Offerpad Solutions Inc. · NYSE:OPAD
Offerpad Solutions — Investor Presentation (May 2022)
30 slides from Offerpad Solutions's investor presentation, May 2022
Slide 1: Investor Presentation May 2022 Update
Offerpad. INVESTOR PRESENTATION MAY 2022 UPDATE
Slide 2: Disclaimer
DISCLAIMER Forward-Looking Statements Certain statements in this Presentation may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Offerpad Solutions Inc.’s (the “Compa
Slide 3: Our Mission: Provide your best way to buy and sell a home
OUR MISSION: PROVIDE YOUR BEST WAY TO BUY AND SELL A HOME. PERIOD. 3
Slide 4: Agenda
01 REAL ESTATE IS CHANGING 02 OFFERPAD’S MARKET APPROACH 03 OFFERPAD’S GROWTH DRIVERS 04 BUSINESS MODEL POSITIONED TO PERFORM 05 APPENDIX 4
Slide 5: Real Estate Is Changing
01 REAL ESTATE IS CHANGING 5
Slide 6: Massive and Rapidly Evolving Offline to Online Market
MASSIVE AND RAPIDLY EVOLVING OFFLINE TO ONLINE MARKET 1 $2.5T Real Estate opportunity today 99% analog MARKET $1.5T 3 $2.07B ~1% Digital penetration 2 OPPORTUNITY “BUY BOX” TODAY 2021 REVENUE 1 US Census & National Association of Realtors 2 Company Estimates 3 Houses in the US in the price range of
Slide 7: Online, Single-Click Transactions Fuel the Future of Real Estate
ONLINE, SINGLE-CLICK TRANSACTIONS FUEL THE FUTURE OF REAL ESTATE Request a cash offer Search homes online Access available home via mobile app Complete inspection, virtual closings 7
Slide 8: Offerpad Is Transforming the Industry
OFFERPAD IS TRANSFORMING THE INDUSTRY As long as 6 months or more to buy or sell a home. Closing 30+ days & 10+ showings 30-45 can take 30+ Days $1000’s of list days in escrow 30+ days 6+ months TRADITIONAL ready repairs on market VS. Broker search Prepare listing & Showing Closing marketing & open
Slide 9: Offerpad's Market Approach
02 OFFERPAD’S MARKET APPROACH 9
Slide 10: Strong Value Proposition for All Customers
STRONG VALUE PROPOSITION FOR ALL CUSTOMERS CONVENIENCE | CERTAINTY | CONTROL ANCILLARY SERVICES CASH OFFER BUY AND LIST WITH CONFIDENCE ADDITIONAL OPTIONS For those who want to sell on their own schedule For those who want to buy or list with Offering personalized solutions to meet each with more co
Slide 11: Our Customers Are Our Best Reference
OUR CUSTOMERS ARE OUR BEST REFERENCE +74 NET PROMOTER SCORE* “Enjoyable” Lauren in North Carolina 94% CUSTOMER “Very transparent” SATISFACTION* Kim in Arizona “No showing hassles” Thomas in Indiana Kenia * Based on surveys from over 1,000 customers in the first quarter 2022. 11
Slide 12: Sophisticated Renovations Expand Market Opportunities
SOPHISTICATED RENOVATIONS EXPAND MARKET OPPORTUNITIES AVERAGE COST AVERAGE DAYS $17,000 23 Renovations completed Number of days per in Q1 2022 project in Q1 2022 UTILIZE IN-HOUSE TALENT AND VETTED EXTERNAL SPECIALISTS TO INCREASE QUALITY AND CONTROL 12
Slide 13: Offerpad's Growth Drivers
03 OFFERPAD’S GROWTH DRIVERS 13
Slide 14: Growth Plan with Multiple Profit Expansion Touch Points
GROWTH PLAN WITH MULTIPLE PROFIT EXPANSION TOUCH POINTS Market penetration in existing markets • Long-term goal to drive total market share to 3-4%, from current approximately 1% Expanding into new markets nationwide • Added 3 new markets in Q1 2022 • Announced 5 more new markets opening in 2022 • 2
Slide 15: Success Increasing Market Share in Current Markets
SUCCESS INCREASING MARKET SHARE IN CURRENT MARKETS Offerpad Market Share in Existing Markets 1.2% Market share rebounded to surpass pre- COVID-19 pandemic highs 1.0% 0.8% Lifetime Aggregate Revenue of over $6.8B 0.6% 0.4% 0.2% 0.0% Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4
Slide 16: Massive Revenue Potential with Market Expansion Strategy
MASSIVE REVENUE POTENTIAL WITH MARKET EXPANSION STRATEGY Market Strategy • Geographical diversity • Historical transactions (quantity & composition) • Housing affordability • Housing supply and demand • Population and employment growth Expected New Market Expansion • Added 3 California markets in Q1
Slide 17: Product Innovation Possibilities
PRODUCT INNOVATION POSSIBILITIES Product Expansion Roadmap CURRENT PRODUCT OFFERINGS Offerpad EXPRESS & Offerpad FLEX, Mortgage, Title, Bundle Rewards, Buyer Boost POTENTIAL NEAR-TERM PRODUCT OFFERINGS Home Warranty, Remodel Services, Insurance POTENTIAL LONG-TERM PRODUCT OFFERINGS Smart Home, Energ
Slide 18: Business Model Positioned to Outperform
04 BUSINESS MODEL POSITIONED TO OUTPERFORM 18
Slide 19: Model Increases Value Creation Opportunities
MODEL INCREASES VALUE CREATION OPPORTUNITIES LEVERAGING TECHNOLOGY RENOVATING TO ADD VALUE EXPEDITING TIME TO CASH* 133 DAYS 57 DAYS 104 DAYS 95 95 DAYS DAYS 76 DAYS 2017 2018 2019 2020 2021 *Time to cash measures the time from when a home is acquired to sold 19
Slide 20: Rapid Market Additions: Key Revenue Driver
RAPID MARKET ADDITIONS: KEY REVENUE DRIVER Total Markets at Year End 21 29 14 Expected by YE 2022 12 10 8 2017 2018 2019 2020 2021 Total Revenue ($B) +60% $2.1 CAGR $1.1 $1.1 $0.9 $0.3 1 2017 2018 2019 2020 2021 20 1 Negatively impacted growth due to COVID-19 pandemic
Slide 21: Offerpad's Model Is Driving Accelerating KPI Results
OFFERPAD’S MODEL IS DRIVING ACCELERATING KPI RESULTS Revenue ($M) & Homes Sold Gross Profit ($M) & Margin $1,600 3,602 4,000 $160 $1,400 3,500 $140 $132 $1,200 2,423 $1,374 3,000 $120 $1,000 2,500 $100 $800 1,673 2,000 $80 $70 1,259 $868 $51 $53 $600 1,018 1,500 $60 $34 $400 $540 1,000 $40 $200 $284
Slide 22: Attractive Unit Economics
ATTRACTIVE UNIT ECONOMICS Q1’22 TTM contribution margin per home after interest $38K $(2K) $(11K) $26K $23K $1K $23K NET SALE HOLDING SELLING CONTRIBUTION CONTRIBUTION MARGIN OTHER TOTAL CONTRIBUTION PROCEEDS COSTS COSTS MARGIN AFTER INTEREST SERVICES MARGIN AFTER INTEREST EXPRESS 22
Slide 23: Capital Efficiency Featuring High Returns on Investment
CAPITAL EFFICIENCY FEATURING HIGH RETURNS ON INVESTMENT ROI Based on Total Homes Sold 2019 - 2021 2021 2021 87 DAYS 76 Days 23.6% 42.0% TIME TO CASH ANNUALIZED ROI FOR EVERY $1 VS. <5% cost of debt 2 8.8% 10.0% GROSS MARGIN 60% $14K $23k REVENUE CAGR 2017-2021 CONTRIBUTION AFTER INTEREST PER HOME So
Slide 24: 1Q 2022 Financial & Operational Highlights
1Q 2022 FINANCIAL & OPERATIONAL HIGHTLIGHTS Revenue $1.37B +384% YoY Homes Acquired 2,856 +139% YoY 1Q 2022 HIGHLIGHTS • 115% increase in request volume Homes Sold 3,602 +254% year over year YoY • Maintained average time from $35.3M acquisition to sale below our 100- Net Income $41.0M when excluding
Slide 25: Second Quarter 2022 Outlook
SECOND QUARTER 2022 OUTLOOK HOMES SOLD 2,900 – 3,100 REVENUE $1.1B – $1.15B ADJUSTED EBITDA1 $27M – $37M 1 See Non-GAAP financial measures on slide 2 for an explanation of why a reconciliation of this guidance cannot be provided. 25
Slide 26: Offerpad Investment Highlights
OFFERPAD INVESTMENT HIGHLIGHTS LARGE ADDRESSABLE MARKET Offerpad operates in the residential real estate industry with a Total Addressable Market of $2.5T. FOCUSED BUSINESS MODEL Offerpad is focused on responsible, long-term growth powered by our real estate expertise and advanced, proprietary algor
Slide 27: Appendix
05 APPENDIX 27
Slide 28: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Three Months Ended (in thousands, except percentages and homes sold, unaudited) March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 Gross profit (GAAP) $ 132,142 $ 70,292 $ 53,122 $ 50,864 $ 33,537 Gross margin 9.6% 8.1% 9.8% 13.4% 11.8% Homes so
Slide 29: Non-GAAP Reconciliations Cont.
NON-GAAP RECONCILIATIONS CONT. Three Months Ended (in thousands, except percentages, unaudited) March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 Net income (loss) (GAAP) $ 40,988 $ 12,806 $ (15,303) $ 9,192 $ (233) Change in fair value of warrant liabilities (5,664) (
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