Item 7. Management’s Discussion and Analysis
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. The discussion should be read together with the historical audited annual consolidated financial statements as of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024, and 2023.
This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Forward-Looking Statements,” “Risk Factors,” or in other parts of this Annual Report on Form 10-K.
Overview
Opendoor’s mission is to tilt the world in favor of homeowners, by making homeownership simpler, faster, and fairer for everyone. Residential real estate is a trillion-dollar industry underpinned by a process that is complicated, time-consuming, stressful, and offline. Our data-driven pricing models and integrated local operations are modernizing residential real estate by providing a simple, certain, and largely digital way to buy and sell homes. Since our founding, we have completed over 294,000 transactions across the United States, making us one of the largest buyers and sellers of homes in the United States.
Financial Highlights and Operating Metrics
Year Ended December 31,
(in millions, except percentages, homes purchased, homes sold, number of markets, and homes in inventory)
2025 2024 2023 2024 to 2025 Change
2023 to 2024 Change
Revenue $ 4,371 $ 5,153 $ 6,946 $ (782) $ (1,793)
Gross profit $ 350 $ 433 $ 487 $ (83) $ (54)
Gross margin 8.0 % 8.4 % 7.0 %
Net loss $ (1,300) $ (392) $ (275) $ (908) $ (117)
Homes sold 11,791 13,593 18,708 (1,802) (5,115)
Homes purchased
8,241 14,684 11,246 (6,443) 3,438
Homes in inventory (at period end) 2,867 6,417 5,326 (3,550) 1,091
Inventory (at period end) $ 925 $ 2,159 $ 1,775 $ (1,234) $ 384
Percentage of homes “on the market” for greater than 120 days (at period end)
33 % 46 % 18 %
Non-GAAP Financial Highlights (1)
Contribution Profit (Loss)
$ 150 $ 242 $ (258) $ (92) $ 500
Contribution Margin 3.4 % 4.7 % (3.7) %
Adjusted EBITDA $ (83) $ (142) $ (627) $ 59 $ 485
Adjusted EBITDA Margin (1.9) % (2.8) % (9.0) %
Adjusted Net Loss $ (195) $ (258) $ (778) $ 63 $ 520
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(1) See “— Non-GAAP Financial Measures ” for further details and a reconciliation of such non-GAAP measures to their nearest comparable GAAP measures.
Current Housing Environment
Throughout 2025, the U.S. housing market remained constrained by elevated mortgage rates and persistent affordability challenges. Existing home sales totaled approximately four million units for the full year, representing a 30-year low and roughly 20% below the pre-pandemic decade average of approximately 5 million annual sales. Home prices remained relatively flat, supported by limited inventory, even as transaction volumes reflected continued buyer hesitancy. Inventory levels remained constrained in December, representing just over 3 months of supply. Mortgage rates declined to approximately 6.2%
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(Tabular amounts in millions, except share and per share data and ratios, or as noted)
in November from highs around 7% earlier in the year. However, seller-buyer disconnect persisted, with delistings (homes withdrawn from the market without selling) reaching the highest levels in Opendoor’s operating history.
In response to these market conditions, we maintained a disciplined, data-driven approach to managing our business, dynamically adjusting our pricing strategies to balance growth, margin, and risk. In 2025 we continued to have elevated spread levels in response to this uncertainty and expanded our agent-led distribution channel and capital-light product initiatives. Beginning in the fourth quarter of 2025, we refined our high spread policy to adopt a more tailored approach, providing stronger offers for higher-quality homes with greater expected resale velocity while maintaining higher spreads for lower-quality homes with elevated risk and slower resale clearance expectations. We believe these refinements will increase the likelihood of offer acceptance among higher-quality homes, improve the overall quality mix of homes in our portfolio, and support faster sell‑through. In addition, we dynamically adjust list prices to calibrate to market sell‑through rates and drive resale clearance. We closely monitor macroeconomic developments and remain agile in our decision-making, enabling us to respond effectively to shifts in interest rates and broader market conditions.
Factors Affecting our Business Performance
Market Penetration
Residential real estate is one of the largest consumer markets in the United States, of which less than 1% of the estimated $1.7 trillion of home value transacted annually is conducted online. Given the fact that we operate in a highly fragmented industry and offer a differentiated value proposition to the traditional offline selling process, we believe there is significant opportunity to expand our market share. By providing a consistent, high-quality and differentiated experience to our customers, we hope to continue to drive positive word-of-mouth awareness and trust in our platform.
Partnership channels with homebuilders, agents, and online real estate platforms are an important source of leads for our business. We have relationships with two of the largest online real estate platforms, Zillow and Redfin, which together reach millions of unique monthly visitors and allow home sellers to request an offer directly from Opendoor. In addition to driving incremental acquisitions, we expect these partnerships can build our brand awareness and serve as additional avenues for sellers to learn about the benefits of our flagship cash offer.
A continued source of opportunity is re-engagement with our base of registered sellers, meaning sellers that have received an offer from Opendoor but have not yet sold their home. In the last ten years, we have sent millions of offers and, while not everyone is ready to act when they request an offer, we treat everyone as a potential future seller. We perpetually iterate on our re-engagement strategies and believe that our registered customer base will continue to be an important source of home acquisition volumes.
Geographic Footprint
We continually evaluate opportunities to expand our market footprint. At the start of 2025, our products were available in 50 markets across select U.S. states. By the end of 2025, we expanded our reach to serve customers nationwide across the contiguous United States through one or more of our product offerings, including cash and cash plus offers.
Adjacent Services
We believe home sellers and buyers value simplicity and certainty. To that end, we are building an online, integrated suite of home services, which currently includes title insurance, escrow services and real estate brokerage services.
Our success with title insurance and escrow services helps validate our view that customers prefer an online, integrated experience. We will continue to evaluate new ways to improve our end-to-end solution and expect to invest in additional adjacent products and services over time, including through potential strategic transactions, growth opportunities or partnerships, with the expectation that these adjacent services will continue to improve our unit economics.
Unit Economics
We view Contribution Margin as a key measure of unit economic performance. Contribution Margin is a non-GAAP financial measure. See “— Non-GAAP Financial Measures ” for further details and a reconciliation of Contribution Margin to
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(Tabular amounts in millions, except share and per share data and ratios, or as noted)
gross margin. Our long-term financial performance depends, in part, on continuing to maintain and expand unit margins through the following initiatives:
• Optimization and enhancements of our pricing engine;
• Platform efficiency improvements through greater use of generative AI, automation and self-service;
• Incremental attach of services, which supplement the core transaction margin profile;
• Continuation of our agent-led distribution channel; and
• Leveraging our platform to develop additional offerings, which we expect can increase overall conversion and unlock more capital-light margin.
Inventory Management
Effectively managing our overall inventory position and balancing growth, margin, and risk are critical to our financial performance. Since our inception, we have prioritized investment in our pricing capabilities across our home acquisition processes and our forecasting and resale systems, and expect to continue to do so. As part of our overall risk management framework, we consider both individual market and aggregate portfolio exposures. We typically seek to maximize the resale margin performance of our inventory in the context of managing overall risk and inventory health through monitoring sell-through rates, holding periods, and portfolio aging, and we will adjust down listed prices on our inventory when appropriate to stay in-line with market sell-through rates and drive resale clearance. We also adjust the spreads embedded in our offers to respond to current market conditions, both at a macro and local level. (Spreads are defined as total discount to our home valuation at time of offer less the Opendoor service fee.)
Real estate inventory is reviewed for valuation adjustments on a quarterly basis. If the carrying amount for a given home is not expected to be recovered, an inventory valuation adjustment is recorded to cost of revenue and the home’s carrying value is adjusted to its net realizable value. Inventory valuation adjustments are not offset by any expected gains and are not reversed or adjusted should the expected net realizable value subsequently increase. We recorded inventory valuation adjustments of $57 million and $57 million during the years ended December 31, 2025 and 2024, respectively. See “— Critical Accounting Policies and Estimates — Real Estate Inventory” for a detailed discussion of inventory valuation adjustments.
As one key measure of inventory management performance, we evaluate our portfolio metrics relative to the broader market (as observed on the multiple listing services (“MLS”)). One such metric is our percentage of homes “on the market” for greater than 120 days as measured from initial listing date. As of December 31, 2025, such homes represented 33% of our portfolio, compared to 37% for the broader market when filtered for the types of homes we are able to underwrite and acquire based on characteristics such as market, price range, home type, home location, year built and lot size (which we refer to as our “buybox”). This metric fluctuates based on seasonal factors, market dynamics, and our resale strategies.
Inventory Financing
Our business model is working capital intensive and inventory financing is a key enabler of our growth. We primarily rely on our access to non-recourse asset-backed debt, which consists of asset-backed senior debt facilities and asset-backed mezzanine term debt facilities, to finance our home acquisitions. See “— Liquidity and Capital Resources — Debt and Financing Arrangements. ”
Seasonality
The residential real estate market is seasonal, with greater demand and home price appreciation from home buyers in the spring and summer, and typically weaker demand and lower home price appreciation in late fall and winter. In general, we expect our financial results and working capital requirements to reflect seasonal variations over time. However, other factors, including growth, market expansion and changes in macroeconomic conditions, such as inflation and interest rate fluctuations, have obscured the impact of seasonality in our historical financials and may continue to do so.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Tabular amounts in millions, except share and per share data and ratios, or as noted)
Non-GAAP Financial Measures
In addition to our results of operations below, we report certain financial measures that are not required by, or presented in accordance with, U.S. generally accepted accounting principles (“GAAP”).
These measures have limitations as analytical tools when assessing our operating performance and should not be considered in isolation or as a substitute for GAAP measures, including gross profit and net loss. We may calculate or present our non-GAAP financial measures differently than other companies who report measures with similar titles and, as a result, the non-GAAP financial measures we report may not be comparable with those of companies in our industry or in other industries.
Adjusted Gross Profit and Contribution Profit (Loss)
To provide investors with additional information regarding our margins and return on inventory acquired, we have included Adjusted Gross Profit and Contribution Profit (Loss), which are non-GAAP financial measures. We believe that Adjusted Gross Profit and Contribution Profit (Loss) are useful financial measures for investors as they are supplemental measures used by management in evaluating unit level economics and our operating performance. Each of these measures is intended to present the economics related to homes sold during a given period. We do so by including revenue generated from homes sold (and adjacent services) in the period and only the expenses that are directly attributable to such home sales, even if such expenses were recognized in prior periods, and excluding expenses related to homes that remain in inventory as of the end of the period. Contribution Profit (Loss) provides investors a measure to assess Opendoor’s ability to generate returns on homes sold during a reporting period after considering home purchase costs, renovation and repair costs, holding costs and selling costs.
Adjusted Gross Profit and Contribution Profit (Loss) are supplemental measures of our operating performance and have limitations as analytical tools. For example, these measures include costs that were recorded in prior periods under GAAP and exclude, in connection with homes held in inventory at the end of the period, costs required to be recorded under GAAP in the same period. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. We include a reconciliation of these measures to the most directly comparable GAAP financial measure, which is gross profit.
Adjusted Gross Profit / Margin
We calculate Adjusted Gross Profit as gross profit under GAAP adjusted for (1) inventory valuation adjustment in the current period and (2) inventory valuation adjustment in prior periods. Inventory valuation adjustment in the current period is calculated by adding back the inventory valuation adjustments recorded during the period on homes that remain in inventory at period end. Inventory valuation adjustment in prior periods is calculated by subtracting the inventory valuation adjustments recorded in prior periods on homes sold in the current period. Adjusted Gross Margin is Adjusted Gross Profit as a percentage of revenue. See “— Critical Accounting Policies and Estimates — Real Estate Inventory” for a detailed discussion of inventory valuation adjustments.
We view this metric as an important measure of business performance as it captures gross margin performance isolated to homes sold in a given period and provides comparability across reporting periods. Adjusted Gross Profit helps management assess home pricing, service fees and renovation performance for a specific resale cohort.
Contribution Profit / Margin
We calculate Contribution Profit (Loss) as Adjusted Gross Profit, minus certain costs incurred on homes sold during the current period including: (1) holding costs incurred in the current period, (2) holding costs incurred in prior periods, and (3) direct selling costs. Contribution Margin is Contribution Profit (Loss) as a percentage of revenue.
We view this metric as an important measure of business performance as it captures the unit level performance isolated to homes sold in a given period and provides comparability across reporting periods. Contribution Profit (Loss) helps management assess inflows and outflows directly associated with a specific resale cohort.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Tabular amounts in millions, except share and per share data and ratios, or as noted)
The following table presents a reconciliation of our Adjusted Gross Profit and Contribution Profit to our gross profit, which is the most directly comparable GAAP measure, for the periods indicated:
Year Ended December 31,
(in millions, except percentages) 2025 2024 2023
Revenue (GAAP)
$ 4,371 $ 5,153 $ 6,946
Gross profit (GAAP) $ 350 $ 433 $ 487
Gross Margin 8.0 % 8.4 % 7.0 %
Adjustments:
Inventory valuation adjustment – Current Period (1)(2)
19 25 23
Inventory valuation adjustment – Prior Periods (1)(3)
(25) (26) (455)
Adjusted Gross Profit $ 344 $ 432 $ 55
Adjusted Gross Margin 7.9 % 8.4 % 0.8 %
Adjustments:
Direct selling costs (4)
(123) (132) (197)
Holding costs on sales – Current Period (5)(6)
(47) (44) (50)
Holding costs on sales – Prior Periods (5)(7)
(24) (14) (66)
Contribution Profit (Loss)
$ 150 $ 242 $ (258)
Contribution Margin 3.4 % 4.7 % (3.7) %
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(1) Inventory valuation adjustment includes adjustments to record real estate inventory at the lower of its carrying amount or its net realizable value. See “— Critical Accounting Policies and Estimates — Real Estate Inventory. ”
(2) Inventory valuation adjustment — Current Period is the inventory valuation adjustments recorded during the period presented associated with homes that remain in inventory at period end.
(3) Inventory valuation adjustment — Prior Periods is the inventory valuation adjustments recorded in prior periods associated with homes that sold in the period presented.
(4) 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. Selling costs are included in Sales, marketing and operations on the Consolidated Statements of Operations.
(5) Holding costs primarily include property taxes, insurance, utilities, homeowners association dues and maintenance costs. Holding costs are included in Sales, marketing, and operations on the Consolidated Statements of Operations.
(6) Represents holding costs incurred in the period presented on homes sold in the period presented.
(7) Represents holding costs incurred in prior periods on homes sold in the period presented.
Adjusted Net Loss and Adjusted EBITDA
We also present Adjusted Net Loss and Adjusted EBITDA, which are non-GAAP financial measures that management uses to assess our underlying financial performance. These measures are also commonly used by investors and analysts to compare the underlying performance of companies in our industry. We believe these measures provide investors with meaningful period over period comparisons of our underlying performance, adjusted for certain charges that are non-cash, not directly related to our revenue-generating operations, not aligned to related revenue, or not reflective of ongoing operating results that vary in frequency and amount.
Adjusted Net Loss and Adjusted EBITDA are supplemental measures of our operating performance and have important limitations. For example, these measures exclude the impact of certain costs required to be recorded under GAAP. These measures also include inventory valuation adjustments that were recorded in prior periods under GAAP and exclude, in connection with homes held in inventory at the end of the period, inventory valuation adjustments required to be recorded under GAAP in the same period. These measures could differ substantially from similarly titled measures presented by other
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Tabular amounts in millions, except share and per share data and ratios, or as noted)
companies in our industry or companies in other industries. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. We include a reconciliation of these measures to the most directly comparable GAAP financial measure, which is net loss.
Adjusted Net Loss
We calculate Adjusted Net Loss as GAAP net loss adjusted to exclude non-cash expenses of stock-based compensation, equity securities fair value adjustment, intangibles amortization expense, and the amortization of stock-based compensation capitalized to internally developed software (“IDSW”). It excludes expenses that are not directly related to our revenue-generating operations such as restructuring, legal contingency accruals, and CEO make-whole provision. It also excludes loss (gain) on extinguishment of debt as these expenses or gains were incurred as a result of decisions made by management to terminate or partially extinguish portions of our outstanding credit facilities or convertible senior notes early; these expenses are not reflective of ongoing operating results and vary in frequency and amount. Adjusted Net Loss also aligns the timing of inventory valuation adjustments recorded under GAAP to the period in which the related revenue is recorded in order to improve the comparability of this measure to our non-GAAP financial measures of unit economics, as described above. Our calculation of Adjusted Net Loss does not currently include the tax effects of the non-GAAP adjustments because our taxes and such tax effects have not been material to date.
Adjusted EBITDA / Margin
We calculated Adjusted EBITDA as Adjusted Net Loss adjusted for depreciation and amortization, property financing and other interest expense, interest income, and income tax expense. Adjusted EBITDA is a supplemental performance measure that our management uses to assess our operating performance and the operating leverage in our business. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Tabular amounts in millions, except share and per share data and ratios, or as noted)
The following table presents a reconciliation of our Adjusted Net Loss and Adjusted EBITDA to our net loss, which is the most directly comparable GAAP measure, for the periods indicated:
Year Ended December 31,
(in millions, except percentages) 2025 2024 2023
Revenue (GAAP) $ 4,371 $ 5,153 $ 6,946
Net loss (GAAP) $ (1,300) $ (392) $ (275)
Adjustments:
Stock-based compensation 56 114 126
Stock-based compensation for market condition RSUs 103 — —
Equity securities fair value adjustment (1)
3 7 1
Intangibles amortization expense (2)
— 4 7
Amortization of stock-based compensation capitalized to IDSW (3)
14 — —
Inventory valuation adjustment – Current Period (4)(5)
19 25 23
Inventory valuation adjustment – Prior Periods (4)(6)
(25) (26) (455)
Restructuring (7)
10 17 14
CEO make-whole provision (8)
5 — —
Loss (gain) on extinguishment of debt
924 2 (216)
Legal contingency accrual and related expenses
— 5 —
Other (9)
(4) (14) (3)
Adjusted Net Loss $ (195) $ (258) $ (778)
Adjustments:
Depreciation and amortization, excluding amortization of intangibles
20 35 45
Property financing (10)
102 116 174
Other interest expense (11)
29 17 37
Interest income (12)
(39) (53) (106)
Income tax expense — 1 1
Adjusted EBITDA $ (83) $ (142) $ (627)
Adjusted EBITDA Margin (1.9) % (2.8) % (9.0) %
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(1) Represents the gains and losses on certain financial instruments, which are marked to fair value at the end of each period.
(2) Represents amortization of acquisition-related intangible assets. The acquired intangible assets had useful lives ranging from 1 to 5 years and amortization was incurred until the intangible assets were fully amortized in 2024.
(3) Beginning in 2025, the Company revised the presentation of the amortization of stock-based compensation capitalized to IDSW to more appropriately present the full impact of all stock-based compensation expenses. This expense was previously included in “Depreciation and amortization, excluding amortization of intangibles.” Had this presentation been applied for the years ended December 31, 2024 and December 31, 2023, Adjusted Net Loss would have improved by $13 million and $12 million, respectively, with no impact to Adjusted EBITDA.
(4) Inventory valuation adjustment includes adjustments to record real estate inventory at the lower of its carrying amount or its net realizable value. See “— Critical Accounting Policies and Estimates — Real Estate Inventory. ”
(5) Inventory valuation adjustment — Current Period is the inventory valuation adjustments recorded during the period presented associated with homes that remain in inventory at period end.
(6) Inventory valuation adjustment — Prior Periods is the inventory valuation adjustments recorded in prior periods associated with homes that sold in the period presented.
(7) Restructuring costs consist primarily of severance and employee termination benefits and bonuses incurred in connection with the elimination of employees’ roles, consulting fees and expenses related to the termination of certain leases incurred during the restructuring process.
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(Tabular amounts in millions, except share and per share data and ratios, or as noted)
(8) In connection with the appointment of the Company's new Chief Executive Officer in September 2025, the Company granted two make-whole awards related to compensation forfeited from his former employer. The awards consist of (i) a $15 million cash award and (ii) a restricted stock unit award with a grant date value of $15 million. Both awards vest nine months after his start date, contingent upon his continued service as Chief Executive Officer through the vesting date, and are expensed over the requisite service period. The CEO make-whole provision adjustment reflects only the expense associated with the cash make-whole award. The expense associated with the restricted stock unit make-whole award is included in the stock-based compensation line item presented separately in the reconciliation above.
(9) Primarily includes gain on deconsolidation, net and related party services income.
(10) Includes interest expense on our non-recourse asset-backed debt facilities.
(11) Includes (i) amortization of debt issuance costs, loan origination fees, commitment fees, unused fees, and other interest-related costs on our asset-backed debt facilities, and (ii) amortization of debt issuance costs and debt discounts and interest expense related to our convertible senior notes.
(12) Consists mainly of interest earned on cash, cash equivalents, restricted cash and marketable securities.
Components of Our Results of Operations
Revenue
We generate the majority of our revenue from the sale of homes that we previously acquired from homeowners. In addition, we generate revenue from additional services we provide to both home sellers and buyers, which consists primarily of title insurance and escrow services and brokerage services.
Home sales revenue from selling residential real estate is recognized when title to and possession of the property has transferred to the buyer and we have no continuing involvement with the property, which is generally the close of escrow. The amount of revenue recognized for each home sale is equal to the sale price of the home net of any concessions.
Cost of Revenue
Cost of revenue includes the property purchase price, acquisition costs and direct costs to renovate or repair the home. These costs are accumulated in real estate inventory during the property holding period and charged to cost of revenue under the specific identification method when the property is sold. Real estate inventory is reviewed for valuation adjustments at least quarterly. If the carrying amount for a given home is not expected to be recovered, an inventory valuation adjustment is recorded to cost of revenue and the home’s carrying value is adjusted to its net realizable value. Additionally, for our revenue other than home sales revenue, cost of revenue consists of any costs incurred in delivering the service, including associated headcount expenses such as salaries, benefits and stock-based compensation.
Operating Expenses
Sales, Marketing and Operations Expense
Sales, marketing and operations expense consists primarily of broker commissions (paid to the home buyers’ real estate agents and third-party listing agents, if applicable), resale closing costs, holding costs related to real estate inventory including property taxes, insurance, utilities, homeowners association dues and maintenance, and expenses associated with product marketing, promotions and brand-building. Sales, marketing and operations expense also includes any headcount expenses in support of sales, marketing, and real estate operations such as salaries, benefits and stock-based compensation.
General and Administrative Expense
General and administrative expense consists primarily of headcount expenses, including salaries, benefits and stock-based compensation for our executive, finance, human resources, legal and administrative personnel, third-party professional services fees and rent expense.
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(Tabular amounts in millions, except share and per share data and ratios, or as noted)
Technology and Development Expense
Technology and development expense consists primarily of employee-related expenses for product development, design, data analytics and engineering, including salaries, benefits and stock-based compensation, as well as contractor and consultant fees, third-party software and hosting costs, and amortization of internally developed software. We continue to focus our technology and development efforts on enhancing our pricing and valuation algorithms, improving transaction efficiency, and expanding the capabilities, product offerings and user experience of our digital home buying and selling platform. While we expect technology and development expenses to increase in absolute dollars as we continue to invest in our platform, over the long term we expect our technology and development expenses will eventually decline as a percentage of total revenues.
Restructuring Expense
Restructuring expense consists primarily of severance and other termination benefits for employees whose roles have been eliminated, consulting fees, and expenses related to the termination of certain leases incurred during the restructuring process. See “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 20. Restructuring” for additional information regarding restructuring expenses.
(Loss) Gain on Extinguishment of Debt
(Loss) gain on extinguishment of debt consists primarily of gains or losses recognized in conjunction with the termination or partial debt extinguishment of debt facilities and convertible senior notes and the derecognition of associated unamortized deferred costs. See “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 5. Credit Facilities, Long-Term Debt, and Convertible Notes” for additional information regarding the convertible senior notes.
Interest Expense
Interest expense consists primarily of interest paid or payable and the amortization of debt discounts and debt issuance costs. Interest expense varies period over period, primarily due to fluctuations in our inventory volumes and changes in the floating benchmark interest rates (“Benchmark Rates”), based on the secured overnight financing rate (“SOFR”), plus an applicable margin, which impact the interest incurred on our senior revolving credit facilities (see “— Liquidity and Capital Resources — Debt and Financing Arrangements ”).
We expect our overall interest expense to increase as inventory increases. Subject to market conditions and cost of capital trade-offs, we will evaluate opportunities to expand our sources of financing over time, which may allow us to diversify our mix of financing sources to include more cost-effective financing relative to our higher cost mezzanine term debt facilities.
Other Income — Net
Other income – net consists primarily of interest income on our Cash and Restricted cash balances and from our investment in money market funds, debt securities, and gains from deconsolidation.
Income Tax Expense
We record income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are recorded based on the estimated future tax effects of differences between the financial statement and income tax basis of existing assets and liabilities. These differences are measured using the enacted statutory tax rates that are expected to apply to taxable income for the years in which differences are expected to reverse. We recognize the effect on deferred income taxes of a change in tax rates in income in the period that includes the enactment date.
We record a valuation allowance to reduce our deferred tax assets and liabilities to the net amount that we believe is more likely than not to be realized. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Tabular amounts in millions, except share and per share data and ratios, or as noted)
Results of Operations
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
The following table sets forth our results of operations for the years ended December 31, 2025 and 2024:
Year Ended December 31, Change in
(in millions, except percentages) 2025 2024 $ %
Revenue $ 4,371 $ 5,153 $ (782) (15) %
Cost of revenue 4,021 4,720 (699) (15) %
Gross profit 350 433 (83) (19) %
Operating expenses:
Sales, marketing and operations 310 413 (103) (25) %
General and administrative 238 182 56 31 %
Technology and development 79 141 (62) (44) %
Restructuring 10 17 (7) (41) %
Total operating expenses 637 753 (116) (15) %
Loss from operations
(287) (320) 33 (10) %
Loss on extinguishment of debt
(924) (2) (922) N/M
Interest expense (131) (133) 2 (2) %
Other income-net
42 64 (22) (34) %
Loss before income taxes (1,300) (391) (909) 232 %
Income tax expense — (1) 1 (100) %
Net loss $ (1,300) $ (392) $ (908) 232 %
N/M - Not meaningful.
Revenue
Revenue decreased by $782 million, or 15%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease in revenue was primarily attributable to lower sales volumes during the year ended December 31, 2025. We sold 11,791 homes during the year ended December 31, 2025, compared to 13,593 homes during the year ended December 31, 2024, representing a decrease of 13%. Revenue per home sold decreased 2% between the same periods.
Cost of Revenue and Gross Profit
Cost of revenue decreased by $699 million, or 15%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease in cost of revenue was primarily attributable to lower sales volumes and a 2% decrease in cost of revenue per home sold.
Gross profit decreased from $433 million to $350 million and gross margin decreased from 8.4% to 8.0% for the years ended December 31, 2024 and December 31, 2025, respectively. For the same periods, Adjusted Gross Margin decreased from 8.4% to 7.9% and Contribution Margin decreased from 4.7% to 3.4%. The decrease in gross profit was attributable to lower sales volumes as discussed above. The decrease in gross margin, Adjusted Gross Margin and Contribution Margin was largely driven by a higher mix of older inventory in the resale cohort. Adjusted Gross Margin and Contribution Margin are non-GAAP financial measures. See “— Non-GAAP Financial Measures ” for further details and a reconciliation of such non-GAAP measures to their nearest comparable GAAP measures.
Operating Expenses
Sales, Marketing and Operations . Sales, marketing and operations decreased by $103 million, or 25%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily attributable to a $39 million decrease in advertising expense, which decreased from $86 million for the year ended December 31, 2024 to $47 million for the year ended December 31, 2025, a $36 million decrease in headcount expenses, including salaries, benefits, and stock-based
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(Tabular amounts in millions, except share and per share data and ratios, or as noted)
compensation expenses due to lower headcount consistent with ongoing cost-reduction and organizational streamlining efforts, an $11 million decrease in resale transaction costs and broker commissions, consistent with the 15% decrease in revenue during the same period, and a $9 million decrease in property holding costs due to decreased homes in inventory.
General and Administrative . General and administrative increased by $56 million, or 31%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily attributable to a $103 million increase in market-condition restricted stock units granted to executives, partially offset by a $38 million decrease in headcount expenses, including salaries, benefits, and stock-based compensation expenses due to lower headcount consistent with ongoing cost-reduction and organizational streamlining efforts, a $5 million decrease in legal loss contingency expense and a $4 million decrease in rent expense.
Technology and Development . Technology and development decreased by $62 million, or 44%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily driven by a $76 million decrease in headcount expenses, including salaries, benefits, and stock-based compensation expenses due to lower headcount consistent with ongoing cost-reduction and organizational streamlining efforts. These cost reductions were partially offset by a $21 million decrease in capitalization of IDSW expenses.
Restructuring. Restructuring decreased by $7 million, or 41%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was attributable to higher expenses associated with the Company’s transformation initiatives in 2024 than 2025.
Loss on Extinguishment of Debt
Loss on extinguishment of debt increased by $922 million, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The loss on extinguishment of debt of $924 million in the year ended December 31, 2025 resulted primarily from the Company’s partial repurchase of its 2030 Notes.
Interest Expense
Interest expense decreased by $2 million, or 2%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Other Income — Net
Other income – net decreased by $22 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily related to a $14 million decrease in interest income due to a reduction in interest rates and the average cash, cash equivalents and restricted cash balances, and a $14 million non-recurring gain recognized in 2024 from the deconsolidation of Mainstay. The decrease in Other income – net was partially offset by a $4 million decrease in net loss on marketable equity securities.
Income Tax Expense
Income tax expense changed by a nominal amount for the year ended December 31, 2025 compared to the year ended December 31, 2024.
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(Tabular amounts in millions, except share and per share data and ratios, or as noted)
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
The following table sets forth our results of operations for the years ended December 31, 2024 and 2023:
Year Ended December 31, Change in
(in millions, except percentages) 2024 2023 $ %
Revenue $ 5,153 $ 6,946 $ (1,793) (26) %
Cost of revenue 4,720 6,459 (1,739) (27) %
Gross profit 433 487 (54) (11) %
Operating expenses:
Sales, marketing and operations 413 486 (73) (15) %
General and administrative 182 206 (24) (12) %
Technology and development 141 167 (26) (16) %
Restructuring 17 14 3 21 %
Total operating expenses 753 873 (120) (14) %
Loss from operations
(320) (386) 66 (17) %
(Loss) gain on extinguishment of debt
(2) 216 (218) N/M
Interest expense (133) (211) 78 (37) %
Other income-net
64 107 (43) (40) %
Loss before income taxes (391) (274) (117) 43 %
Income tax expense (1) (1) — — %
Net loss $ (392) $ (275) $ (117) 43 %
N/M - Not meaningful.
Revenue
Revenue decreased by $1.8 billion, or 26%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease in revenue was primarily attributable to lower sales volumes during the year ended December 31, 2024. We sold 13,593 homes during the year ended December 31, 2024, compared to 18,708 homes during the year ended December 31, 2023, representing a decrease of 27%. Revenue per home sold increased 2% between the same periods. The decrease in sales volumes was primarily attributable to proactively slowing inventory acquisitions beginning in the third quarter of 2022 in reaction to volatility in the U.S. housing market coupled with a focus on clearing existing inventory, which had reached peak levels in 2022. The Company entered 2024 with 5,326 homes in inventory as compared to 12,788 homes in inventory at the start of 2023, representing a 58% decrease in homes available for resale.
Cost of Revenue and Gross Profit
Cost of revenue decreased by $1.7 billion, or 27%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease in cost of revenue was primarily attributable to lower sales volumes.
Gross profit decreased from $487 million to $433 million and gross margin increased from 7.0% to 8.4% for the years ended December 31, 2023 and December 31, 2024, respectively. For the same periods, Adjusted Gross Margin increased from 0.8% to 8.4% and Contribution Margin increased from (3.7)% to 4.7%. The decrease in gross profit was attributable to lower sales volumes as discussed above. The increase in gross margin, Adjusted Gross Margin and Contribution Margin reflects relative home price stabilization and higher spreads embedded in our acquisition offers beginning in the third quarter of 2022. As a reminder, Adjusted Gross Margin and Contribution Margin include inventory valuation adjustments recorded in prior periods on homes sold in the current period and exclude inventory valuation adjustments on homes remaining in inventory at the end of the period, which can create significant differences between these metrics and Gross margin. Adjusted Gross Margin and Contribution Margin for the years ended December 31, 2023 and December 31, 2024 are inclusive of $455 million and $26 million, respectively, of inventory valuation adjustments recorded in prior periods on homes sold in the current period. Adjusted Gross Margin and Contribution Margin are non-GAAP financial measures. See “— Non-GAAP Financial Measures ” for further details and a reconciliation of such non-GAAP measures to their nearest comparable GAAP measures.
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(Tabular amounts in millions, except share and per share data and ratios, or as noted)
Operating Expenses
Sales, Marketing and Operations . Sales, marketing and operations decreased by $73 million, or 15%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily attributable to a $65 million decrease in resale transaction costs and broker commissions, consistent with the 26% decrease in revenue during the same period. In addition, during the same period, headcount expenses, including salaries, benefits and stock-based compensation, decreased $21 million, primarily due to workforce reductions and the transition of certain roles to lower-cost geographies. Advertising expense increased by $11 million, from $75 million for the year ended December 31, 2023 to $86 million for the year ended December 31, 2024.
General and Administrative . General and administrative decreased by $24 million, or 12%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily attributable to a $8 million decrease in depreciation expense as we slowed our pace of fixed assets additions and existing assets became fully depreciated. In addition, headcount expenses, including salaries, benefits and stock-based compensation, decreased $8 million, primarily due to workforce reductions and the transition of certain roles to lower-cost geographies. Rent expense decreased by $3 million, driven by partial terminations of leases and subleases.
Technology and Development . Technology and development decreased by $26 million, or 16%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily driven by a $39 million reduction in headcount expenses, including salaries, benefits, and stock-based compensation, resulting from workforce reductions and the transition of certain roles to lower-cost geographies. Additionally, amortization of intangibles from past acquisitions declined by $3 million. These cost reductions were partially offset by a $17 million net increase in expenses related to internally developed software, reflecting lower capitalization of development costs and increased amortization expenses, partially offset by a decrease in impairment expense.
Restructuring. Restructuring increased by $3 million, or 21%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was attributable to the Company’s reduction in force announced on November 7, 2024 as well as the termination of certain non-cancelable leases and consulting fees incurred during the restructuring process.
(Loss) Gain on Extinguishment of Debt
(Loss) gain on extinguishment of debt decreased by $218 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The gain on extinguishment of debt of $216 million in the year ended December 31, 2023 resulted from the Company’s partial repurchase of its 2026 Notes at a discount, net of unamortized deferred costs associated with the 2026 Notes. This gain was partially offset by expenses related to partial debt extinguishments during the year ended December 31, 2023.
Interest Expense
Interest expense decreased by $78 million, or 37%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily attributable to a significant decrease in average balances in our non-recourse asset-backed debt and a decrease in loan fees as a result of committed debt reductions.
Other Income — Net
Other income – net decreased by $43 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily related to a $53 million decrease in interest income due to a reduction in the average cash, cash equivalents and restricted cash balances and a $7 million unrealized loss versus a $4 million unrealized gain on marketable equity securities during the years ended December 31, 2024 and December 31, 2023, respectively. The decrease was partially offset by the $14 million gain from the deconsolidation of Mainstay. See “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 16. Deconsolidation” for additional information regarding the deconsolidation of Mainstay.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Tabular amounts in millions, except share and per share data and ratios, or as noted)
Income Tax Expense
Income tax expense changed by a nominal amount for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Liquidity and Capital Resources
Overview
Our principal sources of liquidity have historically consisted of cash generated from our operations and from financing activities. As of December 31, 2025, we had cash and cash equivalents of $962 million and restricted cash of $339 million. The increase in our cash, cash equivalents and marketable securities balance of $283 million as compared to December 31, 2024 resulted primarily from approximately $198 million of total cash proceeds, after commissions, from the issuance of common stock under the at-the-market equity offering sales agreement (the “ATM Agreement”), as well as $75 million of gross cash proceeds, excluding certain fees and other offering expenses, from the issuance of convertible senior notes, $41 million of gross cash proceeds from certain PIPE offerings and capital released as a result of a decrease in real estate inventory partially offset by operating losses. The increase in our restricted cash balance of $247 million as compared to December 31, 2024 was primarily due to capital released as a result of a decrease in real estate inventory partially offset by $805 million net principal payments on non-recourse asset-backed debt.
As of December 31, 2025, the Company had total outstanding balances on our asset-backed debt of $1.1 billion and aggregate principal outstanding from convertible senior notes of $197 million. In addition, we had undrawn borrowing capacity of $6.0 billion under our non-recourse asset-backed debt facilities (as described further below), of which $500 million was committed.
As market conditions warrant, we may, from time to time, repurchase our outstanding debt securities in the open market, in privately negotiated transactions, by tender offer, by exchange transaction or otherwise. Such repurchases, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity and other factors and may be commenced or suspended at any time. The amounts involved and total consideration paid may be material.
In May 2025, the Company entered into privately negotiated transactions with certain holders of the 0.25% convertible senior notes due in 2026 (the “2026 Notes”) and new investors, pursuant to which the Company issued $325 million aggregate principal amount of 7.00% convertible senior notes due 2030 (the “2030 Notes”; collectively with the 2026 Notes “Convertible Senior Notes”) consisting of (i) $246 million aggregate principal amount of 2030 Notes issued in exchange for $246 million principal amount of 2026 Notes (the “Debt Exchange") and (ii) $79 million aggregate principal amount of 2030 Notes issued for cash. Such transactions resulted in gross cash proceeds of $75 million, excluding certain fees and other offering expenses, and represent an issue price of 95%. The Company accounted for the Debt Exchange of the 2026 Notes as a debt extinguishment and recorded $10 million of gain on debt extinguishment, included within the Company’s consolidated statements of operations. During the third quarter of 2025, the remaining 2026 Notes became due within 12 months of the balance sheet date. Accordingly, the $135 million outstanding principal balance of the 2026 Notes has been classified as a current liability in the consolidated balance sheet as of December 31, 2025.
The 2030 Notes become convertible during any calendar quarter if, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter, the last reported sale price of the Company’s common stock exceeds 130% of the conversion price for at least 20 trading days. This condition was met during the third and fourth quarter of 2025. Accordingly, the 2030 Notes became convertible at the option of the noteholders on October 1, 2025 and remain convertible through March 31, 2026 and are classified as a current liability in the consolidated balance sheet as of December 31, 2025. See “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 5 — Credit Facilities, Long-Term Debt, and Convertible Notes”for additional conversion conditions.
In November 2025, the Company entered into share purchase agreements with a limited number of purchasers (together, the “Purchasers”), providing for the issuance and sale by the Company of an aggregate of 180,580,200 shares of the common stock at a price of $6.56 per share (the “Registered Direct Offering”). Concurrent with the Registered Direct Offering, the Company entered into separate, privately negotiated transactions with the Purchasers, pursuant to which the Company agreed to repurchase an aggregate of approximately $264 million principal amount of the 2030 Notes for an aggregate repurchase price of
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(Tabular amounts in millions, except share and per share data and ratios, or as noted)
approximately $1.2 billion, which the Company repurchased using the net proceeds from the Registered Direct Offering (the “Convertible Notes Repurchase”). On a net basis, the Company did not receive any proceeds from these transactions. The Company accounted for the transaction as a debt extinguishment by recognizing the difference between the reacquisition price of the debt and the net carrying amount of the retired 2030 Notes as loss on debt extinguishment. Accordingly, on the retirement date, the Company: (i) reduced the carrying value of the 2030 Notes by $264 million, (ii) reduced outstanding deferred issuance costs and original issuance discount by $16 million, (iii) incurred fees of $4 million and (iv) recorded $933 million of loss on debt extinguishment, included within the Company’s consolidated statements of operations. The outstanding principal balance of the 2030 Notes as of December 31, 2025 is $62 million.
In May 2024, the Company entered into 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, 2025, the Company issued and sold an aggregate of 21,587,667 shares at a weighted average price of $9.26 per share under the ATM Agreement for total cash proceeds, after commissions, of approximately $198 million.
On September 10, 2025, the Company closed certain private investment in public equity (“PIPE”) offerings and entered into purchase agreements with accredited investors that resulted in aggregate gross cash proceeds to the Company of approximately $41 million. See “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 17 — Related Parties” for details regarding the PIPE offerings.
On November 6, 2025, our Board declared a distribution of a dividend in the form of warrants to purchase shares of our common stock, to holders of record as of the close of business on November 18, 2025. The Warrants (as defined herein) are initially exercisable only for cash at the applicable exercise price, subject to the Company’s ability to permit net exercise as provided in the applicable warrant agreement. See “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 11 — Shareholders' Equity ” to our consolidated financial statements included in this Annual Report on Form 10‑K for additional details regarding the Warrant Dividend (as defined herein).
We have incurred losses from inception through December 31, 2025 and we expect to incur additional losses in the future. Our ability to service our debt and fund working capital, business operations and capital expenditures will depend on our ability to generate cash from operating activities, which is subject to our future operating success, and ability to obtain inventory acquisition financing on reasonable terms, which is subject to factors beyond our control, including potential economic recession, rising interest rates, inflation and general economic, political and financial market conditions.
Our working capital requirements may increase should our inventory balance increase. We believe our cash and cash equivalents, together with cash we expect to generate from future operations and borrowings, will be sufficient to meet our working capital and capital expenditure requirements for a period of at least 12 months from the date of this Annual Report on Form 10-K.
Debt and Financing Arrangements
Our financing activities include: short-term borrowings under our asset-backed senior revolving credit facilities; the issuance of long-term asset-backed senior term debt, asset-backed mezzanine term debt, convertible debt, and new issuances of equity. Historically, we have required access to external financing resources in order to fund growth, expansion into new markets and strategic initiatives and we expect this to continue in the future. Our access to capital markets can be impacted by factors outside our control, including economic conditions.
We primarily use non-recourse asset-backed debt, consisting of asset-backed senior debt facilities and asset-backed mezzanine term debt facilities, to provide financing for our real estate inventory purchases and renovations. Our business is capital intensive and maintaining adequate liquidity and capital resources is needed as we continue to scale and accumulate additional inventory. We intend to actively manage our relationships with multiple financial institutions and seek to optimize duration, flexibility, efficiency and cost of funds, but there can be no assurance that we will be able to obtain sufficient capital for our business or to do so on acceptable financial and other terms.
Our asset-backed facilities are each collateralized by a specified pool of assets, consisting of real estate inventory, restricted cash and equity interests in certain consolidated subsidiaries of Opendoor that directly or indirectly own our real
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(Tabular amounts in millions, except share and per share data and ratios, or as noted)
estate inventory. The terms of our inventory financing facilities require an Opendoor subsidiary to comply with customary financial covenants, such as maintaining certain levels of liquidity, tangible net worth or leverage (ratio of debt to tangible net worth). As of December 31, 2025, the Company was in compliance with all financial covenants.
Our property financing subsidiaries’ assets and credit generally are not available to satisfy the debts and other obligations of any other Opendoor entities. Our asset-backed debt is non-recourse to Opendoor and our subsidiaries that are not party to the relevant financing arrangements, except for limited guarantees provided by an Opendoor subsidiary for certain obligations in situations involving “bad acts” by an Opendoor entity and certain other limited circumstances.
Our asset-backed senior debt facilities generally provide for advance rates of 75% to 90% against our cost basis in the underlying properties upon acquisition. Our mezzanine term facilities may finance up to 95% to 100% of our cost basis in the underlying properties upon acquisition. The maximum initial advance rates vary by facility and generally decrease on a fixed timeline that varies by facility based on the length of time a given property has been financed and other facility-specific adjustments, including adjustments based on collateral performance.
We would be required to keep amounts in restricted cash accounts to collateralize our asset-backed term debt facilities if the property borrowing base is insufficient to satisfy the borrowing base requirements or if the value of the assets of a certain Opendoor subsidiary declines below certain levels. If these events occur, we may utilize other available credit facilities for our cash needs, potentially at higher interest rates. The amounts required to be kept in restricted cash accounts may fluctuate due to seasonality, timing of property acquisitions and resales, and the outstanding loan balances under our asset-backed term debt facilities.
The following table summarizes certain details related to our non-recourse asset-backed debt as of December 31, 2025 (in millions, except interest rates):
Outstanding Amount
December 31, 2025 Borrowing
Capacity
Current Non-Current Weighted
Average
Interest Rate
End of Revolving / Withdrawal Period
Final Maturity
Date
Non-Recourse Asset-backed Debt:
Asset-backed Senior Revolving Credit Facilities
Revolving Facility 2018-2 $ 1,000 $ — $ — — % June 25, 2027 June 25, 2027
Revolving Facility 2018-3 750 — — 7.28 % December 11, 2028 December 11, 2028
Revolving Facility 2019-1 300 — — 7.24 % February 18, 2027 February 18, 2027
Revolving Facility 2019-2 300 — — 7.15 % October 2, 2026 October 1, 2027
Revolving Facility 2019-3 100 — — 7.28 % April 5, 2027 April 3, 2028
Asset-backed Senior Term Debt Facilities
Term Debt Facility 2021-S1 400 — 100 6.03 % February 24, 2027 August 24, 2027
Term Debt Facility 2021-S2 52 52 — 3.57 % September 10, 2025 March 10, 2026
Term Debt Facility 2021-S3 1,000 — 625 3.75 % January 31, 2027 July 31, 2027
Total $ 3,902 $ 52 $ 725
Issuance Costs — (3)
Carrying Value $ 52 $ 722
Asset-backed Mezzanine Term Debt Facilities
Term Debt Facility 2020-M1 $ 3,000 $ — $ 200 12.12 % February 25, 2028 February 25, 2029
Term Debt Facility 2022-M1 $ 250 $ — $ 150 12.31 % January 31, 2027 November 1, 2027
Total $ 3,250 $ — $ 350
Issuance Costs (4)
Carrying Value $ 346
Total Non-Recourse Asset-backed Debt $ 7,152 $ 52 $ 1,068
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(Tabular amounts in millions, except share and per share data and ratios, or as noted)
Asset-backed Senior Revolving Credit Facilities
We classify the senior revolving credit facilities as current liabilities on our consolidated balance sheets. In some cases, the borrowing capacity amounts under the asset-backed senior revolving credit facilities as reflected in the table are not fully committed and any borrowings above the committed amounts are subject to the applicable lender’s discretion. As of December 31, 2025, we had committed borrowing capacity with respect to asset-backed senior revolving credit facilities of $400 million.
The revolving period end dates and final maturity dates reflected in the table above are inclusive of any extensions that are at the sole discretion of the Company. Certain of our asset-backed senior revolving credit facilities may also have additional extension options that are subject to lender approval that are not reflected in the table above.
Asset-backed Senior Term Debt Facilities
We classify our senior term debt facilities as current or non-current liabilities in our consolidated balance sheets based on the applicable final maturity date. The carrying value of the non-current liabilities is reduced by issuance costs of $3 million. In some cases, the borrowing capacity amounts under the asset-backed senior term debt facilities as reflected in the table are not fully committed and any borrowings above the committed amounts are subject to the applicable lender’s discretion. As of December 31, 2025, we had committed borrowing capacity with respect to asset-backed senior term debt facilities of $777 million.
The withdrawal period end dates and final maturity dates reflected in the table above are inclusive of any extensions that are at the sole discretion of the Company. Certain of our asset-backed senior term debt facilities may also have additional extension options that are subject to lender approval that are not reflected in the table above.
Asset-backed Mezzanine Term Debt Facilities
In addition to the asset-backed senior revolving credit facilities and asset-backed senior term debt facilities, we have issued asset-backed mezzanine term debt facilities which are subordinated to the related senior facilities. The borrowing capacity amounts under the asset-backed mezzanine term debt facilities as reflected in the table are not fully committed and any borrowing above the committed amounts are subject to the applicable lender’s discretion. As of December 31, 2025, we had committed borrowing capacity with respect to asset-backed mezzanine term debt facilities of $450 million.
Convertible Senior Notes
In August 2021, we issued the 2026 Notes and in May 2025, we issued the 2030 Notes. The table below summarizes certain details related to our Convertible Senior Notes (in millions), as of December 31, 2025:
December 31, 2025 Remaining Aggregate Principal Amount
Unamortized Debt Discount and Issuance Costs Net Carrying Amount
2026 Notes $ 135 $ — $ 135
2030 Notes
62 (4) 58
Total Convertible Senior Notes
$ 197 $ (4) $ 193
See “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 5. Credit Facilities, Long-Term Debt, and Convertible Notes ” for additional information regarding our debt and financing arrangements.
Special Purpose Entities
The Company has established certain special purpose entities (“SPEs”) for the purpose of financing the Company’s purchase and renovation of real estate inventory through the issuance of asset-backed debt. The Company is the primary beneficiary of the various variable interest entities (“VIE”) within these financing structures and consolidates these VIEs. See
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(Tabular amounts in millions, except share and per share data and ratios, or as noted)
“ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 4. Variable Interest Entities ” for additional information regarding our VIEs.
The following table summarizes the assets and liabilities related to the VIEs consolidated by the Company as well as the assets, liabilities and equity related to Opendoor Technologies Inc (Parent Company Only) (“Parent Company”) and subsidiaries that are not VIEs, as of December 31, 2025 (in millions):
VIE Non-VIE Total
CURRENT ASSETS:
Cash and cash equivalents $ — $ 962 $ 962
Restricted cash 334 5 339
Escrow receivable 4 — 4
Real estate inventory 935 10 945
Inventory valuation adjustment (19) (1) (20)
Real estate inventory, net 916 9 925
Other current assets 3 66 69
Total current assets 1,257 1,042 2,299
OTHER ASSETS (1)
— 108 108
TOTAL ASSETS $ 1,257 $ 1,150 $ 2,407
CURRENT LIABILITIES:
Current asset-backed senior term debt
$ 52 $ — $ 52
Convertible senior notes – current portion — 193 193
Other current liabilities (2)
13 69 82
Total current liabilities 65 262 327
Non-current asset-backed mezzanine term debt
346 — 346
Non-current asset-backed senior term debt
722 — 722
LEASE LIABILITIES – Net of current portion — 6 6
OTHER LIABILITIES
— 1 1
TOTAL LIABILITIES $ 1,133 $ 269 $ 1,402
SHAREHOLDERS’ EQUITY: $ 124 $ 881 $ 1,005
________________
(1) The Company’s consolidated Other Assets include the following assets as shown in the Consolidated Balance Sheets: Property and Equipment – Net, $27 million; Right of Use Assets, $8 million; Goodwill, $3 million; and Other Assets, $70 million.
(2) The Company’s consolidated Other Current Liabilities include the following liabilities as shown in the Consolidated Balance Sheets: Accounts Payable and Other Accrued Liabilities, $80 million; Interest Payable, $1 million; and Lease Liabilities – Current, $1 million.
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(Tabular amounts in millions, except share and per share data and ratios, or as noted)
Cash Flows
The following table summarizes our cash flows for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31,
(in millions) 2025 2024 2023
Net cash provided by (used in) operating activities $ 1,049 $ (595) $ 2,344
Net cash (used in) provided by investing activities $ (12) $ 28 $ 44
Net cash used in financing activities $ (499) $ (210) $ (2,639)
Net increase (decrease) in cash, cash equivalents, and restricted cash $ 538 $ (777) $ (251)
Net Cash Provided by (Used in) Operating Activities
Net cash provided by (used in) operating activities was $1.0 billion, $(595) million and $2.3 billion for the years ended December 31, 2025, 2024 and 2023, respectively. For the year ended December 31, 2025, cash provided by operating activities was primarily driven by a $1.2 billion decrease in real estate inventory, partially offset by our net loss, net of non-cash items, of $106 million. For the year ended December 31, 2024, cash used in operating activities was primarily driven by a $449 million increase in real estate inventory and our net loss, net of non-cash items, of $168 million. For the year ended December 31, 2023, cash provided by operating activities was primarily driven by a $2.6 billion decrease in real estate inventory, partially offset by our net loss, net of non-cash items, of $214 million.
Net Cash (Used in) Provided by Investing Activities
Net cash (used in) provided by investing activities was $(12) million, $28 million and $44 million for the years ended December 31, 2025, 2024 and 2023, respectively. For the year ended December 31, 2025, cash used in investing activities consisted of a $12 million increase in property and equipment principally related to the capitalization of IDSW, as well as a $6 million increase in non-marketable equity securities, partially offset by a decrease in marketable securities of $6 million. For the year ended December 31, 2024, cash provided by investing activities primarily consisted of a $55 million decrease in marketable securities, partially offset by a $25 million increase in property and equipment principally related to the capitalization of IDSW. For the year ended December 31, 2023, cash provided by investing activities primarily consisted of a $80 million net decrease in marketable securities, partially offset by a $37 million increase in property and equipment principally related to the capitalization of IDSW.
Net Cash Used in Financing Activities
Net cash used in financing activities was $(499) million, $(210) million and $(2.6) billion for the years ended December 31, 2025, 2024 and 2023, respectively. For the year ended December 31, 2025, cash used in financing activities was primarily attributable to $805 million net principal payments on non-recourse asset-backed debt, partially offset by approximately $198 million of total cash proceeds, after commissions, from the issuance of common stock under the ATM Agreement, as well as $75 million of proceeds from the issuance of convertible senior notes, net of discount, and $41 million of proceeds from certain PIPE offerings. For the year ended December 31, 2024, cash used in financing activities was primarily attributable to $217 million net principal payments on non-recourse asset-backed debt. For the year ended December 31, 2023, cash used in financing activities was primarily attributable to $2.3 billion net principal payments on non-recourse asset-backed debt, as well as $362 million related to the partial repurchase of the 2026 Notes.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Tabular amounts in millions, except share and per share data and ratios, or as noted)
Contractual Obligations and Commitments
Contractual obligations are cash amounts that we are obligated to pay as part of certain contracts that we have entered into during the normal course of business. Below is a table that shows our material contractual obligations as of December 31, 2025:
Payment Due by Year
(in millions) Total Less than
1 year
1 – 3 years 4 – 5 years
More than
5 years
Senior and mezzanine term debt facilities (1)
$ 1,288 $ 126 $ 958 $ 204 $ —
Convertible senior notes (2)
202 202 — — —
Operating leases (3)
9 2 4 3 —
Purchase commitments (4)
248 248 — — —
Total $ 1,747 $ 578 $ 962 $ 207 $ —
________________
(1) Represents the principal amounts outstanding as of December 31, 2025 and estimated interest payments assuming the principal balances remain outstanding until maturity. The final maturity dates of the senior and mezzanine term debt facilities vary, as discussed above.
(2) Represents the principal amounts outstanding and interest payments for the 2026 Notes through maturity and the principal amounts outstanding for the 2030 Notes assuming conversion within one year (noteholders may convert through March 31, 2026). The 2030 Notes mature on May 15, 2030; assuming no conversions, total future cash outflows would be as follows:
Payment Due by Year
(in millions)
Total Less than
1 year
1 – 3 years 4 – 5 years More than
5 years
Convertible senior notes
$ 217 $ 140 $ 9 $ 68 $ —
(3) Represents future payments for long-term operating leases that have commenced, or have been executed but not yet commenced, as of December 31, 2025. In May 2025, the Company amended its Tempe, Arizona office lease to terminate the Company’s obligations with respect to a portion of the leased premises, which resulted in a decrease of undiscounted, future lease payments of $10 million.
(4) As of December 31, 2025, we were under contract to purchase 710 homes for an aggregate purchase price of $248 million.
Critical Accounting Policies and Estimates
Discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and related disclosure of contingent assets and liabilities, revenue, and expenses at the date of the financial statements. Generally, we base our estimates on historical experience and on various other assumptions in accordance with GAAP that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
We consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on the consolidated financial statements. Based on this definition, we have identified the critical accounting policy and estimate addressed below. In addition, we have other key accounting policies and estimates that are described in “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 1. Description of Business and Accounting Policies” .
Real Estate Inventory
Real estate inventory carrying value is equal to the lower of cost or net realizable value and each home constitutes the unit of account. Real estate inventory cost includes but is not limited to the property purchase price, acquisition costs and direct costs to renovate or repair the home, less inventory valuation adjustments, if any. The property purchase price is net of our service fee and represents the cash proceeds paid to the home seller. Real estate inventory is reviewed for valuation adjustments
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Tabular amounts in millions, except share and per share data and ratios, or as noted)
on a quarterly basis. If the carrying amount for a given home is not expected to be recovered, an inventory valuation adjustment is recorded to cost of revenue and the home’s carrying value is adjusted to its net realizable value. Inventory valuation adjustments are not offset by any expected gains and are not reversed or adjusted should the expected net realizable value subsequently increase. For homes under resale contract, the net realizable value is the contract price less expected selling costs and any expected concessions. For homes listed for sale and not under resale contract, net realizable value is management’s forecasted resale price, less expected selling costs. Changes in our pricing assumptions may lead to a change in the outcome of our inventory valuation adjustment, and actual results may also differ from our assumptions.
Recent Accounting Pronouncements
For information on recent accounting standards, see “ Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 1. Description of Business and Accounting Policies” .
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