Company posts profitable Q2; grows
acquisitions 340% in tight real estate market
Second Quarter 2021 Highlights – compared with the prior-year
second quarter:
- Revenue increased 32% to $378.6 million
- Fully diluted earnings per share were $0.31, marking the first
profitable quarter in company history
- Net income improved to $9.2 million, an increase of $16.6
million
- Adjusted EBITDA increased $16.8 million to a record $13.1
million
- Gross profit increased $33.0 million to $50.9 million, or 13.4%
of revenue
- Contribution profit after interest per home sold increased to
$31,500 from $1,400
- Acquired a record 2,025 homes, up from 460
- Business combination with Supernova Partners Acquisition
Company (NYSE: SPNV) expected to close in the third quarter of
2021
Offerpad, Inc. (“Offerpad”), a leading tech-enabled platform for
buying and selling residential real estate, today reported
financial results for its second quarter ended June 30, 2021.
“Offerpad performed exceptionally well this quarter and posted
our first quarterly profit,” said Brian Bair, CEO and founder of
Offerpad. “For consumers, the nearly $2 trillion U.S. residential
real estate market remains fractured, time consuming, stressful and
expensive. Consumers want and expect a fast, easy, and seamless
online experience when buying and selling a home. At Offerpad, we
distinguish ourselves as an incredibly adaptable, customer-centric
company that has proven our ability to grow and excel in all types
of market conditions. To succeed in this industry, you need a
combination of proprietary technology, home underwriting accuracy,
and renovation excellence. Our unique expertise combining
technology development and real estate transaction experience
allows us to operate at the most efficient level in the market.
“We’re thrilled with the record number of acquisitions and the
extraordinary contribution margin we achieved in the second
quarter. At Offerpad, we celebrate the wins, such as our
performance this quarter, while also staying focused on keeping our
business model adaptable. For the balance of the year, we expect
continued growth and high customer satisfaction levels as we
further our mission to provide the best way to buy and sell a
home.”
Q2 Financial Highlights
Q2 2021
Q2 2020
Percentage Change
Revenue
$378.6 million
$287.0 million
31.9%
Homes sold
1,259
1,166
8.0%
Homes acquired
2,025
460
340.2%
Gross profit
$50.9 million
$17.9 million
184.8%
Net income (loss)
$9.2 million
($7.4) million
N. A.
Adjusted EBITDA
$13.1 million
($3.7) million
N. A.
Contribution profit after interest per
home sold
$31,500
$1,400
2,093.3%
“Our results this quarter were driven by our continued focus on
operational excellence, our ability to match the right services
with the right consumers, as well as favorable market conditions,”
said Mike Burnett CFO of Offerpad. “Our operational performance was
particularly strong, with a total contribution profit after
interest of $39.7 million, bringing the year-to-date total for the
first two quarters of 2021 to $63.2 million, surpassing our
internal projections for full year 2021. We continued to prove our
scalability and adaptability, acquiring a record 2,025 homes in the
second quarter and completing our first 24-hour close on a home.
Our second quarter results demonstrated Offerpad’s significant
business momentum as we executed well on both our market
penetration and expansion strategy, setting ourselves up for a
strong second half of the year,” continued Burnett. “We expect to
continue to drive expansion into additional new markets for the
balance of the year, having recently announced that we will be
entering Columbia, South Carolina, Columbus, Ohio, St. Louis and
Kansas City.”
Third Quarter and Full Year 2021 Outlook
Based on the favorable results in the first half of the year,
Offerpad is providing its full year outlook for 2021 as
follows:
2021 Outlook
2020
Percentage Change
Homes Sold
5,612-6,000
4,281
31% - 40%
Revenue
$1.7 billion - $1.85 billion
$1.1 billion
60% - 74%
Gross Profit
$170 million - $180 million
$88 million
94% - 105%
Adjusted EBITDA
($15) million – ($6) million
($8.2) million
N.A.
Additionally, for the third quarter of 2021, revenue is expected
to be between $460 million and $520 million, which represents a
sequential growth rate of 29% over the second quarter of 2021 at
the midpoint of the range, and adjusted EBITDA is expected to be
between ($15) million and ($8.5) million.
Conference Call and Webcast Details
Offerpad founder and CEO Brian Bair and CFO Mike Burnett will
host a live conference call and accompanying webcast on August 16,
2021, at 2 p.m. PDT / 5 p.m. EDT. Registration for the conference
call can be completed here, and participants will receive a
personalized dial in and PIN to access the call. The webcast is
available to the public and can be accessed on Offerpad’s Investor
Relations website at
https://investor.offerpad.com/events-and-presentations. All
participants are encouraged to register for the event, or access
the website 10 minutes before the start of the live event. Access
to a replay of the webcast will be available from the same website
address after the live webcast concludes.
About Offerpad
Offerpad’s mission is to provide the best way to buy and sell a
home. Period. We use technology-enabled solutions to remake the
home selling and buying experience by offering customers the
convenience, control and certainty to solve their housing needs. We
combine our fundamental real estate expertise with our data-driven
digital “Solutions Center” platform to give users a holistic,
customer-centric experience, enabling them to efficiently sell and
buy their homes online with streamlined access to other services
including mortgage, listing, and buyer representation services.
Forward-Looking Statements
Certain statements in this press release may be considered
forward-looking statements. Forward-looking statements generally
relate to future events or Offerpad’s future financial or operating
performance. For example, statements regarding Offerpad’s outlook
for the third quarter and full year 2021, anticipated growth in the
industry in which Offerpad operates, and the anticipated timing of
the proposed business combination, are forward-looking statements.
In some cases, you can identify forward-looking statements by
terminology such as “pro forma,” “may,” “should,” “could,” “might,”
“plan,” “possible,” “project,” “strive,” “budget,” “forecast,”
“expect,” “intend,” “will,” “estimate, ””anticipate,” “believe,”
“predict,” “potential” or “continue,” or the negatives of these
terms or variations of them or similar terminology. Such
forward-looking statements are subject to risks, uncertainties, and
other factors which could cause actual results to differ materially
from those expressed or implied by such forward-looking statements.
These forward-looking statements are based upon estimates and
assumptions that, while considered reasonable by Offerpad and its
management, are inherently uncertain. Factors that may cause actual
results to differ materially from current expectations include, but
are not limited to: the outcome of any legal proceedings that may
be instituted against Supernova, Offerpad, the combined company or
others following the announcement of the business combination and
any definitive agreements with respect thereto; the inability to
complete the business combination due to the failure to obtain
approval of the stockholders of Supernova or to satisfy other
conditions to closing; changes to the proposed structure of the
business combination that may be required or appropriate as a
result of applicable laws or regulations or as a condition to
obtaining regulatory approval of the business combination; the
ability to meet stock exchange listing standards following the
consummation of the business combination; the risk that the
business combination disrupts current plans and operations of
Offerpad as a result of the announcement and consummation of the
business combination; the ability to recognize the anticipated
benefits of the business combination, which may be affected by,
among other things, competition, the ability of the combined
company to grow and manage growth profitably, maintain
relationships with customers and suppliers and retain its
management and key employees; costs related to the business
combination; changes in applicable laws or regulations; the ability
to respond to general economic conditions; the health of the U.S.
residential real estate industry; the ability to grow market share
in existing markets or any new markets; the impact of the COVID-19
pandemic; the ability to manage growth effectively; the ability to
accurately value and manage inventory, and to maintain an adequate
and desirable supply of inventory; the ability to successfully
launch new product and service offerings, and to manage, develop
and refine the technology platform; and other risks and
uncertainties set forth in the sections entitled “Risk Factors” and
“Cautionary Note Regarding Forward-Looking Statements” in the
registration statement on Form S-4 and proxy statement/prospectus
discussed below and other documents filed by Supernova from time to
time with the Securities and Exchange Commission (the “SEC”).
Nothing in this press release should be regarded as a
representation by any person that the forward-looking statements
set forth herein will be achieved or that any of the contemplated
results of such forward-looking statements will be achieved. You
should not place undue reliance on forward-looking statements,
which speak only as of the date they are made. Offerpad does not
undertake any duty to update these forward-looking statements.
Additional Information and Where to Find It
Supernova has filed a registration statement on Form S-4 with
the SEC, which includes a proxy statement/prospectus, that is both
the proxy statement that was distributed to holders of Supernova’s
common stock in connection with its solicitation of proxies for the
vote by Supernova’s stockholders with respect to the proposed
business combination and other matters as described in the
registration statement, as well as the prospectus relating to the
offer and sale of the securities to be issued in the business
combination. Supernova has mailed the definitive proxy
statement/prospectus and other relevant documents to its
stockholders. This press release does not contain all the
information that should be considered concerning the proposed
business combination and is not intended to form the basis of any
investment decision or any other decision in respect of the
business combination. Supernova’s stockholders and other interested
persons are advised to read the preliminary proxy
statement/prospectus included in the registration statement and the
amendments thereto and the definitive proxy statement/prospectus
and other documents filed in connection with the proposed business
combination, as these materials will contain important information
about Offerpad, Supernova and the business combination.
Stockholders are also able to obtain copies of the definitive proxy
statement and other documents filed with the SEC, without charge at
the SEC’s website at www.sec.gov, or by directing a request to
Supernova’s secretary at 4301 50th Street NW, Suite 300 PMB 1044,
Washington, D.C. 20016, (202) 918-7050.
Participants in the Solicitation
Supernova, Offerpad, and their respective directors and
executive officers may be deemed participants in the solicitation
of proxies from Supernova’s stockholders with respect to the
proposed business combination. A list of the names of those
directors and executive officers and a description of their
interests is contained in Supernova’s registration statement on
Form S-4, which is available free of charge at the SEC’s website at
www.sec.gov. To the extent such holdings of Supernova’s securities
by Supernova’s directors and executive officers may have changed
since that time, such changes have been or will be reflected on
Statements of Change in Ownership on Form 4 filed with the SEC.
No Offer or Solicitation
This press release does not constitute (i) a solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the proposed business combination or (ii) an offer to
sell, a solicitation of an offer to buy, or a recommendation to
purchase any security of Supernova, Offerpad, or any of their
respective affiliates.
OFFERPAD, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per share
data, unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Revenue
$
378,647
$
287,007
$
662,619
$
654,662
Cost of revenue
327,783
269,146
578,218
611,903
Gross profit
50,864
17,861
84,401
42,759
Operating expenses:
Sales, marketing and operating
31,595
17,547
56,671
42,976
General and administrative
5,137
3,862
9,871
8,223
Technology and development
2,603
1,692
4,886
3,821
Total operating expenses
39,335
23,101
71,428
55,020
Net Income (loss) from
operations
11,529
(5,240
)
12,973
(12,261
)
Other income (expense):
Interest expense
(2,257
)
(2,418
)
(4,175
)
(7,092
)
Other income, net
7
268
248
498
Total other expense
(2,250
)
(2,150
)
(3,927
)
(6,594
)
Net Income (loss) before income
taxes
9,279
(7,390
)
9,046
(18,855
)
Income tax expense
(89
)
-
(89
)
-
Net Income (loss)
$
9,190
$
(7,390
)
$
8,957
$
(18,855
)
Net Income (loss) per share, basic
$
1.17
$
(0.96
)
$
1.14
$
(2.45
)
Net Income (loss) per share, diluted
$
0.31
$
(0.96
)
$
0.30
$
(2.45
)
Weighted average common shares
outstanding, basic
7,884
7,682
7,830
7,682
Weighted average common shares
outstanding, diluted
29,796
7,682
29,748
7,682
OFFERPAD, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except par value
per share, unaudited)
June 30,
December 31,
2021
2020
ASSETS
Current Assets:
Cash and cash equivalents
$
44,560
$
43,938
Restricted cash
13,341
6,804
Accounts receivable
7,117
2,309
Inventory
482,860
171,359
Prepaid expenses and other current
assets
13,217
2,880
Total current assets
561,095
227,290
Property and equipment, net
12,110
8,231
Other non-current assets
122
352
TOTAL ASSETS
$
573,327
$
235,873
LIABILITIES, TEMPORARY EQUITY, AND
STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable
$
5,302
$
2,149
Accrued liabilities
26,606
11,181
Secured credit facilities and notes
payable, net - related party
255,344
126,825
Secured credit facilities and notes
payable
234,508
50,143
Total current liabilities
521,760
190,298
Secured credit facilities and notes
payable, net of current portion
-
4,710
Total liabilities
521,760
195,008
Commitments and Contingencies
Temporary Equity:
Series A convertible preferred stock,
2,789 shares authorized at
June 30, 2021 and December 31, 2020; 2,775
shares issued and
outstanding at June 30, 2021 and December
31, 2020; liquidation
preference of $15,099 at June 30, 2021 and
December 31, 2020
14,921
14,921
Series A-1 convertible preferred stock,
1,448 shares authorized,
issued and outstanding at June 30, 2021
and December 31, 2020;
liquidation preference of $7,500 at June
30, 2021 and December 31, 2020
7,470
7,470
Series A-2 convertible preferred stock,
1,105 shares authorized,
issued and outstanding at June 30, 2021
and December 31, 2020;
liquidation preference of $7,500 at June
30, 2021 and December 31, 2020
7,463
7,463
Series B convertible preferred stock,
7,751 shares authorized,
issued and outstanding at June 30, 2021
and December 31, 2020;
liquidation preference of $50,000 at June
30, 2021 and December 31, 2020
49,845
49,845
Series C convertible preferred stock,
7,529 shares authorized at
June 30, 2021 and December 31, 2020; 5,308
shares issued and
outstanding at June 30, 2021 and December
31, 2020; liquidation
preference of $105,750 at June 30, 2021
and December 31, 2020
104,424
104,424
Total temporary equity
184,123
184,123
Stockholders' Deficit:
Common stock, 34,077 shares authorized at
June 30, 2021 and
December 31, 2020; $0.00001 par value;
7,920 and 7,682 shares
issued and outstanding at June 30, 2021
and December 31, 2020,
respectively
-
-
Additional paid in capital
7,653
5,908
Accumulated deficit
(129,559
)
(138,516
)
Treasury stock
(10,650
)
(10,650
)
Total stockholders' deficit
(132,556
)
(143,258
)
TOTAL LIABILITIES, TEMPORARY EQUITY,
AND
STOCKHOLDERS' DEFICIT
$
573,327
$
235,873
OFFERPAD, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
Six Months Ended
June 30,
2021
2020
Cash flows from operating
activities:
Net Income (loss)
$
8,957
$
(18,855
)
Adjustments to reconcile net income (loss)
to
net cash (used in) provided by operating
activities:
Depreciation
277
204
Gain on sale
(246
)
-
Amortization of debt financing costs
209
89
Impairment of inventory
339
2,908
Stock-based compensation
1,263
538
Changes in operating assets and
liabilities:
Accounts receivable
(4,808
)
(497
)
Inventory
(311,840
)
219,505
Prepaid expenses and other current
assets
(10,108
)
764
Accounts payable
3,153
650
Accrued liabilities
15,274
(2,346
)
Net cash (used in) provided by
operating activities
(297,530
)
202,960
Cash flows from investing
activities:
Purchases of property and equipment
(5,942
)
(11
)
Proceeds from sales of property and
equipment
2,032
-
Net cash used in investing
activities
(3,910
)
(11
)
Cash flows from financing
activities:
Borrowings from credit facilities and
notes payable
888,970
395,455
Repayments of credit facilities and notes
payable
(580,819
)
(608,781
)
Payment of debt financing costs
(185
)
(356
)
Proceeds from issuance of Class C
preferred stock, net
-
29,823
Proceeds from exercise of stock
options
633
-
Net cash provided by (used in)
financing activities
308,599
(183,859
)
Net change in cash, cash equivalents
and restricted cash
7,159
19,090
Cash, cash equivalents and restricted
cash, beginning of period
50,742
29,883
Cash, cash equivalents and restricted
cash, end of period
$
57,901
$
48,973
Reconciliation of cash, cash
equivalents and restricted cash
to the consolidated balance
sheet:
Cash and cash equivalents
$
44,560
$
43,785
Restricted cash
13,341
5,188
Total cash, cash equivalents and
restricted cash
$
57,901
$
48,973
Supplemental disclosure of cash flow
information:
Cash payments for interest
$
5,537
$
9,919
Non-GAAP Financial Measures
In addition to Offerpad’s results of operations above,
Offerpad’s management utilizes certain financial measures that are
not required by, or presented in accordance with, U.S. generally
accepted accounting principles (“GAAP”). These measures have
limitations as analytical tools when assessing Offerpad’s operating
performance and should not be considered in isolation or as a
substitute for GAAP measures, including gross profit and net
income.
Offerpad may calculate or present its non-GAAP financial
measures differently than other companies who report measures with
similar titles and, as a result, the non-GAAP financial measures
Offerpad reports may not be comparable with those of companies in
its industry or in other industries.
Offerpad has not provided a quantitative reconciliation of
forecasted Adjusted EBITDA to forecasted net income (loss) within
this press release because Offerpad is unable to calculate certain
reconciling items without making unreasonable efforts. These items,
which include, but are not limited to, stock-based compensation
with respect to future grants and forfeitures, could materially
affect the computation of forward-looking net income (loss), are
inherently uncertain and depend on various factors, some of which
are outside of Offerpad’s control.
Adjusted gross profit, contribution profit, and contribution
profit after interest (and related margins)
Offerpad believes that adjusted gross profit, contribution
profit, and contribution profit after interest are useful financial
measures for investors as they are used by management in evaluating
unit level economics and operating performance across its markets.
Each of these measures is intended to present the economics related
to homes sold during a given period. Offerpad does so by including
revenue generated from homes sold (and ancillary services) in the
period and only the expenses that are directly attributable to such
home sales, even if such expenses were recognized in prior periods,
and excluding expenses related to homes that remain in inventory as
of the end of the period presented. Contribution profit provides
investors a measure to assess Offerpad’s ability to generate
returns on homes sold during a reporting period after considering
home acquisition costs, renovation and repair costs, and adjusting
for holding costs and selling costs. Contribution profit after
interest further impacts gross profit by including interest costs
(including senior and mezzanine secured credit facilities)
attributable to homes sold during a reporting period. Offerpad
believes these measures facilitate meaningful period over period
comparisons and illustrate our ability to generate returns on
assets sold after considering the costs directly related to the
assets sold in a presented period.
Adjusted gross profit, contribution profit and contribution
profit after interest (and related margins) are supplemental
measures of Offerpad’s operating performance and have limitations
as analytical tools. For example, these measures include costs that
were recorded in prior periods under GAAP and exclude, in
connection with homes held in inventory at the end of the period,
costs required to be recorded under GAAP in the same period.
Accordingly, these measures should not be considered in isolation
or as a substitute for analysis of Offerpad’s results as reported
under GAAP. Offerpad includes a reconciliation of these measures to
the most directly comparable GAAP financial measure, which is gross
profit.
Adjusted gross profit / margin
Offerpad calculates adjusted gross profit as gross profit under
GAAP adjusted for (1) net inventory impairment plus (2) interest
expense associated with homes sold in the presented period and
recorded in cost of revenue. Net inventory impairment is calculated
by adding back the inventory impairment charges recorded during the
period on homes that remain in inventory at period end and
subtracting the inventory impairment charges recorded in prior
periods on homes sold in the current period. Offerpad defines
adjusted gross margin as adjusted gross profit as a percentage of
revenue.
Offerpad views this metric as an important measure of business
performance, as it captures gross margin performance isolated to
homes sold in a given period and provides comparability across
reporting periods. Adjusted gross profit helps management assess
performance across the key phases of processing a home
(acquisitions, renovations, and resale) for a specific resale
cohort.
Contribution profit / margin
Offerpad calculates contribution profit as adjusted gross
profit, minus (1) direct selling costs incurred on homes sold
during the presented period, minus (2) holding costs incurred in
the current period on homes sold during the period recorded in
sales, marketing, and operating, minus (3) holding costs incurred
in prior periods on homes sold in the current period recorded in
sales, marketing, and operating, plus (4) other income which
historically is primarily comprised of net income to us from the
investment related to Offerpad’s OPHL operations. The composition
of Offerpad’s holding costs is described in the footnotes to the
reconciliation table below. Offerpad defines contribution margin as
contribution profit as a percentage of revenue.
Offerpad views this metric as an important measure of business
performance as it captures the unit level performance isolated to
homes sold in a given period and provides comparability across
reporting periods. Contribution profit helps management assess
inflows and outflow directly associated with a specific resale
cohort.
Contribution profit / margin after interest
Offerpad defines contribution profit after interest as
contribution profit, minus (1) interest expense associated with
homes sold in the presented period and recorded in cost of revenue,
minus (2) interest expense associated with homes sold in the
presented period, recorded in costs of sales, and previously
excluded from adjusted gross profit, and minus (3) interest expense
under Offerpad’s senior and mezzanine secured credit facilities
incurred on homes sold during the period. This includes interest
expense recorded in prior periods in which the sale occurred.
Offerpad’s senior and mezzanine secured credit facilities are
secured by its homes in inventory and drawdowns are made on a
per-home basis at the time of purchase and are required to be
repaid at the time the homes are sold. Offerpad defines
contribution margin after interest as contribution profit after
interest as a percentage of revenue.
Offerpad views this metric as an important measure of business
performance. Contribution profit after interest helps management
assess contribution margin performance, per above, when fully
burdened with costs of financing.
The following table presents a reconciliation of Offerpad’s
adjusted gross profit, contribution profit and contribution profit
after interest to its gross profit, which is the most directly
comparable GAAP measure, for the periods indicated:
OFFERPAD, INC.
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands, except percentages and
homes sold, unaudited)
2021
2020
2021
2020
Gross profit
$
50,864
$
17,861
$
84,401
$
42,759
Homes sold
1,259
1,166
2,277
2,683
Gross profit per home sold
40.4
15.3
37.1
15.9
Adjustments:
Inventory impairment - current period
(1)
177
311
189
421
Inventory impairment - prior period
(2)
(95
)
(1,696
)
(142
)
(833
)
Interest expense capitalized (3)
767
920
1,373
2,140
Adjusted gross profit
51,713
17,396
85,821
44,487
Adjustments:
Direct selling costs (4)
(8,787
)
(8,853
)
(16,823
)
(19,298
)
Holding costs on sales - current period
(5)(6)
(533
)
(865
)
(1,161
)
(2,954
)
Holding costs on sales - prior period
(5)(7)
(188
)
(1,147
)
(214
)
(1,352
)
Other income (8)
7
269
248
498
Contribution profit
42,212
6,800
67,871
21,381
Homes sold
1,259
1,166
2,277
2,683
Contribution profit per home
sold
33.5
5.8
29.8
8.0
Adjustments:
Interest expense capitalized (3)
(767
)
(920
)
(1,373
)
(2,140
)
Interest expense on homes sold - current
period (9)
(1,345
)
(1,506
)
(2,826
)
(5,709
)
Interest expense on homes sold - prior
period (10)
(386
)
(2,697
)
(468
)
(4,067
)
Contribution profit after
interest
39,714
1,677
63,204
9,465
Homes sold
1,259
1,166
2,277
2,683
Contribution profit after interest per
home sold
31.5
1.4
27.8
3.5
(1) Inventory impairment – current period
is the inventory valuation adjustments recorded during the period
presented associated with homes that remain in inventory at period
end.
(2) Inventory impairment – prior period is
the inventory valuation adjustments recorded in prior periods
associated with homes that sold in the period presented.
(3) Interest expense capitalized
represents all interest related costs, including senior and
mezzanine secured credit facilities, incurred on homes sold in the
period presented that were capitalized and expensed in cost of
revenue at the time of sale.
(4) Direct selling costs represents
selling costs incurred related to homes sold in the period
presented. This primarily includes broker commissions and title and
escrow closing fees.
(5) Holding costs primarily include
property taxes, insurance, utilities, homeowners association dues,
cleaning and maintenance costs.
(6) Represents holding costs incurred on
homes sold in the period presented and expensed to Sales,
marketing, and operating on the Consolidated Statements of
Operations.
(7) Represents holding costs incurred in
prior periods on homes sold in the period presented and expensed to
Sales, marketing, and operating on the Consolidated Statements of
Operations.
(8) Other income primarily consists of net
income to Offerpad from our investment in Offerpad Home Loans,
except in the presentation of the first six months of 2021, which
represents income from a bulk sale of residential properties.
(9) Represents both senior and mezzanine
interest expense incurred on homes sold in the period presented and
expensed to Interest expense on the Consolidated Statements of
Operations.
(10) Represents both senior and mezzanine
secured credit facilities interest expense incurred in prior
periods on homes sold in the period presented and expensed to
Interest expense on the Consolidated Statements of Operations.
Adjusted EBITDA
Offerpad also presents adjusted EBITDA and its related margin,
which is a non-GAAP financial measure, which its management team
uses to assess its underlying financial performance. Offerpad
believes this provides insight into period over period performance,
adjusted for non-recurring or non-cash items. Offerpad calculates
adjusted EBITDA as net income (loss) adjusted for interest expense,
amortization of capitalized interest, taxes, depreciation and
amortization and stock-based compensation expense. Offerpad defines
adjusted EBITDA Margin as adjusted EBITDA as a percentage of
revenue.
Adjusted EBITDA is supplemental to Offerpad’s operating
performance measures calculated in accordance with GAAP and has
important limitations. For example, adjusted EBITDA excludes the
impact of certain costs required to be recorded under GAAP and
could differ substantially from similarly titled measures presented
by other companies in its industry or companies in other
industries. Accordingly, this measure should not be considered in
isolation or as a substitute for analysis of Offerpad’s results as
reported under GAAP.
The following table presents a reconciliation of Offerpad’s
adjusted EBITDA to its net income (loss), which is the most
directly comparable GAAP measure, for the periods indicated:
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands, except percentages,
unaudited)
2021
2020
2021
2020
Net income (loss)
$
9,190
$
(7,390
)
$
8,957
$
(18,855
)
Interest expense
2,257
2,418
4,175
7,092
Amortization of capitalized interest
(1)
767
920
1,373
2,140
Income tax expense
89
0
89
0
Depreciation and amortization
146
102
277
204
Amortization of stock-based
compensation
649
288
1,263
538
Adjusted EBITDA
13,098
(3,662
)
16,134
(8,881
)
(1) Amortization of capitalized interest
represents all interest related costs, including senior and
mezzanine interest related costs, incurred on homes sold in the
period presented that were capitalized and expensed in cost of
revenue at the time of sale.
Three Months Ended
June 30,
Six Months Ended
June 30,
Margins
2021
2020
2021
2020
Gross margin
13.4%
6.2%
12.7%
6.5%
Adjusted gross margin
13.7%
6.1%
13.0%
6.8%
Contribution margin
11.1%
2.4%
10.2%
3.3%
Contribution margin after interest
10.5%
0.6%
9.5%
1.4%
Net Income (loss)
2.4%
(2.6%)
1.4%
(2.9%)
Adjusted EBITDA
3.5%
(1.3%)
2.4%
(1.4%)
#OPAD_Earnings
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210816005656/en/
Investors James Grout Investors@offerpad.com 602-706-4905
Media Laura Collins 480-220-0021 David Stephan 951-970-6336
Press@Offerpad.com
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