Opendoor (OPEN) Q3 2026 earnings review
Opendoor buys four times as many homes, but losses widen
Opendoor, which buys homes from owners and resells them, bought far more homes but earned less on those it sold. Purchases quadrupled, yet revenue rose only 12%, short of its own plan. When buyers pulled back in late summer, chief executive Kaz Nejatian chose to cut prices, and write-downs on unsold homes reached $53 million.
| Revenue | $1,022M +12% from a year ago; plan was at least +20% |
|---|---|
| Homes bought | 4,865 1,169 a year ago |
| Share of revenue kept per sale after all home costs | 3.3% plan: 4.0–4.5% |
| Fourth-quarter outlook: operating loss excluding one-offs | Loss of $70–85M $43M loss a year ago |
⚖️ Verdict: 🔴 Bearish
The story got worse because Opendoor now plans a bigger fourth-quarter loss and says it is behind on its year-end profit goal. The good news: costs per home bought fell by more than a third, and the company won sellers without raising its offers.
The question now is whether this year's homes sell at a profit once spring buyers return. If the new pricing and repair systems work, margins recover as fresher homes sell; if not, write-downs continue on a stock of homes more than twice last year's. First-quarter margins will settle it.
🐂 Bull Case
Home Purchases Quadrupled Without Bigger Offers
Opendoor buys homes from owners who want a quick sale, then repairs and resells them. Chief executive Kaz Nejatian says it now wins a larger share of those sellers without raising its offers. "We proved that we can grow without buying growth," he said.
The company's own data backs part of that claim. Among owners who got an offer and then sold or listed within 90 days, Opendoor converted about three times as many as in 2025 at the same discount to its valuation.
- Homes bought: 4,865, against 1,169 a year ago
- Share of US home sellers signing with Opendoor: 0.56%, against 0.13% a year ago
- Seller conversion at one comparable discount: 5.8%, against 1.9% in 2025
This matters because earlier growth spurts came from paying sellers more, which left Opendoor with overpriced homes when prices fell. Cash Now, More Later also ties up less money: a seller takes some cash upfront and shares in the resale price later.
What to watch: the margin on homes bought this summer as they sell in early 2027. A margin back in the company's 5–7% target range would show the volume came at sound prices.
Cost per Home Bought Fell by a Third
Opendoor bought four times as many homes as a year ago with flat fixed costs. Chief executive Kaz Nejatian credits software and AI that took over manual work, such as home checks: "Today, that 80% is 2%", he said.
- Operations cost per home bought, last 12 months: $4.0 thousand, down 36%
- Marketing cost per home bought, last 12 months: $2.8 thousand, down 57%
This matters because flat costs on rising volume are Opendoor's route to a profit. But the savings missed the bottom line this quarter, because the margin on each home sold shrank further than costs per home did.
What to watch: cost per home bought in the fourth quarter, when marketing climbs to about $20 million from $5 million. A stable figure would show the savings hold under heavier spending.
Positives this quarter didn't test
Opendoor's newer services grew this quarter, but the company still publishes no revenue or profit figure for any of them, so none can yet move the case on its own.
- Mortgages for home buyers: originations rose about fivefold from last quarter, and Opendoor holds 25 state licences against the 35 to 40 it aimed for by year-end; a revenue figure would test it.
- Title and escrow, the services that check ownership and hold the money at closing: Opendoor bought units of Doma in July to expand them; separate revenue would test it.
- List with Opendoor, which sells a home without Opendoor buying it: Christy Schwartz, who presented the results, said it "lifted first offer conversion by 28% in our tests"; live results would test it.
🐻 Bear Case
Homes Bought in Spring Sold Into Weaker Market
Contribution margin is what Opendoor keeps from each home sale after the purchase price, repairs, selling and holding costs. It fell to 3.3% of revenue, from 5.8% last quarter, and missed the company's own plan.
Christy Schwartz, who presented the results, blamed "homes we bought in the spring selling into a much weaker market" and "deeper price cuts as we chose to clear rather than hold". Opendoor also wrote down unsold homes by $53 million, against $15 million a year ago.
- Write-downs on homes, net of earlier ones: 4.1% of revenue, up 4.3 percentage points
- Homes listed over 120 days: 18%, double last quarter's 9%
This cuts against chief executive Kaz Nejatian's claim that Opendoor grew without taking more risk, because the market turned on homes it had just bought. As mortgage rates climbed, sell-through speed reversed after three quarters of gains. Nejatian also said the first homes renovated under a new AI repair system "were not built the way we would like them".
What to watch: contribution margin in the first quarter of 2027, when the last spring homes sell. Schwartz expects another drop in the fourth quarter, so that reading will show whether this year's buying was priced well.
Profit Goal for 2026 Is Now Behind Schedule
Opendoor promised a profit, excluding one-offs and stock pay, over the 12 months ahead, by year-end. Christy Schwartz, who presented the results, said the company is "behind schedule" on that goal.
Opendoor's break-even model needs about 6,000 home sales a quarter at a margin of 5% or more. It sold 2,728. Taxes, insurance and upkeep on unsold homes cost 1.9% of revenue, against 1.4% last quarter.
Schwartz said "roughly a third of the increase in our expected loss is the additional marketing", with most of the rest from holding more homes. That spending buys homes for spring, but it pushes the profit date past the promise.
What to watch: whether Opendoor sets a new date for the profit goal with its fourth-quarter results. A date within 2027 would keep the break-even model as the test.
Inventory Growth Now Runs on Borrowed Money
Opendoor pays for most homes with loans secured on the homes themselves, known as asset-backed debt. So the jump in purchases drew heavily on lenders and on its own cash.
- Homes held for sale: $2.6 billion, up from $1.1 billion a year ago
- Asset-backed debt: $2.4 billion, against $1.1 billion at the end of 2025
- Lending that banks have committed: $1.6 billion, below the amount drawn
Some of the strain eased. Opendoor repaid $135 million of notes due in August, and two new loan deals after the quarter lifted committed senior lending to $2.1 billion. But lenders lend less against homes that stay unsold longer, and more of Opendoor's homes did so this quarter.
What to watch: committed lending in the annual report, and whether one revolving loan, which stops new lending on December 2, gets extended.
Risks this quarter didn't answer
Three standing concerns got partial evidence or none this quarter. Each needs a specific figure before it can move the case either way.
- Dilution: average shares rose 28% from a year ago, though the August buyback retired about 5% of shares; the year-end share count will show the net effect.
- Executive stock awards: $96 million of expense this quarter, with $466 million still to come over about two years; the profit goal excludes this cost, so the date it ends matters.
- Title, escrow and mortgage income: still not reported on its own; a revenue and margin figure would show how much of the margin these services carry.
👓 Other Themes
Mortgage Rates Rose Above 7% in the Quarter
US home sales stayed near a 30-year low, Opendoor wrote in its quarterly filing. Mortgage rates climbed above 7% by the end of September. Chief executive Kaz Nejatian said a gauge of pending home sales "fell to the lowest level it has ever seen since we started recording it". Sellers also pulled homes off the market at the highest third-quarter rate in Opendoor's history, the filing said.
Convertible Note Money Funded a First Buyback
In August Opendoor sold $650 million of notes due in 2030 that pay no interest and can convert into shares. It used part of the money to buy back about 45 million shares, its first buyback as a public company. Christy Schwartz, who presented the results, said the deal "added approximately $440 million of capital before transaction expenses".
💲 Other KPIs
Interest cost Opendoor $38 million this quarter, or 3.7% of revenue. That ratio climbed from 3.3% last quarter, back to last year's level, because borrowing grew with the inventory. Chief executive Kaz Nejatian said this ratio should fall over time as Cash Now, More Later and listings need less of Opendoor's money.
The backlog of homes Opendoor has agreed to buy fell from 2,310 at the end of June. It had grown for three straight quarters. The backlog still sits far above the 526 of a year ago, and it commits the company to $620 million of purchases.
Average revenue per home sold rose 5% from a year ago, to about $375,000, and held near last quarter's level. Opendoor's break-even model assumes $375,000 per sale, so the price per home is not the gap; margin and volume are.
🔮 Guidance
New. The plan has sales up at least 40% from last year's fourth quarter. By our math that is at least $1,030 million, about level with this quarter. Last year's fourth quarter was weak because Opendoor began it with few homes to sell. Revenue came in under the company's plan in each of the last two quarters.
Cut. Opendoor now expects contribution profit, what it keeps per sale after home, repair, selling and holding costs, to drop from the third quarter. Three months ago chief executive Kaz Nejatian said fourth-quarter contribution margin would top the third quarter's. Christy Schwartz, who presented the results, said spring purchases will keep weighing on results into the first quarter.
Cut. The plan has a loss of $70–85 million on this measure, which excludes interest, depreciation, stock pay and one-offs. By our math the middle of the range is 80% wider than a year earlier. In August the company expected to be profitable on this measure over the 12 months ahead; it now says it is behind.
New. Stock pay should be about $90 million, down from $108 million in the third quarter. Most of it comes from executive awards tied to market conditions. Opendoor leaves this cost out of its profit goal, so the reported loss will keep running well above the adjusted one.
Unchanged, but behind. Opendoor still aims to show a profit, excluding stock pay and one-offs, on a 12-month forward view by year-end. It said a slower market has put it behind and that it intends to catch up. With a wider loss planned for the fourth quarter, the year-end target looks out of reach on current numbers.
❓ Key Questions
How much lending will banks commit after December 2?
One revolving loan stops new lending on December 2, and committed bank lending sat below the amount Opendoor has drawn. Firm commitments decide how many homes it can keep buying.
What do mortgage, title and escrow actually earn?
Management calls these services extra income on every home, yet it reports no revenue or margin for them. Without figures, readers cannot tell how much of any margin recovery they would carry.
When will Opendoor set a new profit date?
The company says it is behind on its year-end profit goal and plans a wider fourth-quarter loss. A new date, with the volume and margin it assumes, would show how far the plan has moved.
How many mortgage licences will Opendoor hold by year-end?
Opendoor holds 25 state licences after aiming for 35 to 40 by year-end. Licences limit how many buyers it can finance, and mortgages sit at the centre of its plan to sell homes faster.
What share of purchases used Cash Now, More Later?
Opendoor said these deals, where sellers get part of the price upfront, outnumbered all its purchases a year ago. Their share and margin would show how much less capital each home now needs.