Opendoor Technologies : 2Q21 Letter to Shareholders

Letter to Shareholders

2Q21

Opendoor home in Azusa, CA

A NOTE FROM ERIC

Dear Shareholders,

Each quarter, we get the opportunity to reflect on our journey to redefine how people buy and sell a home, and transform the world's largest asset class. Last quarter, I spoke to our tremendous momentum, created by our relentless focus on the consumer experience, pricing expertise, and operational excellence. Today, I am proud to share the results of those efforts.

In the second quarter, we acquired a record 8,494 homes, generated revenue of $1.2 billion, and delivered adjusted EBITDA of $25.6 million, representing growth of 136% in homes acquired, 59% in revenue, and nearly $28 million in adjusted EBITDA compared to the first quarter. This strong outperformance is further evidence of the seismic shift in consumer demand towards the modern real estate experience we are pioneering. Based on our current momentum, we are operating today at a second half revenue run rate that is on track to meet the 2023 target we provided at the time of our December listing.

We founded Opendoor with the mission to empower people with the freedom to move and make it possible to buy, sell, and move at the tapofa button. Tangibly, we are transforming what has historically been a complex, uncertain, time-consuming, and mostly offline process into a simple, online experience. Driven by an obsession and focus on theconsumer experience, we have built scalable pricing capabilities,technology-enabled and centralized operations, and a suite of digital-first consumer products over the past seven years. Together, these investments have enabled us to help customers buy or sell homes in over 100,000 transactions and expand our footprint to 41 marketsacross the country, including 12 new markets in Q2 alone. Most importantly, we have scaled rapidly while delighting our customers with an experience that continues to exceed 80 in Net Promoter Score from our sellers.

As we look forward, we believe that building the best-in-class consumerexperience, the most accurate pricing engine, and the lowest costplatform are our foundation to become the clear digital one-stop-shopfor all home buyers and sellers.Following the traction we've seen in ourintegrated title and escrow services, we are continuing to invest in Buywith Opendoor and Opendoor Home Loans, which give customers the ability to buy, finance, sell, and close in one seamless transaction.

I want to thank my teammates for being on this journey to redefine howpeople buy and sell a home. It is their dedication and hard work inserving our customers everyday that enable us to deliver best-in-classconversion, best-in-classunit economics, and best-in-classcustomersatisfaction.

Our Mission

Empower everyone with the freedom to move.

Eric Wu, Co-Founder & CEO

2

2Q21 Highlights

Revenue of $1.2 billion, up 59% versus 1Q21, with 3,481 total homes sold, up 41% versus 1Q21

-

Gross profit of $159 million, up 64% versus 1Q21; gross margin of 13.4%, up 40 basis points versus 1Q21

-

Net income of ($144) million, versus ($270) million in1Q21

-

Adjusted net income of $2.5 million, versus ($21) million in 1Q21

-

Contribution profit of $128 million, up 68% versus 1Q21; contribution margin of 10.8%, up 60 basis points versus 1Q21

-

Adjusted EBITDA of $26 million versus ($2) million in 1Q21; adjusted EBITDA margin of 2.2% versus (0.3%) in 1Q21

-

Expanded to 39 markets at the end of 2Q21 with 12new market launches

-

Purchased 8,494 homes, up 136% versus 1Q21

-

Grew inventory balance to 7,971 homes, representing $2.7 billion in value, up 224% versus 1Q21

-

Ended the quarter with contracts to acquire 8,158 homes, representing $3.0 billion in value

3

HIGHLIGHT FROM OUR 100,000TH CUSTOMER TRANSACTION

Meet The Petitto's

Jack Petitto, a homeowner in Orange County, California, needed to move to accommodate his growing family.

The Petitto's had their sights set on moving to Colorado, and knew right away they needed to avoid the traditional route of prepping and listing their home. Both working from home with a young child, the thought of cleaning, staging, and vacating for showings seemed impossible. Plus, the added uncertainty of a buyer's offer falling through from financing, inspection or other contingencies was unsettling.

So, they started shopping for alternatives to the traditional sale and came across Opendoor. After reading great reviews about the company, Jack decided to put in their address and see what the preliminary offer would be. Once they started their home selling journey with Opendoor, they were sold.

Handling everything online, they accepted their offer and selected their closing date. As unexpected things happen, they ended up finding their next home quicker than expected. With a simple text to Opendoor, they were able to move their closing date up a month earlier to accommodate their move.

"From start to finish, it was very honest and open communication. It made us feel really confident and comfortable moving forward, especially with a company and a service that was new to us and different from the way we purchased our home originally."

Nicole Petitto

"The backend experience was easy and the app was seamless. Everything was very user-friendly and transparent, so we were in tune with every step of the process along the way. You rarely have those types of experiences with a brand that makes you kind of have that 'wow' moment."

Jack Petitto

4

Business Highlights

Our Q2 results were driven by strong execution against our three key priorities of existing market growth, new market expansion, and building a digital, end-to-end experience for our customers.

EXISTING MARKET GROWTH

Our business continued to gain momentum in the second quarter. Offers more than doubled versus 1Q21 and real seller conversion was again at record levels. Acquisition volume grew 136% quarter-over-quarter to a total of 8,494 homes, the highest of any quarter by nearly 50%. This momentum continues to demonstrate the strong demand for our product experience as consumers gravitate towards more seamless, digital-first solutions.

Q2's acquisition volume was in part driven by the 15% increase in our buybox coverage versus last quarter. This means that we are now able to underwrite an additional 15% of homes in our existing markets. As our pricing platform continues to ingest new data to learn and improve our price accuracy, we are able to expand the breadth of price points and home types that we can address. This in turn drives the flywheel for greater awareness, customer adoption, marketing efficiency, and market share over time. It is worth highlighting that since the reacceleration of our acquisition growth late last year, we have expanded our buybox coverage by over 50% compared to the end of 2019 and are now able to serve the majority of homes in all of our markets. The gains that we have made in market coverage to date will be a tailwind for growth as we strive towards servicing all homeowners nationwide.

We have also gained scale across our existing markets, demonstrating that we have the platform and operational capabilities to dial up our market share as our buybox coverage expands. In our top five markets, for example, we are driving a combined acquisition run rate of over $8 billion. On a resale basis, as we sell through our inventory, we would anticipate ongoing share gains as our resale volumes follow our acquisition volumes.

2Q21 Homes Acquired

8,494

2Q21 Homes Sold

3,481

5