Offerpad Q3 Revenue Falls 41%, Targets Positive EBITDA Run Rate

Offerpad Solutions Inc. (Nasdaq: OPAD) reported a 41% year-over-year decline in third-quarter revenue as higher mortgage rates late in the period weighed on resale demand and home sales. However, transaction-level profitability improved, while the company said it expects to reach a positive adjusted EBITDA run rate as it exits the second quarter of 2027.

Revenue for the three months ended September 30, 2026, fell to $78.1 million from $132.7 million a year earlier. Offerpad sold 210 homes, down 43%, while total real estate transactions declined 32% to 324. The broader transaction measure includes Cash Offer home sales, Cash Offer Marketplace transactions and closings through Brokerage Services.

Despite the annual decline, total real estate transactions increased from 295 in the second quarter, marking a second consecutive quarter of sequential growth. Brokerage Services and Cash Offer Marketplace, which provide more capital-light alternatives to purchasing homes directly, accounted for approximately 35% of third-quarter closings.

Unit economics improve as overall loss remains elevated

GAAP gross profit decreased 30% to $6.5 million, but gross margin rose to 8.3% from 7.0%. Gross profit per home sold increased 22% to $30,900, while gross profit per total real estate transaction rose 2% to $20,000.

Contribution profit after interest, a non-GAAP measure that incorporates transaction-related selling, holding and financing costs, increased to $4.2 million from $3.0 million. The corresponding margin expanded to 5.3% from 2.3%. On a per-transaction basis, contribution profit after interest more than doubled to $12,900 from $6,400, while the amount per home sold rose 141% to $19,800.

Offerpad recorded a GAAP net loss of $11.5 million, compared with $11.6 million in the prior-year quarter. The adjusted EBITDA loss widened to $7.5 million from $4.6 million, with the adjusted EBITDA margin declining to negative 9.7% from negative 3.4%. Total operating expenses were $15.9 million, compared with $16.1 million a year earlier.

Acquisitions and inventory rise

Offerpad acquired 605 homes during the quarter, an increase of 198% from the prior-year period. Real estate inventory reached $231.1 million at September 30, up from $93.8 million at the end of 2025.

The larger inventory position was accompanied by increased borrowing. Secured credit facilities and other debt classified as current rose to $197.8 million from $75.5 million at December 31, 2025. Cash and cash equivalents declined to $12.1 million from $26.5 million over the same period, while stockholders’ equity fell to $28.1 million from $38.2 million.

Management said the path to profitability will depend in part on selling inventory acquired during the third quarter, making higher-return purchases and implementing phased cost savings. The company’s platform also continues to emphasize fee-based services that do not require Offerpad to deploy its own balance sheet, including Cash Offer Marketplace, Brokerage Services and renovation work for third parties.

Fourth-quarter outlook

For the fourth quarter of 2026, Offerpad expects revenue of $100 million to $120 million and 400 to 475 total real estate transactions. Management also forecasts sequential improvement in adjusted EBITDA, although the presentation did not provide a specific amount.

The company expects to reach a positive adjusted EBITDA run rate as it exits the second quarter of 2027. Offerpad said incremental volume should benefit margins because of its lower cost structure, while its longer-term expansion plan includes deeper penetration in existing markets, data-driven entry into new markets and growth in capital-light services.

Execution remains subject to housing-market and company-specific risks. Offerpad cited economic conditions, mortgage-sensitive residential demand, inventory availability, home valuation and renovation execution, technology development, third-party relationships, access to desirable inventory and its ability to achieve and sustain profitability. Its expanded inventory and associated borrowing also increase the importance of resale demand, disciplined underwriting and effective capital management.