What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-27 compared with 2024-02-15 · 359 added, 379 removed, 1109 unchanged (40% of the section changed)

5 unchanged sentences

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Changes in Shareholders’ Equity (Deficit)

Consolidated Statements of Changes in Shareholders’ Equity

Consolidated Statements of Cash Flows

36 unchanged sentences

Our audit procedures related to the internal projection price input used for real estate inventory valuation adjustments for homes that are not under sales contract included the following, among others:

• We tested the effectiveness of internal controls over the valuation process, including controls over the inputs to the internal projection price, calculation of the valuation adjustment, and management’s consideration of macroeconomic factors with respect to the valuation adjustment.

• We evaluated whether the estimates of the real estate inventory adjustments for homes that are not under sales contract were consistent with evidence obtained in other areas of the audit, including internal communications to management and the Board of Directors.

• We tested the effectiveness of internal controls over the internal projection price valuation process, calculation of the valuation adjustment, and management’s consideration of macroeconomic factors with respect to the valuation adjustment.

• We evaluated whether the estimates of the real estate inventory valuation adjustments for homes that are not under sales contract were consistent with evidence obtained in other areas of the audit, including internal communications to management and the Board of Directors.

• We made inquiries of management throughout the period about the expected effects of macroeconomic factors on the internal projection price.

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◦ Evaluated the appropriateness of the methodology utilized by management to estimate the internal projection price.

◦ Developed a range of independent sales price estimates for a sample of individual homes using observable market data of actual sale transactions for comparable homes and compared those to management’s internal projection price.

◦ Developed a range of independent projected sales price estimates for a sample of individual homes using observable market data of actual sale transactions for comparable homes and compared those to management’s internal projection price.

/s/ Deloitte & Touche LLP

11 unchanged sentences

Real estate inventory, net 2,159 1,775

Other current assets ($ 0 and $ 1 carried at fair value)

Other current assets

Total current assets 2,997 3,445

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and Total assets of $ 2,236 and $ 2,283 , respectively.

(2) The Company’s consolidated liabilities at December 31, 2023 and 2022 include the following liabilities for which the VIE creditors do not have recourse to Opendoor:

(2) The Company’s consolidated liabilities at December 31, 2024 and 2023 include the following liabilities for which the VIE creditors generally do not have recourse to Opendoor:

Accounts payable and other accrued liabilities, $ 21 and $ 28 ;

3 unchanged sentences

and Total liabilities, $ 1,948 and $ 2,163 , respectively.

See “ Note 4.

Variable Interest Entities ” for additional information regarding our VIEs.

See accompanying notes to consolidated financial statements.

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LOSS FROM OPERATIONS ( 320 ) ( 386 ) ( 931 )

WARRANT FAIR VALUE ADJUSTMENT

GAIN (LOSS) ON EXTINGUISHMENT OF DEBT

(LOSS) GAIN ON EXTINGUISHMENT OF DEBT

( 2 ) 216 ( 25 )

INTEREST EXPENSE ( 133 ) ( 211 ) ( 385 )

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Unrealized gain (loss) on marketable securities

3 ( 2 ) ( 2 )

COMPREHENSIVE LOSS $ ( 391 ) $ ( 272 ) $ ( 1,355 )

1 unchanged sentence

OPENDOOR TECHNOLOGIES INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In millions, except number of shares)

Shareholders’ Equity (Deficit)

Shareholders’ Equity

Common Stock Additional

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Shareholders’

Equity (Deficit)

Shares Amount

BALANCE-December 31, 2021 616,026,565 $ — $ 3,955 $ ( 1,705 ) $ ( 2 ) $ 2,248

Issuance of common stock in connection with the February 2021 Offering 32,817,421 — 857 — — 857

Vesting of restricted shares 628,193 — — — — —

Issuance of common stock for settlement of RSUs, net of shares withheld for participant taxes 17,279,891 — — — — —

Common stock issued upon exercise of warrants 8,200,151 — 58 — — 58

Exercise of stock options 2,958,586 — 4 — — 4

Purchases of Capped Calls related to the 2026 Notes — — ( 119 ) — — ( 119 )

Issuance of common stock under employee stock purchase plan, net of shares withheld for participant taxes 493,790 — 2 — — 2

Stock-based compensation — — 187 — — 187

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BALANCE–December 31, 2022 637,387,025 $ — $ 4,148 $ ( 3,058 ) $ ( 4 ) $ 1,086

OPENDOOR TECHNOLOGIES INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

(In millions, except number of shares)

Shareholders’ Equity (Deficit)

Common Stock Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

Shareholders’

Equity (Deficit)

Shares Amount

BALANCE–December 31, 2021 616,026,565 $ — $ 3,955 $ ( 1,705 ) $ ( 2 ) $ 2,248

Vesting of restricted shares 628,193 — — — — —

Issuance of common stock for settlement of RSUs, net of shares withheld for participant taxes 35,562,197 — ( 1 ) — — ( 1 )

2 unchanged sentences

Stock-based compensation — — 149 — — 149

Other comprehensive loss — — — — ( 2 ) ( 2 )

Other comprehensive income — — — — 3 3

Net loss — — — ( 275 ) — ( 275 )

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3,070,797 — 5 — — 5

Settlement of Capped Calls related to the 2026 Notes — — 2 — — 2

Stock-based compensation — — 129 — — 129

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Net loss $ ( 392 ) $ ( 275 ) $ ( 1,353 )

Adjustments to reconcile net loss to cash, cash equivalents, and restricted cash provided by (used in) operating activities:

Adjustments to reconcile net loss to cash, cash equivalents, and restricted cash (used in) provided by operating activities:

Depreciation and amortization 48 65 83

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Stock-based compensation 114 126 171

Warrant fair value adjustment — — ( 12 )

Inventory valuation adjustment 57 65 737

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Changes in fair value of equity securities 7 1 35

13 ( 1 ) ( 9 )

Origination of mortgage loans held for sale — — ( 118 )

Proceeds from sale and principal collections of mortgage loans held for sale — 1 128

(Gain) loss on early extinguishment of debt

Loss (gain) on early extinguishment of debt

Gain on deconsolidation, net ( 14 ) — —

Changes in operating assets and liabilities:

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Lease liabilities ( 6 ) ( 10 ) ( 8 )

Net cash provided by (used in) operating activities 2,344 730 ( 5,794 )

Net cash (used in) provided by operating activities ( 595 ) 2,344 730

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment ( 25 ) ( 37 ) ( 37 )

Purchase of intangible assets — — ( 1 )

Purchase of marketable securities — — ( 28 )

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Acquisitions, net of cash acquired — — ( 10 )

Net cash provided by (used in) investing activities 44 234 ( 476 )

Cash impact of deconsolidation of subsidiaries ( 2 ) — —

Net cash provided by investing activities 28 44 234

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of convertible senior notes, net of issuance costs — — 953

Repurchase of convertible senior notes

Purchase of capped calls related to the convertible senior notes — — ( 119 )

Settlement of capped calls related to convertible senior notes

Proceeds from exercise of stock options — 3 4

Proceeds from issuance of common stock for ESPP 5 2 2

Proceeds from warrant exercise — — 22

Proceeds from the February 2021 Offering — — 886

Issuance cost of common stock — — ( 29 )

Proceeds from non-recourse asset-backed debt 498 238 10,108

4 unchanged sentences

Payment for early extinguishment of debt — ( 4 ) ( 10 )

Net cash (used in) provided by financing activities ( 2,639 ) ( 1,751 ) 7,342

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 251 ) ( 787 ) 1,072

Net cash used in financing activities ( 210 ) ( 2,639 ) ( 1,751 )

NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 777 ) ( 251 ) ( 787 )

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH – Beginning of year 1,540 1,791 2,578

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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION – Cash paid during the period for interest $ 121 $ 203 $ 355

DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:

Stock-based compensation expense capitalized for internally developed software $ 15 $ 23 $ 16

Investment in non-marketable equity securities due to deconsolidation $ 39 $ — $ —

OPENDOOR TECHNOLOGIES INC.

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(In millions)

DISCLOSURES OF NONCASH FINANCING ACTIVITIES:

Stock-based compensation expense capitalized for internally developed software $ 23 $ 16 $ 12

Issuance of common stock in extinguishment of warrant liabilities $ — $ — $ ( 35 )

RECONCILIATION TO CONSOLIDATED BALANCE SHEETS:

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The Company was incorporated in Delaware on December 30, 2013.

The Company was formed through a business combination with Social Capital Hedosophia Holdings Corp.

The Company completed a business combination with Social Capital Hedosophia Holdings Corp.

II (“SCH”), a Cayman Islands exempted company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).

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Certain prior period amounts in the consolidated financial statements and accompanying notes have been reclassified to conform to the current period’s presentation.

At-The-Market Equity Offering

In May 2024, the Company entered into an at-the-market equity offering sales agreement (the “ATM Agreement”) with Barclays Capital Inc.

and Virtu Americas LLC, as sales agents (the "Agents"), pursuant to which the Company may offer and sell, from time to time, through the Agents, shares of the Company’s common stock having an aggregate offering price of up to $ 200 million.

Under the ATM Agreement, the Agents may sell shares by any method deemed to be an “at-the-market offering.” During the year ended December 31, 2024, there was no activity pursuant to the ATM Agreement.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that have a material impact on the amounts reported in the financial statements and accompanying notes.

Significant estimates, assumptions and judgments made by management include, among others, the determination of the fair value of common stock, share-based awards, warrants, and inventory valuation adjustment.

Significant estimates, assumptions and judgments made by management include, among others, the determination of the fair value of common stock, share-based awards, and inventory valuation adjustment.

Management believes that the estimates and judgments upon which management relies are reasonable based upon information available to management at the time that these estimates and judgments are made.

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the effectiveness of its investment of resources to pursue strategies;

competition in its market;

competition in its

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

the stability of the residential real estate market;

the impact of interest rate changes on demand for and pricing of its products and on the cost of capital;

political and regulatory trends, including potential increased tariffs;

changes in technology, products, markets or services by the Company or its competitors;

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the outcomes of legal proceedings;

natural disasters and catastrophic events, such as pandemics or epidemics (including any future resurgence of COVID-19 or its variants);

natural disasters and catastrophic events, such as pandemics or epidemics;

scaling and adaptation of existing technology and network infrastructure;

its management of its growth;

its ability to attract and retain qualified employees and

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

key personnel;

its ability to attract and retain qualified employees and key personnel;

its ability to successfully integrate and realize the benefits of its past or future strategic acquisitions or investments;

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Concentrations of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents, restricted cash, and investments in marketable securities.

The Company places cash and cash equivalents and investments with major financial institutions, which management assesses to be of high credit quality, in order to limit exposure of the Company’s investments.

Summary of Significant Accounting Policies

Segment Reporting

For the years ended December 31, 2023, 2022, and 2021, the Company was managed as a single operating segment on a consolidated basis.

For the years ended December 31, 2024, 2023, and 2022, the Company was managed as a single operating and reportable segment on a consolidated basis.

Furthermore, the Company determined that the Chief Executive Officer is the Chief Operating Decision Maker (“CODM”) as the CEO is responsible for making decisions regarding the allocation of resources and assessing performance, as well as for strategic operational decisions and managing the organization at a consolidated level.

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Marketable Securities

Marketable equity securities are publicly traded and have readily determinable fair values with changes in fair value recorded in Other (loss) income-net.

Marketable equity securities are publicly traded and have readily determinable fair values with changes in fair value recorded in Other income (loss)-net.

The Company’s investments in marketable securities consist of debt securities classified as available-for-sale as well as marketable equity securities.

The Company’s available-for-sale debt securities are measured at fair value with unrealized gains and losses included in Accumulated other comprehensive loss in shareholders’ equity and realized gains and losses included in Other income (loss)-net.

The Company’s available-for-sale debt securities are measured at fair

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

value with unrealized gains and losses included in Accumulated other comprehensive loss in shareholders’ equity and realized gains and losses included in Other income (loss)-net.

Non-Marketable Equity Securities and Equity Method Investments

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These securities are recorded at cost minus impairment, if any, adjusted for changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

Realized and unrealized gains and losses or the Company's share of the investee's earnings or losses on non-marketable equity securities, including impairment losses, are recognized in Other income (loss)-net.

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If the carrying amount or cost basis is not expected to be recovered, an inventory valuation adjustment is recorded to Cost of revenue and the related assets are adjusted to their net realizable value.

Mortgage Loans Held for Sale Pledged under Agreements to Repurchase

Mortgage loans held for sale pledged under agreements to repurchase (“MLHFS”) include residential mortgages originated for sale in the secondary markets on a best-effort basis.

The Company has elected the fair value option for all MLHFS (see “Note 6 — Fair Value Disclosures” ).

This option allows for the Company to better offset changes in the fair value of MLHFS with derivatives used to economically hedge them when the Company moves away from selling on a best-effort basis, without applying hedge accounting.

MLHFS are recorded at fair value based on sales commitments.

MLHFS are transferred from the Company to the counterparty pursuant to a master repurchase agreement, which is treated as a secured borrowing;

this treatment requires that the assets transferred remain on the Company’s balance sheet and measured as if the transfer did not take place.

Gains and losses on MLHFS, including the change in fair value associated with MLHFS, are recorded in Revenue.

Direct loan origination costs and fees including headcount costs related to loan production are recorded in Cost of revenue.

Interest income on MLHFS is calculated based upon the note rate of the loan and recorded in Interest income.

Convertible Senior Notes

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There will not be any gains or losses recognized upon a conversion.

Upon extinguishment of any portion of the 2026 Notes, the dif ference between the repurchase price of the extinguished notes and the respective net carrying amount is recorded as a gain or loss in Gain on extinguishment of debt in the condensed consolidated statements of operations.

See “Note 5 — Credit Facilities and Long-Term Debt” for details on the partial repurchase of the Company's convertible notes that occurred in the period.

Upon extinguishment of any portion of the 2026 Notes, the difference between the repurchase price of the extinguished notes and the respective net carrying amount is recorded as a gain or loss in (Loss) gain on extinguishment of debt in the consolidated statements of operations.

See “Note 5 — Credit Facilities and Long-Term Debt” for details on the partial repurchase of the Company's convertible notes.

The Company purchased certain capped calls in connection with the issuance of the 2026 Notes which it expects to reduce potential dilution from conversions of the 2026 Notes.

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As of December 31, 2024 and 2023, the Company did not record an allowance for credit losses and for the years ended December 31, 2024, 2023 and 2022, the Company did not have any material write-offs.

No customers accounted for 10% or more of the Company’s Escrow Receivable as of December 31, 2023 or 2022, respectively.

Property and Equipment

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For operating leases, the Company recognizes straight-line rent expense.

The Company’s lease arrangements may include options to extend or early terminate a lease, which it does not include in expected lease terms unless they are reasonably certain to be exercised.

The Company has lease arrangements with lease and

OPENDOOR TECHNOLOGIES INC.

1 unchanged sentence

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

The Company’s lease arrangements may include options to extend or early terminate a lease, which it does not include in expected lease terms unless they are reasonably certain to be exercised.

The Company has lease arrangements with lease and non-lease components.

non-lease components.

As a lessee, the Company has elected to apply the practical expedient to combine lease and related non-lease components, for all classes of underlying assets, and shall account for the combined component as a lease component.

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The Company recorded intangible assets with finite lives, including developed technology, customer relationships, trademarks, and non-competition agreements, as a result of acquisitions as well as internal development.

Intangible assets are amortized based on their estimated economic lives, ranging from 1 to 5 years.

Intangible assets were amortized based on their estimated economic lives, ranging from 1 to 5 years.

Impairment of Long-Lived Assets

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If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment loss is recognized to the extent the carrying amount of the underlying asset exceeds its fair value.

The impairment loss recognized for the years ended December 31, 2023, 2022, and 2021 is related to abandonment of property and equipment, impairment and abandonment of certain internally developed software projects, and sublease of certain right of use assets.

The impairment loss recognized for the periods presented is primarily related to abandonment of certain internally developed software projects.

The impairment loss recognized during the periods presented is as follows (in millions):

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Revenue Recognition

The Company generates revenue through home sales, along with other revenue from ancillary real estate services.

The Company generates revenue through home sales, along with other revenue from ancillary real estate services in the United States.

Other revenue represents an insignificant portion of the Company’s total revenue.

The Company recognizes revenue when it satisfies its performance obligations by transferring control of promised goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

OPENDOOR TECHNOLOGIES INC.

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(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

Home sales revenue consists of selling residential real estate to customers.

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The amount of revenue recognized for each home sale is equal to the sale price of the home net of any concessions.

Other revenue consists primarily of title insurance facilitation revenue, closing and escrow services, real estate broker commissions, and gain (loss) on sale of mortgage loans.

Other revenue consists primarily of title insurance facilitation revenue, closing and escrow services, and real estate broker commissions.

These real estate services are provided in conjunction with home sales, and revenue is recognized consistent with home sales revenue, generally upon close of escrow.

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Technology and Development

Technology and development expense consists primarily of amortization expense of capitalized software development costs in addition to headcount expenses, including salaries, benefits, and stock-based compensation for employees in the design, development, testing, maintenance and operation of the Company’s mobile applications, websites, tools and other applications that support its products.

Technology and development expense consists primarily of headcount expenses, including salaries, benefits, and stock-based compensation for employees in the design, development, testing, maintenance and operation of the Company’s websites, tools, applications, and mobile apps that support its products.

Technology and development expense also includes amortization of capitalized software development costs and third-party software and hosting costs.

Stock-Based Compensation

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The Company uses the Black-Scholes-Merton option-pricing model to determine the fair value as of the grant date for stock options.

Prior to its listing, the Company granted RSUs with a performance condition, based on a liquidity event, as defined by the share agreement, as well as a service condition to vest, which was generally four years .

The Company determined the fair value of RSUs based on the valuation of the Company’s common stock as of the grant date.

No compensation expense was

OPENDOOR TECHNOLOGIES INC.

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(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

The Company determined the fair value of RSUs based on the valuation of the Company’s common stock as of the grant date.

No compensation expense was recognized for performance-based awards until the liquidity event occurred in February 2021.

recognized for performance-based awards until the liquidity event occurred in February 2021.

Subsequent to the occurrence of the liquidity event, compensation expense was recognized on an accelerated attribution basis over the requisite service period of the awards.

After the Company became listed, the RSUs granted are generally only subject to a service condition to vest and typically vest over two to four years .

After the Company became listed, the Company began granting RSUs subject to a service condition to vest, which is generally two to four years .

Compensation expense is recognized on a straight-line basis subject to a floor of the vested number of shares for each award.

In the quarter ended March 31, 2024, the Company began granting RSUs to certain executive employees that contain a performance condition and service condition to vest.

If the award is deemed probable of being earned, compensation expense is recognized on an accelerated attribution basis over the requisite service period of the award, which is generally three years .

The Company reassesses the probability of achieving the performance condition at each reporting date during the performance period.

The Company determines the fair value of RSUs based on the Company’s grant date closing stock price and recognizes forfeitures as they occur.

Market Condition RSUs

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The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized.

In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

If the Company determines that it would be able to realize its deferred tax assets in the future in excess of

In making such a determination, the Company considers all available positive and negative evidence, including future

OPENDOOR TECHNOLOGIES INC.

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(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain tax positions on the basis of a two-step process whereby:

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The Company assesses whether or not the Company is the primary beneficiary of a VIE on an ongoing basis.

Public and Sponsor Warrants

On April 30, 2020, SCH consummated its IPO of 41,400,000 units, consisting of one share of Class A common stock and one third of one warrant exercisable for Class A common stock, at a price of $ 10.00 per unit.

Each whole warrant entitled the holder to purchase one share of Class A common stock at an exercise price of $ 11.50 per share (the “Public Warrants”).

Simultaneously with the closing of the IPO, SCH completed the private sale of 6,133,333 warrants to SCH’s sponsor at a price of $ 1.50 per warrant (the “Sponsor Warrants”).

Each Sponsor Warrant allowed the sponsor to purchase one share of Class A common stock at $ 11.50 per share.

The Sponsor Warrants and shares of common stock issuable upon the exercise of Sponsor Warrants were not able to be transferred, assigned, or sold until 30 days after the completion of a Business Combination.

Additionally, the Sponsor Warrants were eligible for cash and cashless exercises, at the holder’s option, and were redeemable only if the reference value, as defined in the Warrant Agreement, was less than $ 18.00 per share.

If the Sponsor Warrants were held by someone other than the sponsors and certain permitted transferees, the Sponsor Warrants would have been redeemable and exercisable on the same basis as the Public Warrants.

The Company evaluated the Public and Sponsor Warrants under ASC 815-40, Derivatives and Hedging-Contracts in Entity’s Own Equity , and concluded that the Sponsor Warrants did not meet the criteria to be classified in shareholders’ equity.

Specifically, the exercise and settlement features for the Sponsor Warrants precluded them from being considered indexed to the Company’s own stock, given that a change in the holder of the Sponsor Warrants may alter the settlement of the Sponsor Warrants.

Since the holder of the instrument is not an input to a standard option pricing model (a consideration with respect to the indexation guidance), the fact that a change in the holder could impact the value of the Sponsor Warrants means the Sponsor Warrants were not indexed to the Company’s own stock.

Since the Sponsor Warrants meet the definition of a derivative under ASC 815, the Company recorded these warrants as liabilities on the balance sheet at fair value upon the consummation of the Business Combination, with subsequent changes in their respective fair values recognized in the consolidated statement of operations at each reporting period.

The Company concluded that the Public Warrants, which did not have the same exercise and settlement features as the Sponsor Warrants, meet the criteria to be classified in shareholders' equity.

On June 9, 2021, the Company filed a notice of redemption of all outstanding Public Warrants and Sponsor Warrants.

The end of the redemption period was July 9, 2021, at which time the Company redeemed all unexercised warrants at a price of $ 0.10 per Warrant.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

Recently Issued Accounting Standards

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These updates were effective immediately and did not have a material impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This guidance is effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted and retrospective application to all prior periods presented in the financials is required.

The Company adopted ASU 2023-07 in its annual reporting period as of and for the year ended December 31, 2024.

See “ Note 18 — Segment Information” for further discussion.

In November 2024, the FASB issued ASU 2024-04 which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

The new guidance is effective for annual periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

Early adoption is permitted for all entities that have adopted the amendments in Update 2020-06.

The Company early adopted ASU 2024-04 as of the year ended December 31, 2024.

The updates had no impact to the Company’s consolidated financial statements upon adoption.

Recently Issued Accounting Standards Not Yet Adopted

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The Company is currently assessing the impact on the Company's disclosures.

In November 2023, the FASB issued ASU 2023-07, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This guidance is effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted and retrospective application to all prior periods presented in the financials is required.

The Company is currently assessing the impact on the Company's consolidated financial statements and disclosures.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

In December 2023, the FASB issued ASU 2023-09, which expands income tax disclosure requirements to include additional information related to the rate reconciliation of effective tax rates to statutory rates as well as additional disaggregation of taxes paid.

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The Company is currently assessing the impact on the Company's disclosures.

In November 2024, the FASB issued ASU 2024-03, which is intended to improve the disclosures about a public business entity’s expenses and provide detailed information about the types of expenses in commonly presented expense captions.

The new guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, and early adoption is permitted.

The Company is currently assessing the impact on the Company's consolidated financial statements and disclosures.

REAL ESTATE INVENTORY

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During the years ended December 31, 2024, 2023, and 2022, the Company recorded inventory valuation adjustments for real estate inventory of $ 57 million, $ 65 million, and $ 737 million, respectively, in Cost of revenue in the consolidated statements of operations.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

CASH, CASH EQUIVALENTS, AND INVESTMENTS

The amortized cost, gross unrealized gains and losses, and fair value of cash, cash equivalents, and marketable securities as of December 31, 2023 and 2022, are as follows (in millions):

The amortized cost, gross unrealized gains and losses, and fair value of cash, cash equivalents, and marketable securities as of December 31, 2024 and 2023, were as follows (in millions):

December 31, 2024

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Money market funds 611 — — 611 611 —

Corporate debt securities 55 — ( 1 ) 54 — 54

Equity securities 8 — — 8 — 8

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Equity securities 15 — — 15 — 15

Certificates of deposit 9 — — 9 — 9

Asset-backed securities 2 — — 2 — 2

Total $ 1,069 $ — $ ( 1 ) $ 1,068 $ 999 $ 69

During the years ended December 31, 2023 and 2022, the Company recognized $ 4 million and $( 35 ) million of net unrealized gains (losses), respectively, in the consolidated statements of operations related to marketable equity securities.

A summary of debt securities with unrealized losses aggregated by period of continuous unrealized loss is as follows (in millions):

Less than 12 Months 12 Months or Greater Total

December 31, 2023 Fair Value Unrealized

Corporate debt securities $ — $ — $ 54 $ ( 1 ) $ 54 $ ( 1 )

Total $ — $ — $ 54 $ ( 1 ) $ 54 $ ( 1 )

Less than 12 Months 12 Months or Greater Total

December 31, 2022 Fair Value Unrealized

Corporate debt securities $ 5 $ — $ 117 $ ( 4 ) $ 122 $ ( 4 )

Certificates of deposit 6 — — — 6 —

Asset-backed securities — — 2 — 2 —

Total $ 11 $ — $ 119 $ ( 4 ) $ 130 $ ( 4 )

Net unrealized losses of the Company's available-for-sale debt securities as of December 31, 2023 and 2022 were $ 1 million and $ 4 million, respectively.

These unrealized losses are associated with the Company’s investments in corporate debt securities and were due to interest rate increases, and not credit-related events.

The Company does not expect to be required to sell the investments before recovery of the amortized cost bases.

As such, no allowance for credit losses is required as of December 31, 2023 or 2022.

OPENDOOR TECHNOLOGIES INC.

1 unchanged sentence

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

The scheduled contractual maturities of debt securities as of December 31, 2023 are as follows (in millions):

December 31, 2023 Fair Value Within

During the years ended December 31, 2024 and 2023, the Company recognized $( 7 ) million and $ 4 million of net unrealized (losses) gains, respectively, in the consolidated statements of operations related to marketable equity securities.

The Company had no available-for-sale debt securities as of December 31, 2024.

A summary of debt securities with unrealized losses aggregated by period of continuous unrealized loss as of December 31, 2023 was as follows (in millions):

Less than 12 Months 12 Months or Greater Total

December 31, 2023 Fair Value Unrealized

Corporate debt securities $ — $ — $ 54 $ ( 1 ) $ 54 $ ( 1 )

Total $ — $ — $ 54 $ ( 1 ) $ 54 $ ( 1 )

A summary of non-marketable equity securities and equity method investment balances as of December 31, 2023 and 2022 are as follows (in millions):

Net unrealized losses of the Company's available-for-sale debt securities as of December 31, 2023 were $ 1 million.

These unrealized losses were associated with the Company’s investments in corporate debt securities and were due to interest rate increases, and not credit-related events.

The Company did not expect to be required to sell the investments before recovery of the amortized cost bases.

As such, no allowance for credit losses was required as of December 31, 2023.

A summary of non-marketable equity securities and equity method investment balances as of December 31, 2024 and 2023 were as follows (in millions):

2024 December 31,

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Total $ 59 $ 20

During the year-ended December 31, 2023, the Company recognized $ 5 million of net unrealized losses in the consolidated statements of operations related to non-marketable equity securities held as of December 31, 2023.

No unrealized losses were recognized during the year-ended December 31, 2024 in the consolidated statements of operations related to non-marketable equity securities held as of December 31, 2024.

VARIABLE INTEREST ENTITIES

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The Company has a potentially significant variable interest in the entities based upon the equity interest the Company holds in the VIEs.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

The following table summarizes the assets and liabilities related to the VIEs consolidated by the Company as of December 31, 2024 and 2023 (in millions):

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(2) Includes accounts payable and other accrued liabilities and interest payable.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

The creditors of the VIEs generally do not have recourse to the Company’s general credit solely by virtue of being creditors of the VIEs.

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and its consolidated subsidiaries’ assets and liabilities.

As a result, under certain circumstances, this may limit our flexibility to transfer assets from Opendoor subsidiaries to the Parent Company.

As a result, under certain circumstances, this may limit the Company’s flexibility to transfer assets from Opendoor subsidiaries to the Parent Company.

See “Note 5 — Credit Facilities and Long-Term Debt” for further discussion of the recourse obligations with respect to the VIEs.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

CREDIT FACILITIES AND LONG-TERM DEBT

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Asset-backed Senior Term Debt Facilities

Term Debt Facility 2021-S1 100 — 100 3.48 % January 2, 2025 April 1, 2025

Term Debt Facility 2021-S1 100 — 100 3.48 % February 24, 2026 August 24, 2026

Term Debt Facility 2021-S2 400 — 300 3.31 % September 10, 2025 March 10, 2026

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Revolving Facility 2019-3 — — — %

Revolving Facility 2022-1 289 — 8.15 %

Asset-backed Senior Term Debt Facilities

3 unchanged sentences

Term Debt Facility 2022-S1 — 250 4.07 %

Term Debt Facility 2022-S2 200 — 8.48 %

Total $ — $ 1,400

19 unchanged sentences

this committed borrowing capacity is comprised of $ 400 million for senior revolving credit facilities, $ 1.4 billion for senior term debt facilities, and $ 350 million for mezzanine term debt facilities.

The Company recognized $ 9 million and $ 25 million in loss on extinguishment of debt on the consolidated statement of operations for the years ended December 31, 2023 and December 31, 2022, respectively, related to the Company’s voluntary

The Company recognized $ 2 million, $ 9 million, and $ 25 million in loss on extinguishment of debt on the consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022, respectively, related to the Company’s voluntary partial early repayment of non-recourse asset-backed term debt facilities.

The loss on extinguishment of debt for the year ended December 31, 2024 was comprised of $ 2 million in write-offs of associated unamortized deferred costs that were

OPENDOOR TECHNOLOGIES INC.

1 unchanged sentence

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

partial early repayment of non-recourse asset-backed term debt facilities.

The loss on extinguishment of debt for the year ended December 31, 2023 was comprised of $ 4 million in pre-payment fees and $ 5 million in write-offs of associated deferred costs that were previously capitalized.

previously capitalized.

The loss on extinguishment of debt for the year ended December 31, 2023 was comprised of $ 4 million in prepayment fees and $ 5 million in write offs of associated unamortized deferred costs that were previously capitalized.

The loss on extinguishment of debt for the year ended December 31, 2022 was comprised of $ 10 million in prepayment fees and $ 15 million in write offs of associated unamortized deferred costs that were previously capitalized.

Asset-backed Senior Revolving Credit Facilities

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These facilities may also have extensions subject to lender discretion that are not reflected in the table above.

Borrowings under the senior revolving credit facilities accrued interest at various floating rates based on a London Interbank Offered Rate (“LIBOR”) for certain periods prior to November 2022 or a secured overnight financing rate (“SOFR”), plus a margin that varies by facility.

Effective November 2022, all such floating rates were based on SOFR.

Borrowings under the senior revolving credit facilities accrue interest at various floating rates based on a secured overnight financing rate (“SOFR”), plus a margin that varies by facility.

The Company may also pay fees on certain unused portions of committed borrowing capacity.

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When the Company resells a home, the proceeds are used to reduce the outstanding balance under the related senior revolving credit facility.

The borrowing base for a given facility may be reduced as properties age beyond certain thresholds, and any borrowing base deficiencies may be satisfied through contributions of additional properties or partial repayment of the facility.

The borrowing base for a given facility may be reduced as properties age beyond certain thresholds or the performance of the properties financed under that facility declines, and any borrowing base deficiencies may be satisfied through contributions of additional properties or partial repayment of the facility.

Asset-backed Senior Term Debt Facilities

The Company classifies its senior term debt facilities as non-current liabilities on the Company's consolidated balance sheets because its borrowings under these facilities are generally not required to be repaid until the final maturity date.

The Company classifies its senior term debt facilities as current or non-current liabilities on the Company's consolidated balance sheets based on the applicable final maturity date.

The senior term debt facilities are typically structured with an initial withdrawal period up to 60 months during which the outstanding principal amounts are generally not required to be repaid when homes financed through those facilities are sold and instead are intended to remain outstanding until final maturity for each facility.

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These facilities may also have extensions subject to lender discretion that are not reflected in the table above.

Borrowings under the senior term debt facilities accrue interest at a fixed rate with the exception of Term Debt Facility 2022-S2, which accrued interest at a floating rate based on SOFR plus a margin.

Borrowings under the senior term debt facilities accrue interest at a fixed rate.

The Company's senior term debt facilities may include upfront issuance costs that are capitalized as part of the facilities' respective carrying values.

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The senior term debt facilities have aggregated property borrowing bases, which increase or decrease based on the cost and value of the properties financed under a given facility, the time those properties are in the Company’s possession and the amount of cash collateral pledged by the relevant borrowers.

The borrowing base for a given facility may be reduced as

The borrowing base for a given facility may be reduced as properties age or collateral performance declines beyond certain thresholds, and any borrowing base deficiencies may be satisfied through contributions of additional properties, cash or through partial repayment of the facility.

OPENDOOR TECHNOLOGIES INC.

1 unchanged sentence

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

properties age or collateral performance declines beyond certain thresholds, and any borrowing base deficiencies may be satisfied through contributions of additional properties, cash or through partial repayment of the facility.

Asset-backed Mezzanine Term Debt Facilities

The Company classifies its mezzanine term debt facilities as long-term liabilities on the Company’s consolidated balance sheets because its borrowings under these facilities are generally not required to be repaid until the applicable final maturity date.

The Company classifies its mezzanine term debt facilities as current or non-current liabilities on the Company’s consolidated balance sheets based on the applicable final maturity date.

These facilities are structurally and contractually subordinated to the related asset-backed senior debt facilities.

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These facilities may also have extensions subject to lender discretion that are not reflected in the table above.

Borrowings under a given term debt facility accrue interest at a fixed rate.

The mezzanine term debt facilities include upfront issuance costs that are capitalized as part of the facilities’ respective carrying values.

Borrowings under a given mezzanine term debt facility accrue interest at a fixed rate.

The Company’s mezzanine term debt facilities include upfront issuance costs that are capitalized as part of the facilities’ respective carrying values.

These facilities are fully prepayable at any time but may be subject to certain prepayment penalties.

The mezzanine term debt facilities have aggregated property borrowing bases, which increase or decrease based on the cost and the value of the properties financed under a given facility and time in the Company’s possession of those properties and the amount of cash collateral pledged by the relevant borrowers.

The borrowing base for a given facility may be reduced as properties age or collateral performance declines beyond certain thresholds, and any borrowing base deficiencies may be satisfied through contributions of additional properties or cash or through partial repayment of the facility.

The mezzanine term debt facilities have aggregated property borrowing bases, which increase or decrease based on the cost and value of the properties financed under a given facility and time in the Company’s possession of those properties and the amount of cash collateral pledged by the relevant borrowers.

The Company’s inventory financing facilities include customary representations and warranties, covenants and events of default.

3 unchanged sentences

and its consolidated subsidiaries’ assets and liabilities.

As a result, under certain circumstances, this may limit our flexibility to transfer assets from Opendoor subsidiaries to the Parent Company.

At December 31, 2023 and December 31, 2022, $ 275 million and $ 565 million, respectively, of the Company's net assets are restricted as they reflect minimum net asset requirements at Opendoor Labs Inc.

As a result, under certain circumstances, this may limit the Company’s flexibility to transfer assets from Opendoor subsidiaries to the Parent Company.

At December 31, 2024 and December 31, 2023, $ 250 million and $ 275 million, respectively, of the Company's net assets were restricted as they reflect minimum net asset requirements at Opendoor Labs Inc.

As of December 31, 2024, the Company was in compliance with all financial covenants and no event of default had occurred.

Mortgage Financing

In 2022, the Company ceased providing correspondent lending or mortgage brokering services.

As a result, the Company no longer requires mortgage financing and terminated its master repurchase agreement (the “Repurchase Agreement”) in October 2022.

From March 2019 through its exit of mortgage lending and brokering services, the Company utilized the Repurchase Agreement to provide capital for Opendoor Home Loans.

The facility, which was classified as a current liability on the Company’s consolidated balance sheets, provided short-term financing between the issuance of a mortgage loan and when Opendoor Home Loans sold the loan to an investor.

In accordance with the Repurchase Agreement, the lender agreed to pay Opendoor Home Loans a negotiated purchase price for eligible loans and Opendoor Home Loans simultaneously agreed to repurchase such loans from the lender within a specified timeframe and at an agreed upon price that included interest.

Opendoor Labs Inc.

was the guarantor with respect to the Repurchase Agreement and the obligation to repurchase loans previously

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

transferred under the arrangement for the benefit of the lender.

This financing arrangement was an important component of Opendoor Home Loans’ operations as a correspondent lender.

Convertible Senior Notes

In August 2021, the Company issued the 2026 Notes with an aggregate principal amount of $ 978 million.

The tables below summarizes certain details related to the 2026 Notes (in millions, except interest rates):

The tables below summarize certain details related to the 2026 Notes (in millions, except interest rates):

December 31, 2024 Aggregate Principal Amount

4 unchanged sentences

August 15 51.9926 $ 19.23

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

The 2026 Notes will be convertible at the option of the holders before February 15, 2026 only upon the occurrence of certain events.

11 unchanged sentences

For the year ended December 31, 2024, total interest expense on the Company's convertible senior notes was $ 3 million, with coupon interest of $ 1 million and amortization of debt issuance costs of $ 2 million.

For the year ended December 31, 2023, total interest expense on the Company's convertible senior notes was $ 5 million, with coupon interest of $ 2 million and amortization of debt issuance costs of $ 3 million.

For the year ended December 31, 2022, total interest expense on the Company's convertible senior notes was $ 7 million, with coupon interest of $ 2 million and amortization of debt issuance costs of $ 5 million.

In August 2021, in connection with the issuance of the 2026 Notes, the Company purchased capped calls (the “Capped Calls”) from certain financial institutions at a cost of $ 119 million.

2 unchanged sentences

The Capped Calls have an initial strike price of $ 19.23 per share and an initial cap price of $ 29.59 per share or a cap price premium of 100 %.

In December 2024, the Company settled 75 % of the outstanding Capped Calls and received cash of $ 2 million from certain counterparties, which was recognized as an increase in additional paid-in-capital in the fourth quarter of 2024.

FAIR VALUE DISCLOSURES

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

Following is a discussion of the fair value hierarchy and the valuation methodologies used for assets and liabilities recorded at fair value on a recurring and nonrecurring basis and for estimating fair value for financial instruments not recorded at fair value.

2 unchanged sentences

Level 1 — Fair value determined based on quoted prices in active markets for identical assets or liabilities.

Level 2 — Fair value determined using significant observable inputs, such as quoted prices for similar assets or liabilities or quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data, by correlation or other means.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data, by correlation or other means.

Level 3 — Fair value determined using significant unobservable inputs, such as pricing models, discounted cash flows, or similar techniques.

Estimation of Fair Value

The following table summarizes the fair value measurement methodologies, including significant inputs and assumptions, and classification of the Company’s assets and liabilities.

The following table summarizes the fair value measurement methodologies, including significant inputs and assumptions, and classification of the Company’s assets and liabilities recorded at fair value on a recurring basis.

Asset/Liability Class Valuation Methodology, Inputs and

Classification

Cash and cash equivalents Carrying value is a reasonable estimate of fair value based on the short-term nature of the instruments.

Level 1 estimated fair value measurement.

Restricted cash Carrying value is a reasonable estimate of fair value based on the short-term nature of the instruments.

Level 1 estimated fair value measurement.

Marketable securities

3 unchanged sentences

Level 1 recurring fair value measurement.

Other current assets

Mortgage loans held for sale Fair value is estimated based on observable market data including quoted market prices and deal price quotes.

Level 2 recurring fair value measurement.

Non-recourse asset-backed debt

Credit facilities Fair value is estimated using discounted cash flows based on current lending rates for similar credit facilities with similar terms and remaining time to maturity.

Carried at amortized cost.

Level 2 estimated fair value measurement.

Convertible senior notes Fair value is estimated using broker quotes and other observable market inputs.

Carried at amortized cost.

Level 2 estimated fair value measurement.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

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Marketable securities:

Corporate debt securities $ 54 $ — $ 54 $ —

Equity securities $ 8 $ 8 $ — $ —

4 unchanged sentences

Equity securities 15 15 — —

Certificates of deposit 9 — 9 —

Asset-backed securities 2 — 2 —

Other current assets:

Mortgage loans held for sale 1 — 1 —

Total assets $ 69 $ 15 $ 54 $ —

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

Fair Value of Financial Instruments

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Restricted cash 92 92 92 —

Non-recourse asset-backed debt $ 2,134 $ 2,150 $ — $ 2,150

Non-recourse asset-backed debt – current portion

$ 432 $ 431 $ — $ 431

Non-recourse asset-backed debt – net of current portion

1,492 1,443 — 1,443

Convertible senior notes 378 336 — 336

3 unchanged sentences

Restricted cash 541 541 541 —

Non-recourse asset-backed debt $ 4,396 $ 4,427 $ — $ 4,427

Non-recourse asset-backed debt – net of current portion

$ 2,134 $ 2,150 $ — $ 2,150

Convertible senior notes 376 296 — 296

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

PROPERTY AND EQUIPMENT

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Internally developed software $ 106 $ 124

Security systems 19 18

Computers 9 12

Software implementation costs 4 4

Security systems 4 19

Office equipment 2 3

Furniture and fixtures 1 2

Software implementation costs 1 4

Leasehold improvements — 2

3 unchanged sentences

Depreciation and amortization expense of $ 33 million, $ 38 million, and $ 37 million was recorded for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company leases office space throughout the United States under operating and short-term lease agreements.

The Company leases office space throughout the United States and India under operating and short-term lease agreements.

These lease agreements have terms not exceeding 11 years and some contain multi-year renewal options or early termination options that are not considered reasonably certain of exercise except as discussed below.

The Company also leases equipment under immaterial finance lease agreements.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

Components of lease costs for the years ended the December 31, 2024, 2023, and 2022, are as follows (in millions):

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Right-of-use assets obtained in exchange for new or acquired lease liabilities $ 4 $ 1 $ 5

In December 2024, certain operating leases were terminated early by the Company, which resulted in a decrease of undiscounted, future lease payments of $ 8 million.

These early terminations resulted in the reduction of right-of-use assets and lease liabilities of approximately $ 13 million.

The Company paid $ 4 million in early termination fees associated with these leases and recognized $ 3 million in total lease termination costs which are recognized in Restructuring on the consolidated statements of operations.

See “Note 20 - Restructuring” for further discussion.

There were no other material lease modifications for the year ended December 31, 2024.

In May 2023, the Company amended its Tempe, Arizona office lease to partially terminate the Company’s obligation with respect to a portion of the leased premises (“Partial Lease Termination”).

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The Company also recorded a decrease to right-of-use assets of $ 9 million based on the proportionate decrease in the right-of-use asset, which resulted in a gain of $ 1 million recognized in general and administrative expense on the consolidated statements of operations for the year ended December 31, 2023.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

For the year ended December 31, 2022, the Company signed a new lease that resulted in an increase to the right-of-use asset in the amount of $ 5 million and an increase in operating lease liabilities in the amount of $ 5 million.

There were no material lease modifications in the year ended December 31, 2022.

In January 2021, the Company terminated the San Francisco lease prior to the anticipated termination date of September 30, 2021, which resulted in a $ 5 million gain recognized for the year ended December 31, 2021.

There were no other material lease modifications for the year ended December 31, 2021.

The weighted average lease term and the weighted average discount rate are as follows:

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Total lease liabilities $ 15

GOODWILL AND INTANGIBLE ASSETS

For the year ended December 31, 2023 there were no additions to goodwill.

For the year ended December 31, 2022 the carrying amount of goodwill increased by $ 4 million due to acquisitions.

For more information on significant acquisitions, refer to “Note 16 — Business Acquisitions” .

During the fourth quarter of 2022, the market price of our common stock declined significantly.

As such, the Company determined that an indicator of potential impairment existed and decided to perform an interim quantitative test for goodwill impairment.

Based on the quantitative analysis, the Company recorded a goodwill impairment charge of $ 60 million for the year ended December 31, 2022.

There was no impairment of goodwill identified for the years ended December 31, 2023 and December 31, 2021.

Intangible assets subject to amortization consisted of the following as of December 31, 2023 and 2022, respectively (in millions, except years):

December 31, 2023 Gross

Remaining Weighted Average Useful Life

Developed technology $ 17 $ ( 13 ) $ 4 0.8

Customer relationships 7 ( 6 ) 1 0.7

Trademarks 5 ( 5 ) — 0.7

Intangible assets – net $ 29 $ ( 24 ) $ 5

OPENDOOR TECHNOLOGIES INC.

1 unchanged sentence

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

GOODWILL AND INTANGIBLE ASSETS

For the years ended December 31, 2024 and 2023 there were no additions to goodwill.

No impairment of goodwill was identified for the years ended December 31, 2024 and 2023.

All intangible assets that were previously subject to amortization were fully amortized as of December 31, 2024.

As such, the Company does not have any intangible assets subject to amortization remaining as of December 31, 2024.

Intangible assets subject to amortization consisted of the following as of December 31, 2023 (in millions, except years):

December 31, 2023 Gross

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Amortization expense for intangible assets was $ 4 million, $ 7 million, and $ 9 million for the years ended December 31, 2024, 2023, and 2022, respectively.

As of December 31, 2023, expected amortization of intangible assets is as follows (in millions):

ACCOUNTS PAYABLE AND OTHER ACCRUED LIABILITIES

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Accrued expenses due to vendors $ 30 $ 34

Legal contingency accrual 23 —

Accrued payroll and other employee related expenses 12 18

Accrued property and franchise taxes 7 29

Accounts payable due to vendors 9 2

Accrued expenses and liabilities due to related parties

Accrued property and franchise taxes 8 7

Total accounts payable and other accrued liabilities $ 92 $ 64

SHAREHOLDERS’ EQUITY

On February 9, 2021, the Company completed an underwritten public offering (the “February 2021 Offering”) in which the Company sold 32,817,421 shares of its common stock at a public offering price of $ 27.00 per share, including the exercise in full by the underwriters of their option to purchase up to 4,280,533 additional shares of common stock, which was completed on February 11, 2021.

The Company received aggregate net proceeds from the February 2021 Offering of approximately $ 859 million after deducting underwriting discounts and commissions and offering expenses payable by the Company upon closing.

The February 2021 Offering satisfied the liquidity event vesting condition of certain restricted stock units ("RSUs").

For further information on the RSUs, see “ Note 12 — Share-Based Awards”.

On December 21, 2020, the Company’s common stock and warrants began trading on the Nasdaq Global Select Market (“Nasdaq”) under the ticker symbols “OPEN” and “OPENW,” respectively.

Pursuant to the Company’s certificate of incorporation, the Company is authorized to issue 3,000,000,000 shares of common stock with a par value of $ 0.0001 per share.

On July 9, 2021, the Company completed the redemption of all of its outstanding Public and Sponsor Warrants and in connection with the redemption, the Public Warrants stopped trading on Nasdaq.

Prior to the Business Combination, the Company had outstanding shares of Series A, Series B, Series C, Series C-1, Series D, Series D-1, Series E, Series E-1, and Series E-2 convertible preferred stock (collectively, “Preferred Stock”).

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

Immediately prior to the Business Combination, all shares of the Company’s outstanding Preferred Stock converted into a total of 195 million shares of Opendoor Labs Inc.

common stock on a one -for-one basis.

Upon the Closing, Opendoor Labs Inc.

common stock converted to Opendoor Technologies Inc.

common stock with the application of the Exchange Ratio.

Preferred Stock

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As of December 31, 2024, there were no shares of Opendoor Technologies Preferred Stock issued and outstanding.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

Common stock is entitled to dividends when and if declared by the Company’s board of directors, subject to the rights of all classes of stock outstanding having priority rights to dividends.

17 unchanged sentences

Pursuant to this automatic increase provision, as of December 31, 2024, 24,749,340 shares of common stock are reserved for issuance under the ESPP.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

twelve months ended December 31, 2023 and December 31, 2022, shares issued under the ESPP were 2,151,794 at a weighted average price of $ 1.16 per share and 493,790 at a weighted average price of $ 3.68 , respectively.

For the twelve months ended December 31, 2024 and December 31, 2023, shares issued under the ESPP were 3,133,493 at a weighted average price of $ 1.59 per share and 2,151,794 at a weighted average price of $ 1.16 per share, respectively.

2022 Inducement Plan

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The Inducement Plan allows for the issuance of non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents and other stock or cash based awards to new employees of the Company or any subsidiary of the Company.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

Stock options and RSUs

13 unchanged sentences

The total intrinsic value of options exercised for the years ended December 31, 2024, 2023, and 2022, was $ 1 million, $ 3 million, and $ 20 million, respectively.

The weighted-average grant date fair value per option granted for the year ended December 31, 2021 was $ 10.18 .

RSUs typically vest upon a service-based requirement, generally over a two or four year period.

Prior to 2021, certain awards also had a performance condition to vesting, which was satisfied upon completion of the February 2021 Offering and triggered the recognition of compensation expense for certain RSUs for which the time-based vesting condition had been satisfied or partially satisfied.

Subsequent to the February 2021 Offering, these RSUs are only subject to time-based vesting conditions .

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

In the quarter ended March 31, 2024, the Company began granting RSUs to certain executive employees that contain both a performance and service condition to vest.

The Company reassesses the probability of achieving the performance condition at each reporting date during the performance period.

A summary of the RSU activity for the year ended December 31, 2024, is as follows:

9 unchanged sentences

The Restricted Shares vest upon satisfaction of a service condition, which generally ranges from three to four years .

There were no Restricted Shares as of December 31, 2023.

The total fair value of Restricted Shares vested for the years ended December 31, 2022, and December 31, 2021 was $ 1 million and $ 21 million, respectively.

There were no Restricted Shares as of December 31, 2024 and 2023.

The total fair value of Restricted Shares vested for the year ended December 31, 2022 was $ 1 million.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

The first offering period for the Company's 2020 ESPP began on March 1, 2022.

4 unchanged sentences

The ESPP also includes a reset provision for the purchase price if the stock price on the purchase date is less than the stock price on the offering date.

ESPP employee payroll contributions withheld as of December 31, 2023 were $ 2 million and are included within Accounts payable and other accrued liabilities in the consolidated balance sheets.

ESPP employee payroll contributions withheld as of December 31, 2024 and 2023 were $ 1 million and $ 2 million, respectively, and are included within Accounts payable and other accrued liabilities in the consolidated balance sheets.

Payroll contributions withheld as of December 31, 2024 will be used to purchase shares at the end of the current ESPP purchase period ending on February 28, 2025.

1 unchanged sentence

The following assumptions were applied in the model to estimate the grant-date fair value of the ESPP.

Year Ended December 31, 2023 Year Ended December 31, 2022

Year Ended December 31, 2024

Year Ended December 31, 2023

Year Ended December 31, 2022

Fair value $ 0.83 - $ 1.56

$ 0.64 - $ 2.13

$ 1.78 - $ 3.55

Volatility 88.7 % - 121.1 %

101.8 % - 119.1 %

94.5 % - 101.4 %

Risk-free rate 4.35 % - 5.27 %

5.06 % - 5.47 %

0.60 % - 3.34 %

Expected life (in years) 0.5 - 1

Expected dividend $ — $ — $ —

The Company recognized stock-based compensation expense related to the ESPP of $ 2 million during the year ended December 31, 2023.

The Company recognized stock-based compensation expense related to the ESPP of $ 3 million, $ 2 million, and $ 2 million during the years ended December 31, 2024, 2023, and 2022 respectively.

As of December 31, 2024, total estimated unrecognized compensation expense related to the ESPP was $ 2 million.

The unamortized compensation costs are expected to be recognized over the remaining term of the offering period of 0.5 years.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

Stock-based compensation expense

9 unchanged sentences

In December 2022, Eric Wu resigned as CEO of Opendoor, resulting in a $ 57 million reversal of stock-based compensation expense related to his market condition awards.

In June 2021, the market condition for two market condition awards was satisfied, which resulted in the accelerated recognition of $ 2.0 million of stock-based compensation expense in the year ended December 31, 2021.

During the years ended December 31, 2023 and December 31, 2022, no market conditions were satisfied.

During the years ended December 31, 2024, 2023 and 2022 no market conditions were satisfied.

As of December 31, 2024, there was $ 101 million of unamortized stock-based compensation costs related to unvested RSUs.

The unamortized compensation costs are expected to be recognized over a weighted-average period of approximately 2.0 years.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

Valuation of options

15 unchanged sentences

Prior to the Company’s common stock becoming publicly traded, the expected stock price volatilities were estimated based on the historical and implied volatilities of comparable publicly traded companies as the Company did not have sufficient history of trading its common stock.

Subsequent to the Company’s stock becoming publicly trade, the expected stock price

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

volatilities were determined based on the volatilities implied by the price of the Company’s publicly traded call options in its common stock.

Subsequent to the Company’s stock becoming publicly trade, the expected stock price volatilities were determined based on the volatilities implied by the price of the Company’s publicly traded call options in its common stock.

Risk-Free Interest Rate

9 unchanged sentences

(ii) developments in the Company’s business and stage of development;

the Company’s operational and financial performance and condition;

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

Company’s operational and financial performance and condition;

(iii) issuances of preferred stock and the rights and preferences of preferred stock relative to common stock;

3 unchanged sentences

The determination includes an evaluation of whether the subsequent valuation indicates that any significant change in valuation had occurred between the previous valuation and the grant date.

Public and Sponsor Warrants

Prior to the Business Combination, SCH issued 6,133,333 Sponsor Warrants and 13,800,000 Public Warrants (collectively “Warrants”).

Upon Closing, the Company assumed the Warrants.

Each whole warrant entitles the holder to purchase one share of the Company’s common stock at a price of $ 11.50 per share, subject to adjustments.

The Warrants are exercisable at any time commencing the later of a) 30 days after the completion of the Business Combination and b) 12 months from the date of the closing of the SCH’s initial public offering on April 30, 2020, and terminating five years after the Business Combination.

Once the Public Warrants become exercisable, the Company may redeem the outstanding warrants, in whole and not in part, upon a minimum of 30 days’ prior written notice of redemption (“Redemption Period”).

There are two scenarios in which the Company may redeem the Warrants.

For purposes of the redemption scenarios, “Reference Value” shall mean the last reported sales price of the Company’s common stock for any twenty trading days within the thirty trading-day period ending on the third trading day prior to the date on which notice of the redemption is given.

The Company may redeem the outstanding Warrants for cash at a price of $ 0.01 per warrant if the Reference Value equals or exceeds $ 18.00 per share.

The warrant holders have the right to exercise their outstanding warrants prior to the scheduled redemption date during the Redemption Period at $ 11.50 per share.

The Sponsor Warrants are exempt from redemption if the Reference Value is at or above $ 18.00 and the Sponsor Warrants continue to be held by the original warrant holder (“Sponsor") or a permitted transferee.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

The Company may redeem the outstanding Warrants at a price of $ 0.10 per warrant if the Reference Value equals or exceeds $ 10.00 per share.

If the Reference Value is less than $ 18.00 , the Sponsor Warrants must also be concurrently called for redemption with the Public Warrants.

The warrant holders have the right to exercise their outstanding warrants prior to the scheduled redemption date during the Redemption Period on a cashless basis.

The cashless exercise entitles the warrant holders to receive a set number of shares based on the redemption date and the redemption fair value as defined in the warrant agreement.

In connection with the Business Combination, on January 12, 2021, the Company filed a Registration Statement on Form S-1.

This Registration Statement relates to the issuance of an aggregate of up to 19,933,333 shares of common stock issuable upon the exercise of its publicly-traded warrants.

On July 9, 2021, the Company completed the redemption of all of its outstanding Public and Sponsor Warrants to purchase shares of the Company's common stock, par value $ 0.0001 per share, that were issued under the Warrant Agreement, dated April 27, 2020.

Of the 13,799,947 Public Warrants that were outstanding as of the time of the Business Combination, 874,739 were exercised for cash at an exercise price of $ 11.50 per share of Common Stock and 12,521,776 were exercised on a cashless basis in exchange for an aggregate of 4,452,659 shares of Common Stock.

In addition, of the 6,133,333 Sponsor Warrants that were outstanding as of the date of the Business Combination, 1,073,333 were exercised for cash at an exercise price of $ 11.50 per share of Common Stock and 5,060,000 were exercised on a cashless basis in exchange for an aggregate of 1,799,336 shares of Common Stock.

Total cash proceeds to the Company generated from exercises of the Warrants were $ 22 million.

In connection with the redemption, the Public Warrants stopped trading on the Nasdaq on July 9, 2021.

The Company recorded a decrease to the Warrant fair value adjustment of $( 12 ) million for the change in fair value of the Sponsor Warrants for the year ended December 31, 2021.

Marketing Warrants

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As of December 31, 2024, no warrant shares had vested.

Income before income taxes consisted of losses from domestic operations of $ 274 million, $ 1.4 billion, and $ 661 million for the years ended December 31, 2023, 2022, and 2021, respectively.

The following table summarizes components of loss before income taxes as follows (in millions):

Year Ended December 31,

2024 2023 2022

$ ( 393 ) $ ( 274 ) $ ( 1,351 )

Loss before Income Taxes

$ ( 391 ) $ ( 274 ) $ ( 1,351 )

The following table summarizes the components of the Company’s provision for income taxes for the periods presented (in millions):

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For the years ended December 31, 2024, 2023, and 2022, the Company did not record any deferred federal and state income tax expense or benefit due to the full valuation allowance.

Additionally, the Company’s foreign current and deferred expense or benefit was immaterial.

Additionally, the Company’s foreign deferred expense or benefit was immaterial.

OPENDOOR TECHNOLOGIES INC.

9 unchanged sentences

Non-deductible expenses and other 0.1 ( 1.1 ) ( 1.2 )

Non-deductible warrant expenses — — 0.4

Share-based compensation ( 3.2 ) ( 6.6 ) ( 1.7 )

Deduction limitation on executive compensation ( 0.2 ) ( 0.5 ) ( 0.3 )

Impact of deconsolidation

Change in valuation allowance, net ( 19.7 ) ( 20.6 ) ( 21.4 )

2 unchanged sentences

For the years ended December 31, 2024, 2023 and 2022, the Company’s effective tax rate differs from the amount computed by applying the U.S.

federal statutory and state income tax rates to net loss before income tax, primarily as the result of state income taxes, stock-based compensation / deduction limitation on executive compensation, and changes in the Company’s valuation allowance.

federal statutory and state income tax rates to net loss before income tax, primarily as the result of state income taxes, stock-based compensation, and changes in the Company’s valuation allowance.

In December 2021, the Organization for Economic Co-operation and Development Inclusive Framework on Base Erosion Profit Shifting released Model Global Anti-Base Erosion rules (“Model Rules”) under Pillar Two.

The Model Rules set forth the “common approach” for a Global Minimum Tax at 15 percent for multinational enterprises with a turnover of more than 750 million Euros.

Rules under Pillar Two were effective from January 1, 2024.

The Company does not expect adoption of Pillar Two rules to have a significant impact on its consolidated financial statements during fiscal year 2024.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

Deferred Taxes

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A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized in a particular tax jurisdiction.

All available evidence, both positive

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

and negative, is considered to determine whether, based on the weight of that evidence, a valuation allowance is needed for some portion or all of a deferred tax asset.

Due to the losses the Company generated in the current and prior years, the Company believes it is not more likely than not that all of the deferred tax assets can be realized.

All available evidence, both positive and negative, is considered to determine whether, based on the weight of that evidence, a valuation allowance is needed for some portion or all of a deferred tax asset.

Due to the losses the Company generated in the current and prior years, the Company believes it is not more likely than not that all of the deferred tax assets can be realized for its U.S.

federal and state deferred tax assets.

Accordingly, the Company established and recorded a full valuation allowance on its net deferred tax assets of $ 795 million as of December 31, 2024 and a full valuation allowance on its net deferred tax assets of $ 718 million as of December 31, 2023.

The valuation allowance increased by $ 54 million and $ 288 million for 2023 and 2022, respectively primarily as a result of current year losses offset with deductibility of accrual / reserves.

The valuation allowance increased by $ 77 million and $ 54 million for 2024 and 2023, respectively primarily as a result of current year losses.

As of December 31, 2024, the Company had U.S.

9 unchanged sentences

Utilization of the net operating loss carryforwards are subject to various limitations due to the ownership change limitations provided by Internal Revenue Code (IRC) Section 382 and similar state provisions.

The Company performed an ownership analysis and identified three previous ownership changes in 2014, 2016 and 2020, as defined under Section 382 and 383 of the IRC, however none of the previous ownership changes resulted in a material limitation that will reduce the total amount of net operating loss carryforwards and credits that can be utilized.

The Company performed an ownership analysis and identified three previous ownership changes in 2014, 2016 and 2020, as defined under Section 382 and 383 of the IRC, however none of the previous

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

ownership changes resulted in a material limitation that will reduce the total amount of net operating loss carryforwards and credits that can be utilized.

Unrecognized Tax Benefits

9 unchanged sentences

The Company’s policy is to recognize interest and penalties associated with uncertain tax benefits as part of the income tax provision and include accrued interest and penalties with the related income tax liability on the Company’s consolidated balance sheets.

To date, the Company has not recognized any interest and penalties in its consolidated statements of operations, nor has it accrued for or made payments for interest and penalties.

To date, the Company has not recognized nor accrued for any material interest and penalties in its consolidated statements of operations.

The Company is subject to federal and state income taxes in the United States, and foreign income taxes in Canada and India.

Due to the history of net operating losses, the Company is subject to U.S.

federal, state and local examinations by tax authorities for all years since incorporation but as of December 31, 2023 are not currently under any audits.

federal, state and local examinations by tax authorities for all years since incorporation.

As of December 31, 2024, the Company is not currently under any audits that would materially change the unrecognized tax benefits recorded.

The Company has not provided U.S.

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tax liability will be immaterial, due to the participation exemption put in place under the Tax Act.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

NET LOSS PER SHARE

6 unchanged sentences

As there is no contractual obligation for participating securities to share in losses, the Company’s basic net loss per share is computed by dividing the net loss attributable to common shareholders by the weighted-average shares of common stock outstanding during periods with undistributed losses.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common shareholders for the years ended December 31, 2024, 2023, and 2022 (in millions, except share amounts which are presented in thousands, and per share amounts):

6 unchanged sentences

There were no preferred dividends declared or accumulated for the period.

The following securities were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive, or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period (in thousands):

Year Ended December 31,

2023 2022 2021

RSUs 60,896 54,547 53,446

Options 7,820 10,712 14,546

Unvested Shares from Early Exercise — — 4

Restricted Shares — — 692

Employee Stock Purchase Plan 1,992 1,867 —

Total anti-dilutive securities 70,708 67,126 68,688

BUSINESS ACQUISITIONS

On September 3, 2021, the Company acquired 100 % of the outstanding equity of Services Labs, Inc., including its consolidated subsidiaries (“Pro.com”), in exchange for $ 22 million in cash consideration.

The Company acquired Pro.com, a construction project platform, for its technology and talent.

Acquired intangible assets consisted of developed technology valued at $ 4 million and were amortized over one year .

Goodwill attributed to the Pro.com acquisition was $ 16 million.

For the years ended December 31, 2024, 2023, and 2022, 54,665 thousand shares, 70,708 thousand shares, and 67,126 thousand shares, respectively were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive, or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period.

DECONSOLIDATION

On July 31, 2024, a consolidated subsidiary of the Company, Mainstay Labs Inc.

(“Mainstay”), formerly Open Exchange Labs Inc., issued its Series A Preferred Stock to third-party investors (the “Private Investment”).

Mainstay is a market intelligence and transaction platform for the single-family rental industry.

As a result of the Private Investment, the Company no longer had a controlling financial interest in Mainstay in accordance with ASC Topic 810, Consolidation, and Mainstay was deconsolidated from the Company’s consolidated financial statements as of July 31, 2024 (the “Deconsolidation”).

The Company determined that the Deconsolidation does not meet the criteria requiring presentation as discontinued operations in accordance with U.S.

GAAP because it does not represent a strategic shift that will have a major effect on the Company’s operations or financial results.

Upon Deconsolidation, the Company recognized a $ 14 million gain in Other income (loss) – net in the consolidated statement of operations for the year ended December 31, 2024, which represented the fair value of the Company’s retained interest in Mainstay less the carrying value of Mainstay’s net assets and the Company’s liabilities due to Mainstay as of July 31, 2024.

The Company’s retained interest in Mainstay as of July 31, 2024 was recognized as a non-marketable equity security investment under ASC 321, Investment – Equity Securities.

As of December 31, 2024, the retained interest in Mainstay was $ 39 million, which is presented in Other assets in the consolidated balance sheets.

The investment is measured at fair value on a non-recurring basis, with the fair value initially determined as of the transaction date.

There have been no indicators of impairment or other observable price changes since that date.

The fair value on the transaction date was calculated using the option pricing method utilizing a back-solve methodology to infer the total equity value based on the pricing of the Private Investment.

See “Part II – Item 8.

Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 1.

Description of Business and Accounting Policies – Investments.”

See “Note 17 — Related Parties” for further information on the Company’s ongoing relationship and transactions with Mainstay.

RELATED PARTIES

As a result of the Company’s continued investment in Mainstay, transactions between the Company and Mainstay subsequent to the Deconsolidation are considered to be related-party transactions.

Prior to the Deconsolidation, transactions between Mainstay and Opendoor were eliminated upon consolidation.

OPENDOOR TECHNOLOGIES INC.

1 unchanged sentence

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

On November 3, 2021, the Company acquired the assets of RedDoor HQ Inc.

(“RedDoor”) as part of a business combination in exchange for $ 15 million in cash consideration, of which $ 2 million was paid out one year following the date of closing.

The Company acquired the processes, systems and talent of RedDoor, which previously operated an online mortgage brokerage platform.

Acquired intangible assets consisted of developed technology valued at $ 3 million and were amortized over one year .

Goodwill attributed to the RedDoor acquisition was $ 13 million.

On November 4, 2022, the Company acquired TaxProper Inc.

as part of a business combination in exchange for $ 10 million in cash consideration, of which $ 3 million is to be paid out one year following the date of closing.

The Company acquired the processes, systems and talent of TaxProper, which previously provided tax forecasting, payments, and appeals services.

Acquired intangible assets consist of developed technology valued at $ 7 million and are being amortized over two years .

Goodwill attributed to the TaxProper acquisition was $ 2 million.

Subsequent to the Deconsolidation:

• Mainstay provides property tax compliance services (“Property Tax Services”) and brokerage services (“Brokerage Services”) to the Company in the normal course of business, which were nominal for the year ended December 31, 2024.

• The Company is providing certain transition administrative services for a limited period of time to Mainstay (“Transition Services”) which are being paid on a quarterly basis in arrears, in the form of Mainstay Series A Preferred Stock at the original Series A Preferred Stock issuance price.

Services provided for the year ended December 31, 2024 were immaterial .

• The Company has no compensation arrangements with the management of Mainstay who are responsible for directing the activities that most significantly impact the economics of Mainstay (“Mainstay Management”).

As of the Deconsolidation, outstanding Opendoor RSUs held by Mainstay employees, other than Mainstay Management, were modified so that the service-based vesting requirement will be satisfied as long as the Mainstay employee continues to provide services to Mainstay (“Post Deconsolidation RSUs”).

For the year ended December 31, 2024 subsequent to Deconsolidation, 932,163 shares of common stock were issued to Mainstay employees for the settlement of RSUs, net of shares withheld for participant taxes.

As of December 31, 2024, 860,410 RSUs remained unvested and outstanding.

• The Company is continuing to pay for the bonuses of certain Mainstay employees, other than Mainstay Management, through November 2025 (“Post Deconsolidation Bonuses”).

Amounts paid during, and due as of, the year ended December 31, 2024 were immaterial .

SEGMENT INFORMATION

The Company is managed as a single operating and reportable segment on a consolidated basis, reflecting how the Company’s Chief Operating Decision Maker (“CODM”) allocates resources and evaluates the Company’s financial information.

The operating segment is the Company’s residential real estate product and service offerings.

The Company determined that the Chief Executive Officer is the CODM, given their responsibility for making resource allocation decisions, assessing performance, making strategic operational decisions and managing the organization at a consolidated level.

As the Company is managed as a single operating and reportable segment, the measure of segment profit or loss is consolidated net loss.

The CODM utilizes the financial information below in assessing the segment’s performance and allocating resources.

The measure of segment assets is reported on the Company’s consolidated balance sheets as total assets.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

The table below highlights the Company’s reportable segment’s expenses and net loss for the years ended December 31, 2024, 2023, and 2022 (in millions):

Year Ended December 31,

2024 2023 2022

Revenue $ 5,153 $ 6,946 $ 15,567

Cost of revenue ( 4,720 ) ( 6,459 ) ( 14,900 )

Direct selling costs (1)

( 132 ) ( 197 ) ( 414 )

Holding costs (2)

( 58 ) ( 116 ) ( 147 )

Advertising and other marketing expense (3)

( 90 ) ( 80 ) ( 206 )

Operations (4)

( 74 ) ( 80 ) ( 151 )

Fixed operating expense (5)

( 209 ) ( 259 ) ( 306 )

Stock-based compensation ( 114 ) ( 126 ) ( 171 )

Interest expense ( 133 ) ( 211 ) ( 385 )

Interest income 53 106 22

( 68 ) 201 ( 262 )

Net loss $ ( 392 ) $ ( 275 ) $ ( 1,353 )

________________

(1) Represents selling costs incurred related to homes sold in the relevant period.

This primarily includes broker commissions, external title and escrow-related fees and transfer taxes and are included in Sales, marketing and operations.

(2) Represents holding costs incurred both in the period presented and in prior periods on homes sold in the period presented (“Resale Cohort Holding Costs.”) Holding costs include mainly property taxes, insurance, utilities, homeowners association dues, cleaning and maintenance costs.

Holding costs are included in Sales, marketing and operations on the Consolidated Statements of Operations in the period in which they are incurred (“GAAP Holding Costs.”)

(3) Advertising expenses are included in Sales, marketing and operations.

Other marketing expenses include non-advertising marketing expenses such as acquisition leads and referrals and public relations services and are included in Sales, marketing and operations.

(4) Represents operating expenses that are generally related to the volume of homes transacted during the period and tend to be variable in nature.

Primarily includes workforce expenses in support of sales, and real estate inventory operations.

(5) Represents operating expenses that are not directly correlated with home transaction volumes.

These expenses generally include costs related to salaries and benefits for our leadership, finance, technology, human resources, legal, marketing and administrative personnel, as well as third-party professional services fees, rent expense and third-party software.

(6) Other segment (expenses) income are primarily made up of (loss) gain on extinguishment of debt, depreciation and amortization, and goodwill impairment.

This also includes the elimination of holding costs incurred in prior periods on homes sold in the periods presented, and includes holding costs incurred in the current period on homes remaining in inventory at period end.

COMMITMENTS AND CONTINGENCIES

5 unchanged sentences

Accruals are recorded when the outcome is probable and can be reasonably estimated.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

There are various claims and lawsuits arising in the normal course of business pending against the Company, some of which seek damages and other relief which, if granted, may require future cash expenditures.

15 unchanged sentences

The plaintiffs seek class certification, an award of unspecified compensatory damages, an award of interest and reasonable costs and expenses, including attorneys’ fees and expert fees, and other and further relief as the court may deem just and proper.

The defendants filed motions to dismiss on June 30, 2023, which are pending before the court.

We believe that the allegations in the complaint are without merit and we intend to vigorously defend ourselves in the matter.

The defendants filed motions to dismiss on June 30, 2023, which the court granted on February 27, 2024 without prejudice.

On May 14, 2024, the court granted plaintiffs’ motion for reconsideration of certain portions of the court’s order dismissing the complaint.

The court’s orders on the motion to dismiss and motion for reconsideration dismissed all Exchange Act claims and Securities Act claims except for a portion of plaintiffs’ claims brought under Section 11 and Section 15 of the Securities Act.

Defendants filed answers to the complaint on July 12, 2024.

The plaintiffs and the defendant participated in a mediation in February 2025 following which the Company proposed a settlement offer to resolve all claims in the consolidated action on a class-wide basis, which is within the limits of insurance coverage.

Accordingly, pursuant to applicable accounting requirements, the Company has recorded a liability reflecting the proposed settlement amount.

If the offer is not accepted, or a settlement cannot be reached or if a proposed settlement is not approved by the court, the Company intends to vigorously defend itself in the matter.

On March 1, 2023 and March 15, 2023, shareholder derivative lawsuits were filed in the United States District Court for the District of Arizona, captioned Carlson v.

6 unchanged sentences

The cases have been consolidated into a single action, captioned Opendoor Technologies Inc.

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

Stockholder Derivative Litigation (Case No.

The consolidated derivative action has been stayed pending further developments in In re Opendoor Technologies Inc.

Securities Litigation .

On June 29, 2023, a shareholder derivative lawsuit was filed in the United States District Court for the District of Delaware, captioned Juul v.

4 unchanged sentences

The plaintiffs seek to maintain the derivative actions on behalf of the Company, an award of unspecified compensatory damages, an order directing the Company to reform its corporate governance and internal procedures, restitutionary relief, an award of interest and expenses, including attorneys’ fees and expert fees, and other and further relief as the court may deem just and proper.

These derivative actions have been stayed pending further developments in In re Opendoor Technologies Inc.

This derivative action has been stayed pending further developments in In re Opendoor Technologies Inc.

Securities Litigation .

4 unchanged sentences

Securities Litigation .

The plaintiffs have brought claims against certain current and former directors and officers of the Company for breach of fiduciary duty, contribution under Sections 10(b) and 21D of the Exchange Act, SEC Rule 10b-5, violations of Section 14(a) of the Exchange Act, and SEC Rule 14a-9 promulgated thereunder.

The plaintiffs seek to maintain the derivative action on behalf of the Company, an award of unspecified compensatory damages, an order directing one of the defendants to disgorge monies allegedly obtained from certain Company stock sale, equitable relief, an award of interest and expenses, including attorneys’ fees and expert fees, and other and further relief as the court may deem just and proper.

The plaintiffs have brought claims against certain current and former directors and officers of the Company for breach of fiduciary duty, contribution under Sections 10(b)

OPENDOOR TECHNOLOGIES INC.

Notes to Consolidated Financial Statements

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

and 21D of the Exchange Act, SEC Rule 10b-5, violations of Section 14(a) of the Exchange Act, and SEC Rule 14a-9 promulgated thereunder.

The plaintiffs seek to maintain the derivative action on behalf of the Company, an award of unspecified compensatory damages, an order directing one of the defendants to disgorge monies allegedly obtained from certain personal sales of Company stock, equitable relief, an award of interest and expenses, including attorneys’ fees and expert fees, and other and further relief as the court may deem just and proper.

This derivative action has been stayed pending further developments in In re Opendoor Technologies Inc.

7 unchanged sentences

The plaintiff seeks to maintain the derivative action on behalf of the Company, an award of unspecified compensatory damages, an order directing the Company to reform certain corporate governance and internal procedures, restitution, an award of cost and expenses, including attorneys’ fees and expert fees, and other and further relief as the court may deem just and proper.

The defendants filed motions to dismiss on February 8, 2024, which were granted without prejudice on August 14, 2024, and the plaintiff filed an amended complaint on September 12, 2024.

On October 28, 2024, the defendants filed motions to dismiss the complaint, which are pending before the court.

A global mediation of all pending shareholder derivative lawsuits based on the same facts and circumstances as In re Opendoor Technologies Inc.

Securities Litigation was held on February 7, 2025.

The parties agreed in principle that Opendoor would adopt certain corporate governance reforms as part of a potential global resolution of the shareholder derivative lawsuits and in exchange for a full release of claims.

The Company expects that the payment of any court-approved attorneys’ fees and costs would be funded by proceeds from applicable insurance policies.

If the settlement is not consummated or approved by the relevant courts, the Company and its officers and directors intend to vigorously defend themselves in the litigation.

RESTRUCTURING

During the years ended December 31, 2023 and 2022, the Company initiated workforce reductions to realign its capacity with volume expectations, streamline the organization and focus its investments to support its growth plans, re-scale the business, and improve costs.

In the fourth quarter of 2023, the Company initiated two workforce reductions, impacting 120 employees, representing approximately 6 % of the Company’s workforce at that time.

The Company will provide severance and other termination benefits (“Post-Employment Benefits”) to impacted employees for an expected total expense of approximately $ 4 million, of which $ 1 million was paid out through December 31, 2023.

On April 18, 2023, the Company announced a workforce reduction of approximately 560 employees, representing approximately 22 % of the Company’s workforce at that time and primarily impacting volume-based roles.

The Company provided Post-Employment Benefits to impacted employees for a total expense of approximately $ 10 million.

During the years ended December 31, 2024, 2023, and 2022 the Company initiated workforce reductions to align its capacity with volume expectations, streamline the organization and focus its investments to support its growth plans.

These actions were undertaken to optimize costs while preserving the flexibility needed to support future scaling of the business.

On November 7, 2024, the Company announced a workforce reduction of approximately 300 employees, representing 17 % of its workforce at that time as part of a reorganization aimed at prioritizing strategic growth and driving long-term efficiencies (“2024 Restructuring”).

The Company is providing post-employment benefits to impacted employees for a total cash cost of approximately $ 10 million.

In addition to the workforce reduction, the Company incurred $ 3 million of costs related to the early termination of certain leases, and incurred $ 4 million in expenses associated with other activities related to the Company’s cost reduction efforts.

Payments related to the 2024 Restructuring began in December 2024 and are expected to continue into 2025.

In 2023, the Company initiated workforce reductions, impacting approximately 680 employees.

The Company provided severance and other termination benefits (“Post-Employment Benefits”) to impacted employees for a total expense of approximately $ 14 million.

Payments related to this workforce reduction were substantially completed as of December 31, 2023.

3 unchanged sentences

Payments related to this workforce reduction were substantially completed as of December 31, 2022.

These costs have been presented within the Restructuring costs line in the Company’s consolidated statement of operations.

As of December 31, 2023, the remaining $ 3 million is included within Accounts payable and other accrued expenses in the Consolidated balance sheets.

The following table presents the activity of the restructuring liability (in millions).

As of December 31, 2024, the remaining $ 7 million in restructuring costs, presented within the Restructuring costs line in the consolidated statements of operations, is included within Accounts payable and other accrued expenses in the consolidated balance sheets.

OPENDOOR TECHNOLOGIES INC.

1 unchanged sentence

(Tabular amounts in millions, except share and per share amounts, ratios, or as noted)

The following table presents the activity of the restructuring liability (in millions):

Balance-December 31, 2021

5 unchanged sentences

Balance-December 31, 2023

Additions charged to expense 17

Cash payments ( 13 )

Balance-December 31, 2024

SUBSEQUENT EVENTS

The Company has evaluated the impact of events that have occurred subsequent to December 31, 2023, through the date the consolidated financial statements were filed with the SEC.

Based on this evaluation, other than as recorded or disclosed within these consolidated financial statements and related notes, the Company has determined that there are no material subsequent events that would require recognition or disclosure.

Subsequent to the balance sheet date but prior to the issuance of these financial statements, the Company entered into amendments to certain of its non-recourse asset-backed debt agreements that, among other updates, extended the final maturity dates of such agreements by approximately 1 to 3 years.

As a result of the amendments to these existing non-recourse asset-backed debt agreements, the Company has an aggregate borrowing capacity of $ 8.0 billion and fully committed borrowing capacity of $ 2.3 billion.

OPENDOOR TECHNOLOGIES INC.

3 unchanged sentences

(In millions, except share data)

CURRENT ASSETS:

Other current assets

Total current assets 21 —

Intangibles - net — 1

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LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable and other accrued liabilities

Interest payable — 1

Total current liabilities 23 —

Convertible senior notes 378 376

7 unchanged sentences

Accumulated deficit ( 3,725 ) ( 3,333 )

Accumulated other comprehensive income (loss) ( 1 ) ( 4 )

Accumulated other comprehensive loss

Total shareholders’ equity 713 967

11 unchanged sentences

Loss from operations ( 14 ) ( 8 ) ( 7 )

Warrant fair value adjustment — — 12

Gain on extinguishment of debt

Interest expense ( 3 ) ( 5 ) ( 8 )

Income (loss) before income taxes

(Loss) income before income taxes

( 17 ) 212 ( 15 )

Income tax expense — — —

13 unchanged sentences

Depreciation and amortization, net of accretion 2 3 7

Warrant fair value adjustment — — ( 12 )

Gain on early extinguishment of debt

1 unchanged sentence

Other — 2 ( 2 )

Changes in operating assets and liabilities:

Other assets ( 20 ) — —

Accounts payable and other accrued liabilities 22 — —

Net cash used in operating activities ( 13 ) ( 9 ) ( 10 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of intangible assets — — ( 1 )

Investment in subsidiary ( 5 ) ( 4 ) ( 6 )

Distribution from subsidiary 11 370 10

Net cash provided by (used in) investing activities 366 4 ( 1,722 )

Net cash provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of convertible senior notes — — 953

Repurchase of convertible senior notes

Purchase of capped calls related to convertible senior notes — — ( 119 )

Settlement of capped calls related to convertible senior notes 2 — —

Proceeds from exercise of stock options — 3 4

Proceeds from issuance of common stock for ESPP 5 2 2

Proceeds from warrant exercises — — 22

Proceeds from February 2021 Offering — — 886

Issuance of common stock — — ( 29 )

Net cash (used in) provided by financing activities

( 357 ) 6 1,728

Net cash provided by (used in) financing activities

NET INCREASE IN CASH AND CASH EQUIVALENTS — — —

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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION – Cash paid during the period for interest $ 1 $ 3 $ 2

DISCLOSURES OF NONCASH FINANCING ACTIVITIES:

Recognition of warrant liability $ — $ — $ —

Issuance of common stock in extinguishment of warrant liabilities $ — $ — $ ( 35 )

See accompanying note to condensed financial statements.

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data