Opendoor’s third-quarter results reflected a period of major transition, with management citing the legacy risk-averse strategy as a key driver of lower home acquisition volumes and strained margins. CEO Kasra Nejatian described a company that had “lost faith in the power of software” and relied heavily on consultants, leading to slow operational execution. The shift back to a product-driven approach was evident as the company increased its home acquisition pace and began clearing out older inventory, though this resulted in margin pressures as legacy homes were sold. Nejatian acknowledged, “When you stop buying homes, you don’t just lose volume, you lose the ability to manage your inventory mix.”
Is now the time to buy OPEN? Find out in our full research report (it’s free for active Edge members).
Opendoor (OPEN) Q3 CY2025 Highlights:
- Revenue: $915 million vs analyst estimates of $848.7 million (33.6% year-on-year decline, 7.8% beat)
- Adjusted EPS: -$0.08 vs analyst expectations of -$0.07 (19.6% miss)
- Adjusted EBITDA: -$33 million vs analyst estimates of -$19.39 million (-3.6% margin, 70.2% miss)
- EBITDA guidance for Q4 CY2025 is $45 million at the midpoint, above analyst estimates of -$43.58 million
- Operating Margin: -7.4%, down from -4.9% in the same quarter last year
- Homes Sold: 2,568, down 1,047 year on year
- Market Capitalization: $7.24 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Opendoor’s Q3 Earnings Call
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Vladimir Tenev (Robinhood): asked about the potential for real estate tokenization and its transformative impact. CEO Kasra Nejatian said, “Asset tokenization is not a side quest for us,” but would only announce products once launched, noting active work in this area.
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Eric Jackson (Retail Investor): inquired about current headcount and plans for revenue expansion through services. Nejatian stated the workforce is about 1,100, with a focus on efficiency, and outlined ambitions to integrate mortgage, title, and insurance natively rather than as add-ons.
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Zach H (Retail Investor): pressed for timing on profitability improvements. Schwartz reaffirmed the goal of positive adjusted net income by next year, detailing a path through volume growth and cost control, while Nejatian pointed to a project-based execution approach.
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Dae Lee (JPMorgan): asked how Opendoor will leverage its identity as a software company for sustainable growth in a weak housing market. Nejatian emphasized that software and data-driven product development, not macro trends, are core to Opendoor’s strategy.
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Ryan Tomasello (KBW): questioned the emphasis on the Cash offer versus capital-light models and growth through agents. Nejatian stressed the importance of meeting customer needs across channels, highlighting the D2C model’s higher conversion and flexibility.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will focus on (1) monitoring the ramp-up in home acquisition volumes and how quickly the new D2C and AI-driven flows scale; (2) tracking sequential margin recovery as legacy inventory is replaced by higher-quality homes; and (3) assessing early revenue and customer feedback from newly launched services like mortgage, warranty, and Opendoor Checkout. Execution on cost discipline and continued product rollout will also be essential markers of progress.
Opendoor currently trades at $9.33, up from $6.55 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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