OPEN

Opendoor's FY2025 numbers are a flashing warning. Revenue fell 15.2% YoY to $4.37B — the fourth straight annual decline from the $15.6B peak in FY2022 — while net loss ballooned 231.6% to -$1.30B. Gross margin collapsed to just 8.0%, operating margin is -6.6%, and net margin is -29.7%. The 10-K's Critical Audit Matter flags the heart of the problem: 'real estate inventory valuation adjustment' for unsold homes, where management must forecast resale prices in an environment the MD&A itself attributes to the 'elevated federal funds rate.' That is the iBuyer model breaking under its own assumptions — you buy homes, mark them down, and the loss flows straight through cost of revenue.

The balance sheet looks superficially fine — $962M cash, equity up 41% to $1.00B — but that equity rebuild is funded by shareholders, not earnings. Shares outstanding jumped 32.5% YoY to 958M, and retained earnings sit at -$5.03B (worse by 35.1% YoY). The $1.05B in operating cash flow is misleading: for an iBuyer, this primarily reflects inventory liquidation (selling homes faster than buying them), i.e. shrinking the book, not generating sustainable cash. ROE of -129.4% confirms capital is being destroyed at a brutal pace.