Technology real estate company Offerpad (NYSE: OPAD) missed Wall Street’s revenue expectations in Q2 CY2025, with sales falling 36.2% year on year to $160.3 million. Next quarter’s revenue guidance of $150 million underwhelmed, coming in 37.1% below analysts’ estimates. Its GAAP loss of $0.39 per share was in line with analysts’ consensus estimates.

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“We’re seeing strong validation of our model and the progress we’ve made,” said Brian Bair, Chairman and CEO of Offerpad.

Company Overview

Known for giving homeowners cash offers within 24 hours, Offerpad (NYSE: OPAD) operates a tech-enabled platform specializing in direct home buying and selling solutions.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Offerpad’s demand was weak and its revenue declined by 13.3% per year. This was below our standards and is a sign of lacking business quality.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Offerpad’s recent performance shows its demand remained suppressed as its revenue has declined by 45.2% annually over the last two years.

We can dig further into the company’s revenue dynamics by analyzing its number of homes sold and homes purchased, which clocked in at 452 and 443 in the latest quarter. Over the last two years, Offerpad’s homes sold averaged 36.4% year-on-year declines while its homes purchased averaged 11.5% year-on-year declines.

This quarter, Offerpad missed Wall Street’s estimates and reported a rather uninspiring 36.2% year-on-year revenue decline, generating $160.3 million of revenue. Company management is currently guiding for a 27.9% year-on-year decline in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 37.1% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and indicates its newer products and services will spur better top-line performance.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Offerpad’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging negative 5.6% over the last two years. Unprofitable consumer discretionary companies that fail to improve their losses or grow sales rapidly deserve extra scrutiny. For the time being, it’s unclear if Offerpad’s business model is sustainable.

In Q2, Offerpad generated a negative 4.9% operating margin. The company's consistent lack of profits raise a flag.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Although Offerpad’s full-year earnings are still negative, it reduced its losses and improved its EPS by 52% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability.

In Q2, Offerpad reported EPS at negative $0.39, up from negative $0.50 in the same quarter last year. This print beat analysts’ estimates by 2.4%. Over the next 12 months, Wall Street expects Offerpad to improve its earnings losses. Analysts forecast its full-year EPS of negative $2.06 will advance to negative $1.14.

Key Takeaways from Offerpad’s Q2 Results

The focus of this quarter was $21 million raised in July, giving Offerpad over $75 million of total liquidity and a stronger balance sheet that was at risk before the raise. As for the quarter, it was encouraging to see Offerpad beat analysts’ EBITDA expectations this quarter. On the other hand, its number of homes sold missed and its revenue guidance for next quarter fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded up 42.7% to $1.72 immediately after reporting.

So do we think Offerpad is an attractive buy at the current price? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.