Offerpad Solutions Inc.

Previous wording

This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements” in this Form 10-Q. Offerpad’s actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” in Part I, Item 1A of Offerpad’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Current wording

This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q. Offerpad’s actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” in Part I, Item 1A of Offerpad’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

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 business-to-business (“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 $12.0 billion of aggregate revenue through June 30, 2025.

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 business-to-business (“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 $12.1 billion of aggregate revenue through September 30, 2025.

Previous wording

During the first half of 2025, the uncertain economic outlook and uneven residential real estate market conditions that have challenged our operating results in recent periods persisted, with the average thirty-year fixed mortgage rate continuing to generally remain between 6.5% and 7%. The sustained elevated and volatile mortgage interest rate environment continues to negatively impact housing affordability and velocity, and create uncertainty for home buyers, which has hindered consumer demand for residential real estate for an extended period of time. Compounding this uncertainty, macroeconomic and geopolitical concerns have been heightened by the trade-related tensions resulting from the tariff announcements made by the U.S. and other governments in 2025. 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 wording

The soft residential real estate market conditions continued during the third quarter of 2025, as housing affordability challenges and weakened consumer confidence persisted, negatively impacting consumer demand for residential real estate. The ongoing concerns associated with the macroeconomic and geopolitical environments, which have been heightened by the trade-related tensions resulting from the recently implemented and proposed tariffs by the U.S. and other governments, have also had an adverse impact on the residential real estate market conditions in recent periods. Although the average thirty-year fixed mortgage rate generally trended downward during the third quarter of 2025 to a level not seen since late 2024, mortgage interest rates remain above 6%, which we expect will continue to contribute to the housing affordability challenges. The cumulative impact of these conditions continues to cause uncertainty in the market and challenge consumer confidence, resulting in lower than normal real estate transaction volumes.

Previous wording

Our operating results during the first half of 2025 have been impacted by these uncertain market conditions. Further, our focus on making more intentional offers and our ongoing reduction in home acquisition pace as part of our effort to balance our real estate inventory levels to potentially optimize our return, has resulted in a fewer number of homes in real estate inventory, which is also reflected in our operating results. We sold 452 homes during the second quarter of 2025, a slight decrease compared to the 460 homes sold during the first quarter of 2025. Additionally, we generated approximately $160 million of revenue during each of the first two quarters of 2025, and our gross profit margin was 8.9% during the second quarter of 2025, reflecting the second consecutive quarter-over-quarter improvement. Further, we achieved 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 wording

Our operating results during the third quarter of 2025 reflect these prevailing market conditions that have been challenging the residential real estate market for an extended period of time. As a result of these conditions, we maintained our focus on selling through our aged real estate inventory during the third quarter of 2025, which had a negative impact on our gross profit margin during the quarter. This activity, combined with our ongoing intentional reduction in home acquisition pace as part of our effort to balance our real estate inventory levels to potentially optimize our return in the future, has resulted in a fewer number of homes in real estate inventory, which is also reflected in our operating results. Although our operating results were unfavorably impacted by these conditions and related strategies during the third quarter of 2025, our focus on cost reduction and operational efficiencies throughout the business continues to be reflected in our lower cost structure, as we achieved year-over-year improvement in our net loss for the third consecutive quarter.

Previous wording

Given the current market conditions, we remain focused on growing our asset-light platform offerings, and within our Cash Offer solution, 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 third 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 third quarter of 2025. As a result of these market dynamics, we may be required to use similar pricing adjustments and incentives in the future, along with reducing our real estate inventory acquisition pace.

Current wording

Given the current market conditions, we remain focused on growing our asset-light platform offerings, and within our Cash Offer solution, 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. While the Federal Reserve Board lowered its benchmark interest rate in both September 2025 and October 2025, and may lower rates further in

Previous wording

On July 25, 2025, we issued and sold 2,857,143 shares (the “Shares”) of our Class A common stock and warrants to purchase up to 1,428,571 shares (the “2025 Warrants”) of our Class A common stock for aggregate gross proceeds of $6.0 million, before deducting placement agent fees and other offering expenses (the “July 2025 Offering”). The Shares and 2025 Warrants were offered and sold on a combined basis for consideration equating to $2.10 for one share and half of one warrant.

Current wording

Class A Common Stock and Warrant Offering – During July 2025, we issued and sold 2,857,143 shares (the “Shares”) of our Class A common stock and warrants to purchase up to 1,428,571 shares (“2025 Warrants”) of our Class A common stock for aggregate gross proceeds of $6.0 million, before deducting placement agent fees and other offering expenses. The Shares and 2025 Warrants were offered and sold on a combined basis for consideration equating to $2.10 for one share and half of one warrant. The 2025 Warrants have an exercise price of $2.30 per share and are initially exercisable on January 26, 2026 and will expire on January 26, 2030.

Previous wording

The 2025 Warrants have an exercise price of $2.30 per share and are initially exercisable on January 26, 2026 and will expire on January 26, 2030. The 2025 Warrants contain standard adjustments to the exercise price, including for stock splits, stock dividends, rights offerings and pro rata distributions. The 2025 Warrants also include certain rights upon the occurrence of a “fundamental transaction” (as described in the 2025 Warrants), including the right of the holder thereof to receive from us or a successor entity the same type or form of consideration (and in the same proportion) that is being offered and paid to the holders of our Class A common stock in such fundamental transaction in the amount of the Black Scholes value (as described in the 2025 Warrants) of the unexercised portion of the Warrant on the date of the consummation of such fundamental transaction. The 2025 Warrants also include cashless exercise rights to the extent the resale of the shares of Class A common stock underlying the 2025 Warrants is not registered under the Securities Act.

Current wording

The 2025 Warrants contain standard adjustments to the exercise price, including for stock splits, stock dividends, rights offerings and pro rata distributions. The 2025 Warrants also include certain rights upon the occurrence of a “fundamental transaction” (as described in the 2025 Warrants), along with cashless exercise rights to the extent there is not an effective registration statement registering the resale of the shares of Class A common stock underlying the 2025 Warrants.

Previous wording

On July 31, 2025, we entered into a $15.0 million revolving credit facility with a lender (the “Revolving Credit Facility”) with a three-year term, to support our continued growth and long-term strategic initiatives. Borrowings under the Revolving Credit Facility accrue interest at 8.50% per annum.

Current wording

Revolving Credit Facility– In July 2025, we entered into a three-year, $15.0 million revolving credit facility with a lender (the “Revolving Credit Facility”) to support our continued growth and long-term strategic initiatives. Borrowings under the Revolving Credit Facility accrue interest at 8.50% per annum.

Previous wording

We believe that our performance and future success depend on a variety of factors that present significant opportunities for our business but also present risks and challenges that could adversely impact our growth and profitability, including those discussed below.

Current wording

We believe that our performance and future success depend on a variety of factors that present significant opportunities for our business but also present risks and challenges that could adversely impact our growth and profitability, including those discussed in Overview above, along with those discussed below.

Previous 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 half of 2025.

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 nine months ended September 30, 2025.

Previous 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.

Current wording

Although we have expanded into three new markets, we have decelerated our market expansion plans in recent years given the uncertain economic outlook and soft residential real estate market 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

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.

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 has the potential to expand our ability to reach more customers, while also providing customers with the benefit of receiving an optimized offer for their home.

Previous wording

During the second quarter of 2025, we launched HomePro, a model that is designed to increase in-home seller engagement and further our mission to provide comprehensive solutions that remove the friction from real estate. Under the HomePro program, certified, local agents from partner brokerages meet with sellers in their home to evaluate their cash offers and listing options and assist sellers in making informed decisions about the home selling process, giving sellers clarity and control over what works best for their situation. Since the initial launch, the HomePro program has been expanded and is available in all of our markets, with select agents across multiple partner brokerages becoming certified HomePro agents. We expect this comprehensive in-home approach will result in sellers being more likely to move forward with their home selling process, leading to increased transaction volumes over time.

Current wording

During the second quarter of 2025, we launched HomePro, a model that is designed to increase in-home seller engagement and further our mission to provide comprehensive solutions that remove the friction from real estate. Under the HomePro program, certified, local agents from partner brokerages meet with sellers in their home to evaluate their cash offers and listing options and assist sellers in making informed decisions about the home selling process, giving sellers clarity and control over what works best for their situation. During the third quarter of 2025, we further enhanced the HomePro program to streamline and optimize the assessment process for HomePro agents, allowing them to spend more time on providing sellers with an increased level of clarity and confidence at every step of the home selling process.

Previous wording

During the second quarter of 2025, the average holding period of homes sold decreased to 133 days as we sold through our aged real estate inventory and our overall real estate inventory mix shifted to include a higher composition of newer acquired homes. Our average real estate inventory holding period is expected to remain generally consistent at around 140 days during the third quarter of 2025. However, as the residential real estate market conditions remain volatile, we intend to continue to make more intentional offers and balance our home acquisition pace to manage our real estate inventory levels, and ultimately, our average real estate inventory holding period.

Current wording

During the nine months ended September 30, 2025, the average holding period of homes sold has remained higher than our historical norms as a result of the softened residential real estate market conditions, and our associated ongoing intentional reduction in home acquisition pace and continued focus on selling through our aged real estate inventory during the year. The average holding period of homes sold during the third quarter of 2025 was 154 days. Based on current market conditions, the normal seasonal increase that occurs in the fall and winter months and our sustained effort on managing our real estate inventory levels, we anticipate our average real estate inventory holding period in the fourth quarter of 2025 will slightly increase to approximately 160 days. However, as the residential real estate market conditions remain challenging, we intend to continue making more intentional offers and balancing our home acquisition pace to manage our real estate inventory levels, and ultimately, our average real estate inventory holding period.

Previous wording

We calculate Contribution Profit as Adjusted Gross Profit, minus (1) direct selling costs incurred on homes sold during the presented period, minus (2) holding costs incurred in the current period on homes sold during the period recorded in sales, marketing, and operating, minus (3) holding costs incurred in prior periods on homes sold in the current period recorded in sales, marketing, and operating, plus (4) other income, net which is primarily composed of interest income earned on our cash and cash equivalents and fair value adjustments of derivative financial instruments. The composition of our holding costs is described in the footnotes to the reconciliation table below. We define Contribution Margin as Contribution Profit as a percentage of revenue.

Current wording

We calculate Contribution Profit as Adjusted Gross Profit, minus (1) direct selling costs incurred on homes sold during the presented period, minus (2) holding costs incurred in the current period on homes sold during the period recorded in sales, marketing, and operating, minus (3) holding costs incurred in prior periods on homes sold in the current period recorded in sales, marketing, and operating, plus (4) other income, net which is primarily composed of interest income earned on our cash and cash equivalents. The composition of our holding costs is described in the footnotes to the reconciliation table below. We define Contribution Margin as Contribution Profit as a percentage of revenue.

Previous wording

Interest expense capitalized represents all interest related costs, including senior and mezzanine secured credit facilities, incurred on homes sold in the period presented that were capitalized and expensed in cost of sales at the time of sale.

Current wording

Interest expense capitalized represents all interest related costs under our senior and mezzanine secured credit facilities and other senior secured debt, incurred on homes sold in the period presented that were capitalized and expensed in cost of sales at the time of sale.

Previous wording

Other income, net principally represents interest income earned on our cash and cash equivalents and fair value adjustments of derivative financial instruments.

Current wording

Other income, net principally represents interest income earned on our cash and cash equivalents.

Previous wording

Represents both senior and mezzanine interest expense incurred on homes sold in the period presented and expensed to interest expense on the Condensed Consolidated Statements of Operations.

Current wording

Represents interest expense under our senior and mezzanine secured credit facilities and other senior secured debt incurred on homes sold in the period presented and expensed to interest expense on the Condensed Consolidated Statements of Operations.

Previous wording

Represents both senior and mezzanine secured credit facilities interest expense incurred in prior periods on homes sold in the period presented and expensed to interest expense on the Condensed Consolidated Statements of Operations.

Current wording

Represents interest expense under our senior and mezzanine secured credit facilities and other senior secured debt incurred in prior periods on homes sold in the period presented and expensed to interest expense on the Condensed Consolidated Statements of Operations.

Previous wording

Amortization of capitalized interest represents all interest related costs, including senior and mezzanine interest related costs, incurred on homes sold in the period presented that were capitalized and expensed in cost of sales at the time of sale.

Current wording

Amortization of capitalized interest represents all interest related costs under our senior and mezzanine secured credit facilities and other senior secured debt, incurred on homes sold in the period presented that were capitalized and expensed in cost of sales at the time of sale.

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 six months ended June 30, 2025 compared to the three and six months ended June 30, 2024.

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 and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024.

Previous wording

Our consolidated revenue decreased by $90.8 million, or 36.2%, to $160.3 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Our Cash Offer solution represents the substantial majority of our business, and generated approximately 95% of our consolidated revenue during each of the three months ended June 30, 2025 and 2024.

Current wording

Our consolidated revenue decreased by $75.4 million, or 36.2%, to $132.7 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Our Cash Offer solution represents the substantial majority of our business and generated over 90% of our consolidated revenue during each of the three months ended September 30, 2025 and 2024.

Previous wording

Cash Offer revenue decreased by $92.8 million, or 37.9%, to $152.1 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was primarily attributable to lower sales volumes. We sold 452 homes during the three months ended June 30, 2025 compared to 742 homes during the three months ended June 30, 2024, representing a decrease of 39.1%. This decrease in homes sold was primarily due to our ongoing intentional reduction in home acquisition pace beginning in 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. Our focus on making more intentional offers and our ongoing reduction in home acquisition pace resulted in a fewer number of homes in real estate inventory during the first half of 2025. This has allowed us to balance our real estate inventory levels to potentially optimize our return in light of the sustained elevated and volatile mortgage interest rate environment, as the average thirty-year fixed mortgage rate continued to generally remain between 6.5% and 7% during the second quarter of 2025. This sustained elevated and volatile mortgage interest rate environment continues to negatively impact housing affordability and velocity, and create uncertainty for home buyers, which has hindered consumer demand for residential real estate for an extended period of time.

Current wording

Cash Offer revenue decreased by $80.1 million, or 39.5%, to $122.8 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease was primarily attributable to lower sales volumes. We sold 367 homes during the three months ended September 30, 2025 compared to 615 homes during the three months ended September 30, 2024, representing a decrease of 40.3%. This decrease in homes sold was primarily due to our ongoing intentional reduction in home acquisition pace over the past year in response to the challenging residential real estate market conditions, resulting in a fewer number of homes in real estate inventory. This intentional reduction has allowed us to balance our real estate inventory levels to potentially optimize our returns in the future as housing affordability challenges and weakened consumer confidence have persisted for an extended period of time, negatively impacting consumer demand for residential real estate.

Previous wording

This decrease in homes sold was partially offset by an increase in the average resale home price from $335,000 in the three months ended June 30, 2024 to $344,000 in the three months ended June 30, 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 June 30, 2025 as compared to the three months ended June 30, 2024.

Current wording

This decrease in homes sold was partially offset by an increase in the average resale home price from $335,000 in the three months ended September 30, 2024 to $342,000 in the three months ended September 30, 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 September 30, 2025 as compared to the three months ended September 30, 2024.

Previous wording

Other revenue increased by $2.0 million, or 32.1%, to $8.2 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was primarily attributable to an increase in B2B Renovate revenue due to higher renovation volumes and a higher average renovation transaction value per home during three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Current wording

Other revenue increased by $4.7 million, or 89.4%, to $9.9 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily attributable to an increase in B2B Renovate revenue due to higher renovation volumes and a higher average renovation transaction value per home during three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Previous wording

Our consolidated cost of revenue decreased by $83.1 million, or 36.3%, to $146.1 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. 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 wording

Our consolidated cost of revenue decreased by $67.6 million, or 35.4%, to $123.3 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. 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.

Previous wording

Cash Offer cost of revenue decreased by $84.1 million, or 37.4%, to $140.9 million for the three months ended June 30, 2025 compared to the three months ended June 30, 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 wording

Cash Offer cost of revenue decreased by $71.1 million, or 37.9%, to $116.4 million for the three months ended September 30, 2025 compared to the three months ended September 30, 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

Other cost of revenue increased by $1.0 million, or 22.7%, to $5.2 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This increase was primarily attributable to an increase in costs associated with our B2B Renovate business due higher renovation volumes and a higher average renovation transaction cost per home during the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Current wording

Other cost of revenue increased by $3.5 million, or 103.1%, to $6.9 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This increase was primarily attributable to an increase in costs associated with our B2B Renovate business due to higher renovation volumes and a higher average renovation transaction cost per home during the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Previous wording

Our consolidated gross profit margin was 8.9% for the three months ended June 30, 2025 compared to 8.7% for the three months ended June 30, 2024.

Current wording

Our consolidated gross profit margin was 7.0% for the three months ended September 30, 2025 compared to 8.2% for the three months ended September 30, 2024.

Previous wording

Cash Offer gross profit margin was 7.3% for the three months ended June 30, 2025 compared to 8.1% for the three months ended June 30, 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 June 30, 2024 to $1.1 million during the three months ended June 30, 2025. The decrease in gross profit margin was also due to a higher average real estate inventory holding period during the first two quarters of 2025 compared to the first two quarters of 2024, along with our increased use of pricing adjustments and other incentives in recent periods as we focused on selling our aged real estate inventory.

Current wording

Cash Offer gross profit margin was 5.2% for the three months ended September 30, 2025 compared to 7.6% for the three months ended September 30, 2024. The decrease in gross profit margin was primarily due to an increase in the real estate inventory valuation adjustment, from $0.8 million during the three months ended September 30, 2024 to $2.0 million during the three months ended September 30, 2025. The decrease in gross profit margin was also due to a higher average real estate inventory holding period during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, along with our increased use of pricing adjustments and other incentives in recent periods as we maintained our focus on selling our aged real estate inventory.

Previous wording

Other gross profit margin was 36.8% for the three months ended June 30, 2025 compared to 31.9% for the three months ended June 30, 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 second quarter of 2025 compared to the second 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 June 30, 2025 compared to the three months ended June 30, 2024.

Current wording

Other gross profit margin was 30.1% for the three months ended September 30, 2025 compared to 34.9% for the three months ended September 30, 2024. This decrease 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 third quarter of 2025 compared to the third quarter of 2024. B2B Renovate, which generally has lower margins compared to the other offerings included within Other, represented a larger component of Other gross profit during the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Previous wording

Sales, marketing and operating expense decreased by $7.0 million, or 34.8%, to $13.2 million for the three months ended June 30, 2025 compared to the three months ended June 30, 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 $1.4 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.

Current wording

Sales, marketing and operating expense decreased by $6.7 million, or 39.9%, to $10.1 million for the three months ended September 30, 2025 compared to the three months ended September 30, 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 $0.6 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 $2.7 million, or 26.0%, to $7.8 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was primarily attributable to decreased average employee headcount, a decrease in fees associated with our credit facilities and lower insurance costs. This decrease was partially offset by increased legal and other professional fees.

Current wording

General and administrative expense decreased by $3.1 million, or 37.6%, to $5.1 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease was primarily attributable to decreased average employee headcount, a decrease in fees associated with our credit facilities, lower insurance costs, and lower legal and other professional fees.

Previous wording

Technology and development expense increased by less than $0.1 million, or 2.3%, to $1.0 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was primarily attributable to increased third-party consulting fees, which was partially offset by a decreased average employee headcount.

Current wording

Technology and development expense decreased by $0.2 million, or 16.8%, to $0.8 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease was primarily attributable to lower third-party consulting fees and decreased average employee headcount.

Previous wording

Change in fair value of warrant liabilities represents a gain of $0.3 million for the three months ended June 30, 2025 and a loss of less than $0.1 million for the three months ended June 30, 2024, 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 $1.0 million for the three months ended September 30, 2025 and a gain of less than $0.1 million for the three months ended September 30, 2024, as a result of the fair value adjustment of our warrant liabilities.

Previous wording

Interest expense decreased by $0.9 million, or 20.0%, to $3.7 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was primarily attributable to a $66.8 million decrease in the average outstanding balance of our senior and mezzanine secured credit facilities, from $280.4 million during the three months ended June 30, 2024 to $213.6 million during the three months ended June 30, 2025. The decrease in expense was also due to a 0.9% decrease in the weighted average variable interest rates associated with our secured credit facilities and other debt.

Current wording

Interest expense decreased by $1.5 million, or 28.7%, to $3.6 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease was primarily attributable to a $85.8 million decrease in the average outstanding balance of our secured credit facilities and other debt, from $278.3 million during the three months ended September 30, 2024 to $192.5 million during the three months ended September 30, 2025. The decrease in expense was also due to a 1.0% 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 less than $0.1 million and an income tax benefit of $0.1 million during the three months ended June 30, 2025 and 2024, respectively, and our effective tax rate was an expense of 0.3% and a benefit 0.4% for the respective periods. Our effective tax rate during the three months ended June 30, 2025 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 $0.4 million and less than $0.1 million during the three months ended September 30, 2025 and 2024, respectively, and our effective tax rate was an expense of 3.4% and 0.2% for the respective periods. Our effective tax rate during the three months ended September 30, 2025 differed from the federal statutory rate of 21% primarily due to state taxes and net operating loss carryforwards.

Previous wording

Our consolidated revenue decreased by $215.5 million, or 40.2%, to $321.0 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. Our Cash Offer solution represents the substantial majority of our business, generating over 95% of our consolidated revenue during each of the six months ended June 30, 2025 and 2024.

Current wording

Our consolidated revenue decreased by $290.9 million, or 39.1%, to $453.7 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. Our Cash Offer solution represents the substantial majority of our business and generated over 90% of our consolidated revenue during each of the nine months ended September 30, 2025 and 2024.

Previous wording

Cash Offer revenue decreased by $216.8 million, or 41.5%, to $305.9 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The decrease was primarily attributable to lower sales volumes. We sold 912 homes during the six months ended June 30, 2025 compared to 1,589 homes during the six months ended June 30, 2024, representing a decrease of 42.6%. This decrease in homes sold was primarily due to our ongoing intentional reduction in home acquisition pace beginning in 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. Our focus on making more intentional offers and the ongoing reduction in home acquisition pace resulted in a fewer number of homes in real estate inventory during the first half of 2025. This has allowed us to balance our real estate inventory levels to potentially optimize our return in light of the sustained elevated and volatile mortgage interest rate environment, as the average thirty-year fixed mortgage rate continued to generally remain between 6.5% and 7% during the first half of 2025. This sustained elevated and volatile mortgage interest rate environment continues to negatively impact housing affordability and velocity, and create uncertainty for home buyers, which has hindered consumer demand for residential real estate for an extended period of time.

Current wording

Cash Offer revenue decreased by $296.9 million, or 40.9%, to $428.7 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease was primarily attributable to lower sales volumes. We sold 1,279 homes during the nine months ended September 30, 2025 compared to 2,204 homes during the nine months ended September 30, 2024, representing a decrease of 42.0%. This decrease in homes sold was primarily due to our ongoing intentional reduction in home acquisition pace over the past year in response to the challenging residential real estate market conditions, resulting in a fewer number of homes in real estate inventory. This intentional reduction has allowed us to balance our real estate inventory levels to potentially optimize our returns in the future as housing affordability challenges and weakened consumer confidence have persisted for an extended period of time, negatively impacting consumer demand for residential real estate.

Previous wording

This decrease in homes sold was partially offset by an increase in the average resale home price from $333,000 in the six months ended June 30, 2024 to $342,000 in the six months ended June 30, 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 six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

Current wording

This decrease in homes sold was partially offset by an increase in the average resale home price from $334,000 in the nine months ended September 30, 2024 to $342,000 in the nine months ended September 30, 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 nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.