Technology real estate company Opendoor (NASDAQ:OPEN) announced better-than-expected revenue in Q3 CY2025, but sales fell by 33.6% year on year to $915 million. Its non-GAAP loss of $0.08 per share was 19.6% below analysts’ consensus estimates.
Is now the time to buy OPEN? Find out in our full research report (it’s free for active Edge members).
Opendoor (OPEN) Q3 CY2025 Highlights:
- Revenue: $915 million vs analyst estimates of $848.7 million (33.6% year-on-year decline, 7.8% beat)
- Adjusted EPS: -$0.08 vs analyst expectations of -$0.07 (19.6% miss)
- Adjusted EBITDA: -$33 million vs analyst estimates of -$19.39 million (-3.6% margin, 70.2% miss)
- EBITDA guidance for Q4 CY2025 is $45 million at the midpoint, above analyst estimates of -$43.58 million
- Operating Margin: -7.4%, down from -4.9% in the same quarter last year
- Homes Sold: 2,568, down 1,047 year on year
- Market Capitalization: $4.87 billion
StockStory’s Take
Opendoor’s third-quarter results reflected a period of major transition, with management citing the legacy risk-averse strategy as a key driver of lower home acquisition volumes and strained margins. CEO Kasra Nejatian described a company that had “lost faith in the power of software” and relied heavily on consultants, leading to slow operational execution. The shift back to a product-driven approach was evident as the company increased its home acquisition pace and began clearing out older inventory, though this resulted in margin pressures as legacy homes were sold. Nejatian acknowledged, “When you stop buying homes, you don’t just lose volume, you lose the ability to manage your inventory mix.”
Looking ahead, Opendoor’s guidance is anchored in accelerating acquisition volumes, aggressive product launches, and a renewed emphasis on AI-driven operational efficiency. Management is targeting positive adjusted net income by the end of next year, supported by streamlined cost structures and the rollout of new services like mortgages and warranties. CFO Christy Schwartz emphasized that the company’s primary focus is now on execution and delivering durable cost reductions, stating, “We are focused on making the right long-term decisions for the business, not managing the short-term guidance.”
Key Insights from Management’s Remarks
Opendoor’s management attributed Q3 results to earlier risk-averse decisions and the deliberate acceleration of product innovation and operational changes aimed at restoring growth and profitability.
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Leadership overhaul and culture shift: CEO Kasra Nejatian outlined a complete reset of Opendoor’s strategy, moving away from reliance on consultants and emphasizing a return to product-led decision-making and operational rigor. He framed the transition as a move from “manager mode” to “founder mode,” with renewed belief in software and AI as core levers.
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AI adoption in core operations: The company has integrated AI throughout its home assessment, underwriting, and transaction processes, reducing manual intervention from up to 11 employees per contract to just one. This shift is expected to accelerate transaction speed, cut costs, and improve the user experience.
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Product launches expanding the platform: In recent weeks, Opendoor introduced Opendoor Checkout (enabling buyers to make offers online), AI-powered multilingual agents, a trade-in widget for homebuilders, and automated title and escrow. These efforts aim to simplify home transactions and increase customer conversion rates.
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Capital structure realignment: To address liquidity risks and fund growth, management executed a $200 million equity raise and refinanced convertible notes, while introducing a pro rata warrant dividend for shareholders. Schwartz highlighted these moves as securing the “right capital setup for the Opendoor 2.0 operating model.”
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Renewed focus on acquisition velocity: The company reversed its prior slowdown in home buying, nearly doubling contract pace within seven weeks and reactivating its direct-to-consumer (D2C) channel, which management says is yielding significantly higher conversion rates than agent-led flows.
Drivers of Future Performance
Management’s outlook for the coming quarters is driven by scalable acquisitions, operating leverage through automation, and expanded service offerings—while navigating lingering inventory and market headwinds.
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Acquisition pace and market share: Management expects a 35% increase in home acquisitions in the next quarter, aiming for a flywheel effect as higher volumes attract more buyers and sellers. The company is prioritizing aggressive offers on high-quality homes and using AI to streamline selection and risk management.
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Margin recovery and ancillary revenue: As legacy inventory is replaced with newly acquired homes, Opendoor anticipates sequential margin improvement. The introduction of mortgage, warranty, and insurance products is expected to boost unit economics and diversify revenue streams, though short-term margins will remain pressured until the inventory mix shifts.
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Cost discipline and operating leverage: The company is targeting significant reductions in fixed operating expenses and will reinvest savings in engineering and automation. Management aims to keep fixed costs stable as volumes scale, with a focus on shifting more expenses to variable components that flex with transaction levels.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will focus on (1) monitoring the ramp-up in home acquisition volumes and how quickly the new D2C and AI-driven flows scale; (2) tracking sequential margin recovery as legacy inventory is replaced by higher-quality homes; and (3) assessing early revenue and customer feedback from newly launched services like mortgage, warranty, and Opendoor Checkout. Execution on cost discipline and continued product rollout will also be essential markers of progress.
Opendoor currently trades at $6.56, in line with $6.55 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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