Q3 2024 Offerpad Solutions Inc Earnings Call

Hello and welcome to the offerpad third quarter 2024 earnings conference call. My name is Harry and I will be your operator today.

All lines are currently in a listen-only mode and there will be an opportunity for Q&A after managed for prepared remarks. If you would like to enter the queue for questions, please dial star full on by one on your telephone keypad. I will now hand the call over to Courtney Reed of Fords Chief of Staff to begin. Please go ahead.

Courtney Reed: Good afternoon and welcome to Opera Pads 3rd Quarter 2020 Fort earnings call. I'm joined today by Opera Pads Chairman and Chief Executive Officer Brian Bairn, and the Chief Financial Officer Peter Knag.

Courtney Reed: During the call today, management will make forward-looking statements as defined in the private security's litigation or reform act of 1995.

Courtney Reed: Forward-looking statements are inherently uncertain and events could differ significantly from management's expectations. Please refer to the risks, uncertainties, and other factors relating to the company's business described in our filing with the U.S. Securities and Exchange Commission.

Courtney Reed: Accepted as required by applicable law, opera pad does not intend to update or alter forward-looking statements, whether as a result of new information, future events or otherwise.

Courtney Reed: On today's call management will refer to certain non-gap financial measures. These metrics exclude certain items to discuss in our earnings release under the heading non-gap financial measures.

Courtney Reed: The reconciliation of offerpad non-get measures to the comparable get measures are available in the financial tables, the third quarter earnings release on offerpad's website. With that, I'll turn the call over to Brian. Thank you, Courtney, and thanks to everyone for joining today.

Brian: In the third quarter, we delivered revenue at the top of our guidance, driven by a healthy mix of our products, including our cash offer, our B2B Renovate Business, our Direct Plus Institutional Biure Program, and our Agent Partnership Program.

Brian: This occurred in a quarter which the country continued to see residential resell transaction volumes at historic lows, persistent affordability issues, abnormal seasonality, and the implementation of the most significant change in the industry commission practices in our lifetime.

Brian: That meant that during the past quarter, consumers not only had to contend with volatility and uncertainty in mortgage rates and access to affordable inventory, but also in how much they should pay their agents.

Brian: Despite the significant macro and market headwinds, we remain focused on our mission to simplify real estate and to provide solutions for consumers and partners. I'll well continue to make important strides in building a long-term, profitable business that can weather any economy.

Brian: Quarter highlights include asset light growth, now making up 30% of the total contribution margin after interest.

Brian: Continued expansion of our Agent Partnership Program, further enhancements in our technology, enhance customer journey, and improve operating leverage through our optimization efforts.

Brian: These lands and positive trends, F.D. and the quarter, are expected to continue leading us on our path to adjusted even of profitability and position as for sustained profitability in any market condition.

Brian: For more than two years now and especially during the last few quarters, we've been hyper focused on returning to positive earnings in cash flow. This has required us to adjust our playbook our while adapting to unprecedented market conditions that we may not ever see again in our lifetimes.

That is not an overstatement.

Brian: If current estimates for this year hold, there will be under 4 million national real estate transactions in 2024. That would mark the second consecutive year with volumes that level below even those seen at the depths of the great financial crisis.

Brian: This reality has meant focusing on diversifying our revenue, adjusting our buy-bops, and managing our acquisition pace to address market uncertainty. Importantly, it has meant taking a keen look at our operations and expenses and only reorganizing our cost-trumps through the thrive.

Brian: These efforts, though challenging have been essential and they're working.

Brian: By prudently reducing acquisitions, especially in Q3, we benefit from owning quality of inventory aligned with our return goals. Our revenue diversification through other platform offerings is provides stability and contribution margins beyond the core cash offer business.

Brian: Additionally, cost saving measures, tech driven process improvements, and strategic reorganization have brought us close to the profitability, even amid historically low volume. In short, we've become a leaner, smarter, and more resilient organization, well positioned to leverage market momentum.

Courtney Reed: This is why I'm especially optimistic about the market transition we expect in the coming quarters. A shift we strategically prepared for and are ready to leverage as we enter the anticipated bed rate cutting cycle.

Courtney Reed: The milestone eagerly awaited by consumers, lenders, agents, and institutional partners will set the states for change. We anticipate continued mortgage rate volatility through Q4, stabilizing into 2025, with a busy or spring selling season on the horizon.

Courtney Reed: We believe that the combination of rate relief, easing inflation, a resilient labor market, and pent-up demand will help bring buyers and sellers back into the marketplace.

Courtney Reed: Additionally, our direct-plus partners have shown increased buying activity, signaling early signs of the market beginning to unlock.

Courtney Reed: Based on these indicators, we're projecting the 15-20% increase in the resale market transaction volume. We've reached an estimated 4.3 to 4.5 million transactions in 2025.

Courtney Reed: Before moving forward, I'd like to address the impact of Hurricane Haleen and Milton at our East Coast markets, particularly in Florida and the Carolinas.

Courtney Reed: As the storms approach, we implemented our standard precautions to safeguard our properties.

Courtney Reed: The impact was minimal primarily limited to landscape cleanup in a few fallen fences with no material damage to our portfolio. The most significant effect was a temporary market slowdown before and after the storms as local communities work through the aftermath.

Courtney Reed: We're grateful that our team members of Partners remain safe and deeply appreciate their dedication through this period.

Courtney Reed: In Q3, our customer engagement remains strong, underscored by a 91% customer satisfaction score, and steady monthly request volume, driven by improved advertising efficiencies.

Courtney Reed: Notably, customers turned to us first, often before consulting a real estate agent, with 33% looking to transact within the next 12 months.

Courtney Reed: We're fully prepared to support customers whenever they're running the Trans Act, whether that's in a week or a year.

Courtney Reed: To maintain strong connections, we've introduced enhanced communication strategies, offering update customer offers every 30 days, with timely updates and alternative solutions through multiple channels and tailored cadences.

Courtney Reed: and sharing the customers received relevant information at every stage of their decision-making journey.

Courtney Reed: In anticipation of increased market activity, we're now strategically expanding our by-bops and raising acquisition volume. Our goal is to accelerate this effort through Q4 and into Q1, position us ahead of what we anticipate being a strong spring season.

Courtney Reed: We're targeting a return to a runway of approximately 1,000 acquisitions per quarter by Q1.

Courtney Reed: As we look forward to growth, we're excited to introduce a significant improvement to our customer journey. Building on our well-known commitment to deliver competitive and quick cash offers.

Courtney Reed: Previously, our timeline was to provide the offer within 24 hours, followed by an inspection period for further evaluations and possible repair negotiations. Now, customers can expect an S-made offer range within minutes, allowing them to schedule their inspection instantly.

Courtney Reed: This shift reduces multiple touchpoints, giving customers even more control over timing and decision making.

Courtney Reed: Powered by advanced pricing technology known as OfferPad Citrus Value and extensive internal data gathered from hundreds of thousands of offers, this improvement reflects our confidence in our pricing model, analytics, and real estate expertise.

Courtney Reed: Early results from our Q3 tests in Phoenix and Vegas show an increase in customer engagement and conversions, affirming the workflow's impact.

Courtney Reed: Launched in all markets at the beginning of Q4, this process offers a smoother, more efficient experience that reinforces our commitment to customer-focused solutions.

Courtney Reed: Progress in our Agent Partnership Program, APP, continues to exceed expectations. The pro tier, which allows agents the ability to earn up to 4% on the successful acquisition and listing of a home, grew quarterly requests and acquisitions to 26% and 33% of total, respectively.

Courtney Reed: Regarding the exclusive max tier that connects high producing agents with regional access to seller and buyer leads, we have continued to refine pricing and operating models. This program is driving consistent monthly reoccurring revenue and many key markets such as Phoenix, Houston, and Las Vegas.

Courtney Reed: Offerpad Renovate continues to be a strong line of business capitalizing on the experienced teams and well-honed processes we've developed over the years.

Courtney Reed: Despite many of our renovate partners operating at reduced levels, we've achieved another strong quarter with 227 completed projects, generate over $4 million in revenue, bringing 2024's running total to $14 million, already surpassing our 2023 total of $12 million.

Courtney Reed: As we've expanded our client base, our average revenue per renovation has grown from approximately $11,000 to $18,000 over the past year. We've steadily added new partners and look forward to serving the institutional buyers we anticipate entering this market cycle.

Courtney Reed: As a result of these investments, we've been able to streamline costs and improve margins.

Courtney Reed: Putting the business on a path to delivering consistent improvements in adjusted EBITDA and cash flow. For example, RENTAL CAPTAIN, which we discussed last quarter, is not only supporting our renovate business, but also making our internal renovations on OfferPad-owned homes more efficient.

Courtney Reed: Renovation costs are among our most significant expenses, making it essential to continually optimize this area. With targeted investments in technology, we're positioned to drive greater efficiency as we ramp up acquisition volume.

Courtney Reed: To recap, we remain disciplined and patient in this difficult real estate cycle while planning for long-term success.

Courtney Reed: We focus on diversifying our product mix and optimizing our cost in the short term, setting us up for the long term. We have grown our asset light services, expanded our partner ecosystem, enhanced our customer offer request journey, and optimized our cost structure.

Courtney Reed: This preparation has positioned OfferPad well as we transition to the next phase of the market and return to our normalized acquisition volume and inventory levels in our cash offer business. With that, I'll now turn the call over to Peter.

Peter Knag: Thank you, Brian. The quarter brought a lot of change in the market and industry, which we expect will bring significant opportunity for each of our lines of business.

Peter Knag: With market conditions expected to stabilize, including easing mortgage rate volatility, we anticipate stronger and more serious interest from buyers in the months ahead, especially as we move past the election and routine seasonality of the holidays.

Courtney Reed: Additionally, decreasing rate expectations have a direct impact on institutional acquisition level.

Courtney Reed: which we're beginning to see them through an offer and transaction activity. This is an exciting early trend that we expect will help us grow our B2B businesses, including Direct Plus and Renovate.

Courtney Reed: During the past few months, we've been highly focused on business improvement opportunities, both cost out actions, as well as change management and process enhancements.

Speaker Change: As Brian mentioned, we've accelerated the speed and efficiency of our initial offers providing customers with an estimated offer range within minutes and an early inspection opportunity.

Courtney Reed: This streamlined approach increases customer engagement, creates more inspection opportunities, and allows us to view more properties, ultimately driving improved conversion.

Courtney Reed: As we discussed last quarter, we carried forward the focus on optimizing margins and costs throughout Q3 as we continue to position the business to generate positive EBITDA and cash flow in any real estate environment.

Courtney Reed: Turning to the quarter, inventory remained in a healthy position. We ended the quarter with 796 homes in inventory, of which only 10.9% were owned over 180 days and not under contract for resale.

Courtney Reed: We acquired 422 homes in the quarter.

Courtney Reed: We're down 49% compared to Q2 and in line with our strategy of acquiring fewer homes at wider margins during this period. However, with the anticipated market transition, we are now focused on increasing acquisition pace throughout the fourth quarter to meet expected demand in 2025.

Courtney Reed: We anticipate this to result in sequential acquisition growth in both Q4 of this year and Q1 2025, with total acquisition levels climbing to 1,000 or more per quarter.

Courtney Reed: While our cash offer continues to drive the majority of our contribution margin, we're pleased with the performance of our asset-like services, including Renovate, Direct Plus, and our Agent Partnership Program. Combined these services represented over 30% of total contribution profit after interest in Q3, and we expect this momentum to continue to the end of the year and into 2025.

Courtney Reed: Home sold in the quarter had an average time to cash of 110 days, an increase of four days quarter over quarter, and in line with our seasonal expectations.

Courtney Reed: Given those same dynamics and our sales mix with a larger portion of aged inventory, given our intentionally lower recent acquisition pace, we expect time to cash to increase.

Courtney Reed: Page PAGE of NUMPAGES www.verbalink.com Page PAGE of NUMPAGES

Courtney Reed: Gross margin was slightly down compared to the second quarter at 8.2%. Gross profit was $17.1 million, down 29% year-over-year and 22% quarter-over-quarter.

Courtney Reed: This performance and gross margin was driven by increased contribution margin in our asset light services, which represented 34% of total transactions in the quarter offset by a slight decrease in contribution margin from our cash offer business.

Courtney Reed: Operating expenses excluding property related selling and holding costs and contribution margin of $19.2 million improved by $4.9 million versus the prior quarter as a result of our continued cost add initiatives.

Courtney Reed: That's an improvement of 48% or $18.1 million year-over-year driven by reduced advertising spend, growth with our agent partnership program, and cost management activities.

Courtney Reed: I'd like to take a moment to emphasize our relentless focus on cost efficiency.

Courtney Reed: Through this commitment, we've achieved remarkable cost reductions.

Courtney Reed: After lowering annual operating expenses by nearly $70 million in 2023, we continued to make excellent progress in our cost-out initiatives during the quarter and now expect to save over $45 million annually, up from the $30 million target.

Courtney Reed: These focus areas, including optimizing OPEX, drove an adjusted EBITDA loss of $6.2 million, an improvement of 53% year-over-year, and a slight decrease of $1.8 million quarter-over-quarter, which did include a one-time restructuring cost of $700,000 in the quarter.

Courtney Reed: As we've discussed, we're hyper-focused on reaching positive cash flow as evidenced through the sequential improvement from $12 million to $8 million in quarterly cash decrease.

Courtney Reed: As we rebuild inventory through increased acquisitions, we anticipate increasing leverage in the coming quarters as we finance acquisitions using our dedicated asset-backed warehouse facilities. We continue to have a strong roster of supported lending partners and, importantly, have zero parent-level debt.

Courtney Reed: Moving now to Guidance.

Courtney Reed: Considering the continued lower industry-wide volumes in our prior strategic decrease in acquisition pace, we expect fourth quarter revenue to be in the range of $160 million

Courtney Reed: As we move through the final quarter of 2024, we're energized by the positive shifts starting to emerge in the market. With a stabilizing and potentially decreasing rate environment expected in 2025, we're poised to return to more normalized acquisition levels, a transition already underway.

Courtney Reed: We are proud of the cost discipline we've maintained throughout this unprecedented period of dislocation and historic low activity in the residential resale market, and we'll continue this discipline as we move back to revenue growth.

Courtney Reed: With our unwavering commitment to profitability, I'm confident that as we resume normalized volumes, we're rebuilding a resilient and sustainable business that can thrive in any real estate environment. We look forward to updating you on our progress.

Speaker Change: We will now open the call for questions.

Speaker Change: Thank you. If you would like to ask a question, please dial star followed by 1 on your telephone keypad now. When preparing to ask your question, please ensure that your phone is unmuted locally.

Speaker Change: If you change your mind and would like to exit the queue, please dial star followed by 2. And finally, we respectfully ask that you limit yourselves to one question and one follow-up per person, and then re-enter the queue for any further questions.

Speaker Change: Great, thanks for taking my questions. I have two. First, for Brian, I appreciate your comments on acquisition volumes and your thoughts on what 2025 might look like, but could you share what assumptions are contemplated in your outlook? Meaning, like, what do you need to see? What kind of mortgage rates environment are you assuming for that?

Speaker Change: Yeah, I'm sorry.

Speaker Change: No, go ahead and turn that on and have a follow-up.

Speaker Change: Yeah, so you know, we're seeing, I think, first and foremost, the pent up demand we're seeing from both sellers and buyers.

Speaker Change: That increases, I feel like, month over month. Obviously, there's been a lot of adversity over the last couple years in that.

Speaker Change: Pent-Up Demand overall is something that we watch really closely.

Speaker Change: on the second part of that is that we're expecting that interest rates, you know, right now they've been so volatile and I've said this, I think the last few earnings calls, but

Speaker Change: It's not just the mortgage rate, it's the volatility. I mean, for example, we saw that in the third quarter again, is that interest rates dipped to six and then back up over seven again. There are seven today.

Speaker Change: So we're expecting that to be that way through 2024, but really to settle in in 2025. That that that will be that will be that on the other part is that, you know, we saw.

Speaker Change: a pretty dramatic pause in the market when about mid-August when we saw the

Speaker Change: The NAR settlement really starts settling in with agents and a lot of confusion, both from sellers, buyers, or I should say sellers, buyers, and agents.

Speaker Change: We're expecting that to

Courtney Reed: to mitigate a little bit as well. And, you know, as.

Courtney Reed: Like I mentioned in the comments, you know, there's gonna be less than 4 million transactions this year

Courtney Reed: You know, that's what they're estimating and

Speaker Change: Unknown Speaker You know, an increase to 42 to 44 range, I think is very realistic in what we're going to see. The last two years we have seen very soft selling seasons and higher seasonality. We're expecting in the spring selling season.

Speaker Change: to to really loosen up again. And like I said, nothing dramatic, but but just to loosen up and then and then, you know, soften the volatility we're seeing with mortgage rates.

Speaker Change: Great, appreciate that. And then as a follow up for Peter,

Speaker Change: When you think about profitability, and I appreciate the comments about reaching positive free cash flow and profitability in any environment, so is it?

Speaker Change: Right, or should we assume that you could be adjusted but it is not profitable for the full year in 2025 or does it need to take a little bit more time for you to get to or achieve full year profitability?

Speaker Change: Yeah, so thanks for the question.

Speaker Change: We are I mean absolutely that is that has that is our our approach and our focus

Speaker Change: We're laser focused on cost outs.

Speaker Change: We're not, I'm not ready to give guidance for, you know, for 2025. So I'm not going to give a direct answer to the question.

Speaker Change: But it's right on target with what we're talking about, of course, and what's in the prepared remarks and what we're doing.

Speaker Change: You can see what I point you to is.

Speaker Change: is from a cost perspective. Pillar one really has been taking costs out of the business. We took $70 million of cost out last year. We've taken $45 million, and there could be more, there will be more. It's just a question of how much more

Speaker Change: And that, by the way, not all of that is in the results because our last cost out work process was in August and, and, and so we don't see all of that in third quarter. So you're, you do already see sequential improvement in cost outs. You can look, you can see that 32 million in, in OPEX, the reported OPEX second quarter down to 26 million in third quarter.

Speaker Change: We're moving now to 1000 homes. So that's, you know, that's really pillar two, we've retooled our cost based

Speaker Change: and and then we're we're we're relaunching back up to levels.

Speaker Change: That's when we will hit adjust the debit to our positive and then after that free cash flow positive.

Speaker Change: Yeah, Dane, just one thing I'll mention as well is...

Speaker Change: We're seeing very strong and continue to see really strong seller demand.

Speaker Change: And, you know, our request volume is strong.

Speaker Change: Our agent partnership program continues to grow.

Speaker Change: and, you know, our partnership we have with Realtor.com. And so we're seeing really strong request volume. And, you know, some of the things I've commented before.

Speaker Change: buying homes is the easy part, but buying them where they perform and making sure that when we buy them under the right circumstances, we know how that home is performing, and that is something we're continuing to see, and it also gives us, you know, we get pretty excited about what the early 2025 is going to look like.

Speaker Change: Got it. Appreciate the color. Thank you.

Speaker Change: The next question today will be from the line of Brian Tomasello with Stiefel. Please go ahead, your line is now open.

Brian Tomasello: Hi, everyone. Thanks for taking the questions. Peter, just in terms of the $45 million of annual cost saves, that's up from I think $35 million that you cited last quarter, and up from $30 million at the beginning of the year. Can you just elaborate on where you're driving those savings from?

Brian Tomasello: And then considering the progress that you guys have continued to make on those expense efficiencies. Can you give us an update?

Brian Tomasello: on what level of monthly or quarterly acquisition volumes you think is necessary to achieve breakeven on a cashflow basis, inclusive of interest costs.

Brian Tomasello: Good.

Speaker Change: So, for sure, as we've stressed over and over at this point, the cost outs are critical in part one. There are people costs there. We have taken the business down to lower levels.

Speaker Change: At the same time, we've worked through with process improvement initiatives, and we've taken the opportunity to make sure that we're not just running the business efficiently, but we're doing it effectively as well. So that is a significant part, over 50% of the cost outs, but on top of that, we've done everything else that you'd expect.

Speaker Change: and we haven't just done that, we've gone all the way down to the long tail, the smaller expenses that are sometimes.

Speaker Change: ignored and gone through those as well.

Speaker Change: And then finally, marketing is an area that we focused on as well. It's a variable expense and

Speaker Change: And, and, and so it's a little bit different than, than the other areas that are that are truly permanent cost outs.

Speaker Change: But we've looked hard at attribution, and before we go and spend more to get more top of funnel, we're making sure that we're getting the best conversion across the lead that we are paying through direct marketing.

Speaker Change: And so we've we've taken the marketing cost down as well and you can see we do disclose that that is in the one of the footnotes in the in the queue where our marketing levels are.

Speaker Change: We're really excited, without saying more than this, we're really excited about what that's going to bring us from a financial perspective when we put the volume at over 1,000 homes back on top of our lower cost structure, and that will bring us where we're looking to go.

Speaker Change: Great and then just one more for Brian, you know now that we have about

Speaker Change: 2-3 months of the N.E.R. settlement behind us.

Speaker Change: I was hoping you can give us an update on any impacts you've observed, whether in terms of actual data or anecdotes you've gotten from the industry around commissions and just the impacts for the industry overall so far.

Brian: Yeah, and like I mentioned, there was definitely a shock to the industry as far as

Speaker Change: You know, we talked about before buyers having to sign buyer agreements with agents.

Speaker Change: and guaranteeing the commission to the agent where, you know, if the seller didn't pay, they would have to pay for it.

Speaker Change: definitely, you know, what was something that everyone had to get used to and on all fronts, but over, you know, seeing as things have settled a little bit and starting to see that definitely starting to see some impact of commissions there.

Speaker Change: you know, from, you know, maybe even 50 basis points coming down the bite on the buy side. And so a lot of direct conversations from agents asking, you know, what, what, what commission offer pad pays.

Speaker Change: Now we've continued with buyer demand being low to keep commissions and obviously to partner with our agents to keep commissions.

Speaker Change: with our original underwritten commissions, at least till the end of the year. You know, that's something that we're always going to be looking at closely. But I do think you're going to start seeing the impact of the overall commissions. You know, even in the early days, you're seeing that impacted a little bit.

Speaker Change: Great, thank you.

Speaker Change: [inaudible]

Speaker Change: Next question today will be from the line of Nick Jones with JMP. Please go ahead, your line is open.

Speaker Change: Hi, this is Luke on for Nick. Thanks for taking our question. Given, you know, ongoing but potentially improving macro volatility, are there any markets you're seeing more resiliency in than others? I guess if you could just provide any color on performance across your different markets, that would be great. Thanks.

Speaker Change: Yeah, from a resilient standpoint, you know, the markets, the Texas markets, Atlanta, the Carolinas have been have been very resilient markets.

Speaker Change: You know, it's hard, you know, the with the impact of of the storms there in the Carolinas

Speaker Change: and the Florida markets has been really just impactful on the timing of a lot of this. And of course, a lot of devastation that's happened there, but those have been very resilient markets.

Speaker Change: and I had commented before markets that saw the highest home price appreciation in the shortest period of time have been the ones that are a little longer to settle in again.

Speaker Change: As a reminder, for any further questions, please dial star followed by 1 on your telephone keypad now. And our next question will be from the line of John Cluantinoni with Jeffreys. Please go ahead, your line is open.

Speaker Change: Great, thanks for taking my questions.

John Cluantinoni: First off, HomePrice Appreciation is beginning to moderate.

Speaker Change: After being elevated for the past five years or so, you know, giving your holding homes now for over 100 days, I'm curious how you plan to adjust to home price appreciation, moderating back to historical averages while holding costs and renovation costs remain elevated. And I have a follow up. Thanks.

Speaker Change: Yeah, great question. We still continue focused on

Speaker Change: the margin on the home and not the volume of what we're making per home and what we're buying.

Speaker Change: The, you know, the interior areas are things that we're that we're focused on the exterior areas, we're seeing, you know, more active inventory, more, more price volatility in those in those areas, but definitely focused on the

Speaker Change: The certain type of product that we feel is going to perform really well and being careful about what we're buying still.

Speaker Change: Yeah, sure.

Speaker Change: Well, first, you're right, it's moderated some, but it still is.

Speaker Change: Unknown Speaker 0

Speaker Change: at a comfortable level at 49 million. And so and so that's what I'd stress number one.

Speaker Change: From a capital market, you know, again, we're focused in the immediate term.

Speaker Change: and we'll get to the intermediate term, I think capital markets for sure.

Speaker Change: We, of course, we look at capital markets opportunities, both from a debt perspective and an equity perspective.

Speaker Change: and from time to time and on an ongoing.

Speaker Change: basis.

Speaker Change: As we get, you know, maybe we can think about it as in three steps. One, these cost outs, which have been critical.

Speaker Change: and have gone really well.

Speaker Change: to ramping up volume. And then three, you know, is everything else, the deeper penetration and our existing markets moving and moving into more broadly into new markets and from a product perspective. And at some point, across across those, those steps, capital markets, you know, could be and may be part of part of our strategy, but, you know, but but

Speaker Change: You know, right now we're laser focused on moving out of the cost out initiative and into the growth initiative and into next year based on that strategy.

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Speaker Change: Thank you.

Speaker Change: Thank you. And with no further questions in the queue, this will conclude the OfferPad third quarter 2024 earnings conference call. Thank you to everyone who was able to join us today. You may now disconnect your lines.