Offerpad Solutions Inc.: Form 10-Q for the period ended Jun 30, 2026

The following discussion and analysis provides information that management of Offerpad (the “Company”) believes is relevant to an assessment and understanding of Offerpad’s consolidated results of operations and financial condition. The discussion should be read together with the unaudited interim condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q and the Company’s audited consolidated financial statements and accompanying notes included in Item 8 of its Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2026.

This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q. Offerpad’s actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” in Part I, Item 1A of Offerpad’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Overview

Our Business

We are a real estate solutions company focused on giving homeowners more control, flexibility, and choice when buying and selling a home. We combine proprietary technology with local real estate expertise to simplify the home sale process and reduce friction across the transaction lifecycle, helping customers move forward with speed, transparency, and confidence. We provide cash offers, brokerage services, access to additional cash buyers through marketplace-enabled capabilities, and renovation services that support both internal transactions and third-party partners. Founded in 2015, we have transacted on homes representing approximately $12.4 billion of aggregate revenue through June 30, 2026.

We are headquartered in Tempe, Arizona and operate in over 1,900 cities and towns in 27 metropolitan markets across 18 states as of June 30, 2026.

Current Economic Conditions and Health of the U.S. Residential Real Estate Industry

Our business and operating results are impacted by the general economic conditions and the health of the U.S. residential real estate industry, particularly the single-family home resale market. Our Cash Offer solution, which is the foundation of our business and generates the substantial majority of our consolidated revenue, generally depends on a high volume of residential real estate transactions throughout the markets in which we operate. While we have expanded our real estate service solutions beyond our Cash Offer service over time, including through the offering of renovation services through our Renovate solution, together with a range of other services that are designed to meet the unique needs of sellers and partners across multiple transaction paths, transaction volumes in the U.S. residential real estate market continue to affect substantially all of the ways that we generate revenue.

During the first half of 2026, the residential real estate market conditions continued to be negatively impacted by the ongoing housing affordability pressures, weakened consumer confidence and concerns associated with the macroeconomic and geopolitical environments, including the conflict in the Middle East which began towards the end of the first quarter of 2026. Additionally, the mortgage interest rate environment has remained elevated during 2026, with the average thirty-year fixed mortgage rate starting the year around 6%, before gradually increasing to around 6.5% at the end of June 2026. The cumulative impact of these factors continue to cause uncertainty in the market and challenge consumer confidence, resulting in decreased consumer demand for residential real estate and lower than normal real estate transaction volumes. We expect the uncertainty resulting from the Middle East conflict could continue to impact the macroeconomic and mortgage interest rate environments in the near-term and may have additional long term effects, particularly if the conflict further escalates or intensifies, or is prolonged.

In response to these prevailing market conditions during the first six months of 2026, we have maintained our focus on refining our operating model with the intention of improving acquisition accuracy, customer engagement, and capital efficiency across the transaction lifecycle. We believe the launch of our AI-powered homeowner intelligence platform, along with our AI-driven portfolio intelligence platform during the first quarter of 2026, has allowed us to better assess and more quickly adjust to changes in the local housing market conditions, allowing us to manage and mitigate our risk exposure more effectively.

Within this operating environment during the first half of 2026, we remained diligent in selling through our aged real estate inventory, while also leveraging our portfolio intelligence platform to streamline our evaluation and underwriting process, in order to steadily increase our home acquisition pace during the second quarter of 2026. This combination resulted in the average holding period of homes sold decreasing during the second quarter of 2026, a trend we expect to continue in the third quarter of 2026. Additionally, we anticipate our increased acquisition pace will also persist into the third quarter of 2026 as we continue to leverage our portfolio intelligence platform to improve the quality of homes in our real estate inventory mix.

Further, our gross profit margin was 9.2% during the second quarter of 2026, the highest level since late 2023. Lastly, our focus on cost reduction and operational efficiencies throughout the business continues to be reflected in our lower cost structure, as we achieved year-over-year improvement in our net loss for the sixth consecutive quarter.

Given the current market conditions, we remain committed to growing our other real estate service solution offerings, and within our Cash Offer solution, proactively optimizing our capital allocation across our highest performing and most efficient markets along with using pricing adjustments and other incentives in an effort to drive consumer demand. These pricing adjustments have had a negative impact on our operating results over the past few years. Further, the uncertainty regarding the near-term macroeconomic conditions has been amplified as a result of the conflict in the Middle East, making it increasingly difficult to predict the near-term direction of mortgage interest rates and consumer demand for residential real estate. We anticipate the ongoing economic uncertainties and affordability pressures will continue to impact consumer demand for residential real estate during the third quarter of 2026. As a result of these market dynamics, we may be required to use similar pricing adjustments and incentives in the future, and though we currently plan to steadily increase our home acquisition pace in the near-term, we may also be required to reduce our real estate inventory or home acquisition pace in future periods in response to the prevailing market conditions at that time, as appropriate.

January 2026 Registered Direct Offering

We have been focusing on strategically strengthening our presence within existing markets through our various real estate service solutions, expanding our operations and implementing our long-term strategic initiatives over time. In connection with these efforts and to strengthen our balance sheet, we entered into a securities purchase agreement in January 2026 with the purchasers named therein, providing for the issuance and sale by us of an aggregate of 1,000,000 shares (the “2026 Shares”) of our Class A common stock. The 2026 Shares were sold for a purchase price of $18.00 per share, for gross proceeds of $18.0 million, before deducting placement agent fees and other offering expenses (as adjusted for the Reverse Stock Split).

New York Stock Exchange Listing Notices

April 2025 NYSE Notification

On April 10, 2025, we received notice (the “April 2025 NYSE Notification”) from the NYSE that we were not in compliance with Section 802.01B of the NYSE Listed Company Manual because our average global market capitalization over a consecutive 30 trading-day period and, at the same time, our last reported stockholders’ equity were each less than $50 million.

On July 16, 2025, the NYSE accepted our business plan advising the definitive action(s) we are taking or plan to take that would bring us into compliance with the NYSE continued listing standards within 18 months of receipt of the April 2025 NYSE Notification (the “Cure Period”). As a result, we are subject to quarterly monitoring for compliance with the business plan.

The April 2025 NYSE Notification has had no immediate impact on the listing of our Class A common stock. Further, our Class A common stock will continue to be listed and traded on the NYSE during the Cure Period, subject to our compliance with the other continued listing standards of the NYSE and continued periodic review by the NYSE of our progress with respect to the business plan.

March 2026 NYSE Notification

On March 3, 2026, we received notice (the “March 2026 NYSE Notification”) from the NYSE that we are not in compliance with Section 802.01C of the NYSE Listed Company Manual because the average closing price of our Class A common stock was less than $1.00 over a consecutive 30 trading-day period.

On March 5, 2026, we notified the NYSE that we intend to cure the stock price deficiency and to return to compliance with the NYSE continued listing standards. On June 3, 2026, at our 2026 Annual Meeting of Stockholders, our stockholders approved a reverse stock split of our Class A common stock in order to regain compliance with the minimum closing price requirement. On June 8, 2026, we filed a certificate of amendment to our Fourth Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-10 reverse stock split, and our Class A common stock began trading on a split-adjusted basis at market open on June 9, 2026.

Under the NYSE’s rules, the price condition is deemed cured if the price promptly exceeds $1.00 per share, and the price remains above that level for at least the following 30 trading days. On July 1, 2026, we were notified by the NYSE that the average closing price of our Class A common stock exceeded the minimum $1.00 per share requirement on a 30-trading day average. Accordingly, we have regained compliance with Section 802.01C of the NYSE Listed Company Manual. However, there is also no assurance that we will maintain compliance with this or the other listing standards of the NYSE.

Factors Affecting Our Performance

We believe our performance and future success depend on a variety of factors that present significant opportunities for our business but also present risks and challenges that could adversely impact our growth and profitability, including those discussed in Overview above, along with those discussed below.

Market Penetration in Existing Markets

The U.S. residential real estate market is substantial, with 4.4 million homes sold for a total transaction value of roughly $1.8 trillion during 2025, and is highly fragmented with a significant number of licensed real estate agents and real estate brokerages. In 2025, the total residential real estate transactions in our 26 active metropolitan markets as of December 31, 2025 covered roughly 22% of the 4.4 million homes sold during the year, and we estimate that we captured roughly 0.2% of such transactions. Given this high degree of fragmentation, we believe that giving homeowners more control, flexibility, and choice when buying and selling a home through our real estate service solutions could lead to continued market share growth and accelerated adoption of the digital model. We have demonstrated higher market share in certain markets over time, providing the backdrop to grow our overall market penetration as we focus on the expansion of our various real estate service solutions in existing markets. Additionally, we anticipate our market share will increase over time as we invest in additional brand marketing, strengthen our local partnerships and continue improving customer awareness of our offerings.

Expansion into New Markets

Since our launch in 2015, we have expanded our real estate operations into 27 metropolitan markets as of June 30, 2026. We have been strategic in our approach to growing our market footprint and have focused on geographic diversification across high population growth cities with affordable median sales prices and increasing employment characteristics. Given this current coverage, we believe there is significant opportunity to both increase market penetration in our existing markets and to grow our business through new market expansion over the long-term. Also, because of our strategic approach in offering four complementary solutions that serve sellers and partners across multiple transaction paths, we believe a significant portion of the total addressable market is serviceable with our business model. As we expand our reach through our various service offerings, we expect to continue to serve customers in markets beyond our direct service area. Further, this strategic approach has historically enabled us to enter into new markets to offer certain of our service offerings, without offering all of our buying and selling services in such markets. In connection with this approach, we are currently offering renovation services in select markets in which we operate.

Although we have expanded into new markets over time, we have decelerated our market expansion plans in more recent years given the uncertain economic outlook and challenging residential real estate market conditions. We intend to continue evaluating expansion plans on an ongoing basis in order to maintain our flexibility in assessing the overall timing of our expansion plan and appropriate market entry points in the future.

Renovate

Our renovation process has been a key component of our business model since our inception, built to improve home quality and resale outcomes. Over time, we have expanded this core capability into a data-driven platform that extends beyond owned homes into third-party renovation services. As we have developed and expanded our Renovate offering in recent years, our renovation volumes have increased and these services have become an increasingly larger component of our business and operating results, a trend we expect to continue in the future as we maintain our focus on driving additional volume from such services.

Through our Renovate services, we are able to leverage our existing logistics, operations, technology, and skill-sets to provide renovation services to other businesses, allowing other companies and homeowners to utilize our renovations team to update their portfolio of homes for rent or to sell. When providing these third-party renovation services, we receive a renovation project fee, and are also typically compensated with a service fee that is based on a percentage of the overall renovation project fee.

Cash Offer Marketplace

Our Cash Offer Marketplace, which includes Direct+ partners, provides third-party buyers with an opportunity to purchase homes within our funnel. Qualified homes are routed through a marketplace of third-party buyers, which is intended to increase overall conversion while preserving speed and certainty for sellers. These transactions can take several forms, including assigning the original purchase contract to the end buyer and collecting a fee at closing.

The Cash Offer Marketplace expands buyer demand beyond our balance sheet and generates additional fee-based revenue.

Brokerage Services

Our Brokerage Services solution provides sellers with different agent-led pathways to sell their home, including HomePro, which connects customers with experienced agents, including both agents affiliated with our internal brokerage and independent local agents, supported by our platform, data, and customer flow. Brokerage Services also includes the Agent Partnership Program, which enables third-party real estate agents to present our cash offer as a potential solution for their customers. These services are designed to enable customers to utilize our services in a way that best suits their home-selling situation and increase in-home seller engagement, while also serving as a valuable resource for real estate agents.

Ancillary Products and Services

Over the long term, we aim to deliver other additional products and services tied to the core real estate transaction in a smooth, efficient, digital-driven platform, focused on transparency and ease of use. Although further developing these products and services will require significant investment, growing our current offerings and offering additional ancillary products and services, potentially including energy efficiency solutions, smart home technology, insurance, and home warranty services, we believe will strengthen our unit economics and allow us to better optimize pricing. Generally, the revenue and margin profiles of our ancillary products and services are different from our Cash Offer service, which accounts for the substantial majority of our revenue, with most ancillary products and services having a smaller average revenue per transaction than our cash offering service, but a higher margin.

While we have offered a variety of ancillary products and services over time, our title and escrow services represent the most notable ancillary service that we currently provide. We have a national relationship with a leading title and escrow company, through which we are able to leverage our size and scale to provide exceptional title and escrow closing services with a favorable economic impact principally in our Cash Offer service.

Unit Economics

We view Contribution Margin and Contribution Margin After Interest (see “—Non-GAAP Financial Measures”) as key performance indicators for unit economic performance, which are currently driven primarily by our Cash Offer transactions. We also use total real estate transactions as an operating metric to assess the scale and reach of our solutions platform across Cash Offer, Cash Offer Marketplace, and Brokerage Services. As we continue to expand our multi-solution platform, we expect future financial performance improvements to be driven by both growth in transaction volume across these solutions and expansion of unit-level margins, through initiatives such as:

• Continued optimization of acquisition, renovation, and resale processes and strategies, including our underwriting processes, as we increase our market penetration in existing markets;
• Effectively growing and expanding our solutions platform, including Cash Offer, Cash Offer Marketplace, and Brokerage Services, while optimizing customer and agent community engagement and increasing conversion across transaction pathways; and
• Introducing and scaling additional ancillary products and services to complement our core Cash Offer solution, over the long term.

Operating Leverage

We utilize our technology and product teams to design systems and workflows to make our operations teams more efficient and able to support and scale with the business. Many positions are considered volume based, and as our business grows over the longer term, we plan to focus on developing more automation tools to gain additional leverage. Additionally, in periods when our business is growing, we expect to be able to gain operating leverage on portions of our cost structure that are more fixed in nature as opposed to purely variable. These types of costs include general and administrative expenses and certain marketing and information technology expenses, which generally grow at a slower pace than proportional to revenue growth.

Real Estate Inventory Financing

Our business model requires significant capital to purchase real estate inventory. Real estate inventory financing is a key enabler to our growth and we rely on our non-recourse asset-backed financing facilities, which primarily consist of senior and mezzanine secured credit facilities, to finance our home purchases. Though we may from time to time adjust the composition of our credit facilities to correspond with our anticipated financing requirements, which may include modifying the available capacity under such credit facilities, or realigning the credit facility provider mix, the loss of adequate access to these types of facilities, or the inability to maintain these types of facilities on favorable terms, would impair our performance. See “—Liquidity and Capital Resources—Financing Activities.”

Seasonality

The residential real estate market is seasonal and varies from market to market. Typically, the greatest number of transactions occur in the spring and summer, with fewer transactions occurring in the fall and winter. Our financial results, including revenue, margins, real estate inventory, and financing costs, have historically had seasonal characteristics generally consistent with the residential real estate market, a trend we expect to continue in the future, subject to the market conditions discussed above.

Risk Management

While we have expanded our real estate service solutions beyond our Cash Offer service over time, a significant portion of our business model continues to be based upon acquiring homes at a price that will allow us to provide a competitive offer to the consumer, while being able to add value through the renovation process, and relisting the home so that it sells at a profit and in a relatively short period of time.

Since inception, we have invested in real estate technology platforms, supported by a growing base of proprietary transaction-level data. This data foundation underpins an AI-driven operating model designed to improve acquisition accuracy, customer engagement, and capital efficiency across the transaction lifecycle.

During the first quarter of 2026, we deployed the first iteration of SCOUT, our AI-powered homeowner intelligence platform, across all markets. SCOUT integrates seller inputs with third-party data, public records, and proprietary data and is designed to inform acquisition and routing decisions prior to a cash offer or other solution being presented to the seller.

We also launched the initial version of HENRY, our portfolio intelligence platform, in its core monitoring capacity during the first quarter of 2026. HENRY is designed to evaluate properties within the context of portfolio performance by integrating market data, renovation outcomes, and capital criteria into a unified system, and is intended to support pricing, acquisition, and asset management decisions. We have implemented AI-driven inspection and renovation estimation tools as part of the HENRY platform, and additional capabilities are under development to support broader lifecycle decision-making.

We believe the recent implementation of our portfolio intelligence platform, combined with the extensive real estate experience of our internal teams, will allow us to better assess and more quickly adjust to changes in the local housing market conditions, and manage and mitigate our risk exposure more effectively.

During the second quarter of 2026, the average holding period of homes sold decreased to 141 days as we sold through our aged real estate inventory and increased our home acquisition pace, causing a shift in our overall real estate inventory mix to include a higher composition of newer acquired homes. Based on our current expectations, we anticipate our average real estate inventory holding period will continue to decline in the third quarter of 2026 as we steadily increase our home acquisition pace and our overall real estate inventory mix continues to shift and includes a greater composition of newly acquired homes. However, as there continues to be an increased level of uncertainty in the residential real estate market, and given our focus on effectively managing and mitigating our risk exposure, we intend to continue balancing our home acquisition pace to manage our real estate inventory levels, and ultimately, our average real estate inventory holding period.

Non-GAAP Financial Measures

In addition to our results of operations below, we report certain financial measures that are not required by, or presented in accordance with, U.S. generally accepted accounting principles (“GAAP”). These measures have limitations as analytical tools when assessing our operating performance and should not be considered in isolation or as a substitute for GAAP measures, including gross profit and net income. We may calculate or present our non-GAAP financial measures differently than other companies who report measures with similar titles and, as a result, the non-GAAP financial measures we report may not be comparable with those of companies in our industry or in other industries.

Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins)

To provide investors with additional information regarding our margins, we have included Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest (and related margins), which are non-GAAP financial measures. We believe that Adjusted Gross Profit, Contribution Profit, and Contribution Profit After Interest are useful financial measures for investors as they are used by management in evaluating unit level economics and operating performance across our markets. Each of these measures is intended to present the economics related to the number of homes sold or other real estate transactions during a given period. We do so by including revenue generated from our Cash Offer, Cash Offer Marketplace, and Brokerage Services solutions in the period and only the expenses that are directly attributable to these transactions, even if such expenses were recognized in prior periods, and excluding expenses related to homes that remain in real estate inventory as of the end of the period presented. Contribution Profit provides investors a measure to assess Offerpad’s ability to generate returns during a reporting period after considering home acquisition costs, renovation and repair costs, and adjusting for holding costs and selling costs. Contribution Profit After Interest further impacts gross profit by including interest costs (including senior and mezzanine secured credit facilities and other senior secured debt) attributable to homes sold during a reporting period. We believe these measures facilitate meaningful period over period comparisons and illustrate our ability to generate returns on our homes sold and other real estate transactions after considering the costs directly related to such transactions in a presented period.

Adjusted Gross Profit, Contribution Profit and Contribution Profit After Interest (and related margins) are supplemental measures of our operating performance and have limitations as analytical tools. For example, these measures include costs that were recorded in prior periods under GAAP and exclude, in connection with homes held in real estate inventory at the end of the period, costs required to be recorded under GAAP in the same period.

Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. We include a reconciliation of these measures to the most directly comparable GAAP financial measure, which is gross profit.

Adjusted Gross Profit / Margin

We calculate Adjusted Gross Profit as gross profit under GAAP adjusted for (1) net real estate inventory valuation adjustment plus (2) interest expense associated with homes sold in the presented period and recorded in cost of revenue. Net real estate inventory valuation adjustment is calculated by adding back the real estate inventory valuation adjustment charges recorded during the period on homes that remain in real estate inventory at period end and subtracting the real estate inventory valuation adjustment charges recorded in prior periods on homes sold in the current period. We define Adjusted Gross Margin as Adjusted Gross Profit as a percentage of revenue.

We view this metric as an important measure of business performance, as it captures gross margin performance isolated to real estate transactions in a given period and provides comparability across reporting periods. Adjusted Gross Profit helps management assess performance across the key phases of processing a home (acquisitions, renovations, and resale) for a specific resale cohort.

Contribution Profit / Margin

We calculate Contribution Profit as Adjusted Gross Profit, minus (1) direct selling costs incurred on homes sold during the presented period, minus (2) holding costs incurred in the current period on homes sold during the period recorded in sales, marketing, and operating, minus (3) holding costs incurred in prior periods on homes sold in the current period recorded in sales, marketing, and operating, plus (4) other income, net which is primarily composed of interest income earned on our cash and cash equivalents. The composition of our holding costs is described in the footnotes to the reconciliation table below. We define Contribution Margin as Contribution Profit as a percentage of revenue.

We view this metric as an important measure of business performance as it captures the unit level performance isolated to real estate transactions in a given period and provides comparability across reporting periods. Contribution Profit helps management assess inflows and outflow directly associated with a specific resale cohort.

Contribution Profit / Margin After Interest

We define Contribution Profit After Interest as Contribution Profit, minus (1) interest expense associated with homes sold in the presented period and recorded in cost of revenue, minus (2) interest expense associated with homes sold in the presented period, recorded in costs of sales, and previously excluded from Adjusted Gross Profit, and minus (3) interest expense under our senior and mezzanine secured credit facilities and other senior secured debt incurred on homes sold during the period. This includes interest expense recorded in prior periods in which the sale occurred. Our senior and mezzanine secured credit facilities and other senior secured debt are secured by our homes in real estate inventory and drawdowns are made on a per-home basis at the time of purchase and are required to be repaid at the time the homes are sold. See “—Liquidity and Capital Resources—Financing Activities.” We define Contribution Margin After Interest as Contribution Profit After Interest as a percentage of revenue.

We view this metric as an important measure of business performance. Contribution Profit After Interest helps management assess Contribution Margin performance, per above, when fully burdened with costs of financing.

The following table presents a reconciliation of our Adjusted Gross Profit, Contribution Profit (Loss) and Contribution Profit (Loss) After Interest to our Gross Profit, which is the most directly comparable GAAP measure, for the periods indicated:

(in thousands, except percentages, homes sold, and real estate transactions, unaudited)

(1) Total real estate transactions represents the total number of closed real estate transactions including Cash Offer homes sold, Cash Offer Marketplace transactions, and listings closed under our Brokerage Services solutions.

(2) Real estate inventory valuation adjustment – current period is the real estate inventory valuation adjustments recorded during the period presented associated with homes that remain in real estate inventory at period end.

(3) Real estate inventory valuation adjustment – prior period is the real estate inventory valuation adjustments recorded in prior periods associated with homes that sold in the period presented.

(4) Interest expense capitalized represents all interest related costs under our senior and mezzanine secured credit facilities and other senior secured debt, incurred on homes sold in the period presented that were capitalized and expensed in cost of sales at the time of sale.

(5) Direct selling costs represents selling costs incurred related to homes sold in the period presented. This primarily includes broker commissions and title and escrow closing fees.

(6) Holding costs primarily include insurance, utilities, homeowners association dues, property taxes, cleaning, and maintenance costs.

(7) Represents holding costs incurred on homes sold in the period presented and expensed to Sales, marketing, and operating on the Condensed Consolidated Statements of Operations.

(8) Represents holding costs incurred in prior periods on homes sold in the period presented and expensed to Sales, marketing, and operating on the Condensed Consolidated Statements of Operations.

(9) Other income, net principally represents interest income earned on our cash and cash equivalents.

(10) Represents interest expense under our senior and mezzanine secured credit facilities and other senior secured debt incurred on homes sold in the period presented and expensed to interest expense on the Condensed Consolidated Statements of Operations.

(11) Represents interest expense under our senior and mezzanine secured credit facilities and other senior secured debt incurred in prior periods on homes sold in the period presented and expensed to interest expense on the Condensed Consolidated Statements of Operations.

Adjusted Net Income (Loss) and Adjusted EBITDA

We also present Adjusted Net Income (Loss) and Adjusted EBITDA, which are non-GAAP financial measures, which our management team uses to assess our underlying financial performance. We believe these measures provide insight into period over period performance, adjusted for non-recurring or non-cash items.

We calculate Adjusted Net Income (Loss) as GAAP Net Income (Loss) adjusted for the change in fair value of warrant liabilities. We define Adjusted Net Income (Loss) Margin as Adjusted Net Income (Loss) as a percentage of revenue.

We calculate Adjusted EBITDA as Adjusted Net Income (Loss) adjusted for interest expense, amortization of capitalized interest, taxes, depreciation and amortization and stock-based compensation expense. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue.

Adjusted Net Income (Loss) and Adjusted EBITDA are supplemental to our operating performance measures calculated in accordance with GAAP and have important limitations. For example, Adjusted Net Income (Loss) and Adjusted EBITDA exclude the impact of certain costs required to be recorded under GAAP and could differ substantially from similarly titled measures presented by other companies in our industry or companies in other industries. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.

The following table presents a reconciliation of our Adjusted Net Income (Loss) and Adjusted EBITDA to our GAAP Net Income (Loss), which is the most directly comparable GAAP measure, for the periods indicated:

(in thousands, except percentages, unaudited)

(1) Amortization of capitalized interest represents all interest related costs under our senior and mezzanine secured credit facilities and other senior secured debt, incurred on homes sold in the period presented that were capitalized and expensed in cost of sales at the time of sale.

Results of Operations

The following details our consolidated results of operations and includes a discussion of our operating results and significant items explaining the material changes in our operating results during the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025.

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

(in thousands, except percentages)

Revenue

Our consolidated revenue decreased by $82.7 million, or 51.6%, to $77.7 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Cash Offer revenue decreased by $80.3 million, or 52.8%, to $71.7 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was primarily attributable to lower sales volumes as we sold 206 homes during the three months ended June 30, 2026 compared to 452 homes during the three months ended June 30, 2025, representing a decrease of 54.4%. This decrease in homes sold was primarily due to the increased level of uncertainty in the residential real estate market and our associated intentional reduction in home acquisition pace during 2025 as part of our effort to balance our real estate inventory levels, resulting in a fewer number of homes in real estate inventory during the first half of 2026.

This decrease in homes sold was partially offset by an increase in the average resale home price from $344,000 in the three months ended June 30, 2025 to $356,000 in the three months ended June 30, 2026. This increase was primarily due to a shift in the mix of homes sold in the respective periods, with a greater percentage of homes sold in geographic markets that tend to share relatively higher median price points during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025.

Renovate revenue decreased by $1.6 million, or 25.6%, to $4.8 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease in Renovate revenue was primarily attributable to a decrease in the average renovation transaction value from $20,400 per home during the three months ended June 30, 2025 to $14,400 per home during the three months ended June 30, 2026. This decrease was partially offset by an increase in renovation volumes. We completed 332 renovation projects during the three months ended June 30, 2026 compared to 315 renovation projects during the three months ended June 30, 2025, representing an increase of 5.4%.

Other revenue, which includes revenue generated by our Cash Offer Marketplace and Brokerage Services solutions, decreased by $0.7 million, or 37.9%, to $1.1 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease in revenue is primarily due to a decrease in the number of Cash Offer Marketplace transactions during the second quarter of 2026 as compared to the second quarter of 2025. This decrease was partially offset by an increase in Brokerage Services transactions, which includes HomePro and Agent Partnership Program.

Cost of Revenue

Our consolidated cost of revenue decreased by $75.6 million, or 51.7%, to $70.5 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Cash Offer cost of revenue decreased by $74.3 million, or 52.7%, to $66.6 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This decrease was primarily attributable to lower sales volumes.

Renovate cost of revenue decreased by $1.3 million, or 25.6%, to $3.8 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This decrease was primarily attributable to a lower average renovation transaction cost per home, from $16,200 per home during the three months ended June 30, 2025 to $11,500 per home during the three months ended June 30, 2026, which was partially offset by an increase in the volume of renovation projects.

Other cost of revenue increased by less than $0.1 million, or 24.2%, during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This increase was primarily due to an increase in Brokerage Services transactions during the second quarter of 2026 as compared to the second quarter of 2025.

Gross Profit

Our consolidated gross profit margin was 9.2% for the three months ended June 30, 2026 compared to 8.9% for the three months ended June 30, 2025.

Cash Offer gross profit margin was 7.2% for the three months ended June 30, 2026 compared to 7.3% for the three months ended June 30, 2025. The slight decrease in gross profit margin was primarily due to a higher average real estate inventory holding period during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease in gross profit margin was partially offset by a decrease in the real estate inventory valuation adjustment, from $1.1 million during the three months ended June 30, 2025 to $0.3 million during the three months ended June 30, 2026.

Renovate gross profit margin was unchanged at 20.2% for each of the three months ended June 30, 2026 and 2025 as the mix of our renovation projects and the associated project and service fees remained relatively consistent during each of the respective periods.

Other gross profit margin was 89.6% for the three months ended June 30, 2026 compared to 94.8% for the three months ended June 30, 2025. The decrease in gross profit margin was primarily due to a shift in the product mix of the solution offerings included in Other. Our Cash Offer Marketplace offering, which includes Direct+ partners, generally has one of the higher margin profiles of the offerings included within Other gross profit, and represented a smaller component of Other gross profit during the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Sales, Marketing and Operating

Sales, marketing and operating expense decreased by $5.6 million, or 42.2%, to $7.6 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This decrease was primarily attributable to a decrease in variable costs associated with the decrease in homes sold, decreased average employee headcount, and a $0.6 million decrease in advertising expense as we continue to reposition and optimize our marketing efforts in response to the increased level of uncertainty in the residential real estate market in recent years.

General and Administrative

General and administrative expense decreased by $1.0 million, or 13.0%, to $6.8 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This decrease was primarily attributable to reductions in fees associated with legal and other professional obligations, operating lease costs, and lender fees in connection with reduced borrowings on our credit facilities.

Technology and Development

Technology and development expense decreased by less than $0.1 million, or 3.2%, during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This decrease was primarily attributable to lower software subscription fees and decreased average employee headcount, which was partially offset by higher third-party consulting fees.

Change in Fair Value of Warrant Liabilities

Change in fair value of warrant liabilities for the three months ended June 30, 2026 and 2025 represents gains of $0.1 million and $0.3 million, respectively, as a result of the fair value adjustment of our warrant liabilities.

Interest Expense

Interest expense decreased by $2.3 million, or 62.2%, to $1.4 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was primarily attributable to a $123.0 million decrease in the average outstanding balance of our secured credit facilities and other debt, from $213.6 million during the three months ended June 30, 2025 to $90.6 million during the three months ended June 30, 2026. The decrease in expense was also due to a 0.2% decrease in the weighted average variable interest rates associated with our secured credit facilities and other debt. These decreases were partially offset by interest expense associated with our revolving credit facility, which was entered into during July 2025.

Other Income, Net

Other income, net principally represents interest income earned on our cash and cash equivalents during each of the three months ended June 30, 2026 and 2025. Other income, net also includes losses from the disposal of property and equipment during the three months ended June 30, 2026.

Income Tax Expense

We recorded income tax expense of less than $0.1 million during each of the three months ended June 30, 2026 and 2025, and our effective tax rate was an expense of 0.2% and 0.3% during the respective periods. Our effective tax rate during the three months ended June 30, 2026 differed from the federal statutory rate of 21% primarily due to state taxes and net operating loss carryforwards.

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

(in thousands, except percentages)

* Not meaningful

Revenue

Our consolidated revenue decreased by $163.3 million, or 50.9%, to $157.7 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Cash Offer revenue decreased by $160.7 million, or 52.5%, to $145.2 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily attributable to lower sales volumes as we sold 417 homes during the six months ended June 30, 2026 compared to 912 homes during the six months ended June 30, 2025, representing a decrease of 54.3%. This decrease in homes sold was primarily due to the increased level of uncertainty in the residential real estate market and our associated intentional reduction in home acquisition pace during 2025 as part of our effort to balance our real estate inventory levels, resulting in a fewer number of homes in real estate inventory during the first half of 2026.

This decrease in homes sold was partially offset by an increase in the average resale home price from $342,000 in the six months ended June 30, 2025 to $356,000 in the six months ended June 30, 2026. This increase was primarily due to a shift in the mix of homes sold in the respective periods, with a greater percentage of homes sold in geographic markets that tend to share relatively higher median price points during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.

Renovate revenue decreased by $1.2 million, or 10.6%, to $10.5 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease in Renovate revenue was primarily attributable to a decrease in the average renovation transaction value from $22,400 per home during the six months ended June 30, 2025 to $14,300 per home during the six months ended June 30, 2026. This decrease in revenue was partially offset by higher renovation volumes. We completed 735 renovation projects during the six months ended June 30, 2026 compared to 524 renovation projects during the six months ended June 30, 2025, representing an increase of 40.3%.

Other revenue decreased by $1.4 million, or 41.0%, to $2.0 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease in revenue is primarily due to the transition from our historical listing service offering as we shifted our focus to agent-led pathways in our Brokerage Services solution. The decrease in revenue was also due to a decrease in the number of Cash Offer Marketplace transactions during the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Cost of Revenue

Our consolidated cost of revenue decreased by $151.3 million, or 51.0%, to $145.1 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Cash Offer cost of revenue decreased by $150.2 million, or 52.4%, to $136.5 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This decrease was primarily attributable to lower sales volumes.

Renovate cost of revenue decreased by $1.0 million, or 10.8%, to $8.3 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This decrease was primarily attributable to a lower average renovation transaction cost per home, from $17,900 per home during the six months ended June 30, 2025 to $11,400 per home during the six months ended June 30, 2026, which was partially offset by an increase in renovation volumes.

Other cost of revenue decreased by $0.1 million, or 27.3%, to $0.2 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This decrease was primarily driven by lower volumes associated with our historical listing service offering, which was partially offset by an increase in Brokerage Services transactions.

Gross Profit

Our consolidated gross profit margin was 8.0% for the six months ended June 30, 2026 compared to 7.7% for the six months ended June 30, 2025.

Cash Offer gross profit margin was 6.0% for the six months ended June 30, 2026 compared to 6.3% for the six months ended June 30, 2025. The decrease in gross profit margin was primarily due to a higher average real estate inventory holding period during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease in gross profit margin was partially offset by a decrease in the real estate inventory valuation adjustment, from $2.8 million during the six months ended June 30, 2025 to $0.7 million during the six months ended June 30, 2026.

Renovate gross profit margin was 20.5% for the six months ended June 30, 2026 compared to 20.2% for the six months ended June 30, 2025. The slight increase in gross profit margin was primarily due to a shift in the mix of our renovation projects and the associated project and service fees.

Other gross profit margin was 88.7% for the six months ended June 30, 2026 compared to 90.8% for the six months ended June 30, 2025. This decrease in gross profit margin was primarily due to a shift in the product mix of the solution offerings included in Other as our Cash Offer Marketplace offering represented a smaller component of Other gross profit during the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Sales, Marketing and Operating

Sales, marketing and operating expense decreased by $11.8 million, or 43.8%, to $15.2 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This decrease was primarily attributable to a decrease in variable costs associated with the decrease in homes sold, decreased average employee headcount, and a $1.7 million decrease in advertising expense as we continue to reposition and optimize our marketing efforts in response to the increased level of uncertainty in the residential real estate market in recent years.

General and Administrative

General and administrative expense decreased by $2.1 million, or 13.9%, to $12.9 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This decrease was primarily attributable to decreases in lender fees in connection with reduced borrowings on our credit facilities, operating lease costs and fees associated with legal and other professional obligations.

Technology and Development

Technology and development expense decreased by $0.2 million, or 8.3%, to $1.8 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This decrease was primarily attributable to lower software subscription fees and decreased average employee headcount, which was partially offset by an increase in third-party consulting fees.

Change in Fair Value of Warrant Liabilities

Change in fair value of warrant liabilities for the six months ended June 30, 2026 and 2025 represents gains of $0.3 million and $0.1 million, respectively, as a result of the fair value adjustment of our warrant liabilities.

Interest Expense

Interest expense decreased by $4.2 million, or 58.2%, to $3.0 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily attributable to a $130.1 million decrease in the average outstanding balance of our secured credit facilities and other debt, from $226.9 million during the six months ended June 30, 2025 to $96.8 million during the six months ended June 30, 2026. The decrease in expense was also due to a 0.3% decrease in the weighted average variable interest rates associated with our secured credit facilities and other debt. These decreases were partially offset by interest expense associated with our revolving credit facility, which was entered into during July 2025.

Other Income, Net

Other income, net principally represents interest income earned on our cash and cash equivalents during each of the six months ended June 30, 2026 and 2025. Other income, net also includes losses from the disposal of property and equipment in both periods.

Income Tax Expense

We recorded income tax expense of less than $0.1 million and $0.1 million during the six months ended June 30, 2026 and 2025, respectively, and our effective tax rate was an expense of 0.2% and 0.3% during the respective periods. Our effective tax rate during the six months ended June 30, 2026 differed from the federal statutory rate of 21% primarily due to state taxes and net operating loss carryforwards.

Liquidity and Capital Resources

Overview

As of June 30, 2026, we had cash and cash equivalents of $33.1 million, which consists of operating cash on deposit with financial institutions. Our principal sources of liquidity have historically consisted of cash generated from our operations and financing activities.

With the exception of the year ended December 31, 2021, during which we generated net income, we have incurred losses each year from inception and during the three and six months ended June 30, 2026, and may incur additional losses in the future. Since our launch in 2015, we have invested significantly in the development and expansion of our operations. These investments include a continual improvement to our software and technology platform, including more recently, the development of our AI-driven operating architecture, along with improvements in our infrastructure. We have also invested in sales and marketing as we have increased our market penetration in existing markets, and grown our business through new market expansion and the increased offering of other real estate service solutions.

While we remain focused on strategically strengthening our presence within existing markets through our various real estate service solutions, we expect our working capital requirements will continue to increase over the long term as we seek to expand our operations and implement our long-term strategic initiatives over time.

In connection with our efforts to expand our operations, strengthen our balance sheet and support our working capital requirements, we have executed the following transactions in recent periods:

• January 2026 Registered Direct Offering – During January 2026, we issued and sold 1,000,000 shares (the “2026 Shares”) of our Class A common stock for $18.00 per share, resulting in gross proceeds of $18.0 million, before deducting placement agent fees and other offering expenses (as adjusted for the Reverse Stock Split).
• Sale Agreement – We have an active Open Market Sale AgreementSM (the “Sale Agreement”) with Jefferies LLC, under which we may offer and sell up to $100,000,000 of our Class A common stock from time to time in any manner deemed to be an “at the market” offering. We have no obligation to sell any shares under the Sale Agreement, but we may do so from time to time. No shares were sold under the Sale Agreement during the six months ended June 30, 2026, and we had $69.7 million of remaining availability under the Sale Agreement as of June 30, 2026.

While we have a history of operating losses, we believe our existing cash on hand, proceeds from the resale of homes, fees and commissions earned from our other real estate service solutions, and cash from future borrowings available under each of our existing credit facilities, or the entry into additional new debt financing arrangements or further issuances of equity securities, will be sufficient to meet our short-term working capital and capital expenditure requirements for at least the next twelve months. However, our ability to fund our working capital and capital expenditure requirements depends on the residential real estate market conditions in the markets in which we operate and in the U.S. in general, and various other general economic, financial, competitive, legislative, regulatory, geopolitical and other conditions that may be beyond our control. The uncertain economic outlook and challenging residential real estate market conditions have impacted, and may continue to impact, our business negatively. Based on these and other current market conditions, as described above, we may continue to seek additional financing. Volatility in the credit markets, rising interest rates and weakened consumer demand for residential real estate may have an adverse effect on our ability to obtain additional debt financing, on favorable terms or at all. If we are not able to obtain necessary capital to meet our business objectives, we may need to further stall, moderate or decelerate our expansion activities, which may include various restructuring alternatives and options, including more significant cost reductions, product and operational changes focused on reductions in working capital requirements, including pausing or reducing real estate inventory acquisitions, and other actions to enhance the preservation of cash. If we are able to raise additional funds through further issuances of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our Class A common stock, or may require us to agree to unfavorable terms, and our existing stockholders may experience significant dilution.

Financing Activities

Our financing activities primarily include borrowings under our secured credit facilities and other debt, revolving credit facility and new issuances of equity. Historically, we have required access to external financing resources in order to grow market share in existing markets, expand opportunistically into new markets and launch new real estate solution offerings, and we expect this to continue in the future over the long term. Our access to capital markets can be impacted by factors outside our control, including economic conditions.

Buying and selling high-valued assets, such as single-family residential homes, is very cash intensive and has a significant impact on our liquidity and capital resources. We have historically used non-recourse secured credit facilities, consisting of both senior and mezzanine secured credit facilities, to finance a significant portion of our real estate inventory and related home renovations. Our senior and mezzanine secured credit facilities, however, are not fully committed, meaning the applicable lender may not be obligated to advance new loan funds if they choose not to do so. Our ability to obtain and maintain access to these or similar kinds of credit facilities is significant for us to operate the business.

While we have expanded our real estate service solutions beyond our Cash Offer service over time, including growing our other real estate service solutions which require lower levels of capital investment, our Cash Offer service continues to generate the substantial majority of our consolidated revenue. As a result, our financing needs continue to be significantly impacted by the level of transaction volumes in our Cash Offer service. Given the importance of our secured credit facilities in financing our real estate inventory purchases and renovation projects, we continually monitor our anticipated financing requirements and may from time to time adjust the composition of our credit facilities to correspond with such requirements. These changes may include modifying the available borrowing capacity under our credit facilities or realigning the credit facility provider mix.

In recent years, we reduced our home acquisition pace compared to our historical levels as part of our effort to balance our real estate inventory as we navigated through the increased level of uncertainty in the U.S. residential real estate market. In connection with the reduction in home acquisition pace during that time, we reduced the borrowing capacities available under certain of our credit facilities, along with not renewing certain credit facilities upon their expiration. The amount of our reduction in borrowing availability also represented debt capacity under our secured credit facilities that we had not historically utilized or relied upon in full.

During the first half of 2026, we increased the utilization of our portfolio intelligence platform to streamline our evaluation and underwriting process and steadily increased our home acquisition pace. We anticipate this recent increase in home acquisition pace will also persist in the near-term as we continue to leverage our portfolio intelligence platform to improve the quality of homes in our real estate inventory mix. In connection with our steadily increasing our home acquisition pace during 2026, we continue to adjust the composition of our credit facilities to support our financing requirements, including increasing the available borrowing capacity under certain facilities and evaluating new potential debt arrangements.

Senior Secured Credit Facilities

The following summarizes certain details related to our senior secured credit facilities (in thousands, except interest rates):

Offerpad Solutions Inc. | Second Quarter 2026 Form 10-Q | 40

As of June 30, 2026, we had multiple senior secured credit facilities, including one with a related party. Borrowings under the senior secured credit facilities accrue interest at a rate based on a SOFR reference rate, plus a margin which varies by facility. Each of our senior secured credit facilities also have interest rate floors. We may also pay fees on our senior secured credit facilities, including a commitment fee, a usage fee and/or fees on certain unused portions of the committed borrowing capacity under the respective credit agreements.

Borrowings under our senior secured credit facilities are collateralized by the real estate inventory financed by the senior secured credit facility. The lenders have legal recourse only to the assets securing the debt and do not have general recourse against us with limited exceptions. We have, however, provided limited non-recourse carve-out guarantees under our senior and mezzanine secured credit facilities for certain of the SPEs’ obligations. Each senior secured credit facility contains eligibility requirements that govern whether a property can be financed. When we resell a home, the proceeds are used to reduce the corresponding outstanding balance under the related senior and mezzanine secured credit facilities.

As described below in Part II, Item 5, “Other Information” in this Quarterly Report on Form 10-Q, during July 2026, (i) we amended our senior secured credit facility with financial institution 1, which among other things, extended the revolving period to January 2027 and the final maturity date to June 2027, and provided that the $200 million facility is entirely uncommitted, and (ii) we amended and restated our senior secured credit facility with financial institution 5, which among other things, increased the uncommitted borrowing capacity to $100 million. Lastly, our senior secured credit facility with financial institution 2 expired and was not renewed.

Mezzanine Secured Credit Facilities

In addition to the senior secured credit facilities, we have historically used mezzanine secured credit facilities which are structurally and contractually subordinated to the related senior secured credit facilities. The following summarizes certain details related to our mezzanine secured credit facilities (in thousands, except interest rates):

As of June 30, 2026, we had two mezzanine secured credit facilities, including one with a related party. Borrowings under the mezzanine secured credit facilities accrue interest at a rate based on a SOFR reference rate, plus a margin which varies by facility. Each of our mezzanine secured credit facilities also have interest rate floors. We may also pay fees on our mezzanine secured credit facilities, including a commitment fee, a usage fee and/or fees on certain unused portions of the committed borrowing capacity under the respective credit agreements.

Borrowings under our mezzanine secured credit facilities are collateralized by a second lien on the real estate inventory financed by the relevant credit facility. The lenders have legal recourse only to the assets securing the debt, and do not have general recourse against us with limited exceptions. When we resell a home, the proceeds are used to reduce the corresponding outstanding balance under the related senior and mezzanine secured credit facilities.

During July 2026, our mezzanine secured credit facility with financial institution 1 expired and was not renewed. Additionally, in connection with the July 2026 amendment to our senior secured credit facility with financial institution 1, as described above, the final maturity date for our mezzanine secured credit facility with a related party was automatically extended to March 2027.

Covenants for Senior Secured Credit Facilities and Mezzanine Secured Credit Facilities

Our secured credit facilities include customary representations and warranties, covenants and events of default. Financed properties are subject to customary eligibility criteria and concentration limits. The terms of these facilities and related financing documents require compliance with a number of customary financial and other covenants, such as maintaining certain levels of liquidity, tangible net worth or leverage (ratio of debt to tangible net worth). As of June 30, 2026, we were in compliance with all covenants and no event of default had occurred.

Senior Secured Debt - Other

We have a borrowing arrangement with a financial institution to support purchases of real estate inventory. Borrowings under this arrangement accrue interest at a rate based on a SOFR reference rate, plus a margin. As of June 30, 2026 and December 31, 2025, the weighted-average interest rate under our other senior secured debt was 8.31% and 8.92%, respectively.

Revolving Credit Facility

We have a $15.0 million revolving credit facility with a three-year term expiring in July 2028. Borrowings under the revolving credit facility accrue interest at 8.50% per annum and are secured by certain of our assets. The revolving credit facility includes customary financial and other covenants, such as maintaining a minimum level of liquidity, and events of default. As of June 30, 2026, we had $14.7 million in outstanding borrowings under the revolving credit facility, net of debt financing costs, and we were in compliance with all covenants and no event of default had occurred.

Cash Flows

The following summarizes our cash flows for the six months ended June 30, 2026 and 2025:

($ in thousands)

Operating Activities

Net cash used in operating activities was $16.8 million and $23.6 million for the six months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026, net cash used in operating activities primarily resulted from the $19.4 million net loss during the period, which included $2.0 million of non-cash stock-based compensation expense and a $0.7 million non-cash real estate inventory valuation adjustment. Net cash used in operating activities during the six months ended June 30, 2026 was also due to a $1.1 million increase in real estate inventory as we have steadily increased our home acquisition pace during the first half of 2026.

For the six months ended June 30, 2025, net cash used in operating activities primarily resulted from the $26.0 million net loss during the period, which included $3.0 million of non-cash stock-based compensation expense and a $2.8 million non-cash real estate inventory valuation adjustment. Net cash used in operating activities during the six months ended June 30, 2025 was also due to a $3.7 million increase in accounts receivable, primarily due to a higher number of home sales pending receipt of cash from the title company as compared to December 31, 2024.

Investing Activities

Net cash used in investing activities was less than $0.1 million and $1.1 million during the six months ended June 30, 2026 and 2025, respectively, and principally represents purchases of property and equipment in both periods.

Financing Activities

Net cash provided by (used in) financing activities was $23.5 million and ($22.2) million during the six months ended June 30, 2026 and 2025, respectively. Net cash provided by financing activities during the six months ended June 30, 2026 primarily consisted of $18.0 million of gross proceeds from the January 2026 Offering. Net cash provided by financing activities during the six months ended June 30, 2026 was also due to a net increase in secured credit facility and other debt funding of $7.0 million, resulting from $122.0 million of borrowings and $115.0 million of repayments during the six months ended June 30, 2026. The net increase in secured credit facility and other debt funding was primarily related to the increase in financed real estate inventory during the period.

Net cash used in financing activities during the six months ended June 30, 2025 primarily consisted of $332.9 million of repayments of credit facilities and other debt, which was partially offset by $310.9 million of borrowings from credit facilities and other debt. This net decrease in credit facility funding of $22.0 million was primarily attributable to reduced borrowing levels as a result of certain credit facility lenders advancing new loan funds at a lower rate during the six months ended June 30, 2025.

Material Cash Requirements and Other Obligations

Information regarding our material cash requirements and other obligations is provided in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Other than as described above under “Liquidity and Capital Resources,” there have been no material changes in our material cash requirements and other obligations since December 31, 2025.

Critical Accounting Estimates

We prepare our consolidated financial statements in accordance with GAAP. In doing so, we make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the periods presented. Although we believe our estimates, judgments and assumptions are reasonable, actual results may differ from our estimates under different assumptions, judgments or conditions given the inherent uncertainty involved with such matters, which would impact our financial statements. We base our estimates on historical experience and various other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis.

There have been no material changes to the critical accounting estimates included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Our significant accounting policies and methods used in the preparation of our condensed consolidated financial statements are described in Note 1. Nature of Operations and Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, of this Quarterly Report on Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, refer to Note 1. Nature of Operations and Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, of this Quarterly Report on Form 10-Q.

There have been no material changes to the Company’s exposure to market risk since December 31, 2025. For a discussion of the Company’s exposure to market risk, refer to the Company’s market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Limitations on Effectiveness of Disclosure Controls and Procedures

In designing and evaluating the Company’s disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of the disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of its principal executive officer and its principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, the Company’s principal executive officer and its principal financial officer have concluded that, as of June 30, 2026, the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting, as identified in connection with the evaluation required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that occurred during the three months ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company’s risk factors are described in Part I, Item 1A, “Risk Factors,” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There have been no material changes to the Company’s risk factors since the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.