- General
- March 5, 2021
- 4 minutes read
Earnings: Opendoor’s Revenue Drops 45% In 2020
After going public last year through a SPAC merger in December, iBuying company Opendoor has dropped its first earnings results…
After going public last year through a SPAC merger in December, iBuying company Opendoor has dropped its first earnings results as a public company, reporting its financial results for the fourth quarter of 2020 as well as the full year.
- Opendoor reported $2.6 billion in revenue in 2020, compared to $4.7 billion in 2019 and implying a 45% annual revenue drop. The revenue drop is though expected as Opendoor’s business was significantly affected by a wide pause in the US home buying market in the early months of the Covid-19 pandemic last year.
- Opendoor’s revenue dropped sharply in the fourth quarter of 2020, as it reported $249 million in revenue compared to $1.3 billion in Q4 2019. An 80% drop in quarterly revenue over the past year is definitely something to point out.
- Opendoor isn’t profitable, reporting a net loss of $287 million in 2020, slightly down from $339 million in 2019. In Q4 2020, the company’s net loss was roughly $88 million.
- Opendoor sold a total of 9,913 homes in 2020, compared to 18,799 in 2019. In Q4 2020, the company sold 849 homes, compared to 5,013 in Q4 2019.
As it acknowledged a hit to its business amid a turbulent real estate market last year, Opendoor had some positive sentiments to point out to its shareholders, including that it expects its business to rebound in 2021. The company is forecasting sales of between $600 million and $625 million in the first quarter of this year.
Opendoor has made its mark as the leader in the nascent-but-growing US iBuying market. To the uninitated, iBuying (Instant Buying) deals with buying and selling homes from owners at relatively quick timing without the need for brokers and real estate agents. iBuyers like Opendoor buys homes to then flip them for a profit, harnessing technical data to judge home values before they buy and sell.
Opendoor went public last year through a merger with Social Capital Hedosophia Holdings Corp. II, a special-purpose acquisition company (SPAC). That merger handed over nearly $1 billion of cash proceeds to the company, bolstering its cash and marketable securities haul to $1.46 billion at the end of 2020.
With its cash haul, Opendoor to all appearances can still withstand a series of unprofitable quarters with hopes of becoming stable and turning profitable in the future. Though, the company’s path to profitability seems like an expensive and difficult one to take judging by its financials.
