increase in the real estate inventory valuation adjustment, from $0.6 million during the three months ended March 31, 2024 to $1.7 million during the three months ended March 31, 2025. The decrease in gross profit margin was also due to an increase in the average real estate inventory holding period over the past two quarters, along with our increased use of pricing adjustments and other incentives in recent periods as we focused on selling our legacy real estate inventory.
Current report
Other cost of revenue decreased by $0.7 million, or 12.9%, to $4.5 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This decrease was primarily attributable to lower volumes associated with our historical listing service offering as we transitioned our focus to our partner network, which was partially offset by an increase in costs associated with our B2B Renovate business due to a higher average renovation transaction cost per home during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
Current report
Other gross profit margin was 35.1% for the three months ended March 31, 2025 compared to 31.9% for the three months ended March 31, 2024. This increase in gross profit margin was primarily due to a shift in the product mix of the asset-light platform offerings included in Other during the first quarter of 2025 compared to the first quarter of 2024. Our Agent Partnership Program, which generally has higher margins compared to the other offerings included within Other, represented a larger component of Other gross profit during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
Current report
During April 2025, the Company amended its credit facility with senior financial institution 3, which among other things, extends the revolving period for the facility to January 2026 and the final maturity date to April 2026.
Current report
During April 2025, the Company amended its credit facility with mezzanine financial institution 2, which among other things, extends the revolving period for the facility to January 2026 and the final maturity date to April 2026
Current report
Senior Secured Debt - Other
Current report
The Company has a borrowing arrangement with a financial institution to support purchases of real estate inventory. Borrowings under this arrangement accrue interest at a rate based on a SOFR reference rate, plus a margin. As of March 31, 2025 and December 31, 2024, the weighted-average interest rate under the Company’s other senior secured debt was 9.02% and 9.24%, respectively.
Current report
Net cash (used in) provided by operating activities was ($10.2) million and $2.4 million for the three months ended March 31, 2025 and 2024, respectively. For the three months ended March 31, 2025, net cash used in operating activities primarily resulted from the $15.1 million net loss during the period, which included $1.8 million of non-cash stock-based compensation expense and a $1.7 million non-cash real estate inventory valuation adjustment. Net cash used in operating activities during the three months ended March 31, 2025 was also due to a $2.4 million increase in accounts receivable, primarily due to a higher number of home sales pending receipt of cash from the title company as compared to December 31, 2024. These items were partially offset by a $1.6 million decrease in real estate inventory as a result of sales volumes increasing at a higher rate compared to home acquisitions as we intentionally reduced our home acquisition pace during the second half of 2024 as part of our effort to balance our real estate inventory levels to optimize our returns.
Removed paragraphs (30)
Previous report
The uncertain economic outlook and evolving residential real estate market conditions have continued to challenge our operating results through the first nine months of 2024. The elevated and volatile mortgage interest rate environment has persisted throughout the year, with the average thirty-year fixed mortgage rate generally increasing during the first half of the year, peaking in the mid-7% range in April 2024, before decreasing to close to 6% at the end of September 2024 following the Federal Reserve Board’s reduction to its benchmark interest rate. As the Federal Reserve Board lowers its benchmark interest rate, mortgage rates generally decrease, which reduces the cost of owning a home, and should, in turn, increase the number of potential home buyers who can obtain mortgage financing and affect the prices home buyers may be willing to pay for homes. However, it remains difficult to predict the near-term direction of consumer demand for residential real estate due to the many different factors that impact such demand.
Previous report
The elevated and volatile mortgage interest rate environment has continued to negatively impact housing affordability and create uncertainty for home buyers, which has challenged consumer demand for residential real estate. Additionally, the sustained elevated levels of inflation in the broader economy, along with other macroeconomic and geopolitical concerns, have continued to challenge consumer confidence. Further, recent severe weather events have negatively impacted the economic conditions in certain of the geographic markets in which we operate, resulting in slowdowns in real estate transaction volumes in such markets. As a result of these conditions, we have remained focused on proactively optimizing our capital allocation across our highest performing and most efficient markets. Additionally, we recently reduced our home acquisition pace as we continue to balance our real estate inventory levels to optimize our return.
Previous report
Against this backdrop, our gross profit margin has remained steady at around 8% throughout the year, reflecting our continued progress toward improving the stability of our gross profit margin. Further, our net loss improved on a quarter-over-quarter basis for the second consecutive quarter, as we have continued to focus on operating efficiencies throughout the business.
Previous report
Renovation Services
Previous report
Expand Relationships with Home Buyers
Previous report
Below is a summary of our current ancillary products and services:
Previous report
Offerpad Home Loans (“OPHL”): We have historically provided access to mortgage services through either our in-house mortgage solution, OPHL, or a third-party lending partner.
Previous report
Our ancillary products and services represented less than 1% of our total consolidated revenue during each of the three and nine months ended September 30, 2024.
Previous report
During 2024, the average holding period of homes sold has remained consistent at around 110 days. Based on the current residential real estate market conditions, we anticipate our average real estate inventory holding period in the fourth quarter of 2024 will increase to around 140 days. This anticipated increase reflects our reduction in home acquisition pace during the third quarter of 2024, causing our overall real estate inventory mix to shift and include a lower composition of newer acquired homes, combined with the longer average time of homes on the market and the normal seasonal increase that occurs in the fall and winter.
Previous report
Sales, marketing and operating expense decreased by $10.4 million, or 38.1%, to $16.9 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease was primarily attributable to a $6.4 million decrease in advertising expense as we repositioned and optimized our marketing efforts in response to the ongoing challenging residential real estate market conditions, and decreased average employee headcount.
Previous report
Change in fair value of warrant liabilities for the three months ended September 30, 2024 and 2023 represents gains of less than $0.1 million, and $0.1 million, respectively, as a result of the fair value adjustment of our warrant liabilities.
Previous report
Other income, net during the three months ended September 30, 2024 principally represents interest income earned on our cash and cash equivalents. Other income, net during the three months ended September 30, 2023 represents the gain that was recorded as a result of the fair value adjustment of the derivative financial instruments that were entered into to manage risks that were principally associated with interest rate fluctuations, and interest income earned on our cash and cash equivalents.
Previous report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Previous report
Revenue decreased by $329.4 million, or 30.7%, to $744.5 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease was primarily attributable to lower sales volumes and a lower average sales price per home. We sold 2,204 homes during the nine months ended September 30, 2024 compared to 2,962 during the nine months ended September 30, 2023, representing a decrease of 25.6%. Additionally, the average resale home price decreased from $360,000 in the nine months ended September 30, 2023 to $334,000 in the nine months ended September 30, 2024. During the early stages of 2023, we focused on selling our existing inventory of homes acquired prior to the significant market transition that occurred in the middle of 2022, resulting in a higher number of homes sold during the first half of 2023 as compared to the first half of 2024. The decrease in average sales price per home during the nine months ended September 30, 2024 was primarily due to our increased focus on geographic markets that tend to share relatively lower median price points, as well as homes closer to or below the median price in a given market as higher mortgage interest rates and sustained elevated levels of inflation in the broader economy have continued to negatively impact the residential real estate market conditions. We have also continued to refine our target home purchase price range to focus on acquiring homes with the greatest price stability within each market.
Previous report
Cost of revenue decreased by $337.5 million, or 33.1%, to $682.9 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This decrease was primarily attributable to lower sales volumes, a lower average home acquisition price, and a decrease in the real estate inventory valuation adjustment.
Previous report
Gross profit margin was 8.3% for the nine months ended September 30, 2024 compared to 5.0% for the nine months ended September 30, 2023. The increase in gross profit margin was primarily due to an increase in the difference between the average home resale price and the average home acquisition price during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, and a $6.4 million decrease in the real estate inventory valuation adjustment during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. These changes were primarily due to our focus on selling our existing inventory of homes acquired prior to the significant market transition that occurred in the middle of 2022 during the early stages of 2023, resulting in a lower gross profit margin during the first half of 2023 as compared to the first half of 2024.
Previous report
Sales, Marketing and Operating
Previous report
General and Administrative
Previous report
General and administrative expense decreased by $10.6 million, or 25.6%, to $30.7 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease in expense was primarily attributable to a decrease in fees associated with our credit facilities, decreased average employee headcount, lower insurance costs, and decreased legal, accounting and professional fees.
Previous report
Technology and Development
Previous report
Technology and development expense decreased by $3.0 million, or 45.1%, to $3.7 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease in expense was primarily attributable to decreased average employee headcount.
Previous report
Interest Expense
Previous report
Interest expense increased by $0.9 million, or 6.5%, to $14.6 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase in expense was primarily attributable to a 0.7% increase in the weighted average variable interest rates associated with our senior and mezzanine secured credit facilities. This increase was partially offset by a $174.1 million decrease in the average outstanding balance of our senior and mezzanine secured credit facilities, from $429.6 million during the nine months ended September 30, 2023 to $255.5 million during the nine months ended September 30, 2024.
Previous report
Other Income, Net
Previous report
Other income, net during the nine months ended September 30, 2024 principally represents interest income earned on our cash and cash equivalents. Other income, net during the nine months ended September 30, 2023 represents interest income earned on our cash and cash equivalents, and the gain that was recorded as a result of the fair value adjustment of the derivative financial instruments that were entered into to manage risks that were principally associated with interest rate fluctuations.
Previous report
Income Tax Expense
Previous report
Pre-Funded Warrants
Previous report
During January 2023, we sold and issued pre-funded warrants to purchase shares of our Class A common stock, resulting in gross proceeds of approximately $90.0 million. The pre-funded warrants became exercisable during March 2023. All of the pre-funded warrants were subsequently exercised during 2023, upon which, 10.7 million shares of our Class A common stock were issued. Participating investors included Brian Bair, our founder, chief executive officer and chairman of our Board; Roberto Sella, a member of our Board; First American Financial Corporation (“First American”), a holder of more than 10% of our outstanding Class A common stock; and Kenneth DeGiorgio, a member of our Board and chief executive officer of First American.
Previous report
For the nine months ended September 30, 2023, net cash provided by operating activities primarily resulted from a $366.7 million decrease in real estate inventory due to an intentional reduction in real estate inventory levels given the impact of the softened consumer demand for residential real estate, which occurred during the second half of 2022 and continued through the first quarter of 2023. During this period of time, we focused on selling our existing real estate inventory of homes acquired in the first half of 2022 and significantly reduced the number of new homes acquired in the second half of 2022 and throughout the first quarter of 2023. Net cash provided by operating activities during the nine months ended September 30, 2023 was also impacted by the $101.8 million net loss during the period, which included an $8.4 million non-cash real estate inventory valuation adjustment as a result of the softened consumer demand for residential real estate.
Previous report
Net cash provided by investing activities during the nine months ended September 30, 2023 represents proceeds from the sale of derivative instruments, which was partially offset by purchases of derivative instruments.
Reworded paragraphs (38)
Previous wording
Offerpad, dedicated to simplifying the process of buying and selling homes, is committed to providing comprehensive solutions that remove the friction from real estate. Our advanced real estate platform offers a range of services, from consumer cash offers to B2B renovation solutions and industry partnership programs, all tailored to meet the unique needs of our clients. Since 2015, we’ve leveraged local expertise in residential real estate alongside proprietary technology to guide homeowners at every step, and have transacted on homes representing approximately $11.5 billion of aggregate revenue through September 30, 2024.
Current wording
Offerpad, dedicated to simplifying the process of buying and selling homes, is committed to providing comprehensive solutions that remove the friction from real estate. Our advanced real estate platform offers a range of services, from consumer cash offers to B2B renovation solutions and industry partnership programs, all tailored to meet the unique needs of our clients. Since 2015, we have leveraged local expertise in residential real estate alongside proprietary technology to guide homeowners at every step, and have transacted on homes representing approximately $11.8 billion of aggregate revenue through March 31, 2025.
Previous wording
We are currently headquartered in Chandler, Arizona and operate in over 1,800 cities and towns in 26 metropolitan markets across 17 states as of September 30, 2024.
Current wording
We are headquartered in Tempe, Arizona and operated in over 1,900 cities and towns in 27 metropolitan markets across 18 states as of March 31, 2025.
Previous wording
While we generated solid operating results during the first nine months of 2024, the ongoing challenging residential real estate market conditions continued to have an impact on our operating results. These conditions have required us to use pricing adjustments and other incentives in recent periods, which have had a negative impact on our operating results during the year. Further, there continues to be uncertainty regarding the near-term macroeconomic conditions, including the path of inflation in the broader economy, the direction of mortgage interest rates, which have reversed course from a decrease in the third quarter of 2024 and increased in the early stages of the fourth quarter of 2024, and the impact of geopolitical conflicts. We anticipate that the sustained elevated and volatile mortgage interest rate environment, economic uncertainties and affordability pressures will continue to impact consumer demand for residential real estate during the fourth quarter of 2024. As a result of these market dynamics, we may be required to use similar pricing adjustments and incentives in the future.
Current wording
Given the current market conditions, we remain focused on proactively optimizing our capital allocation across our highest performing and most efficient markets and using pricing adjustments and other incentives in an effort to drive consumer demand. These pricing adjustments have had a negative impact on our operating results over the past few years. Further, there continues to be an increased level of uncertainty regarding the near-term macroeconomic conditions, including the direction of mortgage interest rates, which have continued to stay around 7% during the early stages of the second quarter of 2025, and the impact of the global trade conditions. Although it remains difficult to predict the near-term direction of consumer demand for residential real estate due to the many different factors that impact such demand, we anticipate that the sustained elevated and volatile mortgage interest rate environment, economic uncertainties and affordability pressures will continue to impact consumer demand for residential real estate during the second quarter of 2025. As a result of these market dynamics, we may be required to use similar pricing adjustments and incentives in the future.
Previous wording
Residential real estate is one of the largest industries, with roughly $1.9 trillion in value of homes transacted in 2023 in the United States, and is highly fragmented with over 100,000 real estate brokerages, according to the National Association of Realtors (NAR). In 2023, we estimate that we captured roughly 0.5% market share of real estate transactions across our 25 active markets as of December 31, 2023. Given this high degree of fragmentation, we believe that bringing a solutions-oriented approach to the market with multiple services to meet the unique needs of customers could lead to continued market share growth and accelerated adoption of the digital model. We have demonstrated higher market share in certain markets, providing the backdrop to grow our overall market penetration as our offerings expand and evolve. By providing a consistent, transparent, and unique experience, we expect to continue to build upon our past success and further strengthen our brand and consumer adoption.
Current wording
Residential real estate is one of the largest industries, with roughly $1.9 trillion in value of homes transacted in 2024 in the United States, and is highly fragmented with over 100,000 real estate brokerages, according to the National Association of Realtors (NAR). In 2024, we estimate that we captured roughly 0.4% market share of real estate transactions across our 26 active markets as of December 31, 2024. Given this high degree of fragmentation, we believe that bringing a solutions-oriented approach to the market with multiple buying and selling services to meet the unique needs of customers could lead to continued market share growth and accelerated adoption of the digital model. We have demonstrated higher market share in certain markets, providing the backdrop to grow our overall market penetration as our offerings expand and evolve. By providing a consistent, transparent, and unique experience, we expect to continue to build upon our past success and further strengthen our brand and consumer adoption.
Previous wording
Since our launch in 2015, we have expanded into 25 markets as of December 31, 2023, which covered roughly 22% of the 4.7 million homes sold in the United States in 2023. Given this current coverage, we believe there is significant opportunity to both increase market penetration in our existing markets and to grow our business through new market expansion over the long-term. Also, because of our strategic approach to our asset-light platform offerings, which include our listing and renovation services, and our agent partnership program, we believe a significant portion of the total addressable market is serviceable with our business model. As we expand our reach through these other service offerings, we expect to continue to serve customers in markets beyond our direct service area. Further, this strategic approach has enabled us to enter into new markets to offer certain of our service offerings, without offering all of our buying and selling services in such markets. In connection with this approach, we began offering renovation services in two additional markets during 2024. This, together with adjusting operations in existing markets has brought our total markets served to 26 as of September 30, 2024.
Current wording
Since our launch in 2015, we have expanded into 26 markets as of December 31, 2024, which covered roughly 23% of the 4.8 million homes sold in the United States in 2024. Given this current coverage, we believe there is significant opportunity to both increase market penetration in our existing markets and to grow our business through new market expansion over the long-term. Also, because of our strategic approach to our asset-light platform offerings, we believe a significant portion of the total addressable market is serviceable with our business model. As we expand our reach through these other service offerings, we expect to continue to serve customers in markets beyond our direct service area. Further, this strategic approach has enabled us to enter into new markets to offer certain of our service offerings, without offering all of our buying and selling services in such markets. In connection with this approach, we began offering renovation services in two additional markets during 2024, followed by one additional market during the first quarter of 2025.
Previous wording
Although we recently expanded into two new markets, we have decelerated our market expansion plans in recent years given the challenging residential real estate market conditions and the uncertainty regarding the near-term macroeconomic conditions, including the path of inflation in the broader economy, the direction of mortgage interest rates and the impact of geopolitical conflicts. We intend to continue evaluating expansion plans on an ongoing basis in order to maintain our flexibility in assessing the overall timing of our expansion plan and appropriate market entry points in the future.
Current wording
Although we recently expanded into three new markets, we have decelerated our market expansion plans in recent years given the uncertain economic outlook and uneven residential real estate market conditions, which has included uncertainty regarding the near-term macroeconomic conditions, including the direction of mortgage interest rates and the impact of global trade conditions. We intend to continue evaluating expansion plans on an ongoing basis in order to maintain our flexibility in assessing the overall timing of our expansion plan and appropriate market entry points in the future.
Previous wording
Our renovation services represent an important component of our asset-light platform offerings. Through our renovation services offering, we are able to leverage our existing logistics, operations, technology and skill-sets to provide renovation services to other businesses, allowing other companies and homeowners to utilize our renovations team to update their portfolio of homes for rent or to sell. When providing renovation services, we receive a renovation project fee, and are also typically compensated with a service fee that is based on a percentage of the overall renovation project fee. Although our renovation services offering is in the early stages, representing approximately 2% of our total consolidated revenue during each of the three and nine months ended September 30, 2024, we believe these services could be a more significant component of our business over time.
Current wording
Our B2B Renovate business services represent an important component of our asset-light platform offerings. Through this offering, we are able to leverage our existing logistics, operations, technology and skill-sets to provide renovation services to other businesses, allowing other companies and homeowners to utilize our renovations team to update their portfolio of homes for rent or to sell. When providing renovation services, we receive a renovation project fee, and are also typically compensated with a service fee that is based on a percentage of the overall renovation project fee. As we continue to develop our B2B Renovate business services offering, we believe these services could be a more significant component of our business over time.
Previous wording
Another component of our asset-light platform offerings includes our program that allows investors and single-family rental companies an opportunity to purchase homes from homeowners, matching investors with sellers. These transactions occur in several forms, including assigning the original purchase contract to the end buyer and collecting a fee at closing. We expect this program will allow us to help more homeowners sell their home and expand our ability to reach more customers, while also providing customers with the benefit of receiving an optimized offer for their home. This offering represented less than 1% of our total consolidated revenue during each of the three and nine months ended September 30, 2024.
Current wording
Another component of our asset-light platform offerings includes our program that allows investors and single-family rental companies an opportunity to purchase homes from homeowners, matching investors with sellers. These transactions occur in several forms, including assigning the original purchase contract to the end buyer and collecting a fee at closing. We expect this program will allow us to help more homeowners sell their home and expand our ability to reach more customers, while also providing customers with the benefit of receiving an optimized offer for their home.
Previous wording
We are also increasing our focus on our partner network, which includes our homebuilder services, our agent partnership program and our agent referral network, to drive growth in our existing markets by expanding our reach and serving a greater number of customers. Our agent partnership program provides referral fees to agents who sell or select our cash offer. This program is designed to enable customers to utilize our services in a way that best suits their home-selling situation, while also serving as a valuable resource for real estate agents.
Current wording
We have increased our focus on our partner network in recent years, which includes our homebuilder services, our agent partnership program and our agent referral network, to drive growth in our existing markets by expanding our reach and serving a greater number of customers. Our agent partnership program provides referral fees to agents who sell or select our cash offer. This program is designed to enable customers to utilize our services in a way that best suits their home-selling situation, while also serving as a valuable resource for real estate agents.
Previous wording
In order to drive additional value from our agent partnership program, we implemented various enhancements to the program during 2024. Under the enhanced program, our partner agents can continue to request a cash offer on behalf of their clients, and now also have the ability to list an acquired home prepared for resale. Additionally, partner agents in the top tier of the program have access to sellers in defined zones and have the potential to list other Offerpad-owned homes in their zone.
Current wording
Additionally, under our enhanced agent partnership program, our partner agents and brokerages can request a cash offer on behalf of their clients, have the ability to list an acquired home prepared for resale, and can gain access to sellers in defined zones, and markets. Further, partner agents in the top tier of the program have access to sellers in defined zones and have the potential to list other Offerpad-owned homes in their zone.
Previous wording
Further, during the second quarter of 2024, we launched a new integration with Realtor.com, allowing customers to request a cash offer from Offerpad directly through the Realtor.com website. We anticipate this integration will further expand our reach and diversify our lead sources.
Current wording
We also have an integration with Realtor.com, allowing customers to request a cash offer from Offerpad directly through the Realtor.com website. We anticipate this integration will further expand our reach and diversify our lead sources.
Previous wording
We aim to deliver other additional products and services tied to the core real estate transaction in a smooth, efficient, digital driven platform, focused on transparency and ease of use. Although further developing these products and services will require significant investment, growing our current offerings and offering additional ancillary products and services, potentially including energy efficiency solutions, smart home technology, insurance, and home warranty services, we believe will strengthen our unit economics and allow us to better optimize pricing. Generally, the revenue and margin profiles of our ancillary products and services are different from our cash offering service that accounts for the vast majority of our revenue, with most ancillary products and services having a smaller average revenue per transaction than our cash offering service, but a higher margin.
Current wording
We aim to deliver other additional products and services tied to the core real estate transaction in a smooth, efficient, digital driven platform, focused on transparency and ease of use. Although further developing these products and services will require significant investment, growing our current offerings and offering additional ancillary products and services, potentially including energy efficiency solutions, smart home technology, insurance, and home warranty services, we believe will strengthen our unit economics and allow us to better optimize pricing. Generally, the revenue and margin profiles of our ancillary products and services are different from our Cash Offer service that accounts for the substantial majority of our revenue, with most ancillary products and services having a smaller average revenue per transaction than our cash offering service, but a higher margin.
Previous wording
Title and Escrow: We have a national relationship with a leading title and escrow company, through which we are able to leverage our size and scale to provide exceptional title and escrow closing services with favorable economics.
Current wording
While we have offered a variety of ancillary products and services over time, our title and escrow services represent the most notable ancillary service that we currently provide. We have a national relationship with a leading title and escrow company, through which we are able to leverage our size and scale to provide exceptional title and escrow closing services with a favorable economic impact principally in our Cash Offer service.
Previous wording
Effectively increasing and expanding our listing service business alongside the cash offer business, optimizing customer and agent community engagement and increasing conversion of requests for home purchases; and
Current wording
Effectively increasing and expanding our Cash Offer solution, optimizing customer and agent community engagement and increasing conversion of requests for home purchases; and
Previous wording
Introducing and scaling additional ancillary products and services to complement our core cash offer and listing service products.
Current wording
Introducing and scaling additional ancillary products and services to complement our core Cash Offer solution.
Previous wording
We utilize our technology and product teams to design systems and workflows to make our operations teams more efficient and able to support and scale with the business. Many positions are considered volume based, and as our business grows, we focus on developing more automation tools to gain additional leverage. Additionally, in periods when our business is growing, we expect to be able to gain operating leverage on portions of our cost structure that are more fixed in nature as opposed to purely variable. These types of costs include general and administrative expenses and certain marketing and information technology expenses, which grow at a slower pace than proportional to revenue growth.
Current wording
We utilize our technology and product teams to design systems and workflows to make our operations teams more efficient and able to support and scale with the business. Many positions are considered volume based, and as our business grows, we focus on developing more automation tools to gain additional leverage. Additionally, in periods when our business is growing, we expect to be able to gain operating leverage on portions of our cost structure that are more fixed in nature as opposed to purely variable. These types of costs include general and administrative expenses and certain marketing and information technology expenses, which generally grow at a slower pace than proportional to revenue growth.
Previous wording
Historically, we have been able to manage our portfolio risk in part by our ability to manage holding periods for our real estate inventory. Traditionally, resale housing pricing moves gradually through cycles; therefore, shorter real estate inventory holding periods limit pricing exposure. As we increased our scale and improved our workflow optimization in prior years, our average real estate inventory holding period of homes sold improved from 138 days in 2016 to 97 days during the fourth quarter of 2023, which is consistent with our expected average real estate inventory holding period and our historical norm.
Current wording
Historically, we have been able to manage our portfolio risk in part by our ability to manage holding periods for our real estate inventory. Traditionally, resale housing pricing moves gradually through cycles; therefore, shorter real estate inventory holding periods limit pricing exposure.
Previous wording
We define 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 our 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. Our senior and mezzanine secured credit facilities are secured by our homes in real estate 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. See“—Liquidity and Capital Resources—Financing Activities.” We define Contribution Margin After Interest as Contribution Profit After Interest as a percentage of revenue.
Current wording
We define 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 our senior and mezzanine secured credit facilities and other senior secured debt incurred on homes sold during the period. This includes interest expense recorded in prior periods in which the sale occurred. Our senior and mezzanine secured credit facilities and other senior secured debt are secured by our homes in real estate 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. See“—Liquidity and Capital Resources—Financing Activities.” We define Contribution Margin After Interest as Contribution Profit After Interest as a percentage of revenue.
Previous wording
The following table presents a reconciliation of our Adjusted Gross Profit, Contribution Profit and Contribution Profit After Interest to our Gross Profit, which is the most directly comparable GAAP measure, for the periods indicated:
Current wording
The following table presents a reconciliation of our Adjusted Gross Profit, Contribution Profit (Loss) and Contribution Profit (Loss) After Interest to our Gross Profit, which is the most directly comparable GAAP measure, for the periods indicated:
Previous wording
The following details our consolidated results of operations and includes a discussion of our operating results and significant items explaining the material changes in our operating results during the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023.
Current wording
The following details our consolidated results of operations and includes a discussion of our operating results and significant items explaining the material changes in our operating results during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
Previous wording
Revenue decreased by $26.2 million, or 11.2%, to $208.1 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease was primarily due to lower sales volumes. We sold 615 homes during the three months ended September 30, 2024 compared to 703 homes during the three months ended September 30, 2023, representing a decrease of 12.5%. This decrease was primarily due to our intentional reduction in home acquisition pace as we adjusted our home purchase criteria through more conservative acquisition underwriting, resulting in higher expected internal rates of return based on current residential real estate market conditions. This reduction in home acquisition pace has allowed us to manage overall inventory growth in light of the ongoing elevated and volatile mortgage interest rate environment, which continues to negatively impact housing affordability and velocity, and create uncertainty for home buyers, challenging consumer demand for residential real estate. The decrease in homes sold was partially offset by a modest increase in the average resale home price from $327,000 in the three months ended September 30, 2023 to $335,000 in the three months ended September 30, 2024. This increase was primarily due to a shift in the mix of homes sold in the respective periods, with a greater percentage of homes sold in geographic markets that tend to share relatively higher median price points during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.
Current wording
Revenue decreased by $124.7 million, or 43.7%, to $160.7 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily due to lower sales volumes. We sold 460 homes during the three months ended March 31, 2025 compared to 847 homes during the three months ended March 31, 2024, representing a decrease of 45.7%. This decrease was primarily due to our intentional reduction in home acquisition pace during the second half of 2024 as we adjusted our home purchase criteria through more conservative acquisition underwriting, resulting in higher expected internal rates of return based on current residential real estate market conditions. This reduction in home acquisition pace, which resulted in a fewer number of homes in real estate inventory during the first quarter of 2025, has allowed us to manage overall inventory growth in light of the sustained elevated and volatile mortgage interest rate environment, as the average thirty-year fixed mortgage rate generally remained between the mid-6% range and 7% during the first quarter of 2025. This mortgage interest rate environment continues to negatively impact housing affordability and velocity, and create uncertainty for home buyers, challenging consumer demand for residential real estate.
Previous wording
Cost of revenue decreased by $19.3 million, or 9.2%, to $190.9 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This decrease was primarily attributable to lower sales volumes, which was partially offset by a higher average home acquisition price.
Current wording
Cost of revenue decreased by $112.6 million, or 42.8%, to $150.2 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This decrease was primarily attributable to lower sales volumes, which was partially offset by an increase in the real estate inventory valuation adjustment.
Previous wording
Gross profit margin was 8.2% for the three months ended September 30, 2024 compared to 10.2% for the three months ended September 30, 2023. The decrease in gross profit margin was primarily due to the wider than normal underwritten spreads associated with real estate inventory acquired towards the end of 2022 and in the early stages of 2023 in response to the considerable softening in consumer demand for residential real estate. This decrease in gross profit margin was also due to our increased use of pricing adjustments and other incentives in recent periods in response to the ongoing challenging residential real estate market conditions.
Current wording
Gross profit margin was 6.5% for the three months ended March 31, 2025 compared to 7.9% for the three months ended March 31, 2024. The decrease in gross profit margin was primarily due to an increase in the real estate inventory valuation adjustment, from $0.6 million during the three months ended March 31, 2024 to $1.7 million during the three months ended March 31, 2025. The decrease in gross profit margin was also due to an increase in the average real estate inventory holding period over the past two quarters, along with our increased use of pricing adjustments and other incentives in recent periods as we focused on selling our legacy real estate inventory.
Previous wording
Sales, marketing and operating expense decreased by $39.1 million, or 39.6%, to $59.5 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease in expense was primarily attributable to an $17.4 million decrease in advertising expense as we repositioned and optimized our marketing efforts in response to the ongoing challenging residential real estate market conditions, decreased average employee headcount and a decrease in variable costs associated with the decrease in homes sold.
Current wording
Sales, marketing and operating expense decreased by $8.6 million, or 38.4%, to $13.8 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily attributable to decreased average employee headcount, a decrease in variable costs associated with the decrease in homes sold, and a $2.1 million decrease in advertising expense as we continued to reposition and optimize our marketing efforts in response to the ongoing uneven residential real estate market conditions.
Previous wording
General and administrative expense decreased by $5.9 million, or 41.6%, to $8.3 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease was primarily attributable to decreased average employee headcount and a decrease in fees associated with our credit facilities.
Current wording
General and administrative expense decreased by $4.8 million, or 39.8%, to $7.2 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily attributable to decreased average employee headcount and a decrease in fees associated with our credit facilities.
Previous wording
Technology and development expense decreased by $1.2 million, or 56.1%, to $0.9 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease was primarily attributable to decreased average employee headcount.
Current wording
Technology and development expense decreased by $0.8 million, or 42.5%, to $1.0 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily attributable to decreased average employee headcount.
Previous wording
Change in fair value of warrant liabilities for the nine months ended September 30, 2024 and 2023 represents gains of $0.3 million and $0.2 million, respectively, as a result of the fair value adjustment of our warrant liabilities.
Current wording
Change in fair value of warrant liabilities represents a loss of $0.3 million for the three months ended March 31, 2025 and a gain of $0.3 million for the three months ended March 31, 2024, as a result of the fair value adjustment of our warrant liabilities.
Previous wording
Interest expense increased by $0.7 million, or 16.1%, to $5.1 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase in expense was primarily attributable to a $43.4 million increase in the average outstanding balance of our senior and mezzanine secured credit facilities, from $234.9 million during the three months ended September 30, 2023 to $278.3 million during the three months ended September 30, 2024. The increase was also due to a 0.5% increase in the weighted average variable interest rates associated with our senior and mezzanine secured credit facilities.
Current wording
Interest expense decreased by $1.4 million, or 28.2%, to $3.5 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily attributable to a $33.1 million decrease in the average outstanding balance of our senior and mezzanine secured credit facilities, from $257.7 million during the three months ended March 31, 2024 to $224.6 million during the three months ended March 31, 2025. The decrease was also due to a 0.6% decrease in the weighted average variable interest rates associated with our secured credit facilities and other debt.
Previous wording
We recorded income tax expense of $0.1 million and $0.2 million during the nine months ended September 30, 2024 and 2023, respectively, and our effective tax rate was an expense of 0.2% and less than 0.1% for the respective periods. Our effective tax rate during the nine months ended September 30, 2024 differed from the federal statutory rate of 21% primarily due to net operating loss carryforwards and state taxes.
Current wording
We recorded income tax expense of less than $0.1 million and $0.1 million during the three months ended March 31, 2025 and 2024, respectively, and our effective tax rate was an expense of 0.2% and 0.7% for the respective periods. Our effective tax rate during the three months ended March 31, 2025 differed from the federal statutory rate of 21% primarily due to net operating loss carryforwards and state taxes.
Previous wording
Cash and cash equivalents balances consist of operating cash on deposit with financial institutions. Our principal sources of liquidity have historically consisted of cash generated from our operations and financing activities. As of September 30, 2024, we had cash and cash equivalents of $48.5 million and had a total undrawn borrowing capacity under our senior and mezzanine secured credit facilities of $755.3 million, $239.2 million of which is committed and $516.1 million uncommitted.
Current wording
Cash and cash equivalents balances consist of operating cash on deposit with financial institutions. Our principal sources of liquidity have historically consisted of cash generated from our operations and financing activities. As of March 31, 2025, we had cash and cash equivalents of $30.8 million and had a total undrawn borrowing capacity under our senior and mezzanine secured credit facilities of $813.6 million, $49.1 million of which is committed and $764.5 million uncommitted.
Previous wording
With the exception of the year ended December 31, 2021, during which we generated net income, we have incurred losses each year from inception and during the three and nine months ended September 30, 2024, and may incur additional losses in the future. Since our launch in 2015, we have invested in the development and expansion of our operations. These investments include improvements in infrastructure and a continual improvement to our software and technology platform. We have also invested in sales and marketing as we have increased our market penetration in existing markets, and grown our business through new market expansion and the increased offering of asset-light platform services.
Current wording
With the exception of the year ended December 31, 2021, during which we generated net income, we have incurred losses each year from inception and during the three months ended March 31, 2025, and may incur additional losses in the future. Since our launch in 2015, we have invested in the development and expansion of our operations. These investments include improvements in infrastructure and a continual improvement to our software and technology platform. We have also invested in sales and marketing as we have increased our market penetration in existing markets, and grown our business through new market expansion and the increased offering of asset-light platform services.
Previous wording
We expect our working capital requirements to continue to increase over the long term, as we seek to increase our real estate inventory and expand our operations. We believe our cash on hand, together with proceeds from the resale of homes and cash from future borrowings available under each of our existing credit facilities, or the entry into new debt financing arrangements or the issuance of equity instruments, will be sufficient to meet our short-term working capital and capital expenditure requirements for at least the next twelve months. However, our ability to fund our working capital and capital expenditure requirements will depend in part on the residential real estate market conditions in the markets in which we operate and in the U.S. in general, and various other general economic, financial, competitive, legislative, regulatory, geopolitical and other conditions that may be beyond our control. Depending on these and other market conditions, we may seek additional financing. Volatility in the credit markets, rising interest rates and softened consumer demand for residential real estate may have an adverse effect on our ability to obtain debt financing on favorable terms or at all. If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, or may require us to agree to unfavorable terms, and our existing stockholders may experience significant dilution.
Current wording
We expect our working capital requirements to continue to increase over the long term, as we seek to increase our real estate inventory and expand our operations. We believe our cash on hand, together with proceeds from the resale of homes and cash from future borrowings available under each of our existing credit facilities, or the entry into new debt financing arrangements or the issuance of equity instruments, will be sufficient to meet our short-term working capital and capital expenditure requirements for at least the next twelve months. However, our ability to fund our working capital and capital expenditure requirements depends on the residential real estate market conditions in the markets in which we operate and in the U.S. in general, and various other general economic, financial, competitive, legislative, regulatory, geopolitical and other conditions that may be beyond our control. Uncertain economic outlook and uneven residential real estate market conditions have impacted, and may continue to impact, our business negatively. Based on these and other current market conditions, we are seeking and plan to continue to seek additional financing. Volatility in the credit markets, rising interest rates and softened consumer demand for residential real estate may have an adverse effect on our ability to obtain debt financing on favorable terms or at all. If we are not able to obtain necessary capital to meet our business objectives, we may need to further stall, moderate or decelerate our expansion activities, which may include various restructuring alternatives and options, including more significant cost reductions, product and operational changes focused on reductions in working capital requirements, including pausing or reducing real estate inventory acquisitions, and other actions to enhance the preservation of cash. If we are able to raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, or may require us to agree to unfavorable terms, and our existing stockholders may experience significant dilution.
Previous wording
As of September 30, 2024, we were in compliance with all covenants and no event of default had occurred.
Current wording
As of March 31, 2025, the Company was in compliance with all covenants and no event of default had occurred. During 2025, including during the second quarter of 2025, the Company has obtained temporary waivers of a minimum liquidity covenant under the related party facilities described above in connection with discussions regarding the renewal of these facilities.
Previous wording
The following summarizes our cash flows for the nine months ended September 30, 2024 and 2023:
Current wording
The following summarizes our cash flows for the three months ended March 31, 2025 and 2024:
Previous wording
Net cash (used in) provided by operating activities was ($12.4) million and $277.0 million for the nine months ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024, net cash used in operating activities primarily resulted from a $44.8 million net loss during the period, which included $7.8 million of non-cash stock-based compensation expense and a $2.0 million non-cash real estate inventory valuation adjustment. This was partially offset by an $18.0 million decrease in real estate inventory as a result of sales volumes increasing at a higher rate compared to home acquisitions.
Current wording
For the three months ended March 31, 2024, net cash provided by operating activities primarily resulted from a $9.8 million decrease in real estate inventory as a result of sales volumes increasing at a higher rate compared to home acquisitions, and a $5.6 million decrease in accounts receivable due to a decreased number of home sales pending receipt of cash from the title company as compared to December 31, 2023. Net cash provided by operating activities during the three months ended March 31, 2024 was also impacted by the $17.5 million net loss during the period, which included $3.9 million of non-cash stock-based compensation expense.
Previous wording
Net cash (used in) provided by investing activities was ($1.2) million and $0.3 million during the nine months ended September 30, 2024 and 2023, respectively. Net cash used in investing activities during the nine months ended September 30, 2024 principally represents purchases of property and equipment.
Current wording
Net cash used in investing activities was $1.0 million and $0.3 million during the three months ended March 31, 2025 and 2024, respectively. Net cash used in investing activities during each of the respective periods principally represents purchases of property and equipment.
Previous wording
Net cash used in financing activities was $7.9 million and $304.2 million during the nine months ended September 30, 2024 and 2023, respectively. Net cash used in financing activities during the nine months ended September 30, 2024 primarily consisted of $635.9 million of repayments of credit facilities and other debt, which was partially offset by $628.1 million of borrowings from credit facilities and other debt. This net decrease in credit facility funding of $7.8 million was directly related to the decrease in financed real estate inventory during the period.
Current wording
Net cash used in financing activities was $26.8 million and $3.5 million during the three months ended March 31, 2025 and 2024, respectively. Net cash used in financing activities during the three months ended March 31, 2025 primarily consisted of $189.4 million of repayments of credit facilities and other debt, which was partially offset by $162.8 million of borrowings from credit facilities and other debt. This net decrease in credit facility funding of $26.6 million was directly related to the decrease in financed real estate inventory during the period.
Previous wording
Net cash used in financing activities during the nine months ended September 30, 2023 primarily consisted of $1,080.8 million of repayments of credit facilities and other debt, which was partially offset by $687.7 million of borrowings from credit facilities and other debt. This net decrease in credit facility funding of $393.1 million was directly related to the decrease in financed real estate inventory during the period. This was partially offset by $90.0 million of proceeds from the issuance of pre-funded warrants, net of issuance costs of $0.8 million.
Current wording
Net cash used in financing activities during the three months ended March 31, 2024 primarily consisted of $245.6 million of repayments of credit facilities and other debt, which was partially offset by $242.1 million of borrowings from credit facilities and other debt. This net decrease in credit facility funding of $3.5 million was directly related to the decrease in financed real estate inventory during the period.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The decrease in homes sold was partially offset by a modest increase in the average resale home price from $332,000 in the three months ended March 31, 2024 to $340,000 in the three months ended March 31, 2025. This increase was primarily due to a shift in the mix of homes sold in the respective periods, with a greater percentage of homes sold in geographic markets that tend to share relatively higher median price points during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
Current report — wording carried from elsewhere
Cash Offer revenue decreased by $124.0 million, or 44.6%, to $153.8 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily attributable to lower sales volumes. We sold 460 homes during the three months ended March 31, 2025 compared to 847 homes during the three months ended March 31, 2024, representing a decrease of 45.7%. This decrease in homes sold was partially offset by a modest increase in the average resale home price from $332,000 in the three months ended March 31, 2024 to $340,000 in the three months ended March 31, 2025. This increase was primarily due to a shift in the mix of homes sold in the respective periods, with a greater percentage of homes sold in geographic markets that tend to share relatively higher median price points during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
We recorded income tax expense of less than $0.1 million during each of the three months ended September 30, 2024 and 2023, and our effective tax rate was an expense of 0.2% and less than 0.1% for the respective periods. Our effective tax rate during the three months ended September 30, 2024 differed from the federal statutory rate of 21% primarily due to net operating loss carryforwards and state taxes.
Previous report — wording carried elsewhere
Change in Fair Value of Warrant Liabilities