Q2 2026 Opendoor Technologies Inc Earnings Call

August 4, 2026

Speaker #1: Smell in your home.

Speaker #2: Hey everyone, welcome to Open Door's second quarter 2026 financial open house earnings livestream. I'm Michael Judd, Open Door's Head of Investor Relations. Now, a few housekeeping items before we get started.

Michael Judd: Hey, everyone. Welcome to Opendoor's Q2 2026 Financial Open House Earnings Live Stream. I'm Michael Judd, Opendoor's Head of Investor Relations. A few housekeeping items before we get started. Like all things Opendoor, we're going to do this faster. Details of our results and additional management commentary are available in our earnings release, which can be found at investor.opendoor.com. The following discussion contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact are statements that could be deemed forward-looking, including, but not limited to, statements regarding Opendoor's financial condition, anticipated financial performance, business strategy and plans, market opportunity and expansion, and management objectives for future operations. These statements are neither promises nor guarantees, and undue reliance should not be placed on them.

Speaker #2: Like all things Open Door, we're going to do this faster. Details of our results and additional management commentary are available in our earnings release, which can be found at investor.opendoor.com.

Speaker #2: The following discussion contains forward-looking statements within the meeting of the Federal Securities Laws. All statements other than statements of historical fact are statements that could be deemed forward-looking, including but not limited to: statements regarding Open Door's financial condition, anticipated financial performance, business strategy and plans, market opportunity, and expansion, and management objectives for future operations.

Speaker #2: These statements are neither promises nor guarantees, and reliance should not be placed on them. Such forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those discussed here.

Michael Judd: Such forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those discussed here. Additional information that could cause actual results to differ from forward-looking statements can be found in the Risk Factors section of Opendoor's most recent annual report on Form 10-K for the year ended 31 December 2025, as updated by our periodic reports and other filings with the SEC. Any forward-looking statements made on this webcast, including responses to your questions, are based on management's reasonable current expectations and assumptions as of today, Opendoor assumes no obligation to update or revise them, whether as a result of new information, future events, or otherwise, except as required by law. The following discussion contains references to certain non-GAAP financial measures. The company believes these non-GAAP financial measures are useful to investors as supplemental operational measurements to evaluate the company's financial performance.

Speaker #2: Additional information that could cause actual results to differ from forward-looking statements can be found in the risk factor section of Open Door's most recent annual report on Form 10-K for the year ended December 31, 2025, as updated by our periodic reports and other filings of the SEC.

Speaker #2: Any forward-looking statements made on this webcast, including responses to your questions, are based on management's reasonable current expectations and assumptions as of today, and Opendoor assumes no obligation to update or revise them, whether as a result of new information, future events, or otherwise, except as required by law.

Speaker #2: The following discussion contains references to certain non-GAAP financial measures. The company believes these non-GAAP financial measures are useful to investors as supplemental operational measurements to evaluate the company's financial performance.

Speaker #2: For reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP metric, please see our website at investor.opendoor.com. And with that, let's give them the open house with Kaz and Christy.

Michael Judd: For a reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP metric, please see our website at investor.opendoor.com. With that, let's get into the open house with Kaz and Christie.

Speaker #3: Good afternoon, everyone. I usually start these calls by showing you a clip of what I told you during the last call. But this time, I'm going to tell you a story about what my wife told me, and I don't have a video clip because it would be weird if my wife and I just recorded each other all the time.

Kas Nejatian: Good afternoon, everyone. I usually start these calls by showing you a clip of what I told you during the last call. This time, I'm going to tell you a story about what my wife told me, and I don't have a video clip because it'd be weird if my wife and I just recorded each other all the time. You're just going to have to use your imagination. When I was leaving home to fly to San Francisco before my first day at Opendoor, I told my wife that I'd be back home the following Wednesday, maybe Thursday. She didn't miss a beat. She said, Don't come back until there's a plan to break even. Look, there's a lot of ways people describe the thing I'm about to tell you. It just depends on which tribe they're a part of, right?

Kaz Nejatian: Good afternoon, everyone. I usually start these calls by showing you a clip of what I told you during the last call. This time, I'm going to tell you a story about what my wife told me, and I don't have a video clip because it'd be weird if my wife and I just recorded each other all the time. You're just going to have to use your imagination. When I was leaving home to fly to San Francisco before my first day at Opendoor, I told my wife that I'd be back home the following Wednesday, maybe Thursday. She didn't miss a beat. She said, Don't come back until there's a plan to break even. Look, there's a lot of ways people describe the thing I'm about to tell you. It just depends on which tribe they're a part of, right?

Speaker #3: So you're just going to have to use your imagination. When I was leaving home to fly to San Francisco before my first day at Open Door, I told my wife that I'd be back home the following Wednesday, maybe Thursday.

Speaker #3: And she didn't miss a beat. She said, "Don't come back until there's a plan to break even." Look, there's a lot of ways people describe the thing I'm about to tell you.

Speaker #3: It just depends on which tribe they're part of, right? Paul Graham has a famous essay about it. Finance people call it a 'glide path to profitability.'

Kas Nejatian: Paul Graham has a famous essay about it. Finance people call it a glide path to profitability, mostly because I think finance people are legally required to say things like glide path. Basically, the question is this: If nothing changes and you keep doing what you're doing, what happens? Let's see. There's no magic here. It's just math. This next section, it's going to take me a few minutes, it's incredibly important. I want to give you all the same framework we use internally so you can see things the way we're seeing them right now. Opendoor's core business math is simple. It's how many homes we transact on times our contribution margin minus our OPEX and our financing costs. Let's go through each of these four numbers. First, volume. Right now, we're signing more than 500 contracts every single week. Last week, we signed around 700.

Kaz Nejatian: Paul Graham has a famous essay about it. Finance people call it a glide path to profitability, mostly because I think finance people are legally required to say things like glide path. Basically, the question is this: If nothing changes and you keep doing what you're doing, what happens? Let's see. There's no magic here. It's just math. This next section, it's going to take me a few minutes, it's incredibly important. I want to give you all the same framework we use internally so you can see things the way we're seeing them right now. Opendoor's core business math is simple. It's how many homes we transact on times our contribution margin minus our OPEX and our financing costs. Let's go through each of these four numbers. First, volume. Right now, we're signing more than 500 contracts every single week. Last week, we signed around 700.

Speaker #3: Mostly because I think finance people are legally required to say things like "glide paths." But basically, the question is this: If nothing changes and you keep doing what you're doing, what happens?

Speaker #3: Let's see. There's no magic here. It's just math. This next section is going to take me a few minutes, but it's incredibly important. I want to give you all the same framework we use internally, so you can see things the way we're seeing them right now.

Speaker #3: Open Door's core business math is simple. It's how many homes we transact on times our contribution margin minus our OPEX and our financing costs.

Speaker #3: So let's go through each of these four numbers. First, volume. Right now, we're signing more than $500 contracts every single week. Last week, we signed around 700.

Speaker #3: That's our highest contract week in years. That's over 5x higher year over year, and 5x higher since I joined the company. And just think about when we're doing this.

Kas Nejatian: That's our highest contract week in years. That's over 5x higher year-over-year and 5x higher since I joined the company. Just think about when we're doing this. We're doing this in the weakest housing market in a generation and in the worst season of the year for us. The spring and summer seasons are basically the only times of the year where the traditional real estate system still kind of actually works, right? Over 500 sellers are still saying yes to Opendoor every single week. If you've been following along on accountable.opendoor.com, you've seen this, right? When we put up our ranges last quarter, those numbers weren't sandbags. Those were numbers we thought we'd see to put us on the path we'd need to be at the end of this year.

Kaz Nejatian: That's our highest contract week in years. That's over 5x higher year-over-year and 5x higher since I joined the company. Just think about when we're doing this. We're doing this in the weakest housing market in a generation and in the worst season of the year for us. The spring and summer seasons are basically the only times of the year where the traditional real estate system still kind of actually works, right? Over 500 sellers are still saying yes to Opendoor every single week. If you've been following along on accountable.opendoor.com, you've seen this, right? When we put up our ranges last quarter, those numbers weren't sandbags. Those were numbers we thought we'd see to put us on the path we'd need to be at the end of this year.

Speaker #3: We're doing this in the weakest housing market in a generation, and in the worst season of the year for us. The spring and summer seasons are basically the only times of the year where the traditional real estate system still kind of actually works, right?

Speaker #3: But over 500 sellers are still saying yes to Open Door every single week. If you've been following along on accountable.opendoor.com, you've seen this, right?

Speaker #3: When we put up our ranges, last quarter, those numbers weren't sandbags. Those were numbers we thought we'd see to put us on the path we'd need to be at the end of this year.

Speaker #3: The fact that we have been above the high end of the projections every single week for the last quarter is the reason that I'm so confident about what I'm about to say.

Kas Nejatian: The fact that we have been above the high end of the projections every single week for the last quarter is a reason that I'm so confident about what I'm about to say. Look, our ANI breakeven framework assumes 6,000 quarterly transactions at $375,000 each for around $9 billion in revenue. We're pacing well above that on a contract basis in Q2. Look, some of these won't close. That's normal. That hasn't changed. That isn't the point. The point is we've achieved this in a market and at the time of the year that is the worst for us. I think it's super reasonable to expect that we're going to end up north of the $9 billion mark in revenue. Now, it's important to take a second and describe a pattern that we're seeing as we ramp up for this revenue.

Kaz Nejatian: The fact that we have been above the high end of the projections every single week for the last quarter is a reason that I'm so confident about what I'm about to say. Look, our ANI breakeven framework assumes 6,000 quarterly transactions at $375,000 each for around $9 billion in revenue. We're pacing well above that on a contract basis in Q2. Look, some of these won't close. That's normal. That hasn't changed. That isn't the point. The point is we've achieved this in a market and at the time of the year that is the worst for us. I think it's super reasonable to expect that we're going to end up north of the $9 billion mark in revenue. Now, it's important to take a second and describe a pattern that we're seeing as we ramp up for this revenue.

Speaker #3: Look, our ANI break even frameworks assumes 6,000 quarterly transactions at $375,000 each for around $9 billion in revenue. We're pacing well above that on a contract basis in Q2.

Speaker #3: And look, some of these won't close. That's normal. That hasn't changed. That isn't the point. The point is we've achieved this in a market and at the time of the year that is the worst for us.

Speaker #3: I think it's super reasonable to expect that we're going to end up north of the $9 billion mark, in revenue. Now, it's important to take a second and describe a pattern that we're seeing as we ramp up for this revenue.

Speaker #3: Look, companies have kind of two ways to artificially increase growth in the absence of actual improvement in the company, right? Those two levers are marketing and pricing.

Kas Nejatian: Look, companies have two ways to artificially increase growth in absence of actual improvement in the company, right? Those two levers are marketing and pricing. I'm going to get to marketing in a second. I want to start by talking about pricing. If you've followed Opendoor for a while, when you see high acquisition volumes, you should be skeptical. You should be asking, are we buying growth through more risk and lower spreads? Using regular language that everyday people use, are we paying more than fair prices for homes? Opendoor did this during the COVID era, right? To get volume, it took lots of risks because it believed that price was the only lever it had at its discretion to increase conversion. If it couldn't reduce its overall cost structure, it would lose money.

Kaz Nejatian: Look, companies have two ways to artificially increase growth in absence of actual improvement in the company, right? Those two levers are marketing and pricing. I'm going to get to marketing in a second. I want to start by talking about pricing. If you've followed Opendoor for a while, when you see high acquisition volumes, you should be skeptical. You should be asking, are we buying growth through more risk and lower spreads? Using regular language that everyday people use, are we paying more than fair prices for homes? Opendoor did this during the COVID era, right? To get volume, it took lots of risks because it believed that price was the only lever it had at its discretion to increase conversion. If it couldn't reduce its overall cost structure, it would lose money.

Speaker #3: I'm going to get to marketing in a second, but I want to start by talking about pricing. If you've followed Open Door for a while, when you see high acquisition volumes, you should be skeptical.

Speaker #3: You should be asking, are we buying growth through more risk and lower spreads? Or using regular language of everyday people use, are we paying more than fair prices for homes?

Speaker #3: Open Door did this during the COVID era, right? To get volume, it took lots of risks. Because it believed that price was the only lever it had at its discretion to increase conversion.

Speaker #3: And if it couldn't reduce its overall cost structure, it would lose money. What I'm about to show you is probably the slide that has made me most excited about what we've gotten done so far this year.

Kas Nejatian: What I'm about to show you is probably the slide that has made me most excited about what we've gotten done so far this year. This shows our true seller conversion at different spread levels. True sellers are the people who request an Offer from Opendoor and then either sell to Opendoor or list on the open market. It's the conversion on people who actually want to sell their home. What this chart shows is that we are converting dramatically more sellers at the same spread levels than we've had in the past. We're on track to hit more than the volume we need. We're not doing it by paying above fair prices for homes. That should mean something for our contribution margin. Let's talk about that, right?

Kaz Nejatian: What I'm about to show you is probably the slide that has made me most excited about what we've gotten done so far this year. This shows our true seller conversion at different spread levels. True sellers are the people who request an Offer from Opendoor and then either sell to Opendoor or list on the open market. It's the conversion on people who actually want to sell their home. What this chart shows is that we are converting dramatically more sellers at the same spread levels than we've had in the past. We're on track to hit more than the volume we need. We're not doing it by paying above fair prices for homes. That should mean something for our contribution margin. Let's talk about that, right?

Speaker #3: This shows our true seller conversion at different spread levels. So true sellers are the people who request an offer from Open Door and then either sell to Open Door or list on the open market.

Speaker #3: So it's a conversion on people who actually want to sell their home. What this chart shows is that we are converting dramatically more sellers at the same spread levels than we've had in the past.

Speaker #3: We're on track to hit more than the volume we need and we're not doing it by paying above fair prices for homes. That should mean something for our contribution margin.

Speaker #3: So let's talk about that, right? Our contribution margins have been improving every single quarter this year, and are now in the target range that we told you we would be in.

Kas Nejatian: Our contribution margins have been improving every single quarter this year. They are now in the target range that we told you we would be in. There are about 100 or so homes left from the Opendoor 1.0 era that are going to be a drag on our contribution margin. They're going to be sold mostly this quarter, and we're going to be done with them, and I'm never going to talk about them again. On the new cohorts, our margin is performing. Cohort curves are doing what we want them to do. Now, look, it's for sure true that Q3 is a seasonally worse contribution margin quarter for us than Q2. You should expect quarter-over contribution margin to go down from Q2 to Q3.

Kaz Nejatian: Our contribution margins have been improving every single quarter this year. They are now in the target range that we told you we would be in. There are about 100 or so homes left from the Opendoor 1.0 era that are going to be a drag on our contribution margin. They're going to be sold mostly this quarter, and we're going to be done with them, and I'm never going to talk about them again. On the new cohorts, our margin is performing. Cohort curves are doing what we want them to do. Now, look, it's for sure true that Q3 is a seasonally worse contribution margin quarter for us than Q2. You should expect quarter-over contribution margin to go down from Q2 to Q3.

Speaker #3: There are about 100 or so homes left from the Open Door 1.0 era that are going to be a drag on our contribution margin.

Speaker #3: But they're going to be sold mostly this quarter, and we're going to be done with them, and I'm never going to talk about them again.

Speaker #3: But on a new cohorts, our margin is performing on cohort curves are doing what we want them to do. Now, look, it's for sure true that Q3 is a seasonally worse contribution margin quarter for us than Q2.

Speaker #3: So you should expect quarter-over contribution margin to go down from Q2 to Q3. This year we also have the impact of the domo acquisition, which is a temporary drag on contribution margin, while we integrate domo into Open Door.

Kas Nejatian: This year, we also have the impact of the Doma acquisition, which is a temporary drag on contribution margin while we integrate Doma into Opendoor. We expect to break with Opendoor's historical trend and have a Q4 that is higher in contribution margin than Q3. Every year in Opendoor's public company history, Q4 has had a worse margin than Q3. We're about to revise that trend. Going back to the main point, in Q2, we got to contribution margin zone we told you we'd aim for. We have proven that we can run the company here. Okay, acquisition volume is tracking to where we want it to be. Margin is within the range we told you it would have to be in. That leaves OpEx and financing. Let's talk about OpEx.

Kaz Nejatian: This year, we also have the impact of the Doma acquisition, which is a temporary drag on contribution margin while we integrate Doma into Opendoor. We expect to break with Opendoor's historical trend and have a Q4 that is higher in contribution margin than Q3. Every year in Opendoor's public company history, Q4 has had a worse margin than Q3. We're about to revise that trend. Going back to the main point, in Q2, we got to contribution margin zone we told you we'd aim for. We have proven that we can run the company here. Okay, acquisition volume is tracking to where we want it to be. Margin is within the range we told you it would have to be in. That leaves OpEx and financing. Let's talk about OpEx.

Speaker #3: But we expect to break with Open Door's historical trend and have a Q4 that is higher in contribution margin than Q3. Every year in Open Door's public company history, Q4 has had the worst margin than Q3, and we're about to reverse that trend.

Speaker #3: But going back to the main point, in Q2, we got to a contribution margin zone we told you we would aim for, and we have proven that we can run the company here.

Speaker #3: Okay, so acquisition volume is tracking to where we want it to be, and margin is within the range we told you we would have to be in.

Speaker #3: That leaves OPEX and financing. Let's talk about OPEX. So Open Door's OPEX includes marketing, variable operations, which we call just operations in our financials, and fixed operations.

Kas Nejatian: Opendoor's OpEx includes marketing, variable operations, which we call just operations in our financials, and fixed operations. Most of our costs happen when we buy and renovate homes. It is useful to look at these costs in relation to our acquisition numbers since that is a variable that scales them, right? We have this idea called acquisition GMV, which is roughly the revenue we expect to get from homes we've closed on. Our homes have been selling right around the $375,000 mark, so let's use that assumption so I don't have to leak our internal model to the world. It'll also make the math easier. Acquisition GMV is acquisitions times $375,000. With that in mind, let's talk about the three parts of our OpEx. First, marketing.

Kaz Nejatian: Opendoor's OpEx includes marketing, variable operations, which we call just operations in our financials, and fixed operations. Most of our costs happen when we buy and renovate homes. It is useful to look at these costs in relation to our acquisition numbers since that is a variable that scales them, right? We have this idea called acquisition GMV, which is roughly the revenue we expect to get from homes we've closed on. Our homes have been selling right around the $375,000 mark, so let's use that assumption so I don't have to leak our internal model to the world. It'll also make the math easier. Acquisition GMV is acquisitions times $375,000. With that in mind, let's talk about the three parts of our OpEx. First, marketing.

Speaker #3: So most of our costs happen when we buy and renovate homes. So it's useful to look at these costs in relation to our acquisition numbers since that is the variable that scales them, right?

Speaker #3: So we have this idea called acquisition GMV, which is roughly the revenue we expect to get from homes we've closed on. Our homes have been selling right around the $375,000 mark.

Speaker #3: So let's use that assumption so I don't have to leak our internal models to the world. It'll also make the math easier. So acquisition GMV is acquisition times $375,000.

Speaker #3: With that in mind, let's talk about the three parts of our OPEX. First, marketing. Marketing is our cost of customer acquisition per home we buy.

Kas Nejatian: Marketing is our cost of customer acquisition per home we buy. We do basically no marketing when we sell homes, and the last time we signed more than 6,000 contracts in a quarter, our marketing spend was over $80 million. This quarter it was five. Not five-oh, just five. I know that sounds crazy, but yes, Morgan actually wrote the book on this. Yes, this is one part of Opendoor where I think we're executing 10 out of 10. It took us a minute, but we have found our groove. Our marketing as a percentage of acquisition GMV has gone from 1.6% under Opendoor 1.0 to 0.3%. Let's say we'll not be that good forever. Let's assume we'll get a little worse. Let's assume we'll have 0.5% of acquisition GMV on marketing. Just remember that, okay? Let's talk about variable operations.

Kaz Nejatian: Marketing is our cost of customer acquisition per home we buy. We do basically no marketing when we sell homes, and the last time we signed more than 6,000 contracts in a quarter, our marketing spend was over $80 million. This quarter it was five. Not five-oh, just five. I know that sounds crazy, but yes, Morgan actually wrote the book on this. Yes, this is one part of Opendoor where I think we're executing 10 out of 10. It took us a minute, but we have found our groove. Our marketing as a percentage of acquisition GMV has gone from 1.6% under Opendoor 1.0 to 0.3%. Let's say we'll not be that good forever. Let's assume we'll get a little worse. Let's assume we'll have 0.5% of acquisition GMV on marketing. Just remember that, okay? Let's talk about variable operations.

Speaker #3: We do basically no marketing when we sell homes. And the last time we signed more than 6,000 contracts in a quarter, our marketing spend was over $80 million.

Speaker #3: This quarter, it was 5, not 50, just 5. I know that sounds crazy, but yes, Morgan actually wrote the book this is one part of Open Door where I think we're executing 10 out of 10.

Speaker #3: It took us a minute, but we have found our groove. Our marketing as a percentage of our acquisition GMV has gone from 1.6% under Opendoor 1 to 0.3%.

Speaker #3: Let's say we'll not be that good forever. Let's assume we'll get a little worse. Let's assume we'll have 0.5% of acquisition GMV on marketing, just remember that, okay?

Speaker #3: Next, let's talk about variable operations. Variable operations are mostly the costs we incur when we're buying and renovating our houses, right? This is the human and system cost of underwriting buying and renovating a home.

Kas Nejatian: Variable operations are mostly the costs we incur when we're buying and renovating our houses. This is the human and system cost of underwriting, buying, and renovating a home. Variable ops have declined from 2.7% of acquisition GMV to 0.9% of acquisition GMV. If you look at acquisition contract GMV, this number is already at 50 basis points. Look, don't give us the benefit of this doubt. There'll be some contracts that will fall through. Let's mark this up. Let's say it'll be 70 basis points on acquisition GMV. Why has this number gone down so much? The answer is simple, Ru would tell you, we are among the best users of AI in tech. We have fundamentally reengineered our business around AI automation across underwriting and operations.

Kaz Nejatian: Variable operations are mostly the costs we incur when we're buying and renovating our houses. This is the human and system cost of underwriting, buying, and renovating a home. Variable ops have declined from 2.7% of acquisition GMV to 0.9% of acquisition GMV. If you look at acquisition contract GMV, this number is already at 50 basis points. Look, don't give us the benefit of this doubt. There'll be some contracts that will fall through. Let's mark this up. Let's say it'll be 70 basis points on acquisition GMV. Why has this number gone down so much? The answer is simple, Ru would tell you, we are among the best users of AI in tech. We have fundamentally reengineered our business around AI automation across underwriting and operations.

Speaker #3: So variable ops have declined from 2.7% of acquisition GMV to 0.9% of acquisition GMV. If you look at acquisition contract GMV, this number is already at 50 basis points.

Speaker #3: But look, don't give us the benefit of this doubt. There'll be some contracts that will fall through, so let's mark this up. Let's say it'll be 70 basis points on acquisition GMV.

Speaker #3: Why has this number gone down so much? The answer is simple. And Rube would tell you, we are among the best users of AI in tech.

Speaker #3: We have fundamentally re-engineered our business around AI automation, across underwriting and operations. Look, in Q3 last year, the people who managed our renovations of our homes, our HPMs, they carried three renovations per person per month.

Kas Nejatian: Look, in Q3 last year, the people who managed our renovations of our homes, our HPMs, they carried three renovations per person per month. Right now, they're carrying around 10. By the end of this year, they will carry around 20. In Q3 last year, our pricing underwriting team could handle around 20 underwrites per person per day. They can now do over 50. They'll be able to handle around 100 by the end of the years. A couple of years ago, more than 80% of homes that we bought required an Opendoor employee to visit them before we even made an offer. Today, that percentage is below 20%, and it'll go down to below 10% by the end of this year. 70 basis points, just remember that. The last component is our fixed operations. These are the people that build the machine that runs Opendoor.

Kaz Nejatian: Look, in Q3 last year, the people who managed our renovations of our homes, our HPMs, they carried three renovations per person per month. Right now, they're carrying around 10. By the end of this year, they will carry around 20. In Q3 last year, our pricing underwriting team could handle around 20 underwrites per person per day. They can now do over 50. They'll be able to handle around 100 by the end of the years. A couple of years ago, more than 80% of homes that we bought required an Opendoor employee to visit them before we even made an offer. Today, that percentage is below 20%, and it'll go down to below 10% by the end of this year. 70 basis points, just remember that. The last component is our fixed operations. These are the people that build the machine that runs Opendoor.

Speaker #3: Right now, they're carrying around 10. By the end of this year, they will carry around 20. In Q3 last year, our pricing and underwriting team could handle around 20 underwrites per person per day.

Speaker #3: They can now do over 50. They'll be able to handle around 100 by the end of the years. A couple of years ago, when 80% of homes that we bought required an Open Door employee, to visit them before we even made an offer.

Speaker #3: Today, that percentage is below 20% and it'll go down to below 10% by the end of this year. So 70 basis points, just remember that.

Speaker #3: The last component is our fixed operations. These are the people that build the machine that runs Opendoor. Last year, there were a lot of consultants at G&A.

Kas Nejatian: Last year, there were a lot of consultants in G&A. Now it's a lot of engineers and data scientists writing code. One of the beautiful things about code is that it scales really well. Spinning up a server is easier in hiring a new consulting firm. You can see this in our numbers. In Q3 last year, this number was over 8% of our acquisition GMV, and over 6% of our acquisition contract. In Q2, this was 2.1% of acquisition GMV and 1.4% of acquisition contract GMV. Let's say it'll be somewhere between those two numbers. Let's pick, I don't know, 1.7. So 50 basis points on marketing, 70 basis points on variable operations, and 1.7% on fixed OpEx. Add all those up and it's 2.9% on our acquisition GMV, which doesn't give us the benefit of our increased acquisitions that we're making right now.

Kaz Nejatian: Last year, there were a lot of consultants in G&A. Now it's a lot of engineers and data scientists writing code. One of the beautiful things about code is that it scales really well. Spinning up a server is easier in hiring a new consulting firm. You can see this in our numbers. In Q3 last year, this number was over 8% of our acquisition GMV, and over 6% of our acquisition contract. In Q2, this was 2.1% of acquisition GMV and 1.4% of acquisition contract GMV. Let's say it'll be somewhere between those two numbers. Let's pick, I don't know, 1.7. So 50 basis points on marketing, 70 basis points on variable operations, and 1.7% on fixed OpEx. Add all those up and it's 2.9% on our acquisition GMV, which doesn't give us the benefit of our increased acquisitions that we're making right now.

Speaker #3: Now it's a lot of engineers and data scientists writing code. One of the beautiful things about code is that it scales really well. Spinning up a server is easier in hiring a new consulting firm.

Speaker #3: And you can see this in our numbers. In Q3 last year, this number was over 8% of our acquisition GMV, and over 6% of our acquisition contract.

Speaker #3: Right? In Q2, this was 2.1% of acquisition GMV and 1.4% of acquisition contract GMV. Let's say it'll be somewhere between those two numbers. Let's pick, I don't know, 1.7.

Speaker #3: So 50 basis points on marketing, 70 basis points on variable operations, and 1.7% on fixed OPEX. Add all those up and it's 2.9% on our acquisition GMV, which doesn't give us the benefit of our increased acquisitions that we're making right now.

Speaker #3: If you take the dollars spent and compare them to our $9 billion run rate, that's 2.4%. That's less than the low end of 3 to 4% range I told you we would need to get to to become ANI profitable.

Kas Nejatian: If you take the dollars spent and compare them to our $9 billion run rate, that's 2.4%. That's less than the low end of 3% to 4% range I told you we would need to get to become ANI profitable. The last component here is interest. We finance the homes we buy, so this scales with how many homes we buy and how long we own them. At the speed that we turn inventory right now, that's about three times a year. Net interest runs a little above 2% on our revenue. We're working on lots of things that will lower this, and I think there's a lot of upside here, but don't give us the benefit of the doubt. Let's assume they just stay where they are. What would happen if we just froze the company?

Kaz Nejatian: If you take the dollars spent and compare them to our $9 billion run rate, that's 2.4%. That's less than the low end of 3% to 4% range I told you we would need to get to become ANI profitable. The last component here is interest. We finance the homes we buy, so this scales with how many homes we buy and how long we own them. At the speed that we turn inventory right now, that's about three times a year. Net interest runs a little above 2% on our revenue. We're working on lots of things that will lower this, and I think there's a lot of upside here, but don't give us the benefit of the doubt. Let's assume they just stay where they are. What would happen if we just froze the company?

Speaker #3: Okay, the last component here is interest. Look, we financed the homes we buy so this scales with how many homes we buy and how long we own them.

Speaker #3: At the speed that we turn inventory right now, that's about three times a year. So net interest runs a little above 2% on our revenue.

Speaker #3: We're working on lots of things that will lower this, and I think there's a lot of upside here. But don't give us the benefit of the doubt.

Speaker #3: Let's assume they just stay where they are. So, what would happen if we just froze the company? Like, if we pretend that we don't improve anything—no new products, no final improvements, no pricing model updates, no rate cuts, no macro rescue, no one has to be a hero.

Kas Nejatian: If we pretend that we don't improve anything, no new products, no funnel improvements, no pricing model updates, no rate cuts, no macro rescue. No one has to be a hero. We just keep doing exactly what we did last week. In fact, the math I just showed you assumes that we would get worse at marketing and operations, which we for sure won't. What happens if that happens? Current volumes, current margins, worse cost structures, current financing costs. Run those numbers forward, and this is the back of napkin math. At roughly 6,000 transactions per quarter, Opendoor reaches Adjusted Net Income profitability on a run rate basis heading into next year. No new assumptions, just today's company carried forward. I told you this on our very first call, and I've said it on every call since then.

Kaz Nejatian: If we pretend that we don't improve anything, no new products, no funnel improvements, no pricing model updates, no rate cuts, no macro rescue. No one has to be a hero. We just keep doing exactly what we did last week. In fact, the math I just showed you assumes that we would get worse at marketing and operations, which we for sure won't. What happens if that happens? Current volumes, current margins, worse cost structures, current financing costs. Run those numbers forward, and this is the back of napkin math. At roughly 6,000 transactions per quarter, Opendoor reaches Adjusted Net Income profitability on a run rate basis heading into next year. No new assumptions, just today's company carried forward. I told you this on our very first call, and I've said it on every call since then.

Speaker #3: We just keep doing exactly what we did last week. In fact, the math I just showed you assumes that we would get worse at marketing and operations.

Speaker #3: Which we for sure won't. But what happens if that happens? Current volumes, current margins, worse cost structures, current financing costs—run those numbers forward and this is the backroom napkin math, right?

Speaker #3: At roughly 6,000 transactions per quarter, Open Door reaches adjusted net income profitability on a run rate basis, heading into next year. No new assumptions, just today's company carried forward.

Speaker #3: Look, I told you this on our very first call. I've said it on every call since then. Adjusted net income breakeven at a 12-month go forward basis by the end of 2026.

Kas Nejatian: Adjusted Net Income break even on a 12-month go forward basis by the end of 2026. When I said this, there were more than a few things that needed to go right. We moved fast. We shipped. We took charge of our own company every single week and every quarter, the math became more and more obvious. Giang, our chief investment officer, he runs our pricing and mean teams at Opendoor. He has a simple way of putting these things. He likes it so much that he actually bought a T-shirt at a nerd convention and wears it to the office. The T-shirt says, "It's just math." For years, one question has followed this company everywhere it went: Will Opendoor become profitable? As of today, that question is boring. As things stand right now, Opendoor will become ANI profitable. It's just math.

Kaz Nejatian: Adjusted Net Income break even on a 12-month go forward basis by the end of 2026. When I said this, there were more than a few things that needed to go right. We moved fast. We shipped. We took charge of our own company every single week and every quarter, the math became more and more obvious. Giang, our chief investment officer, he runs our pricing and mean teams at Opendoor. He has a simple way of putting these things. He likes it so much that he actually bought a T-shirt at a nerd convention and wears it to the office. The T-shirt says, "It's just math." For years, one question has followed this company everywhere it went: Will Opendoor become profitable? As of today, that question is boring. As things stand right now, Opendoor will become ANI profitable. It's just math.

Speaker #3: When I said this, there were more than a few things that needed to go right. But we moved fast, we shipped, we took charge of our own company every single week, and every quarter, the math became more and more obvious.

Speaker #3: Yang, our chief investment officer, he runs our pricing and meme teams at Open Door. He has a simple way of putting these things. He likes it so much that he actually bought a t-shirt at a nerd convention and wears it to the office.

Speaker #3: The t-shirt says, "It's just math." For years, one question has followed this company everywhere it went: Will Opendoor become profitable? As of today, that question is boring.

Speaker #3: As things stand right now, Open Door will become ANI profitable. It's just math. Sweetheart, after this call, I am coming home. So the last few minutes have sounded like a confident CEO 10 months into a turnaround holding a napkin that says, "Everything is working." But let me tell you what's not on the napkin.

Kas Nejatian: Sweetheart, after this call, I am coming home. The last few minutes have sounded like a confident CEO 10 months into a turnaround, holding a napkin that says everything is working. Let me tell you what's not on the napkin. Here's the uncomfortable truth. Nothing about this has been easy. Turnarounds are really hard, and there's obviously a bit of a survivor bias here, right? Everyone knows about the ones that worked in retrospect. Why will this one work? We're 10 months now into this process, and I'm really proud of what we've done. If we freeze the company, I just told you we would become ANI profitable even if the macro keeps punching us in the face. Look, we're going to become ANI profitable on the path to fulfilling our mission and becoming a meaningful company for this country.

Kaz Nejatian: Sweetheart, after this call, I am coming home. The last few minutes have sounded like a confident CEO 10 months into a turnaround, holding a napkin that says everything is working. Let me tell you what's not on the napkin. Here's the uncomfortable truth. Nothing about this has been easy. Turnarounds are really hard, and there's obviously a bit of a survivor bias here, right? Everyone knows about the ones that worked in retrospect. Why will this one work? We're 10 months now into this process, and I'm really proud of what we've done. If we freeze the company, I just told you we would become ANI profitable even if the macro keeps punching us in the face. Look, we're going to become ANI profitable on the path to fulfilling our mission and becoming a meaningful company for this country.

Speaker #3: Here's the uncomfortable truth. Nothing about this has been easy. Turnarounds are really, really hard. And there's obviously a bit of a survivor bias here, right?

Speaker #3: Everyone knows about the ones that worked in retrospect. But why will this one work? We're 10 months now into this process. And I'm really proud of what we've done.

Speaker #3: If we freeze the company I just told you, we would become ANI profitable, even if the macro keeps punching us in the face. Look, we're going to become ANI profitable on the path to fulfilling our mission and becoming a meaningful company for this country.

Speaker #3: But there's something else that I need to tell you, right? The math works, and we're going to become ANI profitable. We can very clearly see that right now.

Kas Nejatian: There's something else that I need to tell you. The math works, and we're going to become ANI profitable. We can very clearly see that right now. That does not mean that everything between here and there will be just perfectly smooth. Turnarounds are hard, and they surprise you sometimes. Sometimes these surprises are good. I want to talk about two of them. First is seasonality. Opendoor's business has had a real seasonality to it. We've traditionally been a company that has had feast in Q2 and famine the rest of the year. In fact, every year since we've been public, other than 2023, our margin degradation between Q2 and Q3 has averaged almost 500 basis points. Look, this year we haven't killed off seasonality entirely, so it won't be zero, but it'll be way less.

Kaz Nejatian: There's something else that I need to tell you. The math works, and we're going to become ANI profitable. We can very clearly see that right now. That does not mean that everything between here and there will be just perfectly smooth. Turnarounds are hard, and they surprise you sometimes. Sometimes these surprises are good. I want to talk about two of them. First is seasonality. Opendoor's business has had a real seasonality to it. We've traditionally been a company that has had feast in Q2 and famine the rest of the year. In fact, every year since we've been public, other than 2023, our margin degradation between Q2 and Q3 has averaged almost 500 basis points. Look, this year we haven't killed off seasonality entirely, so it won't be zero, but it'll be way less.

Speaker #3: But what that does not mean that everything between here and there will be just perfectly smooth. Turnarounds are hard and they surprise you sometimes.

Speaker #3: Sometimes these surprises are good. And I want to talk about two of them. First, is seasonality. Open Door's business has had a real seasonality to it.

Speaker #3: We've traditionally been a company that has had feast in Q2 and famine the rest of the year. In fact, every year since we've been public, other than 2023, our margin degradation between Q2 and Q3 has averaged almost 500 basis points.

Speaker #3: Look, this year we haven't killed off seasonality entirely, so it won't be zero. But it'll be way, way, way less. Folks won't appreciate why this is a big deal.

Kas Nejatian: Folks won't appreciate why this is a big deal, and they won't appreciate it for a while, but I think of everything we have done this quarter, this compression may be the most important thing for the long-term health of the company. That's the first thing. The second one is the embedded impact of things that have already happened but don't look like they have. When a seller signs a contract with us, that home becomes revenue a few months later. We buy, we fix, we renovate, we list, we sell. We can't really skip a step in between. It just takes time. This means I always live a few months in the future. Every week, contracts turn into homes, which turn to listings, which turn to closings.

Kaz Nejatian: Folks won't appreciate why this is a big deal, and they won't appreciate it for a while, but I think of everything we have done this quarter, this compression may be the most important thing for the long-term health of the company. That's the first thing. The second one is the embedded impact of things that have already happened but don't look like they have. When a seller signs a contract with us, that home becomes revenue a few months later. We buy, we fix, we renovate, we list, we sell. We can't really skip a step in between. It just takes time. This means I always live a few months in the future. Every week, contracts turn into homes, which turn to listings, which turn to closings.

Speaker #3: And they won't appreciate it for a while. But I think of everything we have done this quarter, this compression may be the most important thing for the long-term health of the company.

Speaker #3: That's the first thing. The second one is the embedded impact of things that have already happened but don't look like they have. When a seller signs a contract with us, that home becomes revenue a few months later, right?

Speaker #3: We buy, we fix, we renovate, we list, we sell. And we can't really skip a step in between, right? It just takes time. This means I always live a few months in the future, right?

Speaker #3: Every week, contracts turn into homes, which turn into listings, which turn into closings. What I see today in our acquisition contracts turns into gap revenue a few months from now.

Kas Nejatian: What I see today in our acquisition contracts turns into GAAP revenue a few months from now based on our conversion rates. It's why we put our weekly contracts on accountable.opendoor.com so you can see what we see in real-time a few months sooner. C.S. Lewis has a famous metaphor about watching a horse grow wings. As a father of daughters, I'm a bit of an expert on this topic. This is technically a Pegasus, not a unicorn. The horse in transition for the first little while would look a little odd. This is a horse that was running fast, and it's going to run a little awkwardly right now because he's growing these bumps on his back that are going to become wings but aren't quite yet. He doesn't take off until the wings grow. Silicon Valley has spent the last 20 years chasing unicorns.

Kaz Nejatian: What I see today in our acquisition contracts turns into GAAP revenue a few months from now based on our conversion rates. It's why we put our weekly contracts on accountable.opendoor.com so you can see what we see in real-time a few months sooner. C.S. Lewis has a famous metaphor about watching a horse grow wings. As a father of daughters, I'm a bit of an expert on this topic. This is technically a Pegasus, not a unicorn. The horse in transition for the first little while would look a little odd. This is a horse that was running fast, and it's going to run a little awkwardly right now because he's growing these bumps on his back that are going to become wings but aren't quite yet. He doesn't take off until the wings grow. Silicon Valley has spent the last 20 years chasing unicorns.

Speaker #3: Based on our conversion rates. It's why we put our weekly contracts on accountable.opendoor.com. So you can see what we see in real time a few months sooner.

Speaker #3: CS Lewis has a famous metaphor about watching a horse grow wings. As a father of daughters, I'm a bit of an expert on this topic.

Speaker #3: This is technically a Pegasus, not a unicorn. The horse in transition for the first little while would look a little odd, right? This is a horse that was running fast and it's going to run a little awkwardly right now because he's growing these bumps on his back that are going to become wings.

Speaker #3: But aren't quite yet. He hasn't taken off until the wings grow. Silicon Valley has spent the last 20 years chasing unicorns. And we're coining a new category, the Pegasus.

Kas Nejatian: We're coining a new category, the Pegasus. Not a company that was magical from the beginning, but a company that had to grow its wings in public. This is what transformations look like midstream. The changes are real before the financial statements catch up. That awkwardness is part of process. Opendoor's really starting to feel that way to me. Awkward, awkward flight. We still have some awkward growing pains, but the wings are growing, and it really, really feels like this thing is taking off. Speaking of things that still look a little awkward but are starting to grow wings, let's talk about mortgages. Look, when you buy a home, you're actually buying two separate things, the house and the money. Two different work streams, two different sets of people, two timelines that need to automatically merge, and 100 different ways that can kill the deal.

Kaz Nejatian: We're coining a new category, the Pegasus. Not a company that was magical from the beginning, but a company that had to grow its wings in public. This is what transformations look like midstream. The changes are real before the financial statements catch up. That awkwardness is part of process. Opendoor's really starting to feel that way to me. Awkward, awkward flight. We still have some awkward growing pains, but the wings are growing, and it really, really feels like this thing is taking off. Speaking of things that still look a little awkward but are starting to grow wings, let's talk about mortgages. Look, when you buy a home, you're actually buying two separate things, the house and the money. Two different work streams, two different sets of people, two timelines that need to automatically merge, and 100 different ways that can kill the deal.

Speaker #3: Not a company that was magical from the beginning, but a company that had to grow its wings in public. This is what transformations look like midstream.

Speaker #3: The changes are real, before the financial statements catch up. That awkwardness is part of the process. Opendoor's really starting to feel that way to me.

Speaker #3: Awkward, awkward, awkward flight. We still have some awkward growing pains, but the wings are growing and it really, really feels like this thing is taking off.

Speaker #3: Speaking of things that still look a little awkward but are starting to grow wings—let's talk about mortgages. Look, when you buy a home, you're actually buying two separate things.

Speaker #3: The house and the money. Two different work streams, two different sets of people, two timelines that need to kind of automatically merge. And a hundred different ways that can kill the deal.

Speaker #3: We're collapsing these two things into one integrated transaction. But why does this matter? It matters because of friction. Friction destroys the process, and getting rid of it expands our margin, reduces risk, and builds a real flywheel between our buying engine and our selling engine.

Kas Nejatian: We're collapsing these two things into one integrated transaction. Why does this matter? It matters because friction. Friction destroys the process, and getting rid of it expands our margin, reduces risk, and builds a real flywheel between our buying engine and our selling engine. The best place to sell a home becomes the best place to buy one. At our core, our job is simple: remove friction from the homeownership process. There are two kinds of friction in residential real estate. There's a friction that holds people in place. Sellers are stuck. They're stuck because of price uncertainty, repair headaches, and all the traditional pain that goes along with the timeline of selling a home. We solved that first with our Offer product. Our core Offer product gives you near instant certainty. Unsticking the sellers is only half the trade.

Kaz Nejatian: We're collapsing these two things into one integrated transaction. Why does this matter? It matters because friction. Friction destroys the process, and getting rid of it expands our margin, reduces risk, and builds a real flywheel between our buying engine and our selling engine. The best place to sell a home becomes the best place to buy one. At our core, our job is simple: remove friction from the homeownership process. There are two kinds of friction in residential real estate. There's a friction that holds people in place. Sellers are stuck. They're stuck because of price uncertainty, repair headaches, and all the traditional pain that goes along with the timeline of selling a home. We solved that first with our Offer product. Our core Offer product gives you near instant certainty. Unsticking the sellers is only half the trade.

Speaker #3: The best place to sell a home becomes the best place to buy one. At our core, our job is simple. Remove friction from homeownership process.

Speaker #3: And there are two kinds of friction in residential real estate. There's a friction that holds people in place, right? Sellers are stuck. They're stuck because of price uncertainty, repair headaches, and all the traditional pain that goes along with the timeline of selling a home.

Speaker #3: We solved that first. With our core offer product, you get near-instant certainty. But unsticking the sellers is only half the trade.

Speaker #3: Once the buyer enters the picture, there's a whole new type of friction. This is like the rate shock that acts as a drag that's already in motion, right?

Kas Nejatian: Once the buyer enters the picture, there's a whole new type of friction. This is like the rate shock that acts as drag that's already in motion, right? A 7% mortgage rate slows the deal down, or it kills it entirely. That's exactly the friction that our mortgage product eliminates. Look, our core product allows sellers to move on. Our mortgage products allows buyers to move in. This isn't theoretical. Look at the early numbers. In Colorado, our first launch market, more than half of our scheduled closes are going to be financed through Opendoor Home Loans. In Texas, just six weeks after launch, we're already at nearly one in five, and that's before rolling out FHA, VA, or adjustable rate products. Look, to be clear, each state we launch will have its own dynamics, right?

Kaz Nejatian: Once the buyer enters the picture, there's a whole new type of friction. This is like the rate shock that acts as drag that's already in motion, right? A 7% mortgage rate slows the deal down, or it kills it entirely. That's exactly the friction that our mortgage product eliminates. Look, our core product allows sellers to move on. Our mortgage products allows buyers to move in. This isn't theoretical. Look at the early numbers. In Colorado, our first launch market, more than half of our scheduled closes are going to be financed through Opendoor Home Loans. In Texas, just six weeks after launch, we're already at nearly one in five, and that's before rolling out FHA, VA, or adjustable rate products. Look, to be clear, each state we launch will have its own dynamics, right?

Speaker #3: A 7% mortgage rate slows the deal down. Or it kills it entirely. That's exactly the friction that our mortgage product eliminates. Look, our core product allows sellers to move on.

Speaker #3: Our mortgage products allows buyers to move in. And this isn't theoretical. Look at the early numbers. In Colorado, our first launch market, more than half of our scheduled closes are going to be financed through Open Door Home Loans.

Speaker #3: In Texas, just six weeks after launch, we're already at nearly one in five. And that's before rolling out FHA, VA, or adjustable-rate products.

Speaker #3: Look, to be clear, each state we launch will have its own dynamics, right? But Texas shows where a market can be in just six weeks, and Colorado is where a market can be with some seasoning.

Kas Nejatian: Texas shows where a market can be in just six weeks, and Colorado is where a market can be with some seasoning. Neither of these are ceilings, right? These numbers are going to bounce around as we scale, and that's normal. What matters is the direction and the underlying physics. There's something big that I think people are missing here. The frame of this has always kind of been wrong, right? This is not an adjacent service. This is not an attach play. If you're evaluating the mortgage as an extra fee on the side, sure, it adds margin, but you're missing the bigger picture. Mortgage is the other half of the coin. Our market maker needs both sides to clear, right? Our offers create sellers, our mortgage create buyers. You can look, ask a fair question. We tried mortgages before and it didn't work.

Kaz Nejatian: Texas shows where a market can be in just six weeks, and Colorado is where a market can be with some seasoning. Neither of these are ceilings, right? These numbers are going to bounce around as we scale, and that's normal. What matters is the direction and the underlying physics. There's something big that I think people are missing here. The frame of this has always kind of been wrong, right? This is not an adjacent service. This is not an attach play. If you're evaluating the mortgage as an extra fee on the side, sure, it adds margin, but you're missing the bigger picture. Mortgage is the other half of the coin. Our market maker needs both sides to clear, right? Our offers create sellers, our mortgage create buyers. You can look, ask a fair question. We tried mortgages before and it didn't work.

Speaker #3: Neither of these are ceilings, right? And these numbers are going to bounce around as we scale, and that's normal. What matters is the direction and the underlying physics.

Speaker #3: There's something big that I think people are missing here. The frame of this has always kind of been wrong, right? This is not an adjacent service.

Speaker #3: This is not an attached play. If you're evaluating the mortgage as an extra fee on the side, sure, it adds margin, but you're missing the bigger picture.

Speaker #3: Mortgage is the other half of the coin. Our market maker needs both sides to clear, right? Our offers create sellers; our mortgages create buyers.

Speaker #3: And you can look ask a fair question, right? We tried mortgages before, and it didn't work. Why will this time be different? I like this question that I just asked because it gives me a chance to be nerdy.

Kas Nejatian: Why will this time be different? I like this question that I just asked because it gives me a chance to be nerdy. You see, I love studying the history of companies, and I want to tell you a story that I tell our product managers. I call it good Sears and bad Sears. For years, I've carried this metal card in my wallet, like actually my wallet. I love the history of money. I wrote a book about this. It is less odd for me to carry an old unusable charge card than almost anyone else. This is the Sears revolving charge card. This one was issued in 1951 to help fund customers buy stuff from Sears. Sears eventually allowed other merchants to accept this card, and that business inside Sears went to become one of the most successful financial services products ever launched.

Kaz Nejatian: Why will this time be different? I like this question that I just asked because it gives me a chance to be nerdy. You see, I love studying the history of companies, and I want to tell you a story that I tell our product managers. I call it good Sears and bad Sears. For years, I've carried this metal card in my wallet, like actually my wallet. I love the history of money. I wrote a book about this. It is less odd for me to carry an old unusable charge card than almost anyone else. This is the Sears revolving charge card. This one was issued in 1951 to help fund customers buy stuff from Sears. Sears eventually allowed other merchants to accept this card, and that business inside Sears went to become one of the most successful financial services products ever launched.

Speaker #3: You see, I love studying the history of companies. And I want to tell you a story that I tell our product managers. I call it good sears and bad sears.

Speaker #3: For years, I've carried this metal card in my wallet—like, actually in my wallet. I love the history of money. I wrote a book about this.

Speaker #3: So it's less odd for me to carry an old unusable charge card than almost anyone else. But this is the Sears revolving charge card.

Speaker #3: This one was issued in 1951 to help fund customers buy stuff from Sears. Sears eventually allowed other merchants to accept this card, and that business inside Sears went to become one of the most successful financial services products ever launched.

Speaker #3: And eventually, it became worth more than all of Sears itself. That business was eventually spun out, and we now call it Discover. That was good Sears.

Kas Nejatian: Eventually, it became worth more than all of Sears itself. That business was eventually spun out, and we now call it Discover. That was good Sears. Financial infrastructure born inside a transaction. A few decades later, Sears bought Dean Witter. It's a brokerage firm. They put it inside their department stores so that a mother of three who came in for a new fridge could also leave with a mutual fund. The idea was just absurd. It was two products sharing a roof, but not a purpose. Sears had no competitive edge, nothing that would make this product special. A bunch of number crunchers tried to create ROI through attach. The whole thing failed. That was bad Sears. Look, the main question is this. There is a difference between bolting something on and building something in.

Kaz Nejatian: Eventually, it became worth more than all of Sears itself. That business was eventually spun out, and we now call it Discover. That was good Sears. Financial infrastructure born inside a transaction. A few decades later, Sears bought Dean Witter. It's a brokerage firm. They put it inside their department stores so that a mother of three who came in for a new fridge could also leave with a mutual fund. The idea was just absurd. It was two products sharing a roof, but not a purpose. Sears had no competitive edge, nothing that would make this product special. A bunch of number crunchers tried to create ROI through attach. The whole thing failed. That was bad Sears. Look, the main question is this. There is a difference between bolting something on and building something in.

Speaker #3: Financial infrastructure was born inside a transaction. A few decades later, Sears bought Dean Witter, a brokerage firm, and they put it inside their department stores.

Speaker #3: So that amount of three who came in for a new fridge could also leave with a mutual fund. The idea was just absurd. It was two products sharing a roof, but not a purpose.

Speaker #3: Sears had no competitive advantage. Nothing that would make this product special. A bunch of number crunchers tried to create ROI through attach. The whole thing failed.

Speaker #3: That was bad, Sears. Look, the main question is this: There is a difference between bolting something on and building something in. During my time at Shopify, we built Shopify Capital—the good Sears way.

Kas Nejatian: During my time at Shopify, we built Shopify Capital, the good Sears way. It didn't work because we cross-sold merchants. It worked because the platform already saw every merchant in real time. We didn't need a loan application. We already had the underlying data, right? The financial product wasn't bolted on. It was born inside the transaction. Opendoor 1.0's mortgage, and honestly, every mortgage product on the market, is bad Sears. You buy a house, and then someone awkwardly tries to sell you a loan. It just adds friction, and it fails because it deserves to fail. These products that fail aren't about the customer. They're about companies wanting margin. The product we're building today, it sits inside the process from day one, built in, not bolted on. That changes both the customer experience and our unit economics. Here's why. People think mortgages are special. They're really, really not.

Kaz Nejatian: During my time at Shopify, we built Shopify Capital, the good Sears way. It didn't work because we cross-sold merchants. It worked because the platform already saw every merchant in real time. We didn't need a loan application. We already had the underlying data, right? The financial product wasn't bolted on. It was born inside the transaction. Opendoor 1.0's mortgage, and honestly, every mortgage product on the market, is bad Sears. You buy a house, and then someone awkwardly tries to sell you a loan. It just adds friction, and it fails because it deserves to fail. These products that fail aren't about the customer. They're about companies wanting margin. The product we're building today, it sits inside the process from day one, built in, not bolted on. That changes both the customer experience and our unit economics. Here's why. People think mortgages are special. They're really, really not.

Speaker #3: It didn't work because we cross-sold merchants; it worked because the platform already saw every merchant in real time. We didn't need a loan application.

Speaker #3: We already had the underlying data, right? Financial product wasn't bolted on. It was born inside the transaction. Open Door 1.0's mortgage and honestly every mortgage product on the market is bad Sears.

Speaker #3: You buy a house, and then someone awkwardly tries to sell you a loan. It just adds friction, and it fails because it deserves to fail.

Speaker #3: These products that fail aren't about the customer; they're about companies wanting margin. The product we're building today sits inside the process from day one.

Speaker #3: Built in, not bolted on. That changes both the customer experience and our unit economics. And here's why. People think mortgages are special. They're really, really not, right?

Kas Nejatian: Right? The legacy mortgage industry carries 65 to 85 basis points of yield in every single loan just to feed the pork barrel buffet of people taking margin. The legacy mortgage industry pays thousands of dollars to acquire each buyer, and this chain exists only because it has always existed. Look, we didn't ask how we could make money on mortgage. We asked the following question: If our goal was to offer the lowest rate possible, what would be built? We built our own point of sale and our own loan origination system. We offer only the most common loans. No bells, no whistles. You can have any flavor of ice cream you want, so long as it's vanilla. If you want a fancy mortgage with lots of features, please use a bank. Do not use Opendoor Home Loans.

Kaz Nejatian: Right? The legacy mortgage industry carries 65 to 85 basis points of yield in every single loan just to feed the pork barrel buffet of people taking margin. The legacy mortgage industry pays thousands of dollars to acquire each buyer, and this chain exists only because it has always existed. Look, we didn't ask how we could make money on mortgage. We asked the following question: If our goal was to offer the lowest rate possible, what would be built? We built our own point of sale and our own loan origination system. We offer only the most common loans. No bells, no whistles. You can have any flavor of ice cream you want, so long as it's vanilla. If you want a fancy mortgage with lots of features, please use a bank. Do not use Opendoor Home Loans.

Speaker #3: The legacy mortgage industry carries 65 to 85 basis points of yield. In every single loan, just to feed the pork barrel buffet of people taking margin.

Speaker #3: The legacy mortgage industry pays thousands of dollars to acquire each buyer. And this chain exists only because it has always existed. Look, we didn't ask how we could make money on mortgage.

Speaker #3: We asked the following question: If our goal was to offer the lowest rate possible, what would be built? So we built our own point of sale and our own loan origination system.

Speaker #3: And we offer only the most common loans. No bells, no whistles. You can have any flavor of ice cream you want, so long as it's vanilla.

Speaker #3: If you want a fancy mortgage with lots of features, please use a bank. Do not use Open Door Home Loans. But if you want a regular mortgage, or a regular home, we are going to be your best bet.

Kas Nejatian: If you want a regular mortgage for a regular home, we are going to be your best bet. We have automated so much of the process. Our loan officers can handle 50 mortgages a month against about 10 in the industry. Oh, and we've spent $0 on marketing. We took all the money we saved and passed them to homebuyers. We're not new at this, right? Home builders have figured this out decades ago. A great mortgage is a more powerful force than a price cut, and we have figured out the same thing. Because we turn inventory a few times a year, the math is even better for us. For a market maker, a lower mortgage rate is the thing that speeds everything else up. It removes friction and means that we get more turns a year.

Kaz Nejatian: If you want a regular mortgage for a regular home, we are going to be your best bet. We have automated so much of the process. Our loan officers can handle 50 mortgages a month against about 10 in the industry. Oh, and we've spent $0 on marketing. We took all the money we saved and passed them to homebuyers. We're not new at this, right? Home builders have figured this out decades ago. A great mortgage is a more powerful force than a price cut, and we have figured out the same thing. Because we turn inventory a few times a year, the math is even better for us. For a market maker, a lower mortgage rate is the thing that speeds everything else up. It removes friction and means that we get more turns a year.

Speaker #3: We have automated so much of the process that our loan officers can handle 50 mortgages a month, compared to about 10 in the industry. Oh, and we've spent $0 on marketing.

Speaker #3: We took all the money we saved and passed it to home buyers. We're not new at this, right? Home builders figured this out decades ago.

Speaker #3: A great mortgage is a more powerful force than a price cut. And we have figured out the same thing. But because we turn inventory a few times a year, the math is even better for us.

Speaker #3: For a market maker a lower mortgage rate, is the thing that speeds everything else up. It removes friction and means that we get more turns a year.

Speaker #3: It frees up capital so we can buy the next house. And the next. And the next. We haven’t invented new math here—we’ve just bent it in a way that a standalone lender structurally can’t.

Kas Nejatian: It frees up capital so we can buy the next house, and the next. We haven't invented new math here. We have just bent it in a way that a stand-alone lender structurally can't. Look, I've spent most of my career building financial services products. I've seen this work. Shopping installments went from not existing to being the largest installment product on the internet in a year. Stand-alone lenders are constantly fighting gravity on customer acquisition. For us, the mortgage is just a second wing. Once both wings are locked in place, the physics switch from drag to lift. Mortgage wasn't the only product that had lots of launches. We also deprecated five bespoke tools and multiple microservices and unified them all into Opendoor's internal God View, Ops Hub, a single piece of software that's our command and control center, gives us end-to-end view of every home.

Kaz Nejatian: It frees up capital so we can buy the next house, and the next. We haven't invented new math here. We have just bent it in a way that a stand-alone lender structurally can't. Look, I've spent most of my career building financial services products. I've seen this work. Shopping installments went from not existing to being the largest installment product on the internet in a year. Stand-alone lenders are constantly fighting gravity on customer acquisition. For us, the mortgage is just a second wing. Once both wings are locked in place, the physics switch from drag to lift. Mortgage wasn't the only product that had lots of launches. We also deprecated five bespoke tools and multiple microservices and unified them all into Opendoor's internal God View, Ops Hub, a single piece of software that's our command and control center, gives us end-to-end view of every home.

Speaker #3: Look, I've spent most of my career building financial services products. I've seen this work. Shopping settlements went from not existing to being the largest installment product on the internet in a year.

Speaker #3: Standalone lenders are constantly fighting gravity on customer acquisition. For us, the mortgage is just a second wing. Once both wings are locked in place, the physics switch.

Speaker #3: From drag to lift. And mortgage wasn't the only product that had lots of launches. We also deprecated five bespoke tools and multiple microservices, and unified them all into Opendoor's internal GuardView.

Speaker #3: Ops Hub—a single piece of software that's our command and control center—gives us an end-to-end view of every home. We opened Opendoor up to agents.

Kas Nejatian: We opened Opendoor up to agents. We launched Opendoor 2.0 for agents with a new structure that puts our offers directly inside the tools agents already use, tools like RealScout, SOLD.com, and Movoto. Our new partner API launched, which means integrations into Opendoor now take days, not months. We rebuilt Opendoor iOS app right from the ground up. We held it to one bar, excellence against apps people use every day, not good enough for a real estate app. We launched a unified dashboard that serves as a user's home within Opendoor. Whether you're selling to us, buying from us, or both, there's now one place for your entire relationship with Opendoor. We put machine learning to work on underwriting. Our auto underwriter now handles roughly one in five valuations, and we're testing models that value entire segments of homes with almost no manual review at all.

Kaz Nejatian: We opened Opendoor up to agents. We launched Opendoor 2.0 for agents with a new structure that puts our offers directly inside the tools agents already use, tools like RealScout, SOLD.com, and Movoto. Our new partner API launched, which means integrations into Opendoor now take days, not months. We rebuilt Opendoor iOS app right from the ground up. We held it to one bar, excellence against apps people use every day, not good enough for a real estate app. We launched a unified dashboard that serves as a user's home within Opendoor. Whether you're selling to us, buying from us, or both, there's now one place for your entire relationship with Opendoor. We put machine learning to work on underwriting. Our auto underwriter now handles roughly one in five valuations, and we're testing models that value entire segments of homes with almost no manual review at all.

Speaker #3: We launched Opendoor 2.0 for agents, with a new structure that puts our offers directly inside the tools agents already use—tools like RealScout, Sold.com, and Movoto.

Speaker #3: And our new partner API launched, which means integrations into Open Door now take days, not months. We rebuilt Open Door iOS app, right from the ground up.

Speaker #3: We held it to one bar: excellence against apps people use every day. Not good enough for a real estate app. We launched a unified dashboard that serves as a user's home within Opendoor.

Speaker #3: Whether you're selling to us, buying from us, or both. There's now one place for your entire relationship with Open Door. We put machine learning to work on underwriting.

Speaker #3: Our auto underwriter now handles roughly one in five valuations, and we're testing models that value entire segments of homes with almost no manual review at all.

Speaker #3: We turn Chloe, our AI assistant, into a real part of our sales teams. She converts three times what she did in January at a third of a cost.

Kas Nejatian: We turned Chloe, our AI assistant, into a real part of our sales teams. She conversed three times what she did in January at a third of the cost. She works 168 hours a week, takes no vacations or bathroom breaks, and is completely transparent about being a bot. People love using her because she is good. We became faster under the hood. Seller dashboards now load three times faster as contract changes went from four hours to 10 minutes, and we retired legacy systems that had been slowing us down for a better part of a decade. We launched a new set of alerts for our buyers, including nearby listing matches, price drop notifications, and recommended homes. That's just a small sample of what we've shipped in the past quarters. Look, in my first call, I told you we would drive Opendoor to ANI profitability.

Kaz Nejatian: We turned Chloe, our AI assistant, into a real part of our sales teams. She conversed three times what she did in January at a third of the cost. She works 168 hours a week, takes no vacations or bathroom breaks, and is completely transparent about being a bot. People love using her because she is good. We became faster under the hood. Seller dashboards now load three times faster as contract changes went from four hours to 10 minutes, and we retired legacy systems that had been slowing us down for a better part of a decade. We launched a new set of alerts for our buyers, including nearby listing matches, price drop notifications, and recommended homes. That's just a small sample of what we've shipped in the past quarters. Look, in my first call, I told you we would drive Opendoor to ANI profitability.

Speaker #3: She works 168 hours a week, takes no vacations or bathroom breaks, and is completely transparent about being a bot. But people love using her because she is good.

Speaker #3: We became faster under the hood. Seller dashboards now load three times faster as contract changes went from four hours to 10 minutes. And we retired legacy systems that had been the slowest down for a better part of a decade.

Speaker #3: We launched a new set of alerts for our buyers, including nearby listing matches, price drop notifications, and recommended homes. And that's just a small sample of what we've shipped in the past quarters.

Speaker #3: Look, in my first call, I told you we would drive Opendoor to A and I profitability. I said "drive" because we didn't know exactly how we would do it.

Kas Nejatian: I said drive because we didn't know exactly how we would do it, and we didn't really have any proof points. Today, we do. We've shown that if you ship great products every week and if you keep tilting the world toward homeowners, the score just takes care of itself. With that, I'll hand it over to Christy to tell you about the numbers. Christy?

Kaz Nejatian: I said drive because we didn't know exactly how we would do it, and we didn't really have any proof points. Today, we do. We've shown that if you ship great products every week and if you keep tilting the world toward homeowners, the score just takes care of itself. With that, I'll hand it over to Christy to tell you about the numbers. Christy?

Speaker #3: And we didn't really have any proof points. Today, we do. We've shown that if you ship great products every week, and if you keep tilting the world toward homeowners, the score just kind of takes care of itself.

Speaker #3: With that, I'll hand it over to Christy to tell you about the numbers. Christy.

Speaker #1: Thank you, Kaz. Three things to know about Q2 before we get into the details. We grew homes acquired by 77% quarter over quarter, and 149% year over year.

Christy Schwartz: Thank you, Kas. Three things to know about Q2 before we get into the details. We grew homes acquired by 77% quarter over quarter and 149% year over year. We also closed the quarter with another 2,310 homes under contract. A year ago, that number was 393. Contribution profit was $51 million, up 59% quarter over quarter and 22% more homes sold. Contribution margin was the highest we've reported in two years. A year ago, we purchased 1,757 homes and spent $15 million on operations expense. This quarter, we purchased 4,378 homes and spent $14 million, two and a half times the volume on less variable cost. Volume, margin, operating leverage. These are the three management objectives on our path to profitability. The table in our earnings release shows where each one stands. Let's walk through them now. First, scale acquisitions.

Christy Schwartz: Thank you, Kaz. Three things to know about Q2 before we get into the details. We grew homes acquired by 77% quarter over quarter and 149% year over year. We also closed the quarter with another 2,310 homes under contract. A year ago, that number was 393. Contribution profit was $51 million, up 59% quarter over quarter and 22% more homes sold. Contribution margin was the highest we've reported in two years. A year ago, we purchased 1,757 homes and spent $15 million on operations expense. This quarter, we purchased 4,378 homes and spent $14 million, two and a half times the volume on less variable cost. Volume, margin, operating leverage. These are the three management objectives on our path to profitability. The table in our earnings release shows where each one stands. Let's walk through them now. First, scale acquisitions.

Speaker #1: We also closed the quarter with another 2,310 homes under contract. A year ago, that number was 393. Contribution profit was $51 million up 59% quarter over quarter, and 22% more homes sold.

Speaker #1: Contribution margin was the highest we've reported in two years. A year ago, we purchased 1,757 homes and spent $15 million on operations expense. This quarter, we purchased 4,378 homes and spent $14 million.

Speaker #1: Two and a half times the volume on less variable cost. Volume, margin, operating leverage. These are the three management objectives on our path to profitability.

Speaker #1: The table in our earnings release shows where each one stands. Let's walk through them now. First, scale acquisitions. We purchased 4,378 homes in the quarter and saw revenue growth of 23% quarter over quarter to $883 million.

Christy Schwartz: We purchased 4,378 homes in the quarter and saw revenue growth of 23% quarter over quarter to $883 million. Acquisition contracts reached 6,908, up from 5,136 in Q1. Marketing spend moved in the opposite direction, from $19 million to $5 million quarter over quarter. Second, improve unit economics and resale velocity. Contribution margin has climbed from a low of 1% three years ago to 5.8% in Q2, landing in the middle of our 5% to 7% range we guided to. Aged inventory, which we define as homes listed for greater than 120 days, has fallen from 51% over that same span to 9% now. Third, build operating leverage. Trailing 12-month operations expense was 1.6% of revenue up from 1.3% in Q1. That said, operations expense actually declined from $52 million to $51 million.

Speaker #1: Acquisition contracts reached 6,908, up from 5,136 in Q1. Marketing spend moved in the opposite direction, from $19 million to $5 million quarter over quarter.

Speaker #1: Second, improve unit economics and resale velocity. Contribution margin has climbed from a low of 1% three years ago to 5.8% in Q2, landing in the middle of our five to seven percent range we guided to.

Speaker #1: Aged inventory, which we define as homes listed for greater than 120 days, has fallen from 51% over that same span to 9% now. Third, build operating leverage.

Speaker #1: Trailing 12-month operations expense was 1.6% of revenue, up from 1.3% in Q1. That said, operations expense actually declined from $52 million to $51 million.

Speaker #1: The increase in the ratio reflects last year's higher revenue quarters rolling out of the trailing window—not any change in our cost discipline. On a per-acquisition basis, operations expense was $3,000 this quarter, down from $5,000 in Q1 and $8,400 a year ago.

Christy Schwartz: The increase in the ratio reflects last year's higher revenue quarters rolling out of the trailing window, not any change in our cost discipline. On a per acquisition basis, operations expense was $3,000 this quarter, down from $5,000 in Q1 and $8,400 a year ago. Fixed operating expenses were $35 million, up $2 million from Q1, funding our investments in AI and engineering. Turning to the balance sheet, we ended the quarter with $896 million in cash and cash equivalents. We deliberately put capital to work rebuilding a larger, higher quality book, growing our inventory by more than $700 million during Q2, funded largely by our non-recourse asset-backed facilities. We held 5,459 homes in inventory at quarter end, with another 2,310 homes already under contract to purchase. One point on capital. As our Cash Now, More Later product scales, it provides a more efficient way to grow.

Speaker #1: Fixed operating expenses were $35 million, up $2 million from Q1, funding our investments in AI and engineering. Turning to the balance sheet, we ended the quarter with $896 million in cash and cash equivalents.

Speaker #1: We deliberately put capital to work, rebuilding a larger, higher-quality book and growing our inventory by more than $700 million during the second quarter, funded largely by our non-recourse asset-backed facilities.

Speaker #1: We held 5,459 homes in inventory at quarter end, with another 2,310 homes already under contract to purchase. 1 point on capital. As our cash now more later products scales, it provides a more efficient way to grow.

Speaker #1: It commits less capital per home than our core product, giving us a way to add acquisitions without growing our balance sheet at the same pace.

Christy Schwartz: It commits less capital per home than our core product, giving us a way to add acquisitions without growing our balance sheet at the same pace. Now the guideposts for Q3. Acquisitions. You can continue to track our contracts on accountable.opendoor.com. Revenue. We expect revenue to increase at least 20% year over year. Contribution profit. We expect contribution profit dollars to more than double year over year, and contribution margin to be around 4% to 4.5%, reflecting typical seasonal trends. Contribution margin has fallen from Q2 to Q3 in every year we have been public by an average of 470 basis points, excluding 2023, when Q2 CM was negative. We expect a decline well below that average and the best Q2 to Q3 relative performance we have delivered outside of 2023. Adjusted EBITDA.

Speaker #1: Now, the guidepost for Q3: acquisitions. You can continue to track our contracts on accountable.opendoor.com. Revenue—we expect revenue to increase at least 20% year over year.

Speaker #1: Contribution profit. We expect contribution profit dollars to more than double year over year and contribution margin to be around four to four and a half percent, reflecting typical seasonal trends.

Speaker #1: Contribution margin has fallen from Q2 to Q3 in every year we have been public, by an average of 470 basis points, excluding 2023, when Q2 CM was negative.

Speaker #1: We expected decline well below that average, and the best Q2 to Q3 relative performance we have delivered outside of 2023. Adjusted EBITDA. We expect to be adjusted EBITDA profitable on a 12-month go-forward basis as of the second quarter of 2026.

Christy Schwartz: We expect to be adjusted EBITDA profitable on a 12-month go-forward basis as of Q2 2026. In Q3, we expect a modest increase in adjusted operating expense driven mostly by the holding costs that come with growing our inventory and a small increase in marketing. Our commitment has not changed. We expect to be adjusted net income + by the end of this year, measured on a 12-month go-forward basis. A quarter ago, we told you exactly what this quarter would look like, despite a real estate market that remains challenged, we did what we said we would do. With that, Michael, I'll turn it over to you for questions.

Speaker #1: In Q3, we expect a modest increase in adjusted operating expense driven mostly by the holding costs that come with growing our inventory and a small increase in marketing.

Speaker #1: Our commitment has not changed. We expect to be adjusted net income positive by the end of this year, measured on a 12-month go-forward basis.

Speaker #1: A quarter ago, we told you exactly what this quarter would look like, and despite a real estate market that remains challenged, we did what we said we would do.

Speaker #1: With that, Michael, I'll turn it over to you for questions.

Speaker #2: Thanks, Christy. Our first question comes to us via video submission from Lorraine Wang.

Kas Nejatian: Thanks, Christie. Our first question comes to us via video submission from Lorraine Wang.

Michael Judd: Thanks, Christie. Our first question comes to us via video submission from Lorraine Wang.

Speaker #3: Hi everyone. My name is Lorraine Wang, a long-term Opendoor shareholder. Thank you for taking my question. When long-term shareholders look back two years from now, what would be the one or two changes inside the business you hope they will point to and say, that's when Opendoor truly became a different company?

Operator: Hi, everyone. My name is Lorraine Wang, a long-term Opendoor shareholder. Thank you for taking my question. When long-term shareholders look back two years from now, what will be the one or two changes inside the business you hope they will point to and say, That's when Opendoor truly became a different company? Thank you.

Lorraine Wang: Hi, everyone. My name is Lorraine Wang, a long-term Opendoor shareholder. Thank you for taking my question. When long-term shareholders look back two years from now, what will be the one or two changes inside the business you hope they will point to and say, That's when Opendoor truly became a different company? Thank you.

Speaker #3: Thank you.

Speaker #2: Lorraine, thanks, Brad. Look, thanks for being a long-term shareholder. People like you are the reason this company survived. So that we could get a chance to turn around.

Kas Nejatian: Lorraine, thanks, man. Thanks for being a long-term shareholder. People like you are the reason this company survived so that we could get a chance to turn around. I generally think of our everyday shareholder as my boss, so I'm going to give you the same answer I would give if you were my boss. I won't give you a number because it won't be a number or a feature launch. It just won't. It'll be this. We stopped being a real estate company with a website and became a product company that happens to be in real estate. Let me tell you what I mean. Look, for most of this company's life, it seems like every decision we made got filtered through a spreadsheet. Mortgage rates, HPA, spreads, conversion, unit economics. Look, I look at these things every single day. They are very real.

Kaz Nejatian: Lorraine, thanks, man. Thanks for being a long-term shareholder. People like you are the reason this company survived so that we could get a chance to turn around. I generally think of our everyday shareholder as my boss, so I'm going to give you the same answer I would give if you were my boss. I won't give you a number because it won't be a number or a feature launch. It just won't. It'll be this. We stopped being a real estate company with a website and became a product company that happens to be in real estate. Let me tell you what I mean. Look, for most of this company's life, it seems like every decision we made got filtered through a spreadsheet. Mortgage rates, HPA, spreads, conversion, unit economics. Look, I look at these things every single day. They are very real.

Speaker #2: I generally think of our everyday shareholders as my boss. So I'm going to give you the same answer I would give if you were my boss.

Speaker #2: I won't give you a number because it won't be a number or a future launch. It just won't. It'll be this. We stopped being a real estate company with a website.

Speaker #2: And became a product company that happens to be in real estate. Let me tell you what I mean. Look, for most of this company's life, it seems like every decision we made got filtered through a spreadsheet: mortgage rates, HPA, spreads, conversion.

Speaker #2: Union economics. And look, I look at these things every single day. They are very real. But that's the business. It's not the company. The company is actually the product and the customers.

Kas Nejatian: That's the business. It's not the company. The company is actually the product and the customers. When you run a company like a financial portfolio, every individual trade, it makes sense on paper, but the end-to-end user experience, it just becomes completely broken. You end up with something that is barely functional, but a pain to use. You end up with a bank. Look, you don't build for a future that doesn't yet exist in spreadsheets. The shift is this. Our primary goal, the reason we come to work every day, is to build something people want. Our unit economics are downstream from that, right? When people use our products, when we eliminate friction, when we help our users, conversion goes up, margin goes up, and everything follows. Our product is better today, but it's still not where it should be, right?

Kaz Nejatian: That's the business. It's not the company. The company is actually the product and the customers. When you run a company like a financial portfolio, every individual trade, it makes sense on paper, but the end-to-end user experience, it just becomes completely broken. You end up with something that is barely functional, but a pain to use. You end up with a bank. Look, you don't build for a future that doesn't yet exist in spreadsheets. The shift is this. Our primary goal, the reason we come to work every day, is to build something people want. Our unit economics are downstream from that, right? When people use our products, when we eliminate friction, when we help our users, conversion goes up, margin goes up, and everything follows. Our product is better today, but it's still not where it should be, right?

Speaker #2: When you run a company like a financial portfolio, every individual trade seems to make sense on paper, but the end-to-end user experience just becomes completely broken.

Speaker #2: You end up with something that is barely functional, but a pain to use. You end up with a bank. Look, you don't build for a future that doesn't yet exist in spreadsheets.

Speaker #2: So the shift is this: our primary goal, the reason we come to work every day, is to build something people want. Our unit economics are downstream from that, right?

Speaker #2: When people use our product, when we eliminate friction, when we help our users, conversion goes up, margin goes up, and everything follows. Our product is better today, but it's still not where it should be, right?

Speaker #2: This is the largest transaction of most folks' lives, and for most of them, it's also the worst. There's no reason why both of those facts have to be true.

Kas Nejatian: This is the largest transaction of most folks' life. For most of them, it's also the worst. There's no reason why both those facts have to be true. Two years from now, I hope to point back to this. We decided to build an excellent product. We took the parts of the product that were bad every single day, and we fixed them. Then you'll wake up one day, and you'll see that all the work we have done to fix our infrastructure, to build a better product, to build a mortgage system that is just awesome, will merge together, and it'll make the process of buying and selling a home as easy as using Shop Pay. All of it will have started on this. We build products, not spreadsheets.

Kaz Nejatian: This is the largest transaction of most folks' life. For most of them, it's also the worst. There's no reason why both those facts have to be true. Two years from now, I hope to point back to this. We decided to build an excellent product. We took the parts of the product that were bad every single day, and we fixed them. Then you'll wake up one day, and you'll see that all the work we have done to fix our infrastructure, to build a better product, to build a mortgage system that is just awesome, will merge together, and it'll make the process of buying and selling a home as easy as using Shop Pay. All of it will have started on this. We build products, not spreadsheets.

Speaker #2: Two years from now, I hope to point back to this. We decided to build an excellent product. We took the parts of the product that were bad every single day, and we fixed them.

Speaker #2: And then you'll wake up one day and you'll see that all the work we have done to fix our infrastructure, to build a better product, to build the mortgage system that is just awesome, will merge together and it'll make the process of buying and selling a home as easy as using Shop Pay.

Speaker #2: But it will all, all of it will have started on this. We built products. Not spreadsheets. Great.

Michael Judd: Great. Our next question comes to us from, say, Q&A. Matthew S asks, Are we still on track for profitability by the end of this year?

Speaker #3: Our next question comes to us from Say Q&A. Matthew S. asks, are we still on track for profitability by the end of this year?

Speaker #2: Yes, yes, yes, yes. Look, every single quarter, we've done what we said we would do. We have come here, we've said what we're going to do, and then we've done it.

Kas Nejatian: Yes. Look, every single quarter we've done what we said we would do. We have come here, we've said what we're going to do, then we've done it. We're going to become ANI profitable on a 12-month go-forward basis at the end of this year. I told you we were going to do it on our first earning calls. I sat here and I said it, we're going to become ANI profitable on a 12-month go-forward basis at the end of this year. We're now giving you a map to back this up. The answer is yes. Is that clear?

Kaz Nejatian: Yes. Look, every single quarter we've done what we said we would do. We have come here, we've said what we're going to do, then we've done it. We're going to become ANI profitable on a 12-month go-forward basis at the end of this year. I told you we were going to do it on our first earning calls. I sat here and I said it, we're going to become ANI profitable on a 12-month go-forward basis at the end of this year. We're now giving you a map to back this up. The answer is yes. Is that clear?

Speaker #2: We're going to become anti-profitable on a 12-month go-forward basis at the end of this year. I told you we're going to do it on our first earnings call.

Speaker #2: I sat here and I said it: We're going to become anti-profitable on a 12-month go-forward basis at the end of this year, and we're now giving you the math to back this up.

Speaker #2: The answer is yes. Was that clear?

Speaker #3: Clear to me. Next question. Angelo E. asks: You have described letting buyers and sellers transact directly on Opendoor without Opendoor owning the home.

Michael Judd: Clear to me. Next question. Angelo E asks, you have described letting buyers and sellers transact directly on Opendoor without Opendoor owning the home. When could this launch, and what revenue and contribution profit per transaction are achievable?

Speaker #3: When could this launch, and what revenue and contribution profit per transaction are achievable?

Speaker #2: Angel, thanks for the question, man. Look, let me address the economics of this upfront. By saying I'm not going to talk about revenue or contribution profit on a product that we haven't launched yet—this is the same answer I gave to Lorraine.

Kas Nejatian: Angelo, thanks for the question, man. Look, let me address the economics of this upfront by saying I'm not going to talk about revenue or contribution profit on a product that we haven't launched yet. The same answer I gave to Lorraine. Great products don't start with a margin target. We build for the mission, we build for the user, and economics follow. Our mission is to tilt the world in favor of homeowners. Today, Americans pay 10% to 12% by transacting on the biggest asset they own, and the process sucks. That's the problem that we need to fix. We'll get there in three steps. I come from the e-commerce world, so I like using that language. I say 1P, 2P, 3P. Step one, 1P. We buy the homes ourselves and we sell them. This is our regular core cash offer product.

Kaz Nejatian: Angelo, thanks for the question, man. Look, let me address the economics of this upfront by saying I'm not going to talk about revenue or contribution profit on a product that we haven't launched yet. The same answer I gave to Lorraine. Great products don't start with a margin target. We build for the mission, we build for the user, and economics follow. Our mission is to tilt the world in favor of homeowners. Today, Americans pay 10% to 12% by transacting on the biggest asset they own, and the process sucks. That's the problem that we need to fix. We'll get there in three steps. I come from the e-commerce world, so I like using that language. I say 1P, 2P, 3P. Step one, 1P. We buy the homes ourselves and we sell them. This is our regular core cash offer product.

Speaker #2: Great products don't start with a margin target. We build for the mission, and we build for the user. And economics follow, right? Our mission is to tilt the world in favor of homeowners.

Speaker #2: Today, Americans pay 10% to 12% transacting on the biggest asset they own. And the process sucks. That's the problem that we need to fix.

Speaker #2: And we'll get there in three steps, right? I come from the e-commerce world, so I like using that language. I say 1P, 2P, 3P.

Speaker #2: Step one, one P: We buy the homes ourselves and we sell them. This is our regular core cash offer product. Step two, two P.

Kas Nejatian: Step two, 2P. This is Cash Now, More Later. We still buy your home, but it's a different way of owning it. It's capital light for us with less risk, with alignment with the seller. Step three is 3P. That's what you're describing. Buyers and sellers transacting directly with each other using all of our services and tools without using any of our balance sheets. Your home, your transaction, our platform. We're on step two right now, and we're not going to move to step three until we are very good at step two. Now look, for what it's worth, I think people overestimate how hard step three is and underestimate how important step one and two are on the way to step three. Just look at Amazon. What did Amazon do? First, they sold their own stuff in their own warehouses, 1P.

Kaz Nejatian: Step two, 2P. This is Cash Now, More Later. We still buy your home, but it's a different way of owning it. It's capital light for us with less risk, with alignment with the seller. Step three is 3P. That's what you're describing. Buyers and sellers transacting directly with each other using all of our services and tools without using any of our balance sheets. Your home, your transaction, our platform. We're on step two right now, and we're not going to move to step three until we are very good at step two. Now look, for what it's worth, I think people overestimate how hard step three is and underestimate how important step one and two are on the way to step three. Just look at Amazon. What did Amazon do? First, they sold their own stuff in their own warehouses, 1P.

Speaker #2: This is cash now, more later. We still buy your home, but it's a different way of owning it. It's capital-light for us, with less risk and more alignment with the seller, right?

Speaker #2: Step three is three P. That's what you're describing. Buyers and sellers transacting directly with each other using all of our services and tools without using any of our balance sheet.

Speaker #2: Your home, your transaction, our platform. We're on step two right now, and we're not going to move to step three until we are very good at step two.

Speaker #2: Don't look, for what it's worth, I think people overestimate how hard step three is, and underestimate how important steps one and two are on the way to step three.

Speaker #2: Just look at Amazon. We're at Amazon, dude. First, they sold their own stuff in their own warehouses—1P, right? Then they sold things that they sold, but it shipped from other people's warehouses.

Kas Nejatian: They sold the things that they sold, but it shipped from other people's warehouses, 2P. Other people's stuff out of other people's warehouses, 3P. Amazon launched other people's stuff from Amazon's warehouses using Amazon Pay. 3P with attached services offered by Amazon. Those last two steps launched the fastest because when you are excellent at the first two, the other two aren't that much work. I have some conviction here because I came from a place where the entire business was 3P. Letting people transact without owning the stuff. It works really well, but only once you've done the work required to earn it.

Kaz Nejatian: They sold the things that they sold, but it shipped from other people's warehouses, 2P. Other people's stuff out of other people's warehouses, 3P. Amazon launched other people's stuff from Amazon's warehouses using Amazon Pay. 3P with attached services offered by Amazon. Those last two steps launched the fastest because when you are excellent at the first two, the other two aren't that much work. I have some conviction here because I came from a place where the entire business was 3P. Letting people transact without owning the stuff. It works really well, but only once you've done the work required to earn it.

Speaker #2: Two P. Then other people's stuff out of other people's warehouses—three P. Then Amazon launched other people's stuff from Amazon's warehouses using Amazon Pay.

Speaker #2: Three P with attached services, offered by Amazon. Those last two steps, like, launch the fastest because when you are excellent at the first two, the other two aren't. And I have some conviction here because I came from a place where the entire business was three P.

Speaker #2: You know, letting people transact without owning the stuff—it works really, really, really well. But only once you've done the work required to earn it.

Speaker #3: Great. Our next question comes to us from Felix B. Hey Kaz, could you update on mortgage product and how many states are using Opendoor Mortgage?

Michael Judd: Great. Our next question comes to us from Felix B. Hey, Kas. Could you update on mortgage product and how many states are using Opendoor Home Loans?

Speaker #2: Yeah, thanks, Felix. I spoke about this a bit already, and I want to be a little careful because our lawyers are going to give me notes after this.

Kas Nejatian: Thanks, Felix. I spoke about this a bit already, and I want to be a little careful because our lawyers are going to give me notes after this. Look, the mortgage licensing process seems to have been designed by the same people who designed the DMV. It's not built for speed, and it's infuriating slow on purpose. It's state-by-state slog, and we're working our way through it, and we're doing it faster than I think anyone expected, but genuinely faster than people thought we could do it, but slower than I want. We expect to be licensed in around 35 to 40 states by the end of this year. Honestly, we'll get there on this front. It's like we know we will. The real question is, how are we doing in states where we are now live? The answer is we're doing just excellent.

Kaz Nejatian: Thanks, Felix. I spoke about this a bit already, and I want to be a little careful because our lawyers are going to give me notes after this. Look, the mortgage licensing process seems to have been designed by the same people who designed the DMV. It's not built for speed, and it's infuriating slow on purpose. It's state-by-state slog, and we're working our way through it, and we're doing it faster than I think anyone expected, but genuinely faster than people thought we could do it, but slower than I want. We expect to be licensed in around 35 to 40 states by the end of this year. Honestly, we'll get there on this front. It's like we know we will. The real question is, how are we doing in states where we are now live? The answer is we're doing just excellent.

Speaker #2: But look, the mortgage licensing process seems to have been designed by the same people who designed the DMV. It's not built for speed, and it's infuriatingly slow on purpose.

Speaker #2: It's a state-by-state slog, and we're working our way through it. We're doing it faster than I think anyone expected—genuinely faster than people thought we could do it.

Speaker #2: But it's slower than I want. So we expect to be licensed in around 35 to 40 states by the end of this year. But also, we'll get there on this front.

Speaker #2: It's like we know we will. So, the real question is: how are we doing in states where we are now live? And the answer is we're doing just excellent.

Speaker #2: Buyers are getting amazing mortgage rates very fast, very little pain. End to end. And if they want it, they don't have to talk to a single human being.

Kas Nejatian: The buyers are getting amazing mortgage rates, very fast, very little pain, end-to-end, and if they want it, they don't have to talk to a single human being. Look, I shared the numbers earlier. It's over half of our scheduled closes in Colorado are going to be on Opendoor Home Loans. Nearly 1 in 5 in Texas, that's only 6 weeks after launch. This is a completely unoptimized product right now. We don't offer FHA, which we will. We don't offer VA, which we will. We don't offer ARM, which we will. The reason this is working is simple. There's a structural unfairness in the American home buying process. There's a pork barrel buffet of margin that takes money out of the hand of home buyers. It's 65 to 85 basis points baked into every single loan.

Kaz Nejatian: The buyers are getting amazing mortgage rates, very fast, very little pain, end-to-end, and if they want it, they don't have to talk to a single human being. Look, I shared the numbers earlier. It's over half of our scheduled closes in Colorado are going to be on Opendoor Home Loans. Nearly 1 in 5 in Texas, that's only 6 weeks after launch. This is a completely unoptimized product right now. We don't offer FHA, which we will. We don't offer VA, which we will. We don't offer ARM, which we will. The reason this is working is simple. There's a structural unfairness in the American home buying process. There's a pork barrel buffet of margin that takes money out of the hand of home buyers. It's 65 to 85 basis points baked into every single loan.

Speaker #2: Look, I shared the numbers earlier. It's over half of our scheduled closes in Colorado. Are going to be on open door home loans nearly one in five in Texas.

Speaker #2: That's only six weeks after launch. And it's the completely unoptimized product right now. We don't offer FHA, which we will. We don't offer VA, which we will.

Speaker #2: We don't offer ARM, which we will, right? But the reason this is working is simple. There's a structural unfairness in the American home buying process.

Speaker #2: There's a pork barrel buffet of margin. That takes money out of hand of home buyers. It's 65% to 85% basis points baked into every single loan.

Speaker #2: We built a mortgage product without any of these costs. And our job is to pass the savings on. When the default option is the cheapest and the easiest option, it just works.

Kas Nejatian: Our job is to pass the saving on. When a default option is the cheapest and the easiest option, it just works. Now look. In the spirit of being very fully transparent, if you're buying a $10 million penthouse in Manhattan, I would like you to use someone else. Do not use us. We will do just vanilla. I'm very confident we're going to do vanilla better than anyone else. It's going to be just

Kaz Nejatian: Our job is to pass the saving on. When a default option is the cheapest and the easiest option, it just works. Now look. In the spirit of being very fully transparent, if you're buying a $10 million penthouse in Manhattan, I would like you to use someone else. Do not use us. We will do just vanilla. I'm very confident we're going to do vanilla better than anyone else. It's going to be just

Speaker #2: Now, like, look, in the spirit of being very fully transparent, if you're buying a $10 million pied-à-terre in Manhattan, I would like you to use someone else.

Speaker #2: Do not use us. We will do just vanilla. But I'm very confident we're going to do vanilla better than anyone else. It's going to be just excellent.

Speaker #3: Our next question comes from Angelo E. He's curious, what could keep open door below 2% of US home sales? Is it seller adoption, home eligibility, offer competitiveness, or buyers' willingness to transact through open door?

Michael Judd: Our next question comes from Angelo E. He's curious, what could keep Opendoor below 2% of US home sales? Is it seller adoption, home eligibility, offer competitiveness, or buyers' willingness to transact through Opendoor? What must change to exceed 6%? Is that good?

Speaker #3: And what must change to exceed 6%? Is that good?

Speaker #2: Man, that's Angelo. That's the same Angelo, I think, right?

Kas Nejatian: Man. Angelo, that's two good questions in one quarter. The same Angelo, I think, right?

Kaz Nejatian: Man. Angelo, that's two good questions in one quarter. The same Angelo, I think, right?

Speaker #3: Mm-hmm.

Speaker #2: Okay. What can keep us below 2%? Honestly, like, these are things I think about a lot. Like, every morning I look at our share as a percentage of all US.

Kas Nejatian: What can keep us below 2%? Honestly, these are things I think about a lot. Every morning, I look at our share as a percentage of all US, a lot of it's what we can control. Let's talk about 2% first. Okay, take offer competitiveness. There's two things that matter on this. How accurately we price the home and how good we are at our operations. In the past, our offers were bad because we were bad at both of these things, and we just used spread to cover our asses. This year, we've gotten much better. We're faster and more accurate with much more property over dispersion. The price of each individual home reflects the merit of the home and its portfolio risk to us, not some random market average.

Kaz Nejatian: What can keep us below 2%? Honestly, these are things I think about a lot. Every morning, I look at our share as a percentage of all US, a lot of it's what we can control. Let's talk about 2% first. Okay, take offer competitiveness. There's two things that matter on this. How accurately we price the home and how good we are at our operations. In the past, our offers were bad because we were bad at both of these things, and we just used spread to cover our asses. This year, we've gotten much better. We're faster and more accurate with much more property over dispersion. The price of each individual home reflects the merit of the home and its portfolio risk to us, not some random market average.

Speaker #2: But a lot of it is what we can control. So let's talk about 2% first. Okay, take offer competitiveness. There are two things that matter on this, right?

Speaker #2: How accurately we price the home and how good we are at our operations. So in the past, our offers were bad because we were bad at both of these things, and we just used spread to cover our asses.

Speaker #2: This year, we've gotten much better. We're faster and more accurate, with much more property-level dispersion. So, the price of each individual home reflects the merit of the home and its portfolio risk to us.

Speaker #2: Not some random market average. And as a result, our offers are just genuinely better, and we're converting better at the same spreads as we have at any point in our history.

Kas Nejatian: As a result, our offers are just genuinely better, we're converting better at the same spread as we have at any point in our history. Seller adoption isn't really the constraint, the demand's always been there. It's just that our offers have sucked, we couldn't convert. We fixed that. Home eligibility is another thing we fixed. Our buy box basically covers the entire lower 48 now, well over 90%. That's not the constraint. Buyer willingness is really just a function of us doing our job and not screwing up. I don't see 2% as a natural ceiling. I really don't. On our current trajectory, we'll cross it, if we don't, it'll be because we screwed something up. To get above 6%, I think two things need to happen. I don't think I've talked about this before. Transparently, it's obvious.

Kaz Nejatian: As a result, our offers are just genuinely better, we're converting better at the same spread as we have at any point in our history. Seller adoption isn't really the constraint, the demand's always been there. It's just that our offers have sucked, we couldn't convert. We fixed that. Home eligibility is another thing we fixed. Our buy box basically covers the entire lower 48 now, well over 90%. That's not the constraint. Buyer willingness is really just a function of us doing our job and not screwing up. I don't see 2% as a natural ceiling. I really don't. On our current trajectory, we'll cross it, if we don't, it'll be because we screwed something up. To get above 6%, I think two things need to happen. I don't think I've talked about this before. Transparently, it's obvious.

Speaker #2: So seller adoption isn't really the constraint. And the demand has always been there. It's just that our offers have sucked and we couldn't convert.

Speaker #2: We fixed that. Home eligibility is another thing we fixed. Our buy box basically covers our entire lower 48 now—well over 90%. So that's not the constraint.

Speaker #2: And buyer willingness is really just a function of us doing our job and not, you know, not screwing it up. So I don't see 2% as a natural ceiling.

Speaker #2: I really don't. On our current trajectory, we'll cross it. And if we don't, it'll be because we screwed something up. But to get above 6%, I think two things need to happen.

Speaker #2: I don't think I've talked about this before, but transparently, it's obvious: 3P needs to be working. Cash offers are generally constrained by our risk appetite and our balance sheet, right?

Kas Nejatian: 3P needs to be working. Cash offers are generally constrained by our risk appetite and our balance sheet. A marketplace isn't. The second thing that needs to happen is more of the transaction needs to happen inside Opendoor. Let me give you a real example. Insurance. Today, our closings get delayed constantly because the buyer's insurance isn't ready, we can't fund a mortgage. That's a step we don't control yet. I'm relatively confident that the same logic that applied for us to mortgage will apply to insurance. We're not going to capture a key. We're just going to make the friction disappear, we'll be very good.

Kaz Nejatian: 3P needs to be working. Cash offers are generally constrained by our risk appetite and our balance sheet. A marketplace isn't. The second thing that needs to happen is more of the transaction needs to happen inside Opendoor. Let me give you a real example. Insurance. Today, our closings get delayed constantly because the buyer's insurance isn't ready, we can't fund a mortgage. That's a step we don't control yet. I'm relatively confident that the same logic that applied for us to mortgage will apply to insurance. We're not going to capture a key. We're just going to make the friction disappear, we'll be very good.

Speaker #2: A marketplace isn't. The second thing that needs to happen is more of the transaction needs to happen inside Opendoor. Let me give you a real example.

Speaker #2: Like insurance. Like today our closings get delayed constantly because the buyer's insurance isn't ready. And we can't fund a mortgage. So that's the step we don't control yet.

Speaker #2: But I'm relatively confident that the same logic that applied for us to mortgage will apply to insurance. We're not going to capture a key.

Speaker #2: We're just going to make the friction disappear and we'll be very, very good.

Speaker #3: Our next question comes to us from Dai Lee from JP Morgan. Do you have any early thoughts on 2027?

Michael Judd: Our next question comes to us from Dae Lee from J.P. Morgan. Do you have any early thoughts on 2027?

Speaker #2: Yeah, I'm incredibly bullish on 2027. I don't want to give guidance for 2027 yet, but we're spending a lot of time working, setting ourselves up so we can have an excellent 2027.

Kas Nejatian: I'm incredibly bullish on 2027. I don't want to give guidance for the 2027 out, we're spending a lot of time doing very difficult work, setting ourselves up so we can have an excellent 2027. I generally think we're going to surprise people by how much of the US housing market will flow through Opendoor next year. Look, it's very obvious we're building a car that's designed to go 200 miles an hour, right now we're kind of testing it at 30 miles an hour, we know it won't fall apart as it turns. This thing really wants to go faster.

Kaz Nejatian: I'm incredibly bullish on 2027. I don't want to give guidance for the 2027 out, we're spending a lot of time doing very difficult work, setting ourselves up so we can have an excellent 2027. I generally think we're going to surprise people by how much of the US housing market will flow through Opendoor next year. Look, it's very obvious we're building a car that's designed to go 200 miles an hour, right now we're kind of testing it at 30 miles an hour, we know it won't fall apart as it turns. This thing really wants to go faster.

Speaker #2: I generally think we're going to surprise people by how much of the U.S. housing market will flow through Opendoor next year. Look, it's very obvious.

Speaker #2: We're building a car that's designed to go 200 miles an hour, and right now we're kind of testing it at 30 miles an hour.

Speaker #2: So we know it won't fall apart as it turns. But this thing really, really wants to go faster.

Speaker #3: Another question from Dai. How is AI specifically changing your ability to scale acquisition volume and improve margins? And what changes are you expecting now that Achieves AI Officer has joined the team?

Michael Judd: Another question from Dae. How is AI specifically changing your ability to scale acquisition volume and improve margins? What changes are you expecting now that the Chief AI Officer has joined the team?

Speaker #2: Did you want to take this?

Speaker #1: I am happy to take this because I personally love the leverage that you get from AI and the environment we've created here at Opendoor to encourage all of us to use it.

Kas Nejatian: Do you want to take this?

Kaz Nejatian: Do you want to take this?

Christy Schwartz: I am happy to take this because I personally love the leverage that you get from AI and the environment we've created here at Opendoor to encourage all of us to use it. Last week while I was in a meeting, I had an agent running a contribution margin analysis and another agent checking a tax filing that a colleague had prepared. I literally was in three places at once. I think that kind of applies and extrapolates to the whole organization. If you walk around our offices, it looks more like a tech lab than a real estate company. You see people with terminal up, Cursor up, Claude Desktop up, doing all sorts of things. People running into meetings with their laptops half-open because they don't want to accidentally disrupt AI from its work in progress.

Speaker #1: Last week, while I was in a meeting, I had an agent running a contribution margin analysis and another agent checking a tax filing that a colleague had prepared.

Speaker #1: So I literally was, like, in three places at once. And I think that kind of applies and extrapolates to the whole organization. If you walk around our offices, it looks more like a tech lab than a real estate company, right?

Speaker #1: You see people with Terminal up, Cursor up, Claude desktop up, doing all sorts of things. People are running into meetings with their laptops half open because they don't want to accidentally disrupt AI from its work in progress.

Speaker #1: Kaz walked through a few examples of how we're actually seeing this leverage in play. You have home project managers that used to manage three renos at a time that are now managing 10.

Christy Schwartz: Kas walked through a few examples of how we're actually seeing this leverage in play. You have home project managers that used to manage three renos at a time that are now managing 10, and by the end of the year, we expect that to be 20. We used to, 80% of our homes, you had to have someone in your house before you could actually receive an Offer. We have that down to 20%, aiming to be at 10% by the end of the year. Our Chief AI Officer was a fantastic addition, his primary objective aligns with our third management objective, which is to build operating leverage so that our costs don't scale linearly with acquisitions. That means making sure our AI spend is efficient and productive. Performance and cost vary a lot depending on which model you use.

Speaker #1: And by the end of the year, we expect that to be 20. We used to—80% of our homes, you had to have someone in your house before you could actually receive an offer.

Speaker #1: We have that down to 20%, aiming to be at 10% by the end of the year. Our Chief AI Officer was a fantastic addition.

Speaker #1: And his primary objective aligns with our third management objective, which is to build operating leverage so that our costs don't scale linearly with acquisitions.

Speaker #1: That means making sure our AI spend is efficient and productive. Performance and cost vary a lot depending on which model you use, so we route work to make sure the right model handles the right task.

Christy Schwartz: We route work to make sure the right model handles the right tasks instead of everyone defaulting to the last model they used. He is focused on consolidating tooling, building with fewer vendors to focus our tech stack, and using scale to negotiate better terms with vendors. Education and strategy, working with our teams to come up with elegant solutions to really challenging and unique problems, and giving each team the tools and training they need to operate at the level of our best individual users and engineers. Thank you for the question, Dae.

Speaker #1: Instead of everyone defaulting to the last model they used, he is focused on consolidating tooling, building with fewer vendors to focus our tech stack, and using scale to negotiate better terms with vendors.

Speaker #1: And then education and strategy, working with our teams to come up with elegant solutions to really challenging and unique problems, and giving each team the tools and training they need to operate at the level of our best individual users and engineers.

Speaker #1: Thank you for the question, Dai.

Speaker #3: Awesome. Next question comes to us from Andrew from Citizens. Could you talk about your progress with adjacent monetization? I want to know about mortgage specifically, but can you grade your progress on product attach broadly and where you see a positive trajectory for adjacent revenue and gross profit to improve overall unit economics for transactions?

Michael Judd: Awesome. The next question comes to us from Andrew from Citizens. Could you talk about your progress with adjacent monetization? I want to know mortgage specifically, but can you grade your progress on product attach broadly and where you see a positive trajectory for adjacent revenue and gross profit to improve overall unit economics for transactions? You can.

Speaker #3: You can.

Speaker #2: This is a great question. Okay, well, this isn't Harvard, so I won't grade inflate. I'll just tell you the grade I would give the PM leading this effort in their performance review. Fair?

Kas Nejatian: This is a great question. Well, this isn't Harvard, so I won't grade inflate. I'll just tell you the grade I would tell the PM leading this stuff in their performance review. On mortgage, I'd give us a solid B-minus. What we've built is insanely hard to imagine building, and we've done it in a hard environment just obscenely quickly, and the product is just excellent. But you don't get participation prizes. We've done all the right stuff to set ourselves up, but we're now have to go out and win. Good early results, but we have work to do. On title and escrow, I'd give us a B-plus. We're almost certainly, I'm very certain about this, we have the best title and escrow product in the US. It's not even close. No company could acquire as many homes as we do and have capacity left over.

Kaz Nejatian: This is a great question. Well, this isn't Harvard, so I won't grade inflate. I'll just tell you the grade I would tell the PM leading this stuff in their performance review. On mortgage, I'd give us a solid B-minus. What we've built is insanely hard to imagine building, and we've done it in a hard environment just obscenely quickly, and the product is just excellent. But you don't get participation prizes. We've done all the right stuff to set ourselves up, but we're now have to go out and win. Good early results, but we have work to do. On title and escrow, I'd give us a B-plus. We're almost certainly, I'm very certain about this, we have the best title and escrow product in the US. It's not even close. No company could acquire as many homes as we do and have capacity left over.

Speaker #3: Okay.

Speaker #2: On mortgage, I'd give us a solid B minus. What we've built is unbelievably hard to imagine building, and we've done it in a tough environment, just obscenely quickly.

Speaker #2: And the product is just excellent. But you don't get participation prizes. We've done all the right stuff to set ourselves up, but now we have to go out and win.

Speaker #2: Good early results, but we have work to do. On title and escrow, I’d give us like a B plus. Like, we’re almost certainly—like, I’m very certain about this.

Speaker #2: We have the best title and escrow product in the US. Like, it's not even close. No company—no company—could acquire as many homes as we do and still have capacity left over.

Speaker #2: And I think we can just, like, do an order of magnitude more transactions with our existing capacity. But it's not an 'A' yet, because we aren't yet doing the majority of title and escrow transactions in the US.

Kas Nejatian: I think we can just do an order of magnitude more transactions with our existing capacity. It's not an A yet, because we aren't yet doing a majority of title and escrow transactions in the US, so B-plus. On insurance, I'd give us an incomplete. We basically dropped out after a semester so we could study for mortgage. We'll pick this up next year. I think things are going better than anyone could reasonably have expected they would go. They're just generally going excellently.

Kaz Nejatian: I think we can just do an order of magnitude more transactions with our existing capacity. It's not an A yet, because we aren't yet doing a majority of title and escrow transactions in the US, so B-plus. On insurance, I'd give us an incomplete. We basically dropped out after a semester so we could study for mortgage. We'll pick this up next year. I think things are going better than anyone could reasonably have expected they would go. They're just generally going excellently.

Speaker #2: So, B-plus. On insurance, I'd give us an incomplete—like we basically dropped out after a semester so we could study for mortgage. We'll pick this up next year.

Speaker #2: So, like, I think things are going better than anyone could reasonably have expected they would go. They're just generally going excellently.

Speaker #3: Good report card. We're coming up on time, so I think this will be the last one. We'll also have one from Andrew at Citizens. From X, slash Twitter, it feels like Kaz is doing a good job of recruiting and bringing in high-level talent.

Michael Judd: Good report card. I think this will be the last one we'll have, also from Andrew at Citizens. From X, it feels like Kas is doing a good job of recruiting and bringing in high-level talent. Can you talk about the investment intensity and expectations that the investment community should have around the cost structure of Opendoor as the team appears to still be being built out?

Speaker #3: Can you talk about the investment intensity and the expectations that the investment community should have around the cost structure of Opendoor, as the team appears to still be being built out?

Speaker #1: Thank you for the question, Andrew. And thank you for the kind words about our team. It is truly incredible, the talent that we've been able to bring in.

Christy Schwartz: Thank you for the question, Andrew, thank you for the kind words on our team. It is truly incredible the talent that we've been able to bring in, they say A players attract A talent. The talent just keeps compounding. These are people who are uniquely skilled in their craft, like Vu and Morgan. They're deeply passionate about our mission and the problems that we're solving here. Here's how I'd frame the investment. I talked about in the prepared remarks that fixed operating expenses increased from $33 million to $35 million in the quarter, that is primarily driven from our investments in talent, engineering, and AI. The way to think about it is that we're spending small controlled amounts now to build software that scales instead of spending large amounts later, ramping up headcount to address capacity constraints.

Speaker #1: And they say players attract talent, like the talent just keeps compounding. These are people who are uniquely skilled in their craft, like Vu and Morgan.

Speaker #1: They're deeply passionate about our mission. And here—here's how I'd frame the investment. I talked about in the prepared remarks that fixed operating expenses increased from $33 million to $35 million in the quarter.

Speaker #1: And that is primarily driven by our investments in talent, engineering, and AI. But the way to think about it is that we're spending small, controlled amounts now to build software that scales, instead of spending large amounts later ramping up headcount to address capacity constraints.

Speaker #1: We're streamlining and consolidating our SaaS tools, and putting that spend into engineers and AI. That's less time and money spent stitching together someone else's software, and more time spent building our own, which we can shape to solve the challenges that are unique to our business.

Christy Schwartz: We're streamlining and consolidating our SaaS tools and putting that spend into engineers and AI. Less time and money spent stitching together someone else's software and more time spent building our own, which we can shape to solve the challenges that are unique to our business. For example, turning on thousands of utilities, turning them off and on every single month as we cycle through homes. There's a cost tailwind underneath all of this. The cost of AI capability itself keeps getting more efficient. What used to take a large model and real spend now runs cheaper and often faster. The same investment deployed effectively can buy more each quarter. The return on our investment will come through in both fixed and variable OpEx as we scale. The last time acquisition contracts were above 6,000 in a quarter, fixed OpEx was double what it is today.

Speaker #1: For example, turning on thousands of utilities and turning them off and on every single month as we cycle through homes. There's a cost tailwind underneath all of this.

Speaker #1: The cost of AI capability itself keeps getting more efficient. What used to take a large model and real spend now runs cheaper and often faster.

Speaker #1: So the same investment deployed effectively can buy more each quarter. The return on our investment will come through in both fixed and variable opex as we scale.

Speaker #1: So, the last time acquisition contracts were above 6,000 in a quarter, fixed OPEX was double what it is today. And as we highlighted on the call, acquisition closes more than doubled year over year, and we spent $1 million less in variable operations.

Christy Schwartz: As we highlighted on the call, acquisition closes more than doubled year-over-year, and we spent $1 million less in variable operations. These achievements are a reflection of our technical investments. The expectation I'd leave you with, fixed OpEx may keep growing modestly in dollar terms as we invest, but the discipline we're holding ourselves to is that fixed OpEx stays relatively constrained and variable costs grow slower than our volumes do.

Speaker #1: These achievements are a reflection of our technical investments. So, the expectation I’d leave you with: fixed opex may keep growing modestly in dollar terms as we invest, but the discipline we’re holding ourselves to is that fixed opex stays relatively constrained.

Speaker #1: And variable costs grow slower than our volumes do.

Speaker #3: Hey, this go for it.

Kas Nejatian: Hey, can I end this?

Kaz Nejatian: Hey, can I end this?

Michael Judd: Go for it.

Speaker #2: Thanks, folks, for joining us for our financial open house. Our job here is simple: our job is to come here and tell you we did what we said we would do.

Kas Nejatian: Thanks, folks, for joining us for our financial open house. Our job here is simple. Our job is to come here and tell you we did what we said we would do. We've now done that three quarters in a row. We'll come back next time and tell you again we did what we said we would do on our way to tilting the world toward homeowners. With that, we'll see you next time. Cheers.

Kaz Nejatian: Thanks, folks, for joining us for our financial open house. Our job here is simple. Our job is to come here and tell you we did what we said we would do. We've now done that three quarters in a row. We'll come back next time and tell you again we did what we said we would do on our way to tilting the world toward homeowners. With that, we'll see you next time. Cheers.

Speaker #2: We've now done that three quarters in a row. And we'll come back next time and tell you again that we did what we said we would do on our way to tilting the world toward homeowners.

Q2 2026 Opendoor Technologies Inc Earnings Call

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