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Opendoor Announces Second Quarter 2021 Financial Results

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SAN FRANCISCO, Aug. 11, 2021 (GLOBE NEWSWIRE) -- Opendoor Technologies Inc. (Nasdaq: OPEN), a leading digital platform for residential real estate, today reported financial results for its quarter ended June 30, 2021. Opendoor’s Second Quarter 2021 financial results and management commentary can be accessed through the Company’s shareholder letter on the quarterly results page of Opendoor’s investor relations website at https://investor.opendoor.com.

“Each quarter, we get the opportunity to reflect on our journey to redefine how people buy and sell a home and transform the world’s largest asset class. Last quarter, I spoke to our tremendous momentum, created by our relentless focus on the consumer experience, pricing expertise, and operational excellence. Today, I am proud to share the results of those efforts,” said Eric Wu, Co-Founder and CEO of Opendoor. “In the second quarter of 2021, we acquired a record 8,494 homes, generated revenue of $1.2 billion, and delivered adjusted EBITDA of $25.6 million, representing growth of 136% in homes acquired, 59% in revenue, and nearly $28 million in adjusted EBITDA compared to the first quarter. This strong outperformance is further evidence of the seismic shift in consumer demand towards the modern real estate experience we are pioneering. Based on our current momentum, we are operating today at a second half revenue run rate that is on track to meet the 2023 target we provided at the time of our December listing.”

Second Quarter 2021 Key Highlights

Unless otherwise stated, all comparisons are on a quarter-over-quarter basis. We believe that sequential comparisons better reflect our underlying growth trends given our decision to pause home acquisitions and actively sell through our inventory last year due to COVID-19.

  • Revenue of $1.2 billion, up 59% versus 1Q21, with 3,481 total homes sold, up 41% versus 1Q21

  • Gross profit of $159 million, up 64% versus 1Q21; gross margin of 13.4%, up 40 basis points versus 1Q21

  • Net income of ($144) million, versus ($270) million in 1Q21

  • Adjusted net income of $2.5 million versus adjusted net income of ($21) million in 1Q21

  • Contribution profit of $128 million, up 68% versus 1Q21; contribution margin of 10.8%, up 60 basis points versus 1Q21

  • Adjusted EBITDA of $26 million versus ($2) million in 1Q21; adjusted EBITDA margin of 2.2% versus (0.3%) in 1Q21

  • Expanded to 39 markets at the end of 2Q21 with 12 new market launches

  • Purchased 8,494 homes, up 136% versus 1Q21

  • Grew inventory balance to $2.7 billion, up 224% versus 1Q21

  • Ended the quarter with contracts to acquire 8,158 homes, representing $3.0 billion in value

Outlook

  • 3Q21 revenue guidance of $1.8 billion - $1.9 billion

  • 3Q21 adjusted EBITDA1 guidance of $15 million - $25 million

Conference Call and Webcast Details
Opendoor will host a conference call to discuss its financial results on August 11, 2021 at 2:00 p.m. Pacific Time. A live webcast of the call can be accessed from Opendoor’s Investor Relations website at https://investor.opendoor.com. An archived version of the webcast will be available from the same website after the call.

Forward Looking Statements
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking, including statements regarding our financial condition, anticipated financial performance, business strategy and plans, market opportunity and expansion and objectives of management for future operations. These forward-looking statements generally are identified by the words “anticipate”, “believe”, “contemplate”, “continue”, “could”, “estimate”, “expect”, “forecast”, “future”, “intend”, “may”, “might”, “opportunity”, “plan”, “possible”, “potential”, “predict”, “project,” “should”, “strategy”, “strive”, “target”, “will”, or “would”, the negative of these words or other similar terms or expressions. The absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many important factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to our public securities’ potential liquidity and trading; our ability to raise financing in the future; our success in retaining or recruiting, or changes required in, our offices, key employees or directors; the impact of the regulatory environment and complexities with compliance related to such environment; our ability to remediate our material weaknesses; various factors relating to our business, operations and financial performance, including, but not limited to, the impact of the COVID-19 pandemic on our ability to grow market share; our ability to respond to general economic conditions and the health of the U.S. residential real estate industry. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described under the caption "Risk Factors" in our annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 4, 2021, as updated by our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2021 and June 30, 2021, and our other filings with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and we assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. We do not give any assurance that we will achieve our expectations.

About Opendoor

Opendoor’s mission is to empower everyone with the freedom to move. Since 2014, Opendoor has provided people across the U.S. with a radically simple way to buy, sell or trade-in a home online. Opendoor currently operates in a growing number of markets across the U.S.

Contact Information

Investors:
Elise Wang
Opendoor
investors@opendoor.com

Media:
Sheila Tran / Charles Stewart
Opendoor
press@opendoor.com


OPENDOOR TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

Three Months Ended
June 30,

Six Months Ended
June 30,

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 BALANCE SHEETS
(In thousands, except share data)
(Unaudited)

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 STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

Six Months Ended
June 30,

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


Non-GAAP Financial Measures

To provide investors with additional information regarding the Company’s financial results, this press release includes references to certain non-GAAP financial measures that are used by management. The Company believes these non-GAAP financial measures including Adjusted Gross Profit, Contribution Profit, Contribution Profit After Interest, Adjusted Net Loss, Adjusted EBITDA, and any such non-GAAP financial measures expressed as a Margin, are useful to investors as supplemental operational measurements to evaluate the Company’s financial performance.

The non-GAAP financial measures should not be considered in isolation or as a substitute for the Company’s reported GAAP results because they may include or exclude certain items as compared to similar GAAP-based measures, and such measures may not be comparable to similarly-titled measures reported by other companies. Management uses these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s performance by excluding certain items that may not be indicative of the Company’s recurring operating results.

Adjusted Gross Profit, Contribution Profit and Contribution Profit After Interest

To provide investors with additional information regarding our margins and return on inventory acquired, we have included Adjusted Gross Profit, Contribution Profit and Contribution Profit After Interest, 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 supplemental measures used by management in evaluating unit level economics and our operating performance in our key 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 adjacent 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 inventory as of the end of the period. Contribution Profit provides investors a measure to assess Opendoor’s ability to generate returns on homes sold during a reporting period after considering home purchase costs, renovation and repair costs, holding costs and selling costs. Contribution Profit After Interest further impacts gross profit by including interest costs 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 given period.

Adjusted Gross Profit, Contribution Profit and Contribution Profit After Interest are supplemental measures of our operating performance and have limitations as analytical tools. For example, these measures include costs that were recorded in prior periods under GAAP and exclude, in connection with homes held in inventory at the end of the period, costs required to be recorded under GAAP in the same period. These measures also exclude the impact of certain restructuring costs that are required under GAAP. 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 gross profit.

Adjusted Gross Profit / Margin

We calculate Adjusted Gross Profit as gross profit under GAAP adjusted for (1) inventory impairment in the current period, (2) inventory impairment in prior periods, and (3) restructuring in cost of revenue. Inventory impairment in the current period is calculated by adding back the inventory impairment charges recorded during the period on homes that remain in inventory at period end. Inventory impairment in prior periods is calculated by subtracting the inventory impairment charges recorded in prior periods on homes sold in the current period. We define Adjusted Gross Margin as Adjusted Gross Profit as a percentage of revenue.

We view this metric as an important measure of business performance as it captures gross margin performance isolated to homes sold in a given period and provides comparability across reporting periods. Adjusted Gross Profit helps management assess home pricing, service fees and renovation performance for a specific resale cohort.

Contribution Profit / Margin

We calculate Contribution Profit as Adjusted Gross Profit, minus (1) holding costs incurred in the current period on homes sold during the period, (2) holding costs incurred in prior periods on homes sold in the current period, and (3) direct selling costs incurred on homes sold during the current period. The composition of our holding costs is described in the footnotes to the reconciliation table below. Contribution Margin is Contribution Profit as a percentage of revenue.

We view this metric as an important measure of business performance as it captures the unit level performance isolated to homes sold in a given period and provides comparability across reporting periods. Contribution Profit helps management assess inflows and outflows directly associated with a specific resale cohort.

Contribution Profit / Margin After Interest

We define Contribution Profit After Interest as Contribution Profit, minus interest expense under our senior credit facilities incurred on the homes sold during the period. This may include interest expense recorded in periods prior to the period in which the sale occurred. Our senior credit facilities are secured by our homes in inventory. For our senior revolving credit facilities, drawdowns are made on a per-home basis at the time of purchase and are required to be repaid at the time the homes are sold. We do not include interest expense associated with our mezzanine term debt facilities in this calculation as we do not view such facilities as reflective of our expected long term capital structure and cost of financing. Contribution Margin After Interest is Contribution Profit After Interest as a percentage of revenue.

We view this metric as an important measure of business performance. Contribution Profit After Interest helps management assess Contribution Margin performance, per above, when fully burdened with expected long-term costs of financing.


OPENDOOR TECHNOLOGIES INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In thousands, except percentages, and homes sold)
(Unaudited)

The following table presents a reconciliation of our Adjusted Gross Profit, Contribution Profit and Contribution Profit After Interest to our gross profit, which is the most directly comparable GAAP measure, for the periods indicated:

Three Months Ended

(in thousands, except percentages)

June 30, 2021

March 31, 2021

June 30, 2020

Gross profit (GAAP)

$

158,771

$

97,132

$

54,574

Gross Margin

13.4

%

13.0

%

7.4

%

Adjustments:

Inventory impairment – Current Period (1)

922

20

1,231

Inventory impairment – Prior Periods (2)

(19

)

(114

)

(6,581

)

Restructuring in cost of revenue (3)

1,901

Adjusted Gross Profit

$

159,674

$

97,038

$

51,125

Adjusted Gross Margin

13.5

%

13.0

%

6.9

%

Adjustments:

Direct selling costs(4)

(26,813

)

(17,340

)

(22,128

)

Holding costs on sales – Current Period (5)(6)

(2,666

)

(2,126

)

(2,383

)

Holding costs on sales – Prior Periods (5)(7)

(2,633

)

(1,426

)

(6,517

)

Contribution Profit

$

127,562

$

76,146

$

20,097

Homes sold in period

3,481

2,462

2,924

Contribution Profit per Home Sold

$

37

$

31

$

7

Contribution Margin

10.8

%

10.2

%

2.7

%

Adjustments:

Interest on homes sold – Current Period (8)(9)

(3,110

)

(2,333

)

(3,155

)

Interest on homes sold – Prior Periods (8)(10)

(1,587

)

(902

)

(5,309

)

Contribution Profit After Interest

$

122,865

$

72,911

$

11,633

Contribution Margin After Interest

10.4

%

9.8

%

1.6

%

________________

(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.

(2)

​Inventory impairment — Prior Periods is the inventory valuation adjustments recorded in prior periods associated with homes that sold in the period presented.

(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.

(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.

(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.

(7)

​Represents holding costs incurred in prior periods on homes sold in the period presented.

(8)

​This does not include interest on mezzanine term debt facilities or other indebtedness.

(9)

​Represents the interest expense under our senior credit facilities incurred on homes sold for the current period during the period.

(10)

Represents the interest expense under our senior credit facilities incurred on homes sold for the current period during prior periods.


Adjusted Net Income (Loss) and Adjusted EBITDA

We also present Adjusted Net Income (Loss) and Adjusted EBITDA, which are non-GAAP financial measures that management uses to assess our underlying financial performance. These measures are also commonly used by investors and analysts to compare the underlying performance of companies in our industry. We believe these measures provide investors with meaningful period over period comparisons of our underlying performance, adjusted for certain charges that are non-recurring, non-cash, not directly related to our revenue-generating operations or not aligned to related revenue.

Adjusted Net Income (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 impairment costs that were recorded in prior periods under GAAP and exclude, in connection with homes held in inventory at the end of the period, impairment costs 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.

Adjusted Net Income (Loss)

We calculate Adjusted Net Income (Loss) as GAAP net loss adjusted to exclude non-cash expenses of stock-based compensation, derivative and warrant fair value adjustment, intangible amortization, and payroll tax on initial RSU release. It also excludes non-recurring restructuring charges, gain on lease termination, and convertible note payment-in-kind (“PIK”) interest and issuance discount amortization. Adjusted Net Income (Loss) also aligns the timing of impairment charges 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 Income (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.

Adjusted EBITDA

We calculated Adjusted EBITDA as Adjusted Net Income (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.

The following table presents a reconciliation of our Adjusted Net Income (Loss) and Adjusted EBITDA to our net loss, which is the most directly comparable GAAP measure, for the periods indicated:

Three Months Ended

(in thousands, except percentages)

June 30, 2021

March 31, 2021

June 30, 2020

Net loss (GAAP)

(143,805

)

$

(270,436

)

$

(55,919

)

Adjustments:

Stock-based compensation

164,216

238,832

3,669

Derivative and warrant fair value adjustment (1)

(23,952

)

15,272

(122

)

Intangibles amortization expense(2)

591

580

1,068

Inventory impairment – Current Period (3)

922

20

1,231

Inventory impairment — Prior Periods (4)

(19

)

(114

)

(6,580

)

Restructuring(5)

79

12,435

Convertible note PIK interest and discount amortization(6)

2,713

Loss on extinguishment of debt

Gain on lease termination

(5,237

)

Payroll tax on initial RSU release

5,124

Other(7)

(602

)

203

(1

)

Adjusted Net Income (Loss)

$

2,475

$

(20,801

)

$

(41,506

)

Adjustments:

Depreciation and amortization, excluding amortization of intangibles and right of use assets

7,894

8,434

5,850

Property financing(8)

12,284

6,980

8,564

Other interest expense(9)

3,542

4,019

6,013

Interest income(10)

(806

)

(867

)

(662

)

Income tax expense

190

94

80

Adjusted EBITDA

$

25,579

$

(2,141

)

$

(21,661

)

Adjusted EBITDA Margin

2.2

%

(0.3

)

%

(2.9

)

%

________________

(1)

Represents the gains and losses on our warrant liabilities, which are marked to fair value at the end of each period.

(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.

(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.

(4)

​Inventory impairment — Prior Periods is the inventory valuation adjustments recorded in prior periods associated with homes that sold in the period presented.

(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.

(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.

(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, and sublease income.

(8)

​Includes interest expense on our asset-backed debt facilities.

(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.

(10)

Consists mainly of interest earned on cash, cash equivalents and marketable securities.

1 Opendoor has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net income (loss) within this press release because the Company is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. These items include, but are not limited to, inventory impairment and stock-based compensation with respect to future grants and forfeitures. These items, which could materially affect the computation of forward-looking GAAP net income (loss), are inherently uncertain and depend on various factors, some of which are outside of the Company’s control. For more information regarding the non-GAAP financial measures discussed in this press release, please see “Use of Non-GAAP Financial Measures” below.