Opendoor (OPEN) Stock: Revenue Beat Can’t Stop Post-Earnings Drop

TLDR

• Opendoor reported Q3 revenue of $915 million, beating analyst estimates by 7.8% but falling 33.6% year-over-year.
• The company posted a GAAP loss of $0.12 per share, missing expectations by 68.5%.
• New CEO Kaz Nejatian is repositioning Opendoor as a software and AI company with plans to reach breakeven by end of 2026.
• Q4 EBITDA guidance of $45 million came in well above analyst estimates of negative $41.15 million.
• The stock dropped 8.5% to $5.99 immediately after earnings despite the revenue beat.

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Opendoor delivered mixed Q3 results that left investors heading for the exits. The real estate technology platform reported revenue of $915 million, topping Wall Street’s $848.7 million estimate by a healthy 7.8%.

But the celebration stopped there. Revenue tumbled 33.6% compared to the same quarter last year. The company’s GAAP loss per share came in at $0.12, missing the consensus estimate of $0.07 by 68.5%.

Adjusted EBITDA also disappointed at negative $33 million. Analysts had been expecting negative $19.39 million. That’s a 70.2% miss on a key profitability metric.

Opendoor Technologies Inc., OPEN

The stock didn’t take the news well. Shares fell 8.5% to $5.99 in immediate post-earnings trading.

New Leadership, New Direction

The earnings call featured the debut of new CEO Kaz Nejatian. His message marked a stark departure from Opendoor’s previous approach.

Opendoor has launched over a dozen AI-powered products and features. Nejatian emphasized that success will come from building technology, not from “charging high spreads and hoping the macro saves us.”

The CEO outlined a three-part path to profitability. First, transact with more sellers. Second, strengthen unit economics through better pricing and faster resale. Third, drive operational efficiency through expense discipline.

Nejatian set a clear timeline. By the end of 2026, he expects Opendoor to reach breakeven on adjusted net income using a 12-month forward-looking basis.

The Numbers Tell a Tough Story

Opendoor’s volume metrics showed continued weakness. The company sold 2,568 homes in Q3, down 1,047 units year-over-year.

Over the past two years, homes sold has averaged a 16.2% annual decline. Revenue has fallen even faster at 27.3% annually over the same period. That spread suggests weakening monetization per transaction.

The operating margin came in at negative 7.4%. That’s worse than the negative 4.9% from the same quarter last year. Over the past two years, Opendoor’s operating margin has averaged negative 5.9%.

Free cash flow margin did provide a bright spot at 47.2%. That’s up sharply from 4.1% in Q3 of last year.

Looking forward, analysts expect revenue to decline another 23% over the next 12 months. Homes sold reached 2,568 in the latest quarter as the company continues to shrink its transaction volume.

The Q4 guidance offered the clearest positive signal from the report. Opendoor projected EBITDA of $45 million at the midpoint. Analysts had been expecting negative $41.15 million. That’s a massive beat on guidance and suggests the turnaround efforts may be gaining traction faster than the market anticipated.

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