Q4 revenue tops forecasts as losses narrow
Opendoor reported fourth quarter 2025 revenue of 736 million dollars, exceeding Wall Street expectations of 595 million dollars. Despite the beat, sales declined 32.1 percent year over year, reflecting continued pressure in the housing market and lower transaction volumes.
The company posted an adjusted loss of 0.07 dollars per share, better than the consensus estimate of a 0.09 dollar loss and an improvement from the 0.11 dollar loss recorded a year earlier. Adjusted EBITDA came in at negative 43 million dollars, representing a margin of negative 5.8 percent and year over year growth of 12.2 percent.
Operating margin deteriorated to negative 20.4 percent compared with negative 8.7 percent in the same quarter last year. Even so, free cash flow turned positive at 67 million dollars, a sharp reversal from negative 83 million dollars in the prior year quarter.
Homes sold during the quarter totaled 1,978, down by 844 units from a year earlier. The company’s market capitalization currently stands at approximately 4.41 billion dollars.
Looking ahead, management guided to positive EBITDA of 30 million dollars at the midpoint for the first quarter of 2026, significantly above analyst expectations that had called for a negative 37.4 million dollars figure.
Transformation plan and strategic reset
Chief Executive Officer Kaz Nejatian said the company is executing a four step transformation strategy aimed at reaching breakeven adjusted net income by the end of 2026 on a forward 12 month basis. The plan includes driving positive unit economics while increasing transaction velocity, shifting toward direct to consumer relationships, and expanding the product portfolio.
Founded by Eric Wu, Opendoor built its brand around a technology driven, streamlined approach to buying and selling homes. The company seeks to simplify residential real estate transactions through digital tools and instant offers.
Growth trajectory under scrutiny
Over the past five years, Opendoor grew revenue at an annualized rate of 11.1 percent. However, growth has reversed over the last two years, with sales declining at an average annual rate of 20.7 percent. The number of homes sold has also trended lower, averaging 7.7 percent year over year declines during that period.
Analysts currently expect revenue to increase about 7 percent over the next 12 months. While that projection suggests potential stabilization, it trails broader consumer discretionary sector growth expectations.
Profitability metrics remain a concern
Operating margin has averaged negative 6.4 percent over the last two years and slipped further in the most recent quarter. Persistent operating losses raise questions about the sustainability of the company’s model, particularly in a cyclical housing environment.
On the earnings front, long term losses have widened, with earnings per share declining at a 7 percent annual rate over four years. More recently, however, performance has improved. Wall Street expects the full year loss to narrow from negative 0.25 dollars per share to negative 0.21 dollars per share over the coming year.
Market reaction
Investors responded positively to the results, particularly the upbeat EBITDA outlook. Shares rose 16.5 percent immediately following the announcement, closing at 5.36 dollars. While revenue trends remain challenged, the combination of better than expected quarterly performance and improved forward guidance has renewed optimism about the company’s turnaround prospects.
