EX-99.3 4 exhibit993q22021financia.htm EX-99.3 exhibit993q22021financia
(in thousands, except percentages) Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020 Key Metrics Total Markets 39 27 21 21 21 Total Revenue $ 1,185,386 $ 747,274 $ 248,886 $ 338,613 $ 739,827 Homes Purchased 8,494 3,594 2,016 799 461 Homes Sold 3,481 2,462 849 1,232 2,924 Homes in Inventory 7,971 2,958 1,827 661 1,094 Inventory $ 2,723,648 $ 840,632 $ 465,936 $ 151,512 $ 263,709 Non-GAAP Financial Measures Adjusted Gross Profit $ 159,674 $ 97,038 $ 38,228 $ 33,073 $ 51,125 Selling Costs (26,813) (17,340) (5,243) (8,909) (22,128) Holding Costs (5,299) (3,552) (1,528) (4,151) (8,900) Contribution Profit $ 127,562 $ 76,146 $ 31,457 $ 20,013 $ 20,097 Contribution Profit After Interest $ 122,865 $ 72,911 $ 30,279 $ 16,362 $ 11,633 Adjusted EBITDA $ 25,579 $ (2,141) $ (27,075) $ (20,998) $ (21,661) Adjusted Net Income (Loss) $ 2,475 $ (20,801) $ (41,323) $ (36,443) $ (41,506) Margins Total Revenue 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Adjusted Gross Profit 13.5 % 13.0 % 15.4 % 9.8 % 6.9 % Contribution Margin 10.8 % 10.2 % 12.6 % 5.9 % 2.7 % Contribution Margin After Interest 10.4 % 9.8 % 12.2 % 4.8 % 1.6 % Adjusted EBITDA 2.2 % (0.3)% (10.9)% (6.2)% (2.9)% Adjusted Net Income (Loss) 0.2 % (2.8)% (16.6)% (10.8)% (5.6)% Period Ended NON-GAAP MEASURES & KEY METRICS OPENDOOR TECHNOLOGIES INC. Exhibit 99.3


 
2021 2020 2021 2020 REVENUE $ 1,185,386 $ 739,827 $ 1,932,660 $ 1,995,622 COST OF REVENUE 1,026,615 685,253 1,676,757 1,850,001 GROSS PROFIT 158,771 54,574 255,903 145,621 OPERATING EXPENSES: Sales, marketing and operations 96,525 47,265 165,591 128,954 General and administrative 190,611 29,323 412,695 58,906 Technology and development 24,388 16,838 75,065 32,625 Total operating expenses 311,524 93,426 653,351 220,485 LOSS FROM OPERATIONS (152,753) (38,852) (397,448) (74,864) DERIVATIVE AND WARRANT FAIR VALUE ADJUSTMENT 23,952 122 8,680 (890) INTEREST EXPENSE (15,826) (17,290) (26,825) (45,017) OTHER INCOME – Net 1,012 180 1,636 2,855 LOSS BEFORE INCOME TAXES (143,615) (55,840) (413,957) (117,916) INCOME TAX EXPENSE (190) (79) (284) (199) NET LOSS $ (143,805) $ (55,919) $ (414,241) $ (118,115) Net loss per share attributable to common shareholders: Basic $ (0.24) $ (0.66) $ (0.72) $ (1.40) Diluted $ (0.24) $ (0.66) $ (0.72) $ (1.40) Weighted-average shares outstanding: Basic 588,374 84,588 576,941 84,308 Diluted 588,374 84,588 576,941 84,308 OPENDOOR TECHNOLOGIES INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended June 30, (Unaudited) Six Months Ended June 30,


 
June 30, 2021 December 31, 2020 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 1,557,815 $ 1,412,665 Restricted cash 131,652 92,863 Marketable securities 200,143 47,637 Mortgage loans held for sale pledged under agreements to repurchase 25,368 7,529 Escrow receivable 32,848 1,494 Real estate inventory, net 2,723,648 465,936 Other current assets ($811 and $373 carried at fair value) 67,149 24,987 Total current assets 4,738,623 2,053,111 PROPERTY AND EQUIPMENT – Net 33,962 29,228 RIGHT OF USE ASSETS 45,581 49,517 GOODWILL 30,945 30,945 INTANGIBLES – Net 7,754 8,684 OTHER ASSETS ($10,000 and $0 carried at fair value) 11,396 4,097 TOTAL ASSETS $ 4,868,261 $ 2,175,582 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable and other accrued liabilities $ 70,900 $ 25,270 Current portion of credit facilities and other secured borrowings 1,690,878 346,322 Warrant liabilities - current 38,669 - Interest payable 4,605 1,081 Lease liabilities - current portion 4,999 20,716 Total current liabilities 1,810,051 393,389 CREDIT FACILITIES – Net of current portion 595,579 135,467 WARRANT LIABILITIES - 47,349 LEASE LIABILITIES – Net of current portion 44,593 46,625 OTHER LIABILITIES 117 94 Total liabilities 2,450,340 622,924 SHAREHOLDERS’ EQUITY: Common stock, $0.0001 par value; 3,000,000,000 shares authorized; 593,838,919 and 540,714,692 shares issued and outstanding, respectively 59 54 Additional paid-in capital 3,875,552 2,596,012 Accumulated deficit (1,457,690) (1,043,449) Accumulated other comprehensive income - 41 Total shareholders’ equity 2,417,921 1,552,658 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 4,868,261 $ 2,175,582 OPENDOOR TECHNOLOGIES INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited)


 
2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (414,241) $ (118,115) Adjustments to reconcile net loss to cash, cash equivalents, and restricted cash (used in) provided by operating activities: Depreciation and amortization – net of accretion 16,608 20,065 Amortization of right of use asset 4,260 8,712 Impairment of software development costs 2,515 - Stock-based compensation 403,048 6,640 Derivative and warrant fair value adjustment (8,680) 890 Gain on settlement of lease liabilities (5,237) - Inventory valuation adjustment 942 7,452 Changes in fair value of derivative instruments (438) (527) Payment-in-kind interest - 2,704 Dividend-in-kind 143 - Net fair value adjustments and gain (loss) on sale of mortgage loans held for sale (2,032) (829) Origination of mortgage loans held for sale (83,360) (42,636) Proceeds from sale and principal collections of mortgage loans held for sale 67,566 34,397 Changes in operating assets and liabilities: Escrow receivable (31,354) 4,178 Real estate inventories (2,249,488) 1,035,088 Other assets (37,057) 10,809 Accounts payable and other accrued liabilities 34,569 (8,881) Interest payable 96 (3,044) Lease liabilities (9,968) (6,556) Net cash (used in) provided by operating activities (2,312,108) 950,347 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (10,957) (10,753) Purchase of intangible assets (240) - Purchase of marketable securities (238,464) (113,833) Proceeds from sales, maturities, redemptions and paydowns of marketable securities 85,638 55,666 Purchase of non-marketable equity securities (10,000) - Net cash used in investing activities (174,023) (68,920) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 6,739 688 Proceeds from warrant exercise 4,823 - Proceeds from the February 2021 Offering 886,067 - Issuance cost of common stock (28,876) - Proceeds from credit facilities and other secured borrowings 3,241,692 824,597 Principal payments on credit facilities and other secured borrowings (1,438,136) (1,723,443) Payment of loan origination fees and debt issuance costs (2,239) (2,386) Net cash provided by (used in) financing activities 2,670,070 (900,544) NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 183,939 (19,117) CASH, CASH EQUIVALENTS, AND RESTRICTED CASH – Beginning of period 1,505,528 684,822 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH – End of period $ 1,689,467 $ 665,705 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION – Cash paid during the period for interest $ 20,526 $ 40,333 RECONCILIATION TO CONDENSED CONSOLIDATED BALANCE SHEETS: Cash and cash equivalents $ 1,557,815 $ 458,058 Restricted cash 131,652 207,647 Cash, cash equivalents, and restricted cash $ 1,689,467 $ 665,705 OPENDOOR TECHNOLOGIES INC. (In thousands) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30,


 
Reconciliation of our Adjusted Gross Profit, Contribution Profit and Contribution Profit After Interest to our Gross Profit (in thousands, except percentages) June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 Gross profit (GAAP) $ 158,771 $ 97,132 $ 38,365 $ 35,811 $ 54,574 Gross Margin 13.4 % 13.0 % 15.4 % 10.6 % 7.4 % Adjustments: Inventory impairment – Current Period (1) 922 20 79 64 1,231 Inventory impairment – Prior Periods  (2) (19) (114) (216) (2,803) (6,581) Restructuring in cost of revenue (3) - - - 1 1,901 Adjusted Gross Profit $ 159,674 $ 97,038 $ 38,228 $ 33,073 $ 51,125 Adjusted Gross Margin 13.5 % 13.0 % 15.4 % 9.8 % 6.9 % Adjustments: Direct selling costs (4) (26,813) (17,340) (5,243) (8,909) (22,128) Holding costs on sales – Current Period (5)(6) (2,666) (2,126) (778) (1,011) (2,383) Holding costs on sales – Prior Periods  (5)(7) (2,633) (1,426) (750) (3,140) (6,517) Contribution Profit $ 127,562 $ 76,146 $ 31,457 $ 20,013 $ 20,097 Homes sold in period 3,481 2,462 849 1,232 2,924 Contribution Profit per Home Sold $ 37 $ 31 $ 37 $ 16 $ 7 Contribution Margin 10.8 % 10.2 % 12.6 % 5.9 % 2.7 % Adjustments: ​ ​ Interest on homes sold – Current Period (8)(9) (3,110) (2,333) (714) (1,060) (3,155) Interest on homes sold – Prior Periods  (8)(10) (1,587) (902) (464) (2,591) (5,309) Contribution Profit After Interest $ 122,865 $ 72,911 $ 30,279 $ 16,362 $ 11,633 Contribution Margin After Interest 10.4 % 9.8 % 12.2 % 4.8 % 1.6 % Three Months Ended NON-GAAP FINANCIAL MEASURES OPENDOOR TECHNOLOGIES INC. ​(2) Inventory impairment — Prior Periods is the inventory valuation adjustments recorded in prior periods associated with homes that sold in the period presented. (1) Inventory impairment — Current Period is the inventory valuation adjustments recorded during the period presented associated with homes that remain in inventory at period end. (3) Restructuring in cost of revenue consists mainly of severance and employee termination benefits that were recorded to cost of revenue due to a reduction in workforce in Q2 2020 following the outbreak of the COVID-19 pandemic. ​(5) Holding costs include mainly property taxes, insurance, utilities, association dues, cleaning and maintenance costs. Holding costs are included in Sales, marketing, and operations on the condensed consolidated statements of operations. ​(6) Represents holding costs incurred in the period presented on homes sold in the period presented. (10) Represents the interest expense under our senior credit facilities incurred on homes sold for the current period during prior periods. ​(9) Represents the interest expense under our senior credit facilities incurred on homes sold for the current period during the period. ​(8) This does not include interest on mezzanine term debt facilities or other indebtedness. ​(7) Represents holding costs incurred in prior periods on homes sold in the period presented. ​(4) Represents selling costs incurred related to homes sold in the relevant period. This primarily includes broker commissions, external title and escrow-related fees and transfer taxes.


 
Reconciliation of our Adjusted Net Income (Loss) and Adjusted EBITDA to our Net Loss (in thousands, except percentages) June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 Net loss (GAAP) $ (143,805) $ (270,436) $ (53,998) $ (80,853) $ (55,919) Adjustments: Stock-based compensation 164,216 238,832 28,843 2,523 3,669 Derivative and warrant fair value adjustment  (1) (23,952) 15,272 (33,074) 24,329 (122) Intangibles amortization expense (2) 591 580 580 986 1,068 Inventory impairment – Current Period (3) 922 20 79 64 1,231 Inventory impairment – Prior Periods  (4) (19) (114) (216) (2,803) (6,580) Restructuring (5) - 79 211 17,217 12,435 Convertible note PIK interest and discount amortization (6) - - 14 2,416 2,713 Loss on extinguishment of debt - - 11,356 - - Gain on lease termination - (5,237) - - - Payroll tax on initial RSU release 5,124 - - - - Other (7) (602) 203 4,882 (322) (1) Adjusted Net Income (Loss) 2,475 (20,801) (41,323) (36,443) (41,506) Adjustments: Depreciation and amortization, excluding amortization of intangibles and right of use assets 7,894 8,434 4,744 6,115 5,850 Property financing (8) 12,284 6,980 5,561 5,236 8,564 Other interest expense (9) 3,542 4,019 4,839 4,724 6,013 Interest income (10) (806) (867) (725) (665) (662) Income tax expense 190 94 (171) 35 80 Adjusted EBITDA 25,579 (2,141) (27,075) (20,998) (21,661) Adjusted EBITDA Margin 2.2 % (0.3)% (10.9)% (6.2)% (2.9)% (10) Consists mainly of interest earned on cash, cash equivalents and marketable securities. ​(9) Includes amortization of debt issuance costs and loan origination fees, commitment fees, unused fees, and other interest related costs on our asset-backed debt facilities. ​(6) Includes non-cash payment-in-kind (“PIK”) interest and amortization of the discount on the convertible notes issued from July through November 2019. We exclude convertible note PIK interest and amortization from Adjusted Net Income (Loss) since these are non-cash in nature and were converted into equity in September 2020 when the Company entered into the Convertible Notes Exchange Agreement with the convertible note holders. Three Months Ended (2) Represents amortization of intangibles acquired in the OSN and Open Listings acquisitions which contribute to revenue generation and are recorded as part of purchase accounting. The acquired intangible assets have useful lives ranging from 2 to 5 years and amortization is expected until the intangible assets are fully amortized. (1) Represents the gains and losses on our derivative and warrant liabilities, which are marked to fair value at the end of each period. ​(5) Restructuring costs consist mainly of employee termination benefits, relocation packages and retention bonuses as well as costs related to the exiting of certain non- cancelable leases. In 2020, these costs related mainly to a reduction in workforce implemented in April 2020 as well as our exercise of the early termination option related to our San Francisco headquarters. ​(4) Inventory impairment — Prior Periods is the inventory valuation adjustments recorded in prior periods associated with homes that sold in the period presented. (3) Inventory impairment — Current Period is the inventory impairment charge recorded during the period presented associated with homes that remain in inventory at period end. ​(7) Includes primarily gain or loss on disposal of fixed assets, gain or loss on interest rate lock commitments, gain or loss on the sale of marketable securities, accrued legal matters, and sublease income. ​(8) Includes interest expense on our asset-backed debt facilities.