Opendoor Technologies Q3 earnings Call: Live Updates

We’re here live-blogging Opendoor Technologies’ Q3 earnings call,or as the company calls it,their “Financial Open House.” Management will be taking Q&A to shareholders, who have submitted questions via Robinhood’s “Say Technologies” platform ahead of this event.

(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)

The online real estate company tumbled after releasing its Q3 results, in which revenues came in well above expectations but its adjusted EBITDA of -$33 million was far worse than its guidance and the -$23.7 million consensus estimate.

The red ink is poised to swell in the fourth quarter, with management guiding for an adjusted loss “in the high $40 millions to mid $50 millions,” which is lower than the Street’s view for adjusted EBITDA of -$47.6 million.

Refresh this page for updates.

After lengthy disclaimers, we’re into it.

* CEO Kaz Nejatian says he considers himself primarily a “product manager.” Says on his first day at Opendoor, he told the team he’d be making a lot of changes because the old Opendoor had kind of lost its way.
* An example of something that’s changed: how manny homes the company is in talk to buy has surged in the seven weeks since he started at the company.
* The old Opendoor “lost faith in the power of software” to improve the home buying and selling process, and “didn’t believe in the power of AI” to do much of anything, he added.
* One of Opendoor’s biggest expenses was to consulting firms “making decisions that should have been made by executives,” says Nejatian.
* “We believe slowing down buying homes just to buy them at a significant spread is a bad strategy” -Nejatian
* Opendoor plans to be more like a market-maker than a prop desk (that is, the company plans to try to make money through high volumes of home flipping). Note: this is arguably what got the company into lots of trouble in the past, but could be offset by compressing how long the company holds its inventories.
* “In the future, buying a home will be as seamless as buying a car from Tesla,” he says, with everything bundled under one roof, in one experience.
* AI > humans to assess real estate values will be a key feature of Opendoor 2.0, he says, with a “default to AI approach.”

Shopify’s Path to Profitability and Future Outlook: insights from COO

Shopify’s Chief Operating Officer, Harley Finkelstein Nejatian, recently shared key insights into the company’s strategy, addressing topics ranging from profitability and handling short sellers to defining Shopify’s core identity. These comments, made during a recent discussion, offer a clear picture of the company’s focus and confidence in its future.

Drive to Profitability

Nejatian emphasized that profitability isn’t achieved through mere projections or spreadsheets.He described it as a deliberate “drive to profitability,” requiring consistent, focused action. He pointed to Shopify’s recent success as evidence of this approach, noting the company became profitable just two quarters after his appointment as COO, despite prior analyst predictions of continued losses.

addressing Short Seller Attacks

When questioned about dealing with short seller attacks,Nejatian revealed a surprisingly dismissive attitude. He stated he doesn’t spend significant time considering them, even expressing pity for short sellers. His core belief is that the most effective response is to consistently deliver strong financial results, allowing the “score to take care of itself.”

Defining Shopify’s Identity

Nejatian firmly positioned Shopify as a software company, differentiating it from businesses reliant on favorable macroeconomic conditions. He highlighted that Shopify’s strength lies in its ability to build exceptional products through excellent code, data analysis, and modeling. He believes that challenging economic times actually benefit strong software companies, forcing discipline and efficient execution.

Key Takeaways

• Profitability is Active: Shopify views profitability as a result of deliberate actions, not passive projections.
• Focus on Execution: the company prioritizes consistent execution and delivering results over worrying about external criticisms like those from short sellers.
• Software-First Approach: Shopify defines itself as a software company driven by code, data, and models, not a hedge fund dependent on market conditions.
• resilience in Hard Times: Nejatian believes challenging economic environments foster discipline and ultimately strengthen software companies.

Looking Ahead

Nejatian expressed strong bullishness about Shopify’s future, citing the company’s demonstrated ability to successfully integrate acquisitions and achieve growth. This confidence, coupled with a clear strategic focus on software growth and disciplined execution, suggests Shopify is well-positioned for continued success. The company’s commitment to proving doubters wrong through tangible results will be a key factor in its ongoing narrative.