Offerpad Solutions Inc.

Previous wording

The following discussion and analysis provides information that Offerpad’s management believes is relevant to an assessment and understanding of Offerpad’s consolidated results of operations and financial condition. The discussion should be read together with the unaudited interim condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q and our audited consolidated financial statements and accompanying notes included in Item 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2025.

Current wording

The following discussion and analysis provides information that management of Offerpad (the “Company”) believes is relevant to an assessment and understanding of Offerpad’s consolidated results of operations and financial condition. The discussion should be read together with the unaudited interim condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q and the Company’s audited consolidated financial statements and accompanying notes included in Item 8 of its Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2026.

Previous 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 September 30, 2025.

Current wording

We are headquartered in Tempe, Arizona and operate in over 1,800 cities and towns in 26 metropolitan markets across 17 states as of March 31, 2026.

Previous wording

Our business and operating results are impacted by the general economic conditions and the health of the U.S. residential real estate industry, particularly the single-family home resale market. Our business model primarily depends on a high volume of residential real estate transactions throughout the markets in which we operate. This transaction volume affects substantially all of the ways that we generate revenue, including our ability to acquire new homes and generate associated fees, and our ability to sell homes that we own.

Current wording

Our business and operating results are impacted by the general economic conditions and the health of the U.S. residential real estate industry, particularly the single-family home resale market. Our Cash Offer solution, which is the foundation of our business and generates the substantial majority of our consolidated revenue, generally depends on a high volume of residential real estate transactions throughout the markets in which we operate. While we have expanded our real estate service solutions beyond our Cash Offer service over time, including through the offering of renovation services through our Renovate solution, together with a range of other services that are designed to meet the unique needs of sellers and partners across multiple transaction paths, transaction volumes in the U.S. residential real estate market continue to affect substantially all of the ways that we generate revenue.

Previous 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.

Current wording

Our operating results during the first quarter of 2026 reflect these prevailing market conditions. We remained focused on selling through our aged real estate inventory during the first quarter, which had a negative impact on our average real estate inventory holding period and gross profit margin during the quarter. This activity, combined with our intentional reduction in home acquisition pace throughout 2025 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 first quarter of 2026, 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 fifth 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. While the Federal Reserve Board lowered its benchmark interest rate in both September 2025 and October 2025, and may lower rates further in

Current wording

Given the current market conditions, we remain focused on growing our other real estate service solution offerings, and within our Cash Offer solution, proactively optimizing our capital allocation across our highest performing and most efficient markets along with 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, the uncertainty regarding the near-term macroeconomic conditions has been amplified as a result of the conflict in the Middle East, making it increasingly difficult to predict the near-term direction of mortgage interest rates and consumer demand for residential real estate. We anticipate the ongoing economic uncertainties and affordability pressures will continue to impact consumer demand for residential real estate during the second quarter of 2026. As a result of these market dynamics, we may be required to use similar pricing adjustments and incentives in the future, along with continuing to reduce our real estate inventory acquisition pace compared to our historical levels.

Previous wording

New York Stock Exchange Listing Notice

Current wording

New York Stock Exchange Listing Notices

Previous wording

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 wording

On April 10, 2025, we received notice (the “April 2025 NYSE Notification”) from the NYSE that we were 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.

Previous wording

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. On May 27, 2025, we submitted to the NYSE a business plan advising the definitive action(s) we are taking or plan to take that would bring us into compliance with the NYSE continued listing standards within 18 months of receipt of the NYSE Notification (the “Cure Period”).

Current wording

On July 16, 2025, the NYSE accepted our business plan advising the definitive action(s) we are taking or plan to take that would bring us into compliance with the NYSE continued listing standards within 18 months of receipt of the April 2025 NYSE Notification (the “April 2025 Cure Period”). As a result, we are subject to quarterly monitoring for compliance with the business plan.

Previous wording

On July 16, 2025, the NYSE accepted the business plan and, as a result, we will be subject to quarterly monitoring for compliance with the business 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 the business plan.

Current wording

Neither the April 2025 NYSE Notification nor the March 2026 NYSE Notification has had any immediate impact on the listing of our Class A common stock. Further, our Class A common stock will continue to be listed and traded on the NYSE during the respective cure periods, subject to our compliance with the other continued listing standards of the NYSE, steps to cure our stock price deficiency, and continued periodic review by the NYSE of our progress with respect to the business plan.

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 in Overview above, along with those discussed below.

Current wording

We believe 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

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.

Current wording

The U.S. residential real estate market is substantial, with 4.4 million homes sold for a total transaction value of roughly $1.8 trillion during 2025, and is highly fragmented with a significant number of licensed real estate agents and real estate brokerages. In 2025, the total residential real estate transactions in our 26 active metropolitan markets covered roughly 22% of the 4.4 million homes sold during the year, and we estimate that we captured roughly 0.2% of such transactions. Given this high degree of fragmentation, we believe that giving homeowners more control, flexibility, and choice when buying and selling a home through our real estate service solutions could lead to continued market share growth and accelerated adoption of the digital model. We have demonstrated higher market share in certain markets over time, providing the backdrop to grow our overall market penetration as we focus on the expansion of our various real estate service solutions in existing markets. Additionally, we anticipate our market share will increase over time as we invest in additional brand marketing, strengthen our local partnerships and continue improving customer awareness of our offerings.

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 nine months ended September 30, 2025.

Current wording

Since our launch in 2015, we have expanded our real estate operations into 26 metropolitan markets as of March 31, 2026. We have been strategic in our approach to growing our market footprint and have focused on geographic diversification across high population growth cities with affordable median sales prices and increasing employment characteristics. 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 in offering four complementary solutions that serve sellers and partners across multiple transaction paths, we believe a significant portion of the total addressable market is serviceable with our business model. As we expand our reach through our various service offerings, we expect to continue to serve customers in markets beyond our direct service area. Further, this strategic approach has historically 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 are currently offering renovation services in select markets in which we operate.

Previous 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.

Current wording

Although we have expanded into new markets over time, we have decelerated our market expansion plans in more recent years given the uncertain economic outlook and challenging 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

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.

Current wording

Through our Renovate services, 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 these third-party 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.

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 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.

Current wording

Over the long term, 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, which 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

We view Contribution Margin and Contribution Margin after Interest (see “—Non-GAAP Financial Measures”) as key performance indicators for unit economic performance, which are currently primarily driven by our cash offer transactions. Future financial performance improvements are expected to be driven by expanding unit level margins through initiatives such as:

Current wording

We view Contribution Margin and Contribution Margin after Interest (see “—Non-GAAP Financial Measures”) as key performance indicators for unit economic performance, which are currently driven primarily by our Cash Offer transactions. We also use total real estate transactions as an operating metric to assess the scale and reach of our solutions platform across Cash Offer, Cash Offer Marketplace, and Brokerage Services. As we continue to expand our multi-solution platform, we expect future financial performance improvements to be driven by both growth in transaction volume across these solutions and expansion of unit-level margins, through initiatives such as:

Previous wording

Continued optimization of acquisition, renovation, and resale processes and strategies, as we increase our market penetration in existing markets;

Current wording

Continued optimization of acquisition, renovation, and resale processes and strategies, including our underwriting processes, as we increase our market penetration in existing markets;

Previous wording

Effectively increasing and expanding our Cash Offer solution, optimizing customer and agent community engagement and increasing conversion of requests for home purchases; and

Current wording

Effectively growing and expanding our solutions platform, including Cash Offer, Cash Offer Marketplace, and Brokerage Services, while optimizing customer and agent community engagement and increasing conversion across transaction pathways; and

Previous wording

Introducing and scaling additional ancillary products and services to complement our core Cash Offer solution.

Current wording

Introducing and scaling additional ancillary products and services to complement our core Cash Offer solution, over the long term.

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 generally 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 over the longer term, we plan to 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

Our business model requires significant capital to purchase real estate inventory. Real estate inventory financing is a key enabler to our growth and we rely on our non-recourse asset-backed financing facilities, which primarily consist of senior and mezzanine secured credit facilities to finance our home purchases. Though we may from time to time reduce our available capacity under such credit facilities to align with our required usage, the loss of adequate access to these types of facilities, or the inability to maintain these types of facilities on favorable terms, would impair our performance. See “—Liquidity and Capital Resources—Financing Activities.”

Current wording

Our business model requires significant capital to purchase real estate inventory. Real estate inventory financing is a key enabler to our growth and we rely on our non-recourse asset-backed financing facilities, which primarily consist of senior and mezzanine secured credit facilities, to finance our home purchases. Though we may from time to time adjust the composition of our credit facilities to correspond with our anticipated financing requirements, which may include reducing our available capacity under such credit facilities, or realigning the credit facility provider mix, the loss of adequate access to these types of facilities, or the inability to maintain these types of facilities on favorable terms, would impair our performance. See “—Liquidity and Capital Resources—Financing Activities.”

Previous wording

Our business model is based upon acquiring homes at a price which will allow us to provide a competitive offer to the consumer, while being able to add value through the renovation process, and relist the home so that it sells at a profit and in a relatively short period of time. We have invested significant resources into our underwriting and asset management systems. Our real estate operations team, including our pricing team, together with our software engineering and data science teams are responsible for underwriting accuracy, portfolio health, and workflow optimization. Our underwriting tools are constantly updated to adjust to the latest market conditions, leveraging inputs from our internal data systems, as well as third-party and other proprietary data sources. This allows us to assess and adjust to changes in the local housing market conditions based on our technology, analysis and local real estate experience, in order to mitigate our risk exposure. Further, our listed homes are typically in market-ready and move-in ready condition following the repairs and renovations we conduct.

Current wording

While we have expanded our real estate service solutions beyond our Cash Offer service over time, a significant portion of our business model continues to be based upon acquiring homes at a price which will allow us to provide a competitive offer to the consumer, while being able to add value through the renovation process, and relisting the home so that it sells at a profit and in a relatively short period of time.

Previous wording

To provide investors with additional information regarding our margins, we have included Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins), which are non-GAAP financial measures. We believe that Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest are useful financial measures for investors as they are used by management in evaluating unit level economics and operating performance across our markets. Each of these measures is intended to present the economics related to homes sold during a given period. We do so by including revenue generated from homes sold (and ancillary services) in the period and only the expenses that are directly attributable to such home sales, even if such expenses were recognized in prior periods, and excluding expenses related to homes that remain in real estate inventory as of the end of the period presented. Contribution Profit provides investors a measure to assess Offerpad’s ability to generate returns on homes sold during a reporting period after considering home acquisition costs, renovation and repair costs, and adjusting for holding costs and selling costs. Contribution Profit After Interest further impacts gross profit by including interest costs (including senior and mezzanine secured credit facilities) attributable to homes sold during a reporting period. We believe these measures facilitate meaningful period over period comparisons and illustrate our ability to generate returns on assets sold after considering the costs directly related to the assets sold in a presented period.

Current wording

To provide investors with additional information regarding our margins, we have included Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins), which are non-GAAP financial measures. We believe that Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest are useful financial measures for investors as they are used by management in evaluating unit level economics and operating performance across our markets. Each of these measures is intended to present the economics related to the number of homes sold or other real estate transactions during a given period. We do so by including revenue generated from our Cash Offer, Cash Offer Marketplace, and Brokerage Services solutions in the period and only the expenses that are directly attributable to these transactions, even if such expenses were recognized in prior periods, and excluding expenses related to homes that remain in real estate inventory as of the end of the period presented. Contribution Profit provides investors a measure to assess Offerpad’s ability to generate returns during a reporting period after considering home acquisition costs, renovation and repair costs, and adjusting for holding costs and selling costs. Contribution Profit After Interest further impacts gross profit by including interest costs (including senior and mezzanine secured credit facilities and other senior secured debt) attributable to homes sold during a reporting period. We believe these measures facilitate meaningful period over period comparisons and illustrate our ability to generate returns on our homes sold and other real estate transactions after considering the costs directly related to such transactions in a presented period.

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, 2025 compared to the three and nine months ended September 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 months ended March 31, 2026 compared to the three months ended March 31, 2025.

Previous 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.

Current wording

Cash Offer revenue decreased by $80.3 million, or 52.2%, to $73.5 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was primarily attributable to lower sales volumes. We sold 211 homes during the three months ended March 31, 2026 compared to 460 homes during the three months ended March 31, 2025, representing a decrease of 54.1%. This decrease in homes sold was primarily due to the continued challenging residential real estate market conditions and our associated intentional reduction in home acquisition pace during 2025 as part of our effort to balance our real estate inventory levels to potentially optimize our return in the future, resulting in a fewer number of homes in real estate inventory.

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 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.

Current wording

This decrease in homes sold was partially offset by an increase in the average resale home price from $340,000 in the three months ended March 31, 2025 to $356,000 in the three months ended March 31, 2026. 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, 2026 as compared to the three months ended March 31, 2025.

Previous wording

Our consolidated cost of revenue decreased by $263.3 million, or 38.6%, to $419.7 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Current wording

Our consolidated cost of revenue decreased by $75.7 million, or 50.4%, to $74.5 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Previous 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.

Current wording

Cash Offer cost of revenue decreased by $75.9 million, or 52.1%, to $69.9 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This decrease was primarily attributable to lower sales volumes and a $1.3 million decrease in the real estate inventory valuation adjustment.

Previous 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.

Current wording

Renovate cost of revenue increased by $0.3 million, or 7.0%, to $4.5 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was primarily attributable to higher renovation volumes, which was partially offset by a lower average renovation transaction cost per home, from $20,300 per home during the three months ended March 31, 2025 to $11,300 per home during the three months ended March 31, 2026.

Previous 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.

Current wording

Our consolidated gross profit margin was 6.9% for the three months ended March 31, 2026 compared to 6.5% for the three months ended March 31, 2025.

Previous 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.

Current wording

Cash Offer gross profit margin was 4.9% for the three months ended March 31, 2026 compared to 5.3% for the three months ended March 31, 2025. The decrease in gross profit margin was primarily due to a higher average real estate inventory holding period during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease in gross profit margin was partially offset by a decrease in the real estate inventory valuation adjustment, from $1.7 million during the three months ended March 31, 2025 to $0.4 million during the three months ended March 31, 2026.

Previous 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.

Current wording

Other gross profit margin was 87.4% for the three months ended March 31, 2026 compared to 86.1% for the three months ended March 31, 2025. This slight increase in gross profit margin was primarily due to a shift in the product mix of the solution offerings included in Other. Our Cash Offer Marketplace offering, which includes Direct+ partners, generally has one of the higher margin profiles of the offerings included within Other, and represented a larger component of Other gross profit during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Previous 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.

Current wording

Sales, marketing and operating expense decreased by $6.3 million, or 45.2%, to $7.6 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease in expense was primarily attributable to a decrease in variable costs associated with the decrease in homes sold, decreased average employee headcount, and a $1.1 million decrease in advertising expense as we continue to reposition and optimize our marketing efforts in response to the ongoing challenging residential real estate market conditions.

Previous wording

General and administrative expense decreased by $10.6 million, or 34.5%, to $20.1 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease in expense 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 $1.1 million, or 14.9%, to $6.1 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease in expense was primarily attributable to decreased average employee headcount and a decrease in lender fees in connection with reduced borrowings on our credit facilities, which was partially offset by increased fees associated with legal and other professional obligations.

Previous 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.

Current wording

Technology and development expense decreased by $0.1 million, or 13.1%, to $0.9 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease in expense was primarily attributable to lower software subscription and third-party consulting fees.

Previous 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.

Current wording

Change in fair value of warrant liabilities represents a gain of $0.2 million for the three months ended March 31, 2026 and a loss of $0.3 million for the three months ended March 31, 2025, as a result of the fair value adjustment of our warrant liabilities.

Previous 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.

Current wording

Interest expense decreased by $1.9 million, or 54.1%, to $1.6 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was primarily attributable to a $137.5 million decrease in the average outstanding balance of our secured credit facilities and other debt, from $224.6 million during the three months ended March 31, 2025 to $87.1 million during the three months ended March 31, 2026. The decrease in expense was also due to a 0.4% decrease in the weighted average variable interest rates associated with our secured credit facilities and other debt. These decreases were partially offset by interest expense associated with our revolving credit facility which was entered into during July 2025.

Previous wording

Other income, net during the nine months ended September 30, 2025 and 2024 principally represents interest income earned on our cash and cash equivalents. Other income, net also includes gains or losses from the disposal of property and equipment in both periods.

Current wording

Other income, net principally represents interest income earned on our cash and cash equivalents during each of the three months ended March 31, 2026 and 2025. Other income, net also includes losses from the disposal of property and equipment in both periods.

Previous 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.

Current wording

We recorded income tax expense of less than $0.1 million during each of the three months ended March 31, 2026 and 2025, and our effective tax rate was an expense of 0.2% during both periods. Our effective tax rate during the three months ended March 31, 2026 differed from the federal statutory rate of 21% primarily due to state taxes and net operating loss carryforwards.

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.

Current wording

As of March 31, 2026, we had cash and cash equivalents of $40.8 million, which consists 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.