Transcript: Opendoor Technologies Q2 2026 Earnings Conference Call

Opendoor Technologies (NASDAQ: OPEN ) held its second-quarter earnings conference call on Tuesday. Below is the complete transcript from the call. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

The full earnings call is available at Summary Opendoor Technologies reported strong performance in Q2 2026, achieving its highest contract volume in years with over 700 contracts in a week, despite a challenging housing market. The company is on track to exceed $9 billion in revenue, driven by improved seller conversions at stable spread levels and effective cost management in marketing and operations. Opendoor's contribution margins improved, reaching target levels, although Q3 margins are expected to decline seasonally; however, Q4 is projected to perform better than Q3. 6%, and AI-driven improvements in underwriting and operations productivity.

Management expressed confidence in achieving adjusted net income profitability by the end of 2026, citing steady progress and strategic initiatives, including the integration of mortgage services to reduce transaction friction. Full Transcript Michael Judd, Senior Director - Capital Markets & Head of Investor Relations Hey everyone. Welcome to Opendoor's second quarter 2026 financial open house earnings livestream. I'm Michael Judd, Opendoor's head of Investor Relations.

Now, a few housekeeping items before we get started. Like all things Opendoor, we're gonna do this faster. com. The following discussion contains forward-looking statements within the meaning of the federal securities laws.

All statements other than statements of historical fact are statements that could be deemed forward-looking, including but not limited to statements regarding Opendoor's financial condition, anticipated financial performance, business strategy and plans, market opportunity and expansion, and management objectives for future operations. These statements are neither promises nor guarantees, and undue reliance should not be placed on them. Such forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those discussed here.

Additional information that could cause actual results to differ from forward-looking statements can be found in the Risk Factors section of Opendoor Technologies' most recent Annual Report on Form 10-K for the year ended December 31, 2025, as updated by our periodic reports and other filings with the SEC. Any forward-looking statements made on this webcast, including responses to your questions, are based on management's reasonable current expectations and assumptions as of today, and Opendoor Technologies assumes no obligation to update or revise them, whether as a result of new information, future events, or otherwise, except as required by law.

The following discussion contains references to certain non-GAAP financial measures that the company believes are useful to investors as supplemental operational measurements to evaluate the company's financial performance. com. And with that, let's get into the open house with Kaz and Kristi. Kaz Nejatian, Chief Executive Officer Good afternoon everyone.

I usually start these calls by showing you a clip of what I told you during the last call. But this time I'm going to tell you a story about what my wife told me. And I don't have a video clip because it'd be weird if my wife and I just record each other all the time, so you're just going to have to use your imagination. When I was leaving home to fly to San Francisco before my first day at Opendoor, I told my wife that I'd be back home the following Wednesday, maybe Thursday.

And she didn't miss a beat. She said, don't come back until there's a plan to break even. Look, there's a lot of ways people describe the thing I'm about to tell you. It just depends on which tribe they're a part of, right?

Paul Graham has a famous essay about it. Finance people call it a glide path to profitability, mostly because I think finance people are legally required to say things like glide path. But basically, the question is this: If nothing changes and you keep doing what you're doing, what happens? There's no magic here.

It's just math. This next section, it's going to take me a few minutes, but it's incredibly important. I want to give you all the same framework we use internally so you can see things the way we're seeing them right now. Opendoor's core business math is simple.

It's how many homes we transact on times our contribution margin, minus our OPEX and our financing costs. So let's go through each of these four numbers. First, volume. Right now, we're signing more than 500 contracts every single week.

Last week we signed around 700. That's our highest contract week in years. That's over 5x higher year over year and 5x higher since I joined the company. And just think about when we're doing this.

We're doing this in the weakest housing market in a generation and in the worst season of year for us. The spring and summer seasons are basically the only times of the year where the traditional real estate system still kind of actually works. But over 500 sellers are still saying yes to Opendoor every single week. com, you've seen this.

When we put up our ranges last quarter, those numbers weren't sandbags. Those were numbers we thought we'd see to put us on the path we need to be at the end of this year. The fact that we have been above the high end of the projections every single week for the last quarter is the reason that I'm so confident about what I'm about to say. Look, our ANI breakeven framework assumes 6,000 quarterly transactions at $375,000 each for around $9 billion in revenue.

We're pacing well above that on a contract basis in Q2. And look, some of these won't close. That's normal. That hasn't changed.

That isn't the point. The point is we've achieved this in a market and at the time of the year that is the worst for us. I think it's super reasonable to expect that we're going to end up north of the $9 billion mark in revenue. Now, it's important to take a second and describe a pattern that we're seeing as we ramp up for this revenue.

Look, companies have kind of two ways to artificially increase growth in absence of actual improvement in the company. Those two levers are marketing and pricing. I'm going to get to marketing in a second, but I want to start by talking about pricing. If you've followed Opendoor for a while, when you see high acquisition volumes, you should be skeptical.

You should be asking, are we buying growth through more risk and lower spreads? Or using regular language everyday people use, are we paying more than fair prices for homes? Opendoor did this during the COVID era to get volume. It took lots of risks because it believed that price was the only lever it had at its discretion to increase conversion.

And if it couldn't reduce its overall cost structure, it would lose money. What I'm about to show you is probably the slide that has made me most excited about what we've gotten done so far this year. This shows our true seller conversion at different spread levels. So true sellers are the people who request an offer from Opendoor and then either sell to Opendoor or list on the open market.

So it's a conversion on people who actually want to sell their home. What this chart shows is that we are converting dramatically more sellers at the same spread levels than we've had in the past. We're on track to hit more than the volume we need, and we're not doing it by paying above fair prices for homes. That should mean something for our contribution margin.

So let's talk about that. Our contribution margins have been improving every single quarter this year and are now in the target range that we told you we would be in. 0 era that are going to be a drag on our contribution margin. But they're going to be sold mostly this quarter and we're going to be done with them.

And I'm never going to talk about them again. But on new cohorts, our margin is performing and cohort curves are doing what we want them to do. Now look, it's for sure true that Q3 is a seasonally worse contribution margin quarter for us than Q2. So you should expect quarter-over-quarter contribution margin to go down from Q2 to Q3 this year.

We also have the impact of the Doma acquisition, which is a temporary drag on contribution margin while we integrate Doma into Opendoor. But we expect to break with Opendoor's historical trend and have a Q4 that is higher in contribution margin than Q3 every year. In Opendoor's public company history, Q4 has had a worse margin than Q3, and we're about to reverse that trend. But going back to the main point, in Q2, we got to the contribution margin zone we told you we'd aim for.

And we have proven that we can run the company here. Okay, so acquisition volume is tracking to where we want it to be and margin is within the range we told you it would have to be in. That leaves OPEX and financing. Let's talk about OPEX.

Opendoor's OPEX includes marketing, variable operations, which we call just operations in our financials, and fixed operations. Most of our costs happen when we buy and renovate homes. So it's useful to look at these costs in relation to our acquisition numbers, since that is the variable that scales them. We have this idea called acquisition GMV, which is roughly the revenue we expect to get from homes we've closed on.

Our homes have been selling right around the $375,000 mark. So let's use that assumption so I don't have to leak our internal model to the world. It'll also make the math easier. So acquisition GMV is acquisitions times $375,000.

With that in mind, let's talk about the three parts of our OPEX. First, marketing. Marketing is our cost of customer acquisition per home we buy. We do basically no marketing when we sell homes.

And the last time we signed more than 6,000 contracts in a quarter, our marketing spend was over $80 million. This quarter it was 5. Not 5-0, just 5. I know that sounds crazy, but yes, Morgan actually wrote the book on this.

And yes, this is one part of Opendoor where I think we're executing 10 out of 10. It took us a minute, but we have found our groove. 3%. Let's say it will not be that good forever.

Let's assume we'll get a little worse. 5% of acquisition GMV on marketing. Just remember that. Okay, next, let's talk about variable operations.

Variable operations are mostly the costs we incur when we're buying and renovating our houses. This is the human and system cost of underwriting, buying, and renovating a home. 9% of acquisition GMV. If you look at acquisition contract GMV, this number is already at 50 basis points.

But don't give us the benefit of this doubt. There will be some contracts that will fall through. So let's mark this up. Let's say it'll be 70 basis points on acquisition GMV.

Why has this number gone down so much? The answer is simple, and Rube would tell you we are among the best users of AI in tech. We have fundamentally re-engineered our business around AI automation across underwriting and operations. In Q3 last year, the people who managed our renovations of our homes, our HPMs, carried three renovations per person per month.

Right now they're carrying around 10. By the end of this year, they will carry around 20. In Q3 last year, our pricing underwriting team could handle around 20 underwrites per person per day. They can now do over 50.

They'll be able to handle around 100 by the end of the year. A couple of years ago, more than 80% of homes that we bought required an Opendoor employee to visit them before we even made an offer. Today that percentage is below 20% and it'll go down to below 10% by the end of this year. So 70 basis points.

Just remember that. The last component is our fixed operations. These are the people that build the machine that runs Opendoor. Last year there were a lot of consultants at G&A.

Now it's a lot of engineers and data scientists writing code. One of the beautiful things about code is that it scales really well. Spinning up a server is easier than hiring a new consulting firm. And you can see this in our numbers.

In Q3 last year this number was over 8% of our acquisition GMV and over 6% of our acquisition contract GMV. 4% of acquisition contract GMV. Let's say it'll be somewhere between those two numbers. 7%.

7% on fixed OPEX. 9% on our acquisition GMV, which doesn't give us the benefit of our increased acquisitions that we're making right now. 4%. That's less than the low end of the 3% to 4% range I told you we would need to get to to become ANI profitable.

Okay, the last component here is interest. We finance the homes we buy. So this scales with how many homes we buy and how long we own them. At the speed that we turn inventory right now, that's about three times a year.

So net interest runs a little above 2% on our revenue. We're working on lots of things that will lower this, and I think there's a lot of upside here. But don't give us the benefit of doubt. Let's assume they just stay where they are.

So what would happen if we just froze the company? Like if we pretend that we don't improve anything. No new products, no funnel improvements, no pricing model updates, no rate cuts, no macro rescue. No one has to be a hero.

We just keep doing exactly what we did last week. In fact, the math I just showed you assumes that we would get worse at marketing and operations, which we for sure won't. But what happens if that happens? Current volumes, current margins, worst cost structures, current financing costs.

Run those numbers forward. And this is the back-of-napkin math. At roughly 6,000 transactions per quarter, Opendoor reaches adjusted net income profitability on a run-rate basis heading into next year. No new assumptions, just today's company carried forward.

Look, I told you this on our very first call. I've said it on every call since then: adjusted net income breakeven on a 12-month go-forward basis by the end of 2026. When I said this, there were more than a few things that needed to go right. But we moved fast.

We shipped. We took charge of our own company every single week. And every quarter, the math became more and more obvious. Yang, our chief investment officer, runs our pricing and meme teams at Opendoor.

He has a simple way of putting these things. He likes it so much that he actually bought a T-shirt at a nerd convention and wears it to the office. The T-shirt says: it's just math. For years, one question has followed this company everywhere it went.

Will Opendoor become profitable? As of today, that question is boring. As things stand right now, Opendoor will become ANI profitable. It's just math.

Sweetheart, after this call, I am coming home. So the last few minutes have sounded like a confident CEO 10 months into a turnaround, holding a napkin that says everything is working. But let me tell you what's not on the napkin. Here's the uncomfortable truth.

Nothing about this has been easy. Turnarounds are really, really hard. And there's obviously a bit of a survivor bias here. Everyone knows about the ones that worked in retrospect.

But why will this one work? We're 10 months now into this process, and I'm really proud of what we've done. If we freeze the company I just told you, we would become ANI profitable even if the macro keeps punching us in the face. Look, we're going to become ANI profitable on the path to fulfilling our mission and becoming a meaningful company for this country.

But there's something else that I need to tell you. The math works, and we're going to become ANI profitable. We can very clearly see that right now. But that does not mean that everything between here and there will be just perfectly smooth.

Turnarounds are hard and they surprise you sometimes. Sometimes these surprises are good. And I want to talk about two of them. First is seasonality.

Opendoor's business has had a real seasonality to it. We've traditionally been a company that's had feast in Q2 and famine the rest of the year. In fact, every year since we've been public, other than 2023, our margin degradation between Q2 and Q3 has averaged almost 500 basis points. This year we haven't killed off seasonality entirely.

So it won't be zero, but it'll be way, way, way less. Folks won't appreciate why this is a big deal and they won't appreciate it for a while. But I think of everything we have done this quarter, this compression may be the most important thing for the long-term health of the company. That's the first thing.

The second one is the embedded impact of things that have already happened but don't look like they have. When a seller signs a contract with us, that home becomes revenue a few months later. We buy, we fix, we renovate, we list, we sell. And we can't really skip a step in between; it just takes time.

This means I always live a few months in the future.