Hey everyone, welcome to Open Door's 3Q2026 Financial Open House Earnings Livestream. I'm Michael Judd, Open Door's Head of Investor Relations. A few housekeeping items before we get started. 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 Thank you for joining us. Thank you. Hey, everyone.

I've been doing this job for just over a year, and like all anniversaries, I thought it'd be a good idea to take a second and look at what we've done in the past year. A year ago, I told you we would build a different Opendoor. Faster, stronger, fully committed to our mission of tilting the world in favour of homeowners. Let's see what's changed. Today, our market share of U.S. real estate is up more than four times. We're now over half the percent of the market. We signed over 7,000 contracts in Q3. A year ago, that was just a little over 1,500. In Q3, we shipped more than 500 new features and products across our stack. We had shipped almost nothing that was useful in the weeks before I started. This time last year, we didn't have a single mortgage license. Today, we have 25 state licenses and our mortgage orientation volume is up 5x quarter over quarter and October alone was over half of Q3. Over the last 12 months, we had over a billion, $1 billion in cash now, more later volume. This is 1 billion more than we had done in the previous 12 months. And even with the listings at unprecedented highs, we're selling homes faster than the market every single week. Look, we should talk a bit about the market because if I don't talk about the market now, every follow-up question will be about the macro. It's not going to be a shock to anyone watching this that the market has turned, right? 2025 was the worst year housing had had in a long time. And 2026 was tracking right on top of it through June. And honestly, we would have been just fine with that. But then in Q3, clears just started to collapse and it hasn't come back. In September, Pending Home Sales Index fell to the lowest level it has ever seen since we started recording it. It's lower than it was in April 2020 when going out to tour homes was basically illegal. And mortgage rates are now above 7%. That's more than a full point higher than it was a year ago. and everyone, everyone in housing got hit. Our job is to build a business that can perform better in difficult conditions and we're doing this in three important ways. First, our capital light volume, right? This past week, around half of the first offers our B2C sellers accepted were listing or cashed down more later. That lets us serve more sellers with less of our capital exposed to changes in the market. Second, velocity. The less time we own a home, the less time the market has opportunity to move against us. So we price homes to sell and focus on reducing the time between acquisition and resale. Third, mortgage. When buyers are hard to find, better financing gives them a reason to choose to work with Opendoor. That's why we launched Buy with Opendoor in beta this week. We need to grow, use less capital per transaction and sell homes faster. Those are things we can control and that's what we're focused on. What matters to us is solving the core problems of our business, and those are what we need to focus on. Look, for most of its life, Opendoor has had basically three problems, right? To grow, we had to overpay sellers for their home. To grow, we had to own more homes and take on more risk on our entire inventory. And to grow, we had to hire more and more people. That is a hard business to scale. A year ago, I said we would change this, and I gave you three objectives, right? One for each of these problems. We've made real progress on these objectives, and we're in a really good place on first and third, and we're making progress on the second. Let's go through each of these objectives. Okay, objective one was scale acquisition, right? The first problem was that for Opendoor, growth always meant paying more for homes. To understand our core business opportunity, you need first to understand two numbers. Just two simple numbers. First, in our core markets, nearly one in four Americans who go to sell their home first try to sell at the open door. That's the first number. Second, one in three Americans cry when trying to sell their home the traditional way. Our problem has never been that we don't have enough demand or that people love crying. Our problem has always been that we have not been able to serve them in a good way, right? So, have we scaled acquisitions? The answer is for sure yes, right? Now, I want to be careful because the easy and lazy story here is Opendoor took on more risks and bought more homes than the market turned. That's not what happened, right? And the evidence is obvious when you look at our true seller conversion. I want you to look at this chart. It takes homeowners who got an offer from us and within 90 days either sold to us or listed on the open market and measures how many chose Opendoor at the same period over the same spread. The blue line is this year, the gray lines are 2024 and 2025. What this shows as we're winning more of these sellers at nearly every spread level and we're literally doing three times better in some of these levels. We're winning the market without having to make riskier offers. So how are we doing this? and the answer is we've just built better products. We have built more ways to meet sellers' needs and have made it easier for them to understand their options and make the choice they want for their own lives, right? Sellers can now adjust the offer's lives and make the choice that is good for their families. Look, not that long ago, Around 80% of the assessments we did on homes required an open door employee, and this could take many, many weeks. Today, that 80% is 2%. 98% of the time, you can ask for an offer Monday morning, complete the assessment before noon, and sign a contract before breakfast Tuesday. We help sellers understand our options. We help them move fast. And sometimes we tell them, we're not the best option for you. And that builds trust. Look, these things don't mean that we price every home perfectly. But by building the product the right way, we have managed to do two things that usually don't go hand in hand. We've increased growth and lowered risk. Every other time this company has scaled, it has done by paying more for houses. This time, it didn't. We proved that we can grow without buying growth. That's the single most important thing that has happened over the last year. Our objective one is solid green. Okay, the second problem was that growth meant owning more homes and carrying all the risk, right? We're changing that with our capitalized products. But when we do own a home, we still have to renovate it, price it, and sell it, and we have to do it fast. On objective two, which was our union economics and research velocity, I think we're yellow. We have some work left to do, but things are much better than they were a year ago. Thank you for joining us. We choose to clear. We choose to clear every single time. The decline in late August and September knocked us off track on execution a little bit because we turned our attention to clearance rather than margin improvement. It costs... like something real in a quarter like this, but that's the right way to run this company for the long run. You don't focus on a quarter, you focus on the mission. The economics that come out of this are not great. They're not what we want, but they're better than they would be otherwise because we're currently scaling Opendoor. And we're learning about all the parts of the company that are not built for scale yet, right? We're fixing these things properly as we come across them rather than putting duct tape over cracks in the foundation because what we want to do is build a generational company and not one that just looks good in the short term. Let me give you a couple of examples, because these are things that if we had not changed, no one would have noticed. And the numbers may have looked better for a quarter, but would have been way worse for the long run, right? We fix things that cost us margin this quarter, but are incredibly important for the long run. Let's first talk about renovation. Every real estate company has a manual, usually a physical manual that they renovate or build homes to. Opendoor had one of these until recently as well. It was called the Universal Repair Standard. This manual and things like it are the reason why all homes basically end up looking the same, right? You look at home after you acquired it, and then you apply some universal set of rules to that home. So a home in Raleigh gets the same renovation as a home in Orlando. And this all requires lots of humans doing lots of human things. And if you don't have lots of human doing those things, like it all just breaks. This past quarter, we rebuilt this entire system at Opendoor. We built an AI system that determines a specific repair plan for every single home before we buy it. Machines then draft a renovation scope and hand it to people doing the renovation. This was a lot of work, and because models don't behave perfectly as you build them, the first few homes that hit the market under this model were not built the way we would like them, right? For the last few weeks, this system has been outperforming the old process just amazingly. Another example is resale, right? Every single real estate company ends up with humans managing resale of homes. If they're exceptional, one person can handle somewhere between 100 and 150 homes at a time. That means that as we rescaled our acquisition in Forex, we would have had to increase the number of people managing these acquisitions by Forex. We have done the exact opposite. Look, until August, our resale process was similar to literally everyone else in real estate. we thought we were better at it, but pricing every home we owned basically lived in like a glorified spreadsheets with 70 something columns, right? So every Tuesday a portfolio manager would scroll through like 3000 rows pulling information from different tools and deciding what price to drop and what price to keep and how much. And then somebody would type this into a spreadsheet and into a separate system and then it was all just very weird. But this was actually state of the art for the industry. up until August, but that doesn't scale. Scaling this means adding more people and adding more errors and then adding more people to catch those errors, right? We replaced this entire thing, this single system, where a model recommends an action right in a tool that looks at comps and offer history and then the people keep the judgment, but software does the work. This works amazingly well today. 12 weeks ago, it didn't exist. Mortgage, that's another example, right? Licensing here has taken us longer than we wanted. We can't rush governments but we're making really good progress. Today, when a buyer finances a home through Opendoor and closes it quickly, we can improve our contribution margin on that home significantly. and through buy with Opendoor, which we just launched in Bayer this week, we can earn mortgage revenue even on homes that we never own. Let's put this all together. Improving resale velocity isn't that complicated. You make the homes better, you get better pricing done, you renovate them quickly, and then you buy something people actually want. And then mortgage makes it something they can afford. Better pricing gets the right buyer to act faster. The proof will be in how fast these homes sell and what we make on them when they do so. Look, I don't think we're there yet. We're much better off than we were a year ago, but I think this objective is yellow and we have work to do. Okay, the third problem. The third problem was that growth meant hiring more people. and here like we're clearly green. We're doing exceptionally well and I think we're doing better than any public company I know of. Here's what this looks like. On a trailing 12 month basis, our operating expense per acquired home is down 36% and fixed operating expense per acquired home is down 34%. Opendoor was founded on this idea that you could take a real estate transaction apart, put it together again in a much better way, right? That thesis still holds, but AI fundamentally changes the math. I wanna talk about three things here. First, automated intelligence. Look at this chart. Over the past year, our pricing team's throughput per person is up about two and a half times. Rather than having people spending their days looking at pictures and doing mundane tasks, our people now each manage an army of agents. In July, in July, we had 5,400 homes. That's 5,400 sellers. sitting in a queue waiting for days for a human to confirm the price on their home. Two weeks ago, that queue was zero. Zero and it will remain zero. As far as I can tell, that's the first time in Opendoor's history where we can say that the queue is zero and we expect it to remain zero. Look, this is not unique to pricing. Last year, the most efficient Open Door employee could turn on a few dozen utilities in a week on homes we had bought. Last week, that number was 400. Last year, the most efficient closer to Open Door could close around 135 escrow files. Today, that number is 431. Second, I want to talk about how workflows connect to each other. Opendoor used to have all of the entire industry's fragmentation inside one company. Our title and escrow team had to open a legacy software system just to look up which Opendoor entity was buying a home. Now that entire information is in one system they already use. That's not just in title and escrow, that's across the entire stack. We're doing the same thing across the entire transaction where our people can benefit from having one tool to manage their day. The last part is our shared platform, right? In a fragmented industry, when you improve something, that makes that something better, but doesn't benefit anything else, right? So if you improve acquisition, acquisition gets better, but resale doesn't improve. At Opendoor, when we improve something, it compounds across the transaction, right? The data we use to buy a home, renovate a home, list a home, give a mortgage on a home, close a transaction, it all works together rather than hopping across multiple parts of the business. Look, there is a test being run right now for all companies. When a new model comes out, Does it make you better, or does it make you more vulnerable? For a lot of companies, the honest answer is more vulnerable, right? Because the thing they sell is a thin layer on top of someone else's model, and the next release just eats that layer away. For us, we get better. Everyone has access to the same model, but what they do not have is what we feed them. Every home we have bought, every repair we have scoped, hundreds of millions of listing photos and trillions of other photos over a decade of what our homes have actually sold for and not the misleading data that's publicly available. No one else has our data advantage. And because we're the largest buyer of homes in America, our data advantage is growing. We see inside of homes and we see foundation of homes for hundreds and hundreds and hundreds of homes. and no one else gets that data. A better model makes Opendoor's core economics better. It doesn't just increase our operational leverage, right? This week I sent a note to our entire team, basically wholesale copying Jeff Bezos. There's a famous shareholder letter that he wrote in 2000 where he referenced the Benjamin Graham line that in the short run, the market is a voting machine, but in the long run, it's a weighing machine. Bezos said that he'd rather be weighed. And I also want to put Opendoor on a scale. If there were a machine to weigh Opendoor, I think it would give you five data points about our business. One. Very few people inside or outside Opendoor believed that this would be true a year ago, right? But we've now proven that we can grow without overpaying for houses. Spreads went up this past year and conversion went up even more. We improved the product and the funnel and more sellers chose us. Two. We're generating volume that needs less of our balance sheet. Around half of what sellers are accepting through our D2C funnel right now is listing and cash down more later. We can serve these sellers while carrying much less risk and paying much less in interest. Three, we're supporting more acquisitions at a lower cost per home, down more than a third on both the measures we talked about earlier. Four, we get paid more than once per home, mortgage, tile and escrow. This is an entirely different business model, and we've added it while we're still fixing the old one, right? Now, every home we touch gives us multiple revenue opportunities. This wasn't true before. Five, every new AI model, every single new model that comes up makes us better because we are sitting on data no one else has. So put these things together. Demand that does not require us to pay higher prices, Volume that doesn't require a heavy balance sheet. Growth that does not cause our pecs to go up linearly. A new tech stack that improves itself every single week. A data advantage that is just growing. Look, we are taking market share and making a stronger company while everyone else is backing down. We have spent the past year building a machine and that machine is getting better every single day. We're not done yet. It's not perfect, but it's getting better every single day. So the question is this. Is Opendoor in a better economic condition than it was a year ago? The answer is obviously yes. We told you we would build a faster, stronger, better Opendoor. And what I just shared with you shows that we have. And with that, I will turn to Christy to tell you about the numbers.

Thank you, Kaz. Financial highlights. Third quarter revenue was over $1 billion, up 12% year over year, and in line with the revised expectations we provided in September, despite a weaker housing market. Contribution profit was $34 million, up 70%. We sold 2,728 homes in the quarter up from 2,568 a year ago and purchased 4,865 homes more than four times the 1,169 we purchased in Q3 last year. We ended the quarter with 1,780 homes under contract to purchase, compared with 526 a year ago. Contribution margin was 3.3%, down from 5.8% in Q2, but up from 2.2% a year ago, and in line with the revised expectations we provided in September. Our adjusted EBITDA loss was 31 million, an improvement from a $33 million loss a year ago, but wider than the $4 million loss in Q2, 2026. Most of the sequential decline came from the homes we bought in the spring selling into a much weaker market along with deeper price cuts as we chose to clear rather than hold. We expect margin to decline again in Q4 and will continue selling through the remaining spring acquisitions into Q1. Slower market clearance also showed up in our inventory aging. At quarter end, 18% of listed homes had been on the market for more than 120 days, up from 9% last quarter as clearance slowed, but still well below the market at 30% and the 51% we carried a year ago. We're continuing to move homes through a difficult market, releasing capital and limiting how long we remain exposed to further changes in prices. While homes we purchased before the market slowed continued to weigh on margins, the business we're building is becoming more efficient. On a trailing 12-month basis through September, operations expense per acquired home was $4,000, down 36% from $6,300 a year ago. Fixed operating expense was $37 million in Q3, slightly up from $35 million in Q2. We've also become more efficient at acquiring customers. On a trailing 12-month basis through September, marketing expense per acquired home was $2,800, down 57% from $6,500 a year ago. That efficiency together with our operational improvements gives us confidence to invest more. Earlier this year, we held marketing spend back while strengthening our products and our ability to deliver them at scale. We're now increasing Q4 marketing to around $20 million, up from $5 million in Q3 and above what we planned last quarter. We've improved seller conversion, expanded our capital light offerings, and addressed key bottlenecks using AI to scale underwriting, tailor renovations to buyer demand, and better inform resale pricing. We still need to prove those improvements show up in realized margins, but we're no longer relying on the same manual processes to support higher volume, and we're not loosening offers to buy volume. While others are retreating, we're advancing. We intend to win more sellers, take share, and build a stronger business. We won't let near-term pressure distract us from our long-term opportunity. Turning to the balance sheet, we strengthened our capital position while keeping existing shareholders at the center of those decisions. We ended the third quarter with $910 million in cash and cash equivalents. The August financing was an important part of that and I want to spend a moment on what we accomplished. In August, we raised $650 million through 0% coupon convertible notes due in 2030. After funding a concurrent share repurchase and capped calls, the transaction added approximately $440 million of capital before transaction expenses. We used $135 million to repay our expiring notes of maturity. The transaction reduced shares outstanding by approximately 5% through our first share repurchase as a public company. The capped calls were designed to limit potential future dilution. Together these actions extended our debt maturity profile, added capital to support growth and protected more of the upside for our existing shareholders. Our responsibility is to now put that capital to work productively. For example, cash now more later requires less capital upfront per acquisition, while list with Opendoor lets us serve sellers without buying their homes. As those products grow, we can serve more customers without a proportional increase in inventory. Faster resale complements that shift by releasing capital sooner and reducing the time we're exposed to changes in the market. Together, these give us more capacity to grow with the capital we have. Before turning to guidance, I want to put the opportunity ahead of us into perspective. In the third quarter, we signed more than 7,000 acquisition contracts, representing just over half a percent of home selling activity in our addressable market. That's more than four times our share a year ago, but we're still serving fewer than one in 100 sellers. Even in this slow market, we're seeing roughly 5 million annualized true sellers. Each incremental 10 basis points of market share is roughly 5,000 homes a year, or roughly 1.9 billion of annual transaction value at today's average price. We've added 40 basis points of share in the past year alone. Our own funnel shows how much room we have to serve more of those sellers. Each week, around 9,000 true sellers come to opendoor.com, and we go into contract with around 500. Most of the rest go on to list their homes. By offering more ways to sell, we can help more of the people already coming to us. List with Opendoor, which we launched two weeks ago, lifted first offer conversion by 28% in our tests. We can build a much larger business by meeting the needs of more sellers who are already coming to us. We can also earn more from each customer relationship. Historically, most of our economics have come from buying and reselling homes, complemented by title and escrow. Our emerging mortgage offering allows us to earn more from each relationship while meeting a critical customer need and making the transaction easier. Those services also open up a broader market. Our emerging buy with Opendoor offering can help buyers whether or not they are buying a home from Opendoor. And we see an opportunity to extend title and escrow to customers who aren't buying or selling through Opendoor. Similar to listings, the offerings extend our reach beyond our home acquisition business and create opportunities to earn without taking ownership of a home. addressing more of the sellers who come into our funnel, financing more buyers, and expanding title and escrow to a broader market gives us multiple ways to grow earnings and build towards profitability. That is why we're investing through this market. The opportunity ahead of us is significant, and we're building the products and capabilities to capture it. Now let me turn to the outlook. We're rebuilding Opendoor while the housing market is shifting every week, and that means our near-term results can move significantly. These guideposts reflect what we see today. We'll keep making the right decisions we believe are right for the business, even when they weigh on near-term results. Our focus remains on our long-term mission, tilting the world in favor of homeowners. With that in mind, here's what we expect. We are behind schedule on our goal of reaching positive adjusted net income by the end of 2026, measured on a 12-month go-forward basis. The same also applies to our prior expectation for adjusted EBITDA profitability on a 12-month go-forward basis. We continue to drive toward profitability and we remain focused on closing the gap. But our fourth quarter guideposts reflect the challenging market conditions we see today. On revenue, we expect growth of at least 40% year over year. You can continue to follow acquisition contracts and resale closings on accountable.opendoor.com. On contribution margin, we expect a sequential decline as we continue selling into a difficult market. Our focus remains on moving homes and managing the capital and market exposure associated with holding them. We expect an increase in adjusted operating expenses from Q3, which will be almost entirely driven by investment in growth, including the higher marketing spend I described earlier and increased holding costs as we rebuild inventory. The higher marketing spend also reflects seasonality. Marketing in the fall and winter helps us acquire homes ahead of the spring and summer selling seasons, when buyer demand is typically stronger. Thank you for watching. Together, sequentially lower contribution margin and higher adjusted operating expenses lead to an expected fourth quarter adjusted EBITDA loss of $70 million to $85 million. Comparing year over year, roughly a third of the increase in our expected loss is the additional marketing, and the remaining two thirds is primarily higher holding costs as we've been rebuilding our inventory. We have more work to do. We'll continue to report against the objectives we set and be clear about where we're delivering and where we're behind. With that, Michael, I'll turn it over to you for questions.

Thanks, Christy. Our first question comes to us from Will down in Phoenix.

Hey, Kaz, Will Bieger here. Super excited to be in the Opendoor office and installed this painting here today. Got a question for you. Thanks for answering my DM, by the way, and getting me involved. Really appreciate that. But I know you studied Opendoor a lot even before becoming the CEO. Wanted to ask the question, what's something or an opportunity that you understand now that Opendoor 2.0 is here that you didn't kind of think of before joining the company. Really appreciate you answering my question and looking forward to watching this earnings call.

Thanks, Matt. Before I answer the question, let me take a second to say this. One of the reasons I love working at Opendoor is because our shareholders believe in the company and our product. That we are on a mission together to tilt the world in favor of homeowners because we believe owning a home is like owning a share in your country. It's like owning a share in your community. And that homeownership just makes the world a better place. Okay, to answer your questions. Look, I think there are lots of ways to answer this, but the one that has honestly surprised me the most is title and escrow. Title and escrow is like the infrastructure that lets a real estate transaction happen, right? It's a lot like payments in e-commerce. I've spent basically my entire life being a payments nerd. I took apart my first credit card terminal when I was a teenager. And when I joined, I thought most of my payment experience would go to building a mortgage product. And to be clear, I'm really bullish on our mortgage product, and I'm much more bullish on it today than when I was joined. Talon Escrow feels like such an amazing opportunity because with mortgage what we're doing is we're pulling a system that was built in the 2000s into 2026. With Talon Escrow, we're building a system that operates not pre-internet but pre-computers. into the modern AI world. And we're doing two things. First, we're making our talent escrow operators just way more effective, right? In some cases they're handling three times more volume than they were a year ago, right? And this is in a business where the biggest cost is people's times, right? and that goes straight to the cost of the transaction, right? So every operator that can handle more transactions gives us capacity to grow. And I'm really excited about this because when we have this capacity, we can build products that we cannot build today and no one can build today. and this is why we're doing the second thing. We're connecting the workflows in talent escrow and mortgage to the actual buying and selling activities. When these systems work together, there's a lot less chasing of information around. It's almost like you're going from Faxing your order with a credit card number into it, into like Sears with a catalog, you're going from that to shop pay today, right?

This is what the big jump will be.

And I generally underestimated how big a business title and escrow could become just in its own right. So the capabilities we're building for open door transactions today are going to be used for non-open door transactions and they can help us deliver title and closing services to people who never buy a home from us or sell a home to us. And that's why I'm just so excited about this because it's making the core business better, but it also allows us to extend the reach of the software we have built outside Opendoor. So we don't have to buy your home to make home ownership better for everyone.

Our next question comes to us from Nia N who asks, when is Opendoor going to be profitable?

Yeah, this is simple. Our goal is to be A&I positive on a 12-month go-forward basis at the end of this year, right? We're a bit behind on this today, but we're going to go through some walls and catch up. Like, this isn't going to be easy. Nothing is for certain, but that's what we're going to do.

Our next question comes to us. Angelo E. asks, you said we don't need rates to fall. If Dalio is right that the bond bear market has a long way to go and mortgages hit 8% through 2027, do we stay solvent without raising money? And how are we hedging our inventory risk so open is a bet on our technology, not home prices?

Yeah. Hey, thanks, Angelo, for the question. Let me start with the easy answer, which is we ended the third quarter with over $900 million in cash. Very happy about our balance sheet position. So, you know, we have all the money we need to deliver on the mission. But the bigger question is how we're changing this business, right? Our job is to provide the right solution for the user who comes to us, right? And different customers want different things. They want different amounts of certainty. They want to take different amounts of risk. And basically all of our products are going to end up being the same underlying infrastructure and models that we have built basically from scratch for cash now more later, but used with differing risk levels, right? So we are rebasing the entire company back on top of cash now more later with basically kind of like a risk toggle. Let's just think about the products for a second. So with cash, you get this maximum certainty, right? We take on the resale risk, and like economically, that is a lot like insurance, right? It has value, it has a cost, and some people want insurance in some things, and some people don't, but this is becoming a smaller and smaller part of our portfolio. Look, I think cash is gonna be a massive business for us, but it'll be a smaller and smaller part of our portfolio overall. Cash down more later is where you receive the cash you need upfront to do the thing you need to do, but then you participate in the outcome of the home in itself, right? That changes how risk is shared. And listing is, we're early here, but listing is basically cash down more later, except with zero risk upfront, right? We use exactly the same tools we use for cash now or later, and we help you sell your home without having to buy it from you, right? The seller will... retain the risk and exposure to the eventual sale price, but they will use all of our tools, workflows, title and escrow technology, and mortgage technology to make the transaction work, right? We don't need to buy every home to help every customer. To be clear, even today, when we're super early on this, there are folks who don't buy or sell a home to Opendoor who use our mortgage product, who use our talent escrow products. This gives us more flexibility as the market changes, and it gives us more ways to grow without taking risk. And for homes that we do own, Underwriting and selling efficiently still matter like a lot, right? But our direction is very clear. Serve more customers, build one infra and one set of models and use it for everything and be very deliberate about the risk we take and how we price it.

Our next question comes to us from Calvin R., who asks, as a long-term shareholder, I've watched age inventory drop from 36% to 9%, and home owns and open or own go live. What's the one metric you want shareholders like me to judge you on over the next 12 months, and what's the target?

Yeah, thanks, Kevlin. We don't really have just one hero metric, and that's very deliberate because Goodhart's Law is real, right? When a measure becomes a target, people start optimizing for the measure rather than the outcome it is designed to produce. This is why lots of tech companies just go right over their skis while improving their KPIs. And that's why we talk about the three... like objectives because they're kind of like three legs of the stool and they all work together, right? Scale acquisitions, improve unit economics and resale velocity and build operating leverage. I'm not gonna repeat everything we said on the call but I think we're very green on one and three. And for two, what you're seeing is that we're scaling our asset by products, we're growing our mortgage product and we're improving The core pricing and home management systems. We have work to do, but we're making great progress here. And that's kind of the beauty of these three objectives. They kind of keep each other honest. You can't take an easy shortcut. We have to do the hard work required to make all of them green.

Great. David C. asks, what milestones would tell investors that Opendoor is successfully shifting from a capital-heavy 1P model toward a more capital-light 2P or 3B structure?

That's a good question. Thanks, David. I think it's kind of useful. Let me just tell you how I think you should think about it, right? So Christie said we see around 9,000 true sellers every week. And to be clear, this is not like all the sellers we see. a lot more, but these are 9,000 people that we know are going to sell or list our home, right? We can't serve all of them if the only product we offer requires to buy every home in America, right? We just can't do that, right? And when we were like a single product company, we were effectively saying to every customer, take this certainty at this price and take it or leave it, right? And for some customers, that was exactly what they wanted. But for others, we were solving a problem they did not have. They did not want to pay us to take a risk. They didn't want to give away, right? That's why we're building Listing and Cash Now, Cash Now more later, alongside Cash. So if you want certainty at an agreed price and you want to be done with the sale, we have cash. If you want something now to move, to put a down payment in your next place, but want to participate with us in the upside, we have cash down more later. And if you just want to use all the tools we have built, to get great listing product, we have lists with Opendoor, right? Like you shouldn't have to pay us to take a risk that you're comfortable keeping. And we shouldn't have to use our balance sheet to provide you certainty that you don't want. That's better for customer and it's more efficient for Opendoor. And I think it's like relatively well understood. that Opendoor's capital costs are not linear, right? The first 80% of the home that we financed cost a lot less in interest than the last 20%, right? So when a product requires us to take less risk, over time our cost of capital should reflect that. So I think if I were outside the company, the best way I would track this is how much interest is open door paying as a percentage of our volume. And if we're successful in this shift from 3p to 2p to 1p, that number should go down over time. I think that's a lot.

Our next question comes to us from Elmir C., who's curious, with a little over a million homes listed on Zillow and Redfin, can Open Door realistically capture 10% of that market within the next five years? What would it take to achieve this scale, and is its current business model capable of supporting it?

Thanks, man. This is a hard question for me to answer, because I mostly think about the customer who's in front of us right now, rather than like, metrics many years out, but let me just answer it. Look, we grew our market share forex over the past year to about half a percent of the US real estate market. Another forex gets us to 2%, and then another forex gets us to 8%. That's the math. and today like one in four people in our core markets who go on to list their home already come to opendoor.com. That isn't a forecast, but I don't think anyone should tell us job well done if we end up being 10% on market in five years, right? Because we have lots of room to grow. The question is, How do we build a business that can support that scale? First of all, you clearly can't do it all with cash alone. We've already talked about this, how listing and cashing out more later help us serve more customers. But the second thing that's important is that you cannot do it if you're a traditional real estate company. It's not possible. Real estate companies have had this bad habit. When the market gets hot and revenue grows, these companies hire a crap ton of people to keep up with this, right? All the money that they thought they were gonna get when volume comes gets lost either because of bad operations or expensive operations, right? and then when the market slows down, these companies are left with a cost structure and a system built for different business, right? That's the disease that Opendoor 2.0 is designed to cure, right? That's why I spend so much of my time on these calls talking about operator efficiency, right? When we say we're investing in growth a lot, what I mean is we are building the capacity to handle the growth that will arrive. We could have postponed building these systems. We could have kept the old processes, put duct tape over everything, and hired more people as volume grew. But that would have meant that we would have carried a broken open door into growth when growth arrives. So instead what we're doing is we're changing the work. Software moves information between systems and AI does the risk scoring and handling the straightforward cases, right? And people focus only on decisions that require human judgment. You can see that in our progress. In Q3, we purchased more than four times as many homes as a year ago, right? And our operation expense was basically the same. The point of investing now is to make the next stage of growth profitable. Every time we grow fourfold, we are not going to increase the size of our OPEX. We are going to put that volume through a better system. and we're going to be able to do the thing real estate companies have not traditionally been able to do in good times. Look, I'm not setting a five-year market share target today, but I genuinely think that if we end up having 10% of the market five years from now, we should all be kind of disappointed, right? The products we have built give customers a reason to choose us and the software and the AI that we are building allows us to serve them and serve them really well.

Moving over, our next question comes to us from Day Lee from JP Morgan. He's curious, Kaz, with the macro shifting against Opendoor, has that reinforced your approach of underwriting new homes for clearing speed? Does anything need to change or are you more confident?

Thanks, Dave. I think you asked one question, but let me answer two things. Let me talk about dispersion and underwriting. First, dispersion. I basically went around for my first three weeks at Opendoor and said dispersion, dispersion, dispersion, because we are focused on diversifying the homes we are buying across multiple different vectors. Geography, home type, price point, dip, There's a reason why people call diversification the only free lunch in finance. But to diversify well, you have to understand how the assets are actually different. And those differences go much deeper than geography or price. People talk about the housing market as though every home is going through the same thing. But it's not true. It's not even true in the same neighborhood. Two homes can look identical on an MLS, but be very different properties and have very different margin profiles. The condition of the home relative to what the buyer expects, the slope of the driveway, the noise from the train, and the feedback of the people who are actually touring the home Those tell very different stories, right? In a market like this, those differences matter like a lot and averages can hide exactly the things that will make you money, right? That's also an advantage that we have with scale. The more homes we work on, the more homes we see, the more we learn and we see what attracts buyers. and what objections come up and how we can prepare the homes in order to get an offer, right? That was actually one of the bad things about Opendoor shrinking is that our data set shrank when we stopped buying homes, right? And that's just a thing you don't wanna do. You don't want to lose volume because it costs you your data advantage that makes everything else else better. Okay, so that was on dispersion. I also wanna talk about, are underwriting, right? That's an incredibly important thing. So for every home that you underwrite, you need to answer three questions, right? How much will the home sell for? How long will it take to sell? And three, and most importantly, what are the odds that you're wrong about either of these two things, right? Opendoor's old valuation model was built in the pre-AI era, right? It was incredibly compute constrained. We also had like just genuinely under invested in it, especially when it came to predicting days in possession. So we've invested a lot here. And these models are genuinely very good now. And now we're investing even more in the third question. How wrong could we be? The confidence around the estimate matters just as much as the estimate itself. Two homes can have the same expected sale price or holding period. but have very different uncertainty bands around them and obviously we shouldn't underwrite those things the same way.

Okay, that was a lot, sorry. Our next question comes to us from Andrew from Citizens. I think this might be a better one for Christie. Explain to us the cadence of repricing homes in the quarter. Has this now been fully recognized or should we expect this to flow through contribution margins over the next one to two quarters as inventory is sold?

Thank you for the question, Andrew. And I'm going to take it in two parts. One, how we're driving demand for our homes, including pricing. And two, how the current inventory will flow through to contribution margin or how we expect it to do so. On demand, we're improving both price and product. So historically, our primary lever was reducing price. We've become more sophisticated about how we do that, moving from largely linear reductions to models that leverage multiple data points such as buyer activity, agent feedback, and comparable homes to inform the timing and size of adjustments for each home. That means better initial listing strategies, learning from buyer and agent response, and adjusting faster as conditions change. But lowering the price is only one way to attract a buyer. We're focused on making our homes easier to shop, Thank you so much for joining us. On contribution margin, the impact of the current inventory is flowing through. Most of the sequential decline came from homes we bought in the spring selling into a weaker market, along with deeper price cuts as we chose to clear rather than hold. We expect margin decline again in Q4 and will continue selling through the remaining spring acquisitions into Q1.

Great. I think we have time for one more. This one's also from Andrew from Citizens. This will be for you, Kaz. With mortgage out of beta, what are the keys looking ahead to driving better attach? What is the opportunity for driving demand for mortgage with non-open door home buyers?

Thanks, Andrew. I want you to know that I noticed that you hacked our system and got two questions in. But let me answer it. So I think it helps to start with who the customer is. Like most people who ask us about our mortgage attach rate underestimate what we're building, right? Look, we expect to finance plenty of buyers who buy open door homes. but we also have sellers who don't sell to us and buyers who don't buy one of our homes, right? Those people can still take a mortgage from us because they have a transaction to complete, right? So we have like around 9,000 true sellers come to us every week and thousands of buyers, right? Someone might decide to list their home instead of taking cash offers, but like that doesn't mean They don't need a mortgage, right? So if your denominator is just the homes that Opendoor sells, you're just underestimating the product. I think we can generate way more mortgages than homes we sell. We will be over 100% on that metric, right? That's why listing and buy with Opendoor matter. The customer relationship does not end because we didn't buy their home. Look, I think... I'll end this section by borrowing from Keith, who's the chair of our board. I think this is actually literally his pinned tweet. There's like a secret startup success formula, like find a large, highly fragmented industry with low NPS, vertically integrate it, build a solution that adds value by building a great product, right? and then you end up having a very large business and buying a home fits that description perfectly. Look, we can connect brokerage and title and escrow and mortgage and buying and selling and simplify the entire process and use the combined economics to not just give the customer a better deal, but a better product. When it comes to mortgage, I think we basically have just two jobs. One is discovery, make sure folks know that Opendoor does mortgages. And the second is make the value obvious, right? The mortgage industry has spent a lot of time making the cost of mortgage very confusing. So our job is to simplify a way The BS that harms customers. And I think we are going to do a really good job here. I think what's going to happen in a little while is that the number of mortgages we issue will be higher than the number of homes that we sell. Okay, I think we have run out of time. With that, let me say thank you. Thank you for joining us. And as always, we'll continue to update you on accountable.opendoor.com because we want to be held accountable as we build this company to tilt the world in favor of homeowners. Thanks, folks.