Offerpad Solutions Inc. · NYSE:OPAD
Offerpad Solutions — Q1 2023 Earnings Presentation
31 slides from Offerpad Solutions's earnings presentation, May 3, 2023
Slide 1: Investor Presentation May 2023 Update
INVESTOR PRESENTATION MAY 2023 UPDATE 1
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: Your best way to buy and sell a home
Offerpade OUR MISSION: PROVIDE YOUR BEST WAY TO BUY AND SELL A HOME. PERIOD. Offerpada
Slide 4: Prior successes demonstrate our ability to execute
Prior successes demonstrate our ability to execute… • Surpassed $10 billion in lifetime aggregate revenue • Established attractive geographically diverse market footprint • Successfully navigated largest real estate market dislocation in decades • Achieved positive GAAP Net Income and Adjusted EBITD
Slide 5: Agenda
01 REAL ESTATE IS CHANGING 02 OFFERPAD’S MARKET APPROACH 03 OFFERPAD’S GROWTH DRIVERS 04 BUSINESS MODEL POSITIONED TO PERFORM 05 APPENDIX 5
Slide 6: Real Estate Is Changing
01 REAL ESTATE IS CHANGING Offerpada
Slide 7: Massive and evolving market presents substantial opportunity
Massive and evolving market presents substantial opportunity 1 $2.3T Real Estate opportunity today 99% analog ~1% Digital penetration 2 MARKET OPPORTUNITY 3 $1.3T $4.0B “BUY BOX” TODAY 2022 REVENUE 1 US Census & National Association of Realtors 2 Company Estimates 3 Houses in the US in the price ran
Slide 8: Offerpad is transforming the industry by simplifying the transaction
Offerpad is transforming the industry by simplifying the transaction As long as 6 months or more to buy or sell a home. Closing 30+ days & 10+ showings can take $1000’s of list 30+ days 30-45 30+ Days days in escrow 6+ ready repairs on market months TRADITIONAL Broker search Prepare listing & Showin
Slide 9: Offerpad's industry impact is growing
THE INDUSTRY Offerpad’s industry impact is growing THE OFFERPAD DISRUPTOR DIFFERENTIAL Over 72,000 real estate transactions since inception1 >10,000 homes sold in 2022 >300,000+ visits to offerpad.com2 1 As of Q1 2023 2 Average/month based on internal data 9
Slide 10: Offerpad's Market Approach
02 OFFERPAD’S MARKET APPROACH 10
Slide 11: Strong customer value proposition supports growth potential
Strong customer value proposition supports growth potential CONVENIENCE | CERTAINTY | CONTROL CASH OFFER LISTING SERVICE ANCILLARY SERVICES For those who want to sell on their own For those who want to buy or list with Offering personalized solutions to meet each schedule with more convenience, guid
Slide 12: Our customers are our best reference
Our customers are our best reference +63 “Quick and efficient” NET PROMOTER SCORE* 9 OUT OF 10 WOULD RECOMMEND TO A FRIEND* Sharon in Florida “Fair, kind, Knowledgeable” 92 % “The entire process was stress free” Victoria and Charles in Georgia CUSTOMER Kenia SATISFACTION* Jose and Tonya in Florida *
Slide 13: Sophisticated renovation operation expands market opportunities
Sophisticated renovation operation expands market opportunities AVERAGE COST AVERAGE DAYS $27,000 30 Renovations completed in Q1 2023 Number of days per project in Q1 2023 UTILIZE IN-HOUSE TALENT AND VETTED EXTERNAL SPECIALISTS TO INCREASE QUALITY AND CONTROL 30,000+ home renovations completed since
Slide 14: Offerpad's Growth Drivers
03 OFFERPAD’S GROWTH DRIVERS 14
Slide 15: Growth plan includes multiple profit expansion touch points
Growth plan includes multiple profit expansion touch points Market penetration in existing markets • Long-term goal to drive total market share to 3-4%, from current less than 1% Expanding business to business services • Direct Plus: connecting institutional buyers with sellers • Renovation as a ser
Slide 16: Large growth opportunity within existing markets
Large growth opportunity within existing markets Offerpad Market Share in Existing Markets 1.4% Market share impacted by slowdown in the broader real estate market in late 2022 1.2% 1.0% Lifetime Aggregate Revenue of over $10B 0.8% 0.6% 0.4% 0.2% 0.0% Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22
Slide 17: Responsible market expansion mitigates risk through geographic diversification
Responsible market expansion mitigates risk through geographic diversification Market Strategy 25 markets/1,700+ cities & towns nationwide • Geographical diversity • Historical transactions (quantity & composition) • Housing affordability • Housing supply and demand • Population and employment growt
Slide 18: 2023 product priorities move towards solutions for all customers
2023 product priorities moves towards providing solutions for all customers Product expansion changes the capital intensity of our model Express Direct + Matches institutional buyers with sellers – Company’s core product segment, providing customer receives the same Offerpad experience customers the
Slide 19: Numerous product innovation opportunities
Numerous product innovation opportunities Product Expansion Roadmap CURRENT PRODUCT OFFERINGS Express Cash Offer, Flex Listing Service, Mortgage, Title, Renovations, Direct +, Bundle Rewards POTENTIAL NEAR-TERM PRODUCT OFFERINGS Home Warranty, Insurance POTENTIAL LONG-TERM PRODUCT OFFERINGS Smart Ho
Slide 20: Business Model Positioned to Perform
04 BUSINESS MODEL POSITIONED TO PERFORM 20
Slide 21: Years of platform investment positions us for future growth
Years of platform investment positions us for future growth Cumulative Value of Homes Sold Since 2015 ($M) Public listing Platform buildout and Market expansion operational expertise Grew nationwide footprint, expanding into 28 markets covering 26% of national real estate transactions Present Launch
Slide 22: Model increases value creation potential
Model increases value creation potential LEVERAGING TECHNOLOGY RENOVATING TO ADD VALUE EXPEDITING TIME TO CASH* 133 32 DAYS DAYS 104 101 DAYS 95 95 DAYS DAYS DAYS 76 DAYS 2017 2018 2019 2020 2021 2022 *Time to cash measures the time from when a home is acquired to sold 22
Slide 23: KPI results show improvement after abrupt market shift in 2022
KPI results show improvement after abrupt market shift in 2022 Revenue ($M) & Homes Sold Gross Profit ($M) & Margin 3,602 $160 12. 0% $132 $93 10. 0% 2,888 8.6% $110 9.6% 8.0 % 2,280 6.0 % 1,865 $60 4.0 % 1,609 $2 $7 2.0 % $1,374 1.2% $10 0.3% 0.0 % $1,080 $822 $677 -2.0% $610 -$40 -$45 -4.0% -6.0%
Slide 24: 1Q 2023 Results
1Q 2023 Results Revenue $609.6M -10% QoQ Homes Acquired 364 -32% QoQ Q1 2023 HIGHLIGHTS • Surpassed $10 billion in Homes Sold 1,609 -14% QoQ lifetime aggregate revenue • Acquisition volume increased Net Income (loss) ($59.4M) ($121.1M) each month in 2023 Q4 2022 • Operating expenses decreased Adj. E
Slide 25: Second Quarter 2023 outlook
Second Quarter 2023 outlook HOMES SOLD 400 – 550 REVENUE $140M – $200M ADJUSTED EBITDA1 ($25)M – ($40)M 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 $2.3T. 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: The lifecycle of a home with Offerpad
The lifecycle of a home with Offerpad Disposition Acquisition Renovation On Market In Escrow 45 days 30 days Seller request received Home acquired Home listed Home sold Verifies data Offer Contract Diligence Final walk Home marketed Offerpad’s Renovation Listing & evaluates delivered signed with Hom
Slide 29: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Three Months Ended (in thousands, except percentages and homes sold, unaudited) March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 Gross (loss) profit $ 7,285 $ (44,860) $ 2,159 $ 92,981 $ 132,142 Gross margin 1.2% -6.6% 0.3% 8.6% 9.6% Homes sol
Slide 30: Non-GAAP Reconciliations Cont.
NON-GAAP RECONCILIATIONS CONT. Three Months Ended (in thousands, except percentages, unaudited) March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 Net (loss) income (GAAP) $ (59,447) $ (121,137) $ (80,022) $ 11,558 $ 40,988 Change in fair value of warrant liabilities 38
Slide 31: all
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