Good afternoon. Thank you for attending today's Offerpad F ourth Quarter 2024 Earnings Conference Call. My name is Jaylenne. I'll be your moderator for today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. I'd now like to turn the conference over to our host, Cortney Read. Cortney, you may proceed. Good afternoon and welcome to Offerpad F ourth Quarter 2024 Earnings Call. I'm joined today by Offerpad's Chairman and Chief Executive Officer, Brian Bair, and Chief Financial Officer, Peter Knag. During the call today, management will make forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently uncertain, and events could differ significantly from management's expectations. Please refer to the risks, uncertainties, and other factors relating to the company's business described in our filings with the U.S. Securities and Exchange Commission. Except as required by applicable law, Offerpad does not intend to update or alter forward-looking statements, whether as a result of new information, future events, or otherwise. On today's call, management will refer to certain non-GAAP financial measures. These metrics exclude certain items discussed in our earnings release under the heading Non-GAAP Financial Measures. The reconciliations of Offerpad's non-GAAP measures to the comparable GAAP measures are available in the financial tables of the fourth quarter earnings release on Offerpad's website. With that, I'll turn the call over to Brian. Thank you, Cortney, and thank you all for joining today. In the fourth quarter, we exceeded the midpoint of our revenue guidance, driven by a well-balanced mix of offerings. Our cash offer program performed well alongside our asset-light services, including the B2B Renovate business, the Direct+ Buyer Program, and the Agent Partnership Program. This success came despite broader market challenges like historically low residential resale volumes, down almost 40% from the pandemic highs, affordability constraints, and shifting industry commission structures. Through these conditions, we remained focused on delivering real estate solutions for consumers and partners while making meaningful progress towards building a sustainable long-term business. Some key highlights from the quarter include continued growth in the asset-light services, which are becoming an increasingly important revenue stream, the expansion of our Agent Partnership Program, driving agent engagement and increasing transaction volume while helping improve CAC by over 45% year over year, and improved operating efficiency, leading to cost savings and supporting contribution margins. These trends have positioned us well to achieve adjusted EBITDA profitability while ensuring financial sustainability across different market conditions. Our efforts remain centered on expanding high-margin revenue streams, optimizing operations, and managing resources effectively to support growth. Meanwhile, enhancements in our product and processes have increased efficiency and have us poised to quickly scale the business as the market recovers. Over the past two years, and specifically in recent quarters, returning to positive earnings and cash flow has been our key objective. Given the market's trajectory, we adjusted our approach by, one, diversifying revenue beyond our core cash offer business to create stability across all market cycles, two, refining acquisition strategies to ensure disciplined inventory management with strong return objectives, and finally, by optimizing our cost structure to leverage operational efficiencies and strengthen profitability. These strategic approaches have made Offerpad a more agile and efficient organization. By moderating acquisition volumes, we maintained a high-quality inventory portfolio while expanding our asset-light services, which have delivered stable contribution margins beyond our foundational business. As a result, we improved unit economics, reduced overhead costs, and positioned ourselves to scale profitably even in lower transaction volume environments. Looking ahead, we are strategically expanding our buy box criteria to capture increased market activity, focusing on acquiring high-potential homes in specific areas. We are ramping towards 1,000 acquisitions per quarter, optimizing our portfolio while improving margins. To further support our growth and maximize opportunities, we are actively exploring options to raise additional capital. This will enhance our financial flexibility, allowing us to scale acquisitions and other business line transactions as the market strengthens, and to position ourselves for long-term success. As mentioned in the previous quarter, we've enhanced how we deliver offers and engage with sellers. This advancement is powered by Offerpad's Citrus Value pricing technology, which leverages years of real estate data, market trends, and machine learning to generate offers. By analyzing hundreds of thousands of home price-related data points and real-time market conditions, Citrus Value enables us to provide customers with an estimated offer range within minutes and the ability to schedule a home inspection immediately. The momentum from our Q4 launch has continued into quarter one, increasing customer engagement and conversion rates. In January alone, we were in nearly 1,200 living rooms, an increase of almost 40% from our rollout in November. Supported by more effective advertising, we are seeing steady request volume and maintaining a strong 95% customer satisfaction score. This streamlined approach reduces touchpoints and gives sellers greater control over timing and decision-making. Alongside these improvements, our Agent Partnership Program continues to exceed expectations, further strengthening our acquisition strategy and lowering CAC. The PRO Tier, which allows agents to earn up to 4% on a successful acquisition in listings, has been a key driver of growth, leading to a 46% increase in quarterly requests year over year. As a result, acquisitions through the program now count for over 45% of our total acquisitions, reinforcing its positive impact on our business. In addition, our B2B Renovate business remains a strong revenue driver, benefiting from our experienced teams and refined processes. Despite some renovate partners operating at reduced levels, we delivered another strong quarter, completing 187 projects and generating over $4 million in revenue. For the full year, Offerpad generated $18 million in revenue, up 49% year over year. Notably, our average revenue per renovation increased from $11,000 to over $22,000, reflecting our expanded service offerings and new client onboarding. As we scale, we continue to add partners of all sizes and types, from institutional investors to local operators. Overall, we remain focused on our strategic priorities and are optimizing the business by diversifying our revenue mix and improving operational efficiency. With that, I'll turn the call over to Peter. Thank you, Brian. Over the past few months, we have concentrated on business improvements, including cost efficiencies and process enhancements. Our refined offer process has accelerated response times, driving higher customer engagement and inspection volume. These efforts align with our ongoing focus on optimizing margins and cost structures to ensure financial resilience in varying market conditions. At the end of the fourth quarter, we had 677 homes in inventory, with 22% owned for over 180 days and not under contract for resale. Our strategy of acquiring fewer homes at higher margins remained in place, aligning with seasonal trends and market dynamics. During Q4, we acquired 384 homes, a 9% decline compared to Q3, in line with our approach to inventory management. However, driven by our process improvements on our cash offer product, we increased acquisition activity towards the quarter's end to prepare for anticipated demand in 2025. While the cash offer business remains a key driver of contribution margin, asset-light services, including Renovate, Direct+, and our Agent Partnership Program, contributed over 33% of total contribution profit after interest in 2024. We anticipate continued momentum in these areas moving into 2025. Fourth quarter revenue totaled $174 million, landing in the upper half of our guidance range, with 503 homes sold. Year over year, revenue declined 28%, and homes sold decreased 29%, primarily due to a strategic reduction in acquisition base earlier in the year. Net loss for the quarter was $17.3 million, a decrease of 12% year over year. For the full year, revenue was $919 million, reflecting a 30% decrease from 2023. Net loss totaled $62 million, representing a 47% or $55 million improvement compared to the previous year. These improvements resulted from business performance enhancements and cost management initiatives. Homes sold in Q4 had an average time to cash of 142 days, consistent with expectations following acquisition adjustments in the second half of the year. We anticipated a temporary increase in this metric in Q1 before decreasing in Q2 as acquisition and sales cycles normalized. Gross margin for the quarter was 6.1%, with gross profit at $10.6 million. For the full year, gross margin was 7.9%, a 47% improvement from the prior year. Operating expenses, excluding property-related costs, totaled $18.2 million, reflecting a $1.1 million sequential improvement and a $2.9 million year-over-year reduction supported by improved advertising efficiencies, Agent Partnership Program expansion, and cost management efforts. Through our relentless focus on cost efficiencies, we're taking big steps towards profitability. After lowering annual operating expenses by nearly $70 million in 2023, we continue to make excellent progress in 2024, removing $44 million of additional cost. You should expect the cost improvements to continue into 2025 as we maintain focus on cost and process efficiencies. Adjusted EBITDA loss for Q4 was $11.5 million, decreasing $5.3 million sequentially. For the full year, adjusted EBITDA loss was $29.2 million, a $53 million, or 65% improvement, over 2023. As of the quarter's end, unrestricted cash totaled $43 million, with total liquidity exceeding $85 million when incorporating the net value of our carried inventory. As acquisition volumes rise, we expect to increase leverage using our asset-backed facilities while maintaining a strong financial position. Additionally, to potentially enhance our capital position and market opportunities, we've begun to engage in capital market discussions beyond our core asset-backed facilities partnerships. Looking ahead, we expect first quarter revenue to be in the range of $150 million-$170 million, with 450-500 homes sold. We also anticipate achieving slightly better adjusted EBITDA as we continue focusing on operating leverage. As we enter 2025, we remain focused on increasing acquisition activity, maintaining cost discipline, and positioning Offerpad for long-term stability and growth. Thank you. We will now open the call for questions. At this time, if you'd like to ask a question, it is star followed by one on your telephone keypad. If for any reason you would like to remove that question, it is star followed by two. Again, to ask a question, it is star followed by one. As a reminder, if you're using a speakerphone, please remember to pick up your headset before asking a question. I'll pause briefly here as questions are registered. Our first question comes from John Colantuoni with the company Jefferies. John, your line is now open. Thanks so much for taking my questions. Maybe starting with expanding the buy box, can you provide more detail on how you're adjusting the buy box and the systems, and talk a little bit to the systems and processes that you've instituted that help give you confidence that you can grow faster while also continuing to build on improved unit economics? Second, you spoke to simplifying certain elements of the offer process to make it more seamless for consumers to receive offers and schedule inspections. Maybe you can just provide a little bit more context into what exactly you're going to be doing there. Thanks. Sure. Awesome. I'll start with the first question. Hey, John. As far as expanding the buy box, what we're doing is basically moving up in price and price point, price range. Obviously, very market-specific. What's interesting about this market and the dynamics, when we first saw the transition happen, we were in the median home price or lower, really focused on that. What's interesting is it's really difficult for first-time home buyers right now to get into a home because of the affordability. What we've done is we moved the buy box up and really expanded it, where we were really focused around the $200,000 to maybe $500,000 price point. Now we're really into the $250,000 to maybe $600,000-$700,000 price point on the market. Basically, that allows us to find buyers that are coming out of another sale and moving their equity from one house to another. That has been really important. The other question you asked actually really ties into the first one. What we have done is really enhanced the cash offer process. With the new process now, when customers get into our website, they tell us about their home, they will get a price range within minutes, and then they can schedule their inspection instantly. What that also does is, as they schedule their inspection, we will get out to their house within just a few days. That also gives us more visibility to exactly what we are buying, which allows us to even go up to a higher price point, which really helps as well. It also allows us face-to-face in the living room to talk to the customer about our other products. If a cash offer does not work for them for whatever reason, we can give them options to list their home as well. Customer engagement so far has been really strong, really finding the seller where they are in the process. Thanks so much. Our next question comes from Nick Jones with the company JMP. Nick, your line is now open. Hi, this is Luke on for Nick. Thanks for taking our questions. I guess just with the $1,000 per month acquisition target, how should we think about that ramp throughout the year from a quarter-to-quarter standpoint, particularly given industry conditions are still tough that we're experiencing? Thank you. Yeah. Thank you, Luke. As we've discussed, $1,000 continues to be our North Star, but I'd highlight that our other products and platform services are really important too. It's a mix across all those products with different types of margins that is important as we move through the year and as we head towards adjusted EBITDA positive and then after that, the cash flow positive. It really does depend on that mix a little bit, but $1,000 homes remains our North Star as we identified last year. We expect to, we've given guidance for first quarter, but we're not going to be at $1,000 homes first quarter, and we won't be for second quarter either, but we're going to be moving sequentially towards that level as we get into the year and there's really two drivers around that from an operational perspective. One is the process improvements that we've done and the changes that we've done to the cash offer that are going to allow us to buy more homes and stay at wider margins. It is also the other products and the platform services, agent partnership products, Direct+, and Renovate. We are focused on executing to that. We are not ready to give guidance to exactly when we hit 1,000 homes, but we expect to be in that neighborhood as we exit the year. We also expect to be on a run rate basis, adjusted EBITDA break-even alongside that also as we exit the year. Appreciate it. Thank you. Our next question comes from Ryan Tomasello with the company KBW. Ryan, your line is now open. Hi, everyone. Thanks for taking the questions. Just a follow-up on the purchase volume target of $1,000 a quarter. How much of that would you say is dependent on this pending capital raise that you're talking about? I mean, obviously limited to what you can say, but is our best option at this point just to consider something similar to what you guys did last time you raised capital or anything else you can say around just the size and structure of what you're looking to do there? Thanks. Yeah. From a capital perspective, first of all, we have a path either way. We are looking at capital markets opportunities, but we're in conversations and we haven't finalized something there. It's important, of course, that we get the right cost of capital, the right structure. It's still at TBD. We probably will have more information on that next quarter. I want to highlight first and foremost that we have a path either way, regardless of whether we do something different on the balance sheet now or we stay the same course with our asset-backed partners. As we've highlighted before, we have very strong relationships with those banks and with those partners. I'd also say that I'd also highlight that we have, just going back across the last couple of quarters, we ended third quarter with about $90 million in liquidity between our cash and the net equity in our inventory. That did moderate, but only a small percentage. That moderated down to $85 million at the end of the year. Some of that's the net equity in the homes. The rest of it, we ended with $43 million in capital. We are looking at capital markets alternatives, but we're looking at it from a strategic perspective as we move through. There are three strategic pillars that we're focused on. One, cost outs, which is critical in enabling us to operate at lower volumes and still be profitable. The second is process improvements, which Brian talked to in his prepared remarks. The last question. Finally, the third pillar is really everything else, investing in the business and deeper penetration into markets and products and developing out our agent partnership products and our platform services. We are looking at capital markets options, and we think it's important to highlight that, but it's for those operational purposes. The other thing that I want to focus on is enhancing our unrestricted cash and our liquidity, of course. It gives flexibility. It is something that we're looking at for that reason. We're also looking at our cost of capital. There are a couple of different reasons that we're looking at some options. We want to try to get the best cost of capital as well alongside our cost out initiatives. Great. Thanks for all that, Peter. Just another follow-up for Brian. I guess you mentioned in your prepared remarks briefly just still digesting all the changes to organize real estate world and commission structures. Now that we have another quarter of that under our belt, just any update you can provide, Brian, on what you're seeing in the market in terms of the impact you're seeing in commissions, how Offerpad may or may not be evolving to take advantage of that. Thanks. Yeah. I think overall it's settled a bit. I still feel like we're seeing a little bit of confusion out there on the commission structures. The benefit from, I think that's where you're seeing some of the growth in our Agent Partnership Program. We have more and more agents that are starting with us first to submit an offer to us before they put the home on the market to see what we can pay for it. That continues to grow. As we talk about a lot, we want to be a solution center for everyone, not just sellers and buyers, but we want to be a solution center for agents and brokerages and builders and platforms. We feel we have an opportunity to do that. I think it's settled a little bit. There was definitely a significant, I think, pause when it all took place. I think things are getting settled in a little bit. Commission still sits, I think, top of everyone's mind right now, and I think that's helping us on our Agent Partnership Program. Our next question comes from Dae K. Lee with the company JP Morgan. Dae, your line is now open. Thanks for repeating my question. I have two. I'm on the first one. What was the biggest factor that drove how you guys are thinking about home acquisition heading into first quarter? Like you said, you guys have revised down, I guess, your target acquisition pace. I was curious, what's driving that and what needs to happen for you guys to be more confident in acquiring more homes? Secondly, could you clarify what adjusted EBITDA high for 1 Q means by slightly? Better, is that quarter over quarter or is that year over year? Does that assume contribution margin for your core cash business is still kind of at the lower end of your normal target range? Thank you. Let me jump in just operationally on the first part as far as home acquisitions. We've been going into 2025. We were expecting transaction volumes to increase year over year. Right now, it's early in the spring selling season, but we're anticipating it to be more flat, maybe a little bit of an increase, but more flat. Getting through the election, obviously, the Fed came out with reducing, they're not going to be as aggressive as reducing rates and some of those. We are cautiously optimistic about seeing maybe a slight increase from the year, but that's where with expanding our buy box, putting more services in place. I think it's key in just a few of the questions that I'm hearing is that getting more and more opportunities of buying homes we really want to buy and buying the homes that we feel that we can buy, renovate, and sell in the shortest period of time. As buyer demand stays weaker than normal, we want to make sure we're buying the right inventory. We've been focused on pockets in different areas of different markets where we want to buy. There's a lot of different things I can point to on that. High HOAs is one thing we're staying away from right now just because of the affordability. Town homes is another one. Normally, they have high HOAs, large homes on small lots. I mean, all those different things is, as there's a little bit more to choose from out there for buyers, we want our homes to sell first. We can do that by buying the right type of homes. Like I said, their process is we're able to see more of the homes and knowing exactly what we're going to buy before making an offer, which has been great. The Agent Partnership Program of getting more opportunities has been really good there as well. That's where we think, as far as the volume of what we can buy, we can buy the right homes with the right margins, but also getting the right opportunity. Okay. Day, I'll jump in on adjusted EBITDA. Adjusted EBITDA will improve sequentially across the year. That's what we're expecting, and that's going to be in line with what we're doing from a cash offer perspective. Again, what we're also doing across the other products and platform services. We've given guidance for Q1, right? You have that. We've given the timing of the 10-K in the call. It's deeper into the quarter, right? We have a lot of visibility into second quarter already from a funnel perspective. Adjusted EBITDA will improve across second quarter or for second quarter along with cash offer volume. We'll do that using our anchored in around our new process. We're going to execute across that through the back half of the year. I'd stress, again, expense reductions. That is part of reaching adjusted EBITDA break-even and then positive. As I think you're aware, we took out $70 million from our effectively fixed cost in 2023. We did another roughly $45 million in 2024, and we're not ready to guide to it, but there will be some additional cost outs that we'll probably get to on the next earnings call. All of that together and the confidence we're seeing from a top line and our proven ability to reduce operating expense is what's going to take us there. I'll just say one other thing as we sit there and we leverage capital and the opportunities here. There's really four ways that we're looking at it. Leveraging technology, that's one of the things with the enhancements on our cash offer we're doing is getting the range offer within minutes. There's a lot of headcount savings there on that end of it, and it's actually a much better seller experience. We're leveraging global talent, integrating some global talent either near or offshore on that end of it. Resource optimizations, obviously, that we're looking at. Then performance-based compensation. Those four things are things that we're looking at, putting it into a category as we look at really every section of operations to get more operation efficiency. Sounds good. Thank you. Our next question comes from Michael Ewing with the company Goldman Sachs. Michael, your line is now open. Hey, good afternoon. Thank you. I just have one for Brian. Brian, as a participant and an observer of the industry, I was just wondering if you could provide your perspective on any potential changes to Clear Cooperation and how Offerpad may respond to any of those changes, whether that's to have more exclusive off-market inventory or anything like that. Thank you. Yeah. Right now, we're obviously seeing a lot of changes happen, especially over the last year. I think we'll continue to see changes. We are definitely, so there's a couple of different ways you can look at it. One, the commission that we pay, especially on the back end, that's our highest pass-through cost that we do. There's two ways we can do it. We can either obviously have opportunities to leverage more of that and make more on the compensation side or basically not pay as much compensation, or to leverage agents to help us drive and sell our homes. Two different ways we look at it right now. We are definitely leveraging the agent community to sell homes, finding the buyers are fewer and far between out there. We're definitely leveraging the agent community on our commission side. We'll take a look at this all the time as we continue to grow and expand and as this thing settles in a little bit more. I do think things are settling in a little bit. You're seeing co-broker commissions and things anywhere from the 2%-3% range, agents getting more comfortable reaching out and asking what the commission is. Where we want to be in this environment, we want to lead and knowing agents, they don't have to negotiate their commissions. When they reach out to Offerpad, they'll know what our commissions are as we continue. Like I said, we'll take a look at that at all times depending on market conditions. As of right now, having agents both on the front end and back end, we're definitely leveraging that and it's helping. Great. Thank you, Brian. That will conclude today's conference call. Thank you for your participation and enjoy the rest of your day.