Opendoor Technologies Inc.
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
View on SEC.govAbout this filing
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.
Sep 30, 2026 · Filed Nov 5, 2026
OPEN$1.40-21.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-04.
0001801169-26-000021
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001801169-26-000028
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 184 previous paragraphs and 191 current paragraphs.
118 unchanged; 57 reworded; 13 added; 8 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 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 (13)
Current report
(2)Represents amortization of acquisition-related intangible assets.
Current report
Cost of Revenue
Current report
Cost of revenue increased by $135 million, or 16%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase in cost of revenue was primarily attributable to higher sales volumes, a 5% increase in cost of revenue per home sold, excluding inventory valuation adjustments on homes in inventory at period end, as well as an increase of $44 million of net inventory valuation adjustments.
Current report
Gross Profit
Current report
Gross profit decreased from $66 million to $38 million for the three months ended September 30, 2025 and September 30, 2026, respectively. The decrease reflected higher net inventory valuation adjustment expense, recognized within cost of revenue, partially offset by higher gross profit from adjacent services. Gross margin decreased from 7.2% to 3.7% for the three months ended September 30, 2025 and September 30, 2026, respectively. The decrease reflected growth in cost of revenue, including higher net inventory valuation adjustment expense, exceeding growth in revenue, partially offset by a greater contribution from adjacent services.
Current report
Gross profit decreased from $293 million to $196 million for the nine months ended September 30, 2025 and September 30, 2026, respectively. The decrease was primarily attributable to lower sales volumes, with higher net inventory valuation adjustment expense, recognized within cost of revenue, also contributing. The decrease was partially offset by higher gross profit from adjacent services. Gross margin decreased from 8.1% to 7.5% for the nine months ended September 30, 2025 and September 30, 2026, respectively. The decrease reflected higher net inventory valuation adjustment expense, partially offset by greater gross profit contribution from adjacent services.
Current report
Interest expense increased by $4 million, or 12%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily attributable to an $10 million increase in property financing costs, driven by higher average balances on our asset-backed debt, partially offset by a $6 million decrease in costs associated with our Convertible Senior Notes.
Current report
Other income— net decreased by $6 million, or 43%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The decrease was primarily attributable to a $5 million decrease in interest income driven by a decrease in average cash, cash equivalents and restricted cash balances.
Current report
In August 2026, the Company issued $650 million aggregate principal amount of 2030-B Notes in privately negotiated subscription transactions with certain investors. Gross proceeds were $650 million, before placement agent fees and other offering expenses of $11 million. As of September 30, 2026, the $650 million outstanding aggregate principal amount of the 2030-B Notes is classified as a non-current liability.
Current report
In August 2026, in connection with the issuance of the 2030-B Notes, the Company purchased the 2030-B Capped Calls from certain financial institutions for an aggregate premium of $52 million and incurred approximately $1 million of related transaction costs. The premium and transaction costs were recorded as a reduction of additional paid-in capital. The 2030-B Capped Calls cover, subject to customary adjustments, approximately 138 million shares of the Company’s common stock. By entering into the 2030-B Capped Calls, the Company expects to reduce the potential dilution to its common stock (or, in the event of a conversion of the 2030-B Notes settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion of the 2030-B Notes its common stock price exceeds the conversion price.
Current report
The 2026 Notes matured on August 15, 2026, and the Company paid $135 million to settle the outstanding aggregate principal amount and accrued and unpaid interest.
Current report
In August 2026, the Company’s board of directors authorized the repurchase of shares of the Company’s common stock. During the three months ended September 30, 2026, the Company repurchased 45,272,209 shares of its common stock in privately negotiated transactions for an aggregate purchase price of $158 million at an average price of $3.49 per share, excluding transaction costs of $3 million with an aggregate $161 million recognized in additional paid-in capital. See“Part I - Item 1. Financial Statements - Notes to Condensed Consolidated Financial Statements - Note 9. Shareholders’ Equity” for additional details.
Current report
September 30, 2026, we had committed borrowing capacity with respect to asset-backed senior revolving credit facilities of $572 million.
Removed paragraphs (8)
Previous report
N/M - Not meaningful.
Previous report
Cost of Revenue and Gross Profit
Previous report
Cost of revenue decreased by $1.0 billion, or 42%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease in cost of revenue was primarily attributable to lower sales volumes and a 1% decrease in cost of revenue per home sold.
Previous report
Gross profit decreased from $128 million to $86 million and gross margin increased from 8.2% to 9.7% for the three months ended June 30, 2025 and June 30, 2026, respectively. For the same periods, Adjusted Gross Margin increased from 8.6% to 10.3% and Contribution Margin increased from 4.4% to 5.8%. The decrease in gross profit was attributable to lower sales volumes as discussed above. The increase in Gross Margin, Adjusted Gross Margin, and Contribution Margin was partially driven by a favorable mix of fresher inventory sold during the period, together with an increase in margin from adjacent services. As a reminder, Adjusted Gross Margin and Contribution Margin include inventory valuation adjustments recorded in prior periods on homes sold in the current period and exclude inventory valuation adjustments on homes remaining in inventory at the end of the period, which can create significant differences between these metrics and gross margin. Adjusted Gross Margin and Contribution Margin are non-GAAP financial measures. See “—Non-GAAP Financial Measures” for further details and a reconciliation of such non-GAAP measures to their nearest comparable GAAP measures.
Previous report
Gross profit decreased from $227 million to $158 million and gross margin increased from 8.3% to 9.9% for the six months ended June 30, 2025 and June 30, 2026, respectively. For the same periods, Adjusted Gross Margin increased from 8.6% to 9.9% and Contribution Margin increased from 4.5% to 5.2%. The decrease in gross profit was attributable to lower sales volumes as discussed above. The increase in Gross Margin, Adjusted Gross Margin, and Contribution Margin is driven by an increase in adjacent services. Adjusted Gross Margin and Contribution Margin are non-GAAP financial measures. See “—Non-GAAP Financial Measures” for further details and a reconciliation of such non-GAAP measures to their nearest comparable GAAP measures.
Previous report
Interest expense decreased by $17 million, or 25%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily attributable to lower average balances on our non-recourse asset-backed debt.
Previous report
Other income— net increased by $7 million, or 50%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily attributable to a $3 million increase in interest income due to an increase in average cash, cash equivalents and restricted cash balances and the non-recurrence of a $3 million expense related to changes in the fair value of marketable equity securities that was recognized in the six months ended June 30, 2025.
Previous report
Net Cash (Used in) Provided by Investing Activities
Reworded paragraphs (57)
Previous wording
Opendoor’s mission is to tilt the world in favor of homeowners, by making homeownership simpler, faster, and fairer for everyone. Residential real estate is a trillion-dollar industry underpinned by a process that is complicated, time-consuming, stressful, and offline. Our data-driven pricing models and integrated local operations are modernizing residential real estate by providing a simple, certain, and largely digital way to buy and sell homes. Since our founding, we have completed over 305,000 transactions across the United States, making us one of the largest buyers and sellers of homes in the United States.
Current wording
Opendoor’s mission is to tilt the world in favor of homeowners, by making homeownership simpler, faster, and fairer for everyone. Residential real estate is a trillion-dollar industry underpinned by a process that is complicated, time-consuming, stressful, and offline. Our data-driven pricing models and integrated local operations are modernizing residential real estate by providing a simple, certain, and largely digital way to buy and sell homes. Since our founding, we have completed over 313,000 transactions across the United States, making us one of the largest buyers and sellers of homes in the United States.
Previous wording
The U.S. housing market remains constrained by elevated mortgage rates and persistent affordability challenges. Existing home sales remain at a seasonally adjusted annual rate of around 4 million units, representing a 30-year low and roughly 20% below the pre-pandemic decade average of approximately 5 million annual sales. As of June 2026, home prices were roughly flat year-over-year. Inventory levels are modestly constrained, representing nearly 5 months of supply as of June 2026. After falling to just under 6% in late February 2026, mortgage rates rose through the second quarter, ending June in the mid-6% range. Seller-buyer disconnect persists, with delistings (homes withdrawn from the market without selling) reaching the highest levels in Opendoor’s operating history.
Current wording
The U.S. housing market remains constrained by elevated mortgage rates and persistent affordability challenges. Existing home sales remain at a seasonally adjusted annual rate of around 4 million units, a 30-year low and roughly 20% below the pre-pandemic decade average of approximately 5 million annual sales. As of September 2026, home prices were roughly flat year- over-year. Mortgage rates increased during the third quarter, with the average 30-year fixed mortgage rate rising from the mid-6% range to above 7% by the end of September. Seller-buyer disconnect persists, with delistings (homes withdrawn from the market without selling) reaching their highest average level for any third quarter in Opendoor’s operating history.
Previous wording
•Incremental attach of services, which supplement the core transaction margin profile; and
Current wording
•Incremental attach of services, which supplement the transaction margin profile; and
Previous wording
Real estate inventory is reviewed for valuation adjustments on a quarterly basis. If the carrying amount for a given home is not expected to be recovered, an inventory valuation adjustment is recorded to cost of revenue and the home’s carrying value is adjusted to its net realizable value. Inventory valuation adjustments are not offset by any expected gains and are not reversed or adjusted should the expected net realizable value subsequently increase. We recorded inventory valuation adjustments of $14 million and $23 million during the three and six months ended June 30, 2026, respectively, and $21 million and $34 million during the three and six months ended June 30, 2025, respectively. See “Part II – Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates – Real Estate Inventory” in our Annual Report on Form 10-K for the year ended December 31, 2025.
Current wording
Real estate inventory is reviewed for valuation adjustments on a quarterly basis. If the carrying amount for a given home is not expected to be recovered, the home’s carrying value is adjusted to its net realizable value and an inventory valuation adjustment is recorded to cost of revenue. Inventory valuation adjustments are not offset by any expected gains and are not reversed or adjusted should the expected net realizable value subsequently increase. We recorded inventory valuation adjustments of $53 million and $76 million during the three and nine months ended September 30, 2026, respectively, and $15 million and $48 million during the three and nine months ended September 30, 2025, respectively. See “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates – Real Estate Inventory” in our Annual Report on Form 10-K for the year ended December 31, 2025.
Previous wording
As one key measure of inventory management performance, we evaluate our portfolio metrics relative to the broader market (as observed on the multiple listing services (“MLS”)). One such metric is our percentage of homes “on the market” for greater than 120 days as measured from initial listing date. As of June 30, 2026, such homes represented 9% of our portfolio, compared to 27% for the broader market when filtered for the types of homes we are able to underwrite and acquire based on characteristics such as market, price range, home type, home location, year built and lot size (which we refer to as our “buybox”). This metric fluctuates based on seasonal factors, market dynamics, and our resale strategies.
Current wording
As one key measure of inventory management performance, we evaluate our portfolio metrics relative to the broader market (as observed on the multiple listing services (“MLS”)). One such metric is our percentage of homes “on the market” for greater than 120 days as measured from initial listing date. As of September 30, 2026, such homes represented 18% of our portfolio, compared to 30% for the broader market when filtered for the types of homes we are able to underwrite and acquire based on characteristics such as market, price range, home type, home location, year built and lot size (which we refer to as our “buybox”). This metric fluctuates based on seasonal factors, market dynamics, and our resale strategies.
Previous wording
Our business model is working capital intensive and inventory financing is a key enabler of our growth. We primarily rely on our access to non-recourse asset-backed debt, which consists of asset-backed senior debt facilities and asset-backed mezzanine term debt facilities, to finance our home acquisitions. See “—Liquidity and Capital Resources — Debt and Financing Arrangements.”
Current wording
Our business model is working capital intensive and inventory financing is a key enabler of our growth. We primarily rely on our access to asset-backed debt, which consists of asset-backed senior debt facilities and asset-backed mezzanine term debt facilities, to finance our home acquisitions. See “—Liquidity and Capital Resources — Debt and Financing Arrangements.”
Previous wording
(1)Inventory valuation adjustment includes adjustments to record real estate inventory at the lower of its carrying amount or its net realizable value.
Current wording
(1)Inventory valuation adjustment includes adjustments to record real estate inventory at the lower of its carrying amount or its net realizable value. The sum of the current period and prior period inventory valuation adjustments is referred to as “net inventory valuation adjustments”.
Previous wording
Adjusted Net Loss and Adjusted EBITDA are supplemental measures of our operating performance and have important limitations. For example, these measures exclude the impact of certain costs required to be recorded under GAAP. These measures also include inventory valuation adjustments that were recorded in prior periods under GAAP and exclude, in connection with homes held in inventory at the end of the period, inventory valuation adjustments required to be recorded under GAAP in the same period. These measures could differ substantially from similarly titled measures presented by other companies in our industry or companies in other industries. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. We include a reconciliation of these measures to the most directly comparable GAAP financial measure, which is net loss.
Current wording
Adjusted Net Loss and Adjusted EBITDA are supplemental measures of our operating performance and have important limitations. For example, these measures exclude the impact of certain costs required to be recorded under GAAP. These measures also include inventory valuation adjustments that were recorded in prior periods under GAAP and exclude, in connection with homes held in inventory at the end of the period, inventory valuation adjustments required to be recorded under
Previous wording
We calculate Adjusted Net Loss as GAAP net loss adjusted to exclude non-cash expenses of stock-based compensation, equity securities fair value adjustment, and the amortization of stock-based compensation capitalized to internally developed software (“IDSW”). It excludes expenses that are not directly related to our revenue-generating operations such as restructuring and CEO make-whole provision. It also excludes loss (gain) on extinguishment of debt as these expenses or gains were incurred as a result of decisions made by management to terminate or partially extinguish portions of our outstanding credit facilities or convertible senior notes early; these expenses or gains are not reflective of ongoing operating results and vary in frequency and amount. Adjusted Net Loss also aligns the timing of inventory valuation adjustments recorded under GAAP to the period in which the related revenue is recorded in order to improve the comparability of this measure to our non-GAAP financial measures of unit economics, as described above. Our calculation of Adjusted Net Loss does not currently include the tax effects of the non-GAAP adjustments because our taxes and such tax effects have not been material to date.
Current wording
We calculate Adjusted Net Loss as GAAP net loss adjusted to exclude non-cash expenses of stock-based compensation, equity securities fair value adjustment, intangibles amortization expense, and the amortization of stock-based compensation capitalized to internally developed software (“IDSW”). It excludes expenses that are not directly related to our revenue-generating operations such as restructuring and CEO make-whole provision. It also excludes loss (gain) on extinguishment of debt as these expenses or gains were incurred as a result of decisions made by management to terminate or partially extinguish portions of our outstanding credit facilities or convertible senior notes early; these expenses or gains are not reflective of ongoing operating results and vary in frequency and amount. Adjusted Net Loss also aligns the timing of inventory valuation adjustments recorded under GAAP to the period in which the related revenue is recorded in order to improve the comparability of this measure to our non-GAAP financial measures of unit economics, as described above. Our calculation of Adjusted Net Loss does not currently include the tax effects of the non-GAAP adjustments because our taxes and such tax effects have not been material to date.
Previous wording
We calculated Adjusted EBITDA as Adjusted Net Loss adjusted for depreciation and amortization, property financing and other interest expense, interest income, and income tax expense. Adjusted EBITDA is a supplemental performance measure that our management uses to assess our operating performance and the operating leverage in our business. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue.
Current wording
We calculate Adjusted EBITDA as Adjusted Net Loss adjusted for depreciation and amortization, property financing and other interest expense, interest income, and income tax expense. Adjusted EBITDA is a supplemental performance measure that our management uses to assess our operating performance and the operating leverage in our business. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue.
Previous wording
(2)Inventory valuation adjustment includes adjustments to record real estate inventory at the lower of its carrying amount or its net realizable value.
Current wording
(3)Inventory valuation adjustment includes adjustments to record real estate inventory at the lower of its carrying amount or its net realizable value. The sum of the current period and prior period inventory valuation adjustments is referred to as “net inventory valuation adjustments”.
Previous wording
(3)Inventory valuation adjustment — Current Period is the inventory valuation adjustments recorded during the period presented associated with homes that remain in inventory at period end.
Current wording
(4)Inventory valuation adjustment — Current Period is the inventory valuation adjustments recorded during the period presented associated with homes that remain in inventory at period end.
Previous wording
(4)Inventory valuation adjustment — Prior Periods is the inventory valuation adjustments recorded in prior periods associated with homes that sold in the period presented.
Current wording
(5)Inventory valuation adjustment — Prior Periods is the inventory valuation adjustments recorded in prior periods associated with homes that sold in the period presented.
Previous wording
(5)Restructuring expense consists primarily of severance and other termination benefits for employees whose roles have been eliminated, consulting fees, and expenses related to the termination of certain leases incurred during the restructuring process.
Current wording
(6)Restructuring expense consists primarily of severance and other termination benefits for employees whose roles have been eliminated, consulting fees, and expenses related to the termination of certain leases incurred during the restructuring process.
Previous wording
(6)In connection with the appointment of the Company's new Chief Executive Officer in September 2025, the Company granted two make-whole awards related to compensation forfeited from his former employer. The awards consist of (i) a $15 million cash award and (ii) a restricted stock unit award with a grant date value of $15 million. Both awards vest nine months after his start date, contingent upon his continued service as Chief Executive Officer through the vesting date, and are expensed over the requisite service period. The CEO make-whole provision adjustment reflects only the expense associated with the cash make-whole award. The expense associated with the restricted stock unit make-whole award is included in the stock-based compensation line item presented separately in the reconciliation above.
Current wording
(7)In connection with the appointment of the Company’s new Chief Executive Officer in September 2025, the Company granted two make-whole awards related to compensation forfeited from his former employer. The awards consisted of (i) a $15 million cash award and (ii) a restricted stock unit award with a grant date value of $15 million. Both awards vested nine months after his start date and were expensed over the requisite service period. The CEO make-whole provision adjustment reflects only the expense associated with the cash make-whole award. The expense associated with the restricted stock unit make-whole award is included in the stock-based compensation line item presented separately in the reconciliation above.
Previous wording
(7)Primarily includes related party services income.
Current wording
(8)Primarily includes related party services income and sublease income.
Previous wording
(8)Includes interest expense on our non-recourse asset-backed debt facilities.
Current wording
(9)Includes interest expense on our asset-backed debt facilities.
Previous wording
(9)Includes (i) amortization of debt issuance costs, loan origination fees, commitment fees, unused fees, and other interest related costs on our asset-backed debt facilities, and (ii) amortization of debt issuance costs and debt discounts and interest expense related to our convertible senior notes.
Current wording
(10)Includes (i) amortization of debt issuance costs, loan origination fees, commitment fees, unused fees, and other interest related costs on our asset-backed debt facilities, and (ii) amortization of debt issuance costs and debt discounts and interest expense related to our 0.25% convertible senior notes due 2026 (the “2026 Notes”), 7.00% convertible senior notes due 2030 (the “2030-A Notes”) and 0.00% convertible senior notes due 2030 (the “2030-B Notes” and, together with the 2026 Notes and the 2030-A Notes, the “Convertible Senior Notes”).
Previous wording
(10)Consists mainly of interest earned on cash, cash equivalents and restricted cash.
Current wording
(11)Consists mainly of interest earned on cash, cash equivalents and restricted cash.
Previous wording
Cost of revenue includes the property purchase price, acquisition costs, and direct costs to renovate or repair the home. These costs are accumulated in real estate inventory during the property holding period and charged to cost of revenue under the specific identification method when the property is sold. Real estate inventory is reviewed for valuation adjustments at least quarterly. If the carrying amount for a given home is not expected to be recovered, an inventory valuation adjustment is recorded to cost of revenue and the home’s carrying value is adjusted to its net realizable value. For homes sold under our Cash Now, More Later product, cost of revenue also includes any remaining sale proceeds remitted to the original seller upon resale, net of our service fee and certain recoverable costs.
Current wording
Cost of revenue includes the property purchase price, acquisition costs, and direct costs to renovate or repair the home. These costs are accumulated in real estate inventory during the property holding period and charged to cost of revenue under the specific identification method when the property is sold. Real estate inventory is reviewed for valuation adjustments at least quarterly. If the carrying amount for a given home is not expected to be recovered, the home’s carrying value is adjusted to its net realizable value and an inventory valuation adjustment is recorded to cost of revenue. For homes sold under our Cash Now, More Later product, cost of revenue also includes any remaining sale proceeds remitted to the original seller upon resale, net of our service fee and certain recoverable costs.
Previous wording
Additionally, for our revenue other than home sales revenue, cost of revenue consists of any costs incurred in delivering the service, including associated headcount expenses such as salaries, benefits, and stock-based compensation.
Current wording
Additionally, for revenue other than home sales revenue, cost of revenue consists of any costs incurred in delivering the service, including associated headcount expenses such as salaries, benefits, and stock-based compensation.
Previous wording
Interest expense consists primarily of interest paid or payable and the amortization of debt discounts and debt issuance costs. Interest expense varies period over period, primarily due to fluctuations in our inventory volumes and changes in the floating benchmark interest rates (“Benchmark Rates”), based on the secured overnight financing rate (“SOFR”), plus an applicable margin, which impact the interest incurred on our asset-backed senior debt facilities (see “—Liquidity and Capital Resources — Debt and Financing Arrangements”).
Current wording
Interest expense consists primarily of interest paid or payable and the amortization of debt discounts and debt issuance costs. Interest expense varies period over period, primarily due to fluctuations in our inventory volumes and changes in the floating benchmark interest rates, based on the secured overnight financing rate (“SOFR”), plus an applicable margin, which impact the interest incurred on our asset-backed senior debt facilities (see “—Liquidity and Capital Resources — Debt and Financing Arrangements”).
Previous wording
Revenue decreased by $684 million, or 44%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease in revenue was primarily attributable to lower sales volumes in the second quarter of 2026, which was driven by lower homes in inventory entering the quarter. We began the second quarter of 2026 with 3,420 homes in inventory, compared to 7,080 homes at the beginning of the second quarter of 2025. We sold 2,339 homes during the three months ended June 30, 2026, compared to 4,299 homes during the three months ended June 30, 2025, representing a decrease of 46%. Revenue per home sold increased 4% between the same periods.
Current wording
Revenue increased by $107 million, or 12%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase in revenue was primarily attributable to higher sales volumes in the third quarter of 2026, which was driven by higher homes in inventory entering the quarter. We began the third quarter of 2026 with 5,459 homes in inventory, compared to 4,538 homes at the beginning of the third quarter of 2025. We sold 2,728 homes during the three months ended September 30, 2026, compared to 2,568 homes during the three months ended September 30, 2025, representing an increase of 6%. Revenue per home sold increased 5% between the same periods.
Previous wording
Revenue decreased by $1.1 billion, or 41%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease in revenue was primarily attributable to lower sales volumes in the first half of 2026, which was driven by lower homes in inventory entering the year. We began 2026 with 2,867 homes in inventory, compared to 6,417 homes at the beginning of 2025. We sold 4,260 homes during the six months ended June 30, 2026, compared to 7,245 homes during the six months ended June 30, 2025, representing a decrease of 41%. Revenue per home sold was flat between the same periods.
Current wording
Revenue decreased by $1.0 billion, or 28%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The decrease in revenue was primarily attributable to lower sales volumes in the first nine months of 2026, which was driven by lower homes in inventory entering the year. We began 2026 with 2,867 homes in inventory, compared to 6,417 homes at the beginning of 2025. We sold 6,988 homes during the nine months ended September 30, 2026, compared to 9,813 homes during the nine months ended September 30, 2025, representing a decrease of 29%. Revenue per home sold increased 1% between the same periods.
Previous wording
Cost of revenue decreased by $642 million, or 45%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease in cost of revenue was primarily attributable to lower sales volumes and partially offset by a 2% increase in cost of revenue per home sold.
Current wording
Cost of revenue decreased by $913 million, or 27%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The decrease in cost of revenue was primarily attributable to lower sales volumes, as cost of revenue per home sold, excluding inventory valuation adjustments on homes in inventory at period end, remained flat, partially offset by an increase of $36 million of net inventory valuation adjustments.
Previous wording
Sales, Marketing and Operations. Sales, marketing and operations decreased by $21 million, or 24%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was primarily attributable to a $14 million decrease in Direct selling costs, consistent with lower sales volumes, a $3 million decrease in property holding costs due to a decrease in average homes in inventory, and a $2 million decrease in advertising expense, which decreased from $7 million for the three months ended June 30, 2025 to $5 million for the three months ended June 30, 2026.
Current wording
Sales, Marketing and Operations. Sales, marketing and operations increased by $14 million, or 21%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily attributable to a $7 million increase in Direct selling costs, consistent with higher sales volumes, a $7 million increase in property holding costs due to an increase in average homes in inventory, partially offset by a $2 million decrease in advertising expense, which decreased from $7 million for the three months ended September 30, 2025 to $5 million for the three months ended September 30, 2026.
Previous wording
Sales, marketing and operations decreased by $49 million, or 27%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily attributable to a $20 million decrease in Direct selling costs, consistent with lower sales volumes, a $14 million decrease in property holding costs due to a decrease in average homes in inventory, a $7 million decrease in advertising expense, which decreased from $31 million for the six months ended June 30, 2025 to $24 million for the six months ended June 30, 2026, and a $6 million decrease in headcount expenses, including salaries and benefits as we streamlined our organization.
Current wording
Sales, marketing and operations decreased by $35 million, or 14%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The decrease was primarily attributable to a $13 million decrease in Direct selling costs, consistent with lower sales volumes, a $9 million decrease in advertising expense, which decreased from $38 million for the nine months ended September 30, 2025 to $29 million for the nine months ended September 30, 2026, a $6 million decrease in property holding costs due to a decrease in average homes in inventory, and a $6 million decrease in headcount expenses, including salaries and benefits as we streamlined our organization.
Previous wording
General and Administrative. General and administrative increased by $107 million, or 382%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily attributable to a $98 million increase in stock-based compensation expenses, including $95 million related to market condition restricted stock units granted to executives, and a $4 million expense related to the CEO make-whole provision.
Current wording
General and Administrative. General and administrative increased by $73 million, or 152%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily attributable to a $75 million increase in stock-based compensation expenses, including $78 million related to market condition restricted stock units granted to executives.
Previous wording
General and administrative increased by $211 million, or 346%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily attributable to a $199 million increase in stock-based compensation expenses, including $194 million related to market condition restricted stock units granted to executives, and a $9 million expense related to the CEO make-whole provision.
Current wording
General and administrative increased by $284 million, or 261%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily attributable to a $274 million increase in stock-based compensation expenses, including $273 million related to market condition restricted stock units granted to executives, and a $9 million increase related to the CEO make-whole provision.
Previous wording
Technology and Development. Technology and development increased by $6 million, or 29%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily attributable to a $10 million increase in stock-based compensation expenses, including $5 million related to market condition restricted stock units granted to executives, partially offset by a $6 million decrease in IDSW expenses due to increased capitalization and decreased amortization.
Current wording
Technology and Development. Technology and development increased by $5 million, or 26%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily attributable to an $8 million increase in stock-based compensation expenses, including $4 million related to market condition restricted stock units granted to executives, and a $2 million increase in payroll and benefits due to higher headcount, partially offset by a $7 million decrease driven by increased IDSW capitalization and decreased amortization.
Previous wording
Technology and development increased by $9 million, or 21%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily attributable to a $15 million increase in stock-based compensation expenses, including $9 million related to market condition restricted stock units granted to executives, partially offset by a $6 million decrease in IDSW expenses due to increased capitalization and decreased amortization.
Current wording
Technology and development increased by $14 million, or 23%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily attributable to a $23 million increase in stock-based compensation expenses, including $12 million related to market condition restricted stock units granted to executives, partially offset by a $13 million decrease driven by increased IDSW capitalization and decreased amortization.
Previous wording
Restructuring. Restructuring decreased by $3 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. For the three months ended June 30, 2026 and 2025, the Company incurred $3 million and $6 million, respectively, of restructuring expenses related to workforce reductions, associated consulting fees, and lease termination cost.
Current wording
Restructuring. Restructuring decreased by $1 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025.
Previous wording
Restructuring decreased by $6 million, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. For the six months ended June 30, 2026 and 2025, the Company incurred $3 million and $9 million, respectively, of restructuring expenses related to workforce reductions, associated consulting fees, and lease termination costs.
Current wording
Restructuring decreased by $7 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. For the nine months ended September 30, 2026 and 2025, the Company incurred $3 million and $10 million, respectively, of restructuring expenses related to workforce reductions, associated consulting fees, and lease termination costs.
Previous wording
(Loss) gain on extinguishment of debt decreased by $10 million, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The gain on extinguishment of debt during the three months ended June 30, 2025 was primarily attributable to the $10 million gain recognized on the Company’s partial extinguishment of its 2026 Notes.
Current wording
(Loss) gain on extinguishment of debt decreased by $10 million from a $9 million gain for the nine months ended September 30, 2025 to a $1 million loss for the nine months ended September 30, 2026. The gain on extinguishment of debt during the nine months ended September 30, 2025 was primarily attributable to the $10 million gain recognized on the Company’s partial extinguishment of its 2026 Notes.
Previous wording
Interest expense decreased by $7 million, or 19%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was primarily attributable to lower average balances on our non-recourse asset-backed debt.
Current wording
Interest expense decreased by $13 million, or 13%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The decrease was primarily attributable to a $7 million decrease in costs associated with our Convertible Senior Notes and a $6 million decrease in property financing costs, driven by lower average balances on our asset-backed debt.
Previous wording
Other income— net increased by $1 million, or 10%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Current wording
Other income— net increased by $1 million, or 4%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.
Previous wording
Income tax expense changed by a nominal amount for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025.
Current wording
Income tax expense changed by a nominal amount for the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025.
Previous wording
Our principal sources of liquidity have historically consisted of cash generated from our operations and from financing activities. As of June 30, 2026, we had cash and cash equivalents of $896 million and restricted cash of $66 million. The decrease in our cash and cash equivalents balance of $66 million as compared to December 31, 2025 resulted primarily from an increase in real estate inventory and operating losses. Restricted cash decreased $273 million as compared to December 31, 2025, primarily reflecting the deployment of cash to acquire real estate inventory, and improved inventory health, which allowed us to finance homes closer to the maximum advance rates available under our non-recourse asset-backed debt facilities.
Current wording
Our principal sources of liquidity have historically consisted of cash generated from our operations and from financing activities. As of September 30, 2026, we had cash and cash equivalents of $910 million and restricted cash of $98 million. The decrease in our cash and cash equivalents balance of $52 million as compared to December 31, 2025 resulted primarily from an increase in real estate inventory and operating losses, repayment of the 2026 Notes, the purchase of capped calls, and the repurchase and retirement of common stock, partially offset by the proceeds from the issuance of the 2030-B Notes. Restricted cash decreased $241 million as compared to December 31, 2025, primarily reflecting the deployment of cash to acquire real estate inventory, and improved inventory health, which allowed us to finance homes closer to the maximum advance rates available under our asset-backed debt facilities.
Previous wording
As of June 30, 2026, the Company had total outstanding balances on our asset-backed debt of $1.8 billion and aggregate principal outstanding from convertible senior notes of $197 million. In addition, we had undrawn borrowing capacity of $5.7 billion under our non-recourse asset-backed debt facilities (as described further below), of which $25 million was committed.
Current wording
As of September 30, 2026, the Company had total outstanding balances on our asset-backed debt of $2.4 billion and aggregate principal outstanding from convertible senior notes of $712 million. In addition, we had undrawn and uncommitted borrowing capacity of $5.1 billion under our asset-backed debt facilities (as described further below).
Previous wording
As of June 30, 2026, the $135 million outstanding principal balance of the 2026 Notes and the $62 million outstanding principal balance of the 2030 Notes are classified as a current liability in the condensed consolidated balance sheet. The 2026 Notes mature on August 15, 2026. While the 2030 Notes mature on May 15, 2030, they become convertible during any calendar quarter if the last reported sale price of the Company’s common stock exceeds 130% of the conversion price for at least 20 of the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter. As of June 30, 2026, this condition was met and the 2030 Notes are convertible through September 30, 2026. See “Part I – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 5. Credit Facilities, Long-Term Debt, and Convertible Notes”for additional conversion conditions.
Current wording
As of September 30, 2026, the $62 million outstanding aggregate principal balance of the 2030-A Notes is classified as a current liability in the condensed consolidated balance sheet. While the 2030-A Notes mature on May 15, 2030, they become convertible during any calendar quarter if the last reported sale price of the Company’s common stock exceeds 130% of the conversion price for at least 20 of the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter. As of September 30, 2026, this condition was met and the 2030-A Notes are convertible through December 31, 2026. See “Part I – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 5. Credit Facilities, Long-Term Debt, and Convertible Notes”for additional details regarding the Convertible Senior Notes.
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Current report — wording carried from elsewhere
GAAP in the same period. These measures could differ substantially from similarly titled measures presented by other companies in our industry or companies in other industries. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. We include a reconciliation of these measures to the most directly comparable GAAP financial measure, which is net loss.
Current report — wording carried from elsewhere
Loss on extinguishment of debt decreased by $1 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025.
Current report — wording carried from elsewhere
Net Cash Used in Investing Activities
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
(Loss) gain on extinguishment of debt decreased by $11 million, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The gain on extinguishment of debt during the six months ended June 30, 2025 was primarily attributable to the $10 million gain recognized on the Company’s partial extinguishment of its 2026 Notes.