“Success can be a trap,” Huffington told Fortune, adding that once you’ve dedicated years of your life to honing your craft and gaining recognition, it can feel impossible to leave it all behind and start something new. Even if you’re miserable where you’re at.

“It’s a trap because a lot of very successful people have a hard time leaving,” she explained. “I have CEO friends who’ve stopped loving their jobs, but they’re afraid to leave.” 

And it’s not just the huge mortgages, private school fees and luxury first-class vacations they’ve become accustomed to bankrolling with their multi-million dollar pay packages keeping them stuck. 

“The financial trap is much easier to see, while the identity trap is less tangible but no less real,” Huffington added. “They’re so identified with the CEO role, or the anchor of an evening show, or whatever big job comes with a lot of recognition—it’s become their identity.”

Huffington could have stayed at the top of Huffington Post. She walked away instead.

Huffington spent a grueling 11 years building Huffington Post into one of the biggest names in digital media, growing its newsroom to more than 850 journalists and becoming the first digital-native outlet to win a Pulitzer Prize. She graced the covers of magazines, made Time’s list of most influential people and was a regular at the likes of Davos. 

By any measure, she’d made it. Walking away from that to start over would have made no sense to many people—and yet that’s exactly what she did in 2016 to found her new wellness venture, Thrive Global. 

“There are no guarantees anytime you start a new company,” the 76-year-old multimillionaire said. “But I was ready to throw myself into health, and if I hadn’t done it, I would have kind of betrayed myself.”

At the time, when she was weighing up whether to hold onto what she had built or walk away, Huffington said that her mother’s voice was in her head.

“She brought me up not to be afraid of failing,” she said, adding that women in particular are hit harder by perfectionism and therefore more likely to remain stuck and not take that leap of faith in case it doesn’t work out. “My mother used to say failure is not the opposite of success, it’s a stepping stone to success.”

It’s why, for Huffington, how a role makes you feel matters more than what it looks like from the outside.

“I’ve always believed that there is no job that defines us, no success that defines us,” she added. “If we are able to follow our heart, it means we can keep growing and evolving.”

From Airbnb’s CEO to Wingstop’s cofounder: These leaders say success felt hollow

Huffington’s far from the first person to admit that reaching the top can leave you feeling empty rather than fulfilled. After cofounding Wingstop UK and selling a majority stake for £400 million (around $540 million), Tom Grogan should have been ecstatic. Instead, he felt hollow.

“For seven years, your whole mind is occupied on making a success of this business,” Grogan told Fortune.  “It’s all you think about. And then when you get there, it’s just a bit surreal. It’s like, Okay, it’s done now. Now what? And money doesn’t necessarily fill that void either.”

Growing up, Brian Chesky, the cofounder and CEO of Airbnb, said he “desperately wanted to be successful” because he thought it would bring him adoration. Plus, having social worker parents who were by no standards rich, he also thought a large sum of money could “solve every problem.” But actually, he said the company’s blockbuster 2020 IPO—despite making him a billionaire—was “one of the saddest periods” of his life. 

Loom cofounder Vinay Hiremath hit a similar wall after selling his company to Atlassian for $975 million. In a blog post candidly titled “I am rich and have no idea what to do with my life,” he described the identity collapse that followed the company’s rapid rise and eventual sale. “I lost myself,” he wrote, adding that the windfall left him with “infinite freedom” but no idea what to do with it.  

It’s why, despite having no current plans to step down, TIAA’s CEO Thasunda Duckett is already thinking about who she is outside of her job.

“I rent my title. I own my character,” Duckett recently told Fortune, noting that a job title is never permanent—and therefore shouldn’t be mistaken for who you actually are. “I own my intellectual curiosity. I own my grit. I own my perseverance. I own my compass.”

DATE

Monday, Aug. 3, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Vice President of Investor Relations and Communications – Cortney Read
• Chairman and Chief Executive Officer – Brian Bair
• Chief Financial Officer – Peter Knag

TAKEAWAYS

• Total Revenue — $77.7 million for Offerpad Solutions Inc. (OPAD -1.04%), representing a 52% decrease compared to the second quarter of 2025 due to reduced transaction volume as the company focused on inventory health.
• Real Estate Transactions — 295, reflecting a 48% decline versus last year but sequential progress from the previous quarter.
• Gross Margin — 9.2%, up from 6.9% in the first quarter of 2026 and marking its highest level since the third quarter of 2023.
• Contribution Profit After Interest — $13,500 per real estate transaction, increasing 36% year over year and 145% sequentially.
• Net Loss — $9.3 million, an improvement from a $10.9 million loss in the second quarter of 2025.
• Adjusted EBITDA — a loss of $6.2 million, representing the second consecutive quarter of sequential improvement toward positive territory.
• Unrestricted Cash — $33.1 million, which grew 46% year over year from $22.7 million.
• Total Liquidity — more than $55 million, including the fair market value of the current home inventory.
• Contract Signings — 256 in June, nearly doubling from 129 in April as conversion improved.
• Homes Acquired — 268, a 70% increase compared to the first quarter of 2026.
• Aged Inventory — fewer than 10 homes, down from over 100 in 2025, which significantly reduced margin pressure from older book sales.
• Operating Expenses — $13.3 million excluding property costs, down from $17 million in the prior-year period.
• Renovate Revenue — $4.8 million, contributing to fee-based revenue diversification for third-party clients.
• Average Time to Cash — 119 days in June, which aligns with management targets of 100 to 120 days.
• Inventory Sales Velocity — 82 days for nonaged homes during the second quarter, compared to 339 days for aged inventory.
• Service Mix — 30% of transactions were fee-based (Brokerage and Marketplace), up from 20% in the first quarter of 2026.
• Q3 2026 Guidance — 350 to 400 real estate transactions, representing a 19% to 36% sequential increase.
• Q3 2026 Revenue Outlook — $90 million to $100 million.
• 2026 Run-Rate Target — a quarterly exit rate of approximately 1,000 transactions and positive adjusted EBITDA.
• Cost Structure Reductions — over $140 million in annualized expenses removed since 2022 to improve operating leverage.
• Conversion Rate — 1 in 3 post-inspection final offers converted to signed contracts in June.

Need a quote from a Motley Fool analyst? Email [email protected]

RISKS

• CFO Knag stated, “Cash Offer Marketplace has moved more slowly as some institutional buyers pull back,” impacting the growth rate of capital-light transaction volumes.

SUMMARY

Management reported that the company’s rebuilding phase has largely concluded, with operations now pivoting toward scaling transaction volume within a leaner cost structure. The company stated that it is leveraging its multi-solution platform to diversify revenue through fee-based services such as Brokerage and Renovate, reducing reliance on balance sheet capital. Offerpad indicated that its current cost base is designed to support adjusted EBITDA breakeven at a 1,000-transaction quarterly run-rate, which management expects to reach by the end of fiscal 2026. The company reported that improved home selection and pricing precision are driving multiyear highs in contribution margins as the aged inventory book has been successfully cleared.

• CEO Bair noted, “The rebuilding phase of Offerpad is largely behind us. The buying engine is back on,” signaling a transition from defensive capital protection to active acquisition growth.
• Management confirmed that July contract signings exceeded June levels, maintaining an upward trend in the company’s leading indicator for future closings.
• CFO Knag emphasized that the current 2026 framework does not require incremental capital, stating that existing liquidity and facilities are sufficient for the growth plan.
• The company is utilizing proprietary AI tools, SCOUT and HENRY, to enhance data-driven decisions for home selection and pricing in high-velocity markets.
• CEO Bair highlighted that sellers’ expectations are beginning to align with market realities as supply increases, stating that “being a buyer in a buyer’s market is a good place to be.”
• The Renovate segment is expanding its third-party business by targeting small to midsize renovation players and family offices, with third-party margins ranging from 20% to 25%.
• CFO Knag stated, “the model is getting healthier, better margins, tighter costs and a cleaner portfolio,” with the fourth quarter expected to reflect current signing momentum.

INDUSTRY GLOSSARY

• iBuying: A real estate business model where companies use technology to make immediate offers on homes, offering sellers a faster and more certain transaction.
• Contribution Profit After Interest: A metric reflecting gross profit minus direct selling costs, holding costs, and interest expense associated with specific home sales.
• Adjusted EBITDA: A non-GAAP measure that adjusts net income to exclude interest, taxes, depreciation, amortization, and stock-based compensation.
• Cash Offer Marketplace: A platform matching home sellers with institutional and third-party buyers instead of Offerpad purchasing the property directly.
• Renovate: Offerpad’s business unit providing renovation and repair services for both its own inventory and external residential property owners.
• SCOUT and HENRY: Proprietary artificial intelligence and data modeling tools used by the company to analyze markets and price individual properties.

Full Conference Call Transcript

Operator: Good afternoon and welcome to Offerpad’s Second Quarter 2026 Earnings Conference Call. My name is Megan and I will be your conference operator today. [Operator Instructions] With that, I’ll turn the call over to Cortney Read, Offerpad’s Vice President of Investor Relations and Communications.

Cortney Read: Good afternoon, and welcome to Offerpad’s Second Quarter 2026 Earnings Call. Management’s remarks today are prerecorded and accompanied by a presentation. A live question-and-answer session will follow. During the call today, management will make forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently uncertain, and events could differ significantly from management’s expectations. Please refer to the risks, uncertainties, and other factors related to the company’s business described in our filings with the U.S. Securities and Exchange Commission. Except as required by applicable law, Offerpad does not intend to update or alter forward-looking statements, whether as a result of new information, future events, or otherwise.

On today’s call, management will refer to certain non-GAAP financial measures. These metrics exclude certain items discussed in our earnings release under the heading non-GAAP financial measures. The reconciliations of Offerpad non-GAAP measures to the comparable GAAP measures are available in the financial tables of the second quarter earnings release on Offerpad’s website. With that, I’ll turn the call over to Brian Bair, Chairman and Chief Executive Officer.

Brian Bair: Thank you, Cortney, and welcome everyone. Before we get into the quarter, I’d like to take a step back and talk about where we are as a company. Over the past 18 months, we made a series of deliberate decisions that weren’t designed to maximize short-term volume, they were designed to build a stronger company for the long-term. We protected capital, we sold through our aged inventory. When we set our cost structure, we put the right people in place across pricing, operations, and every product line, expanded from a single product company into a multi-solution platform and embedded artificial intelligence across our business. None of those investments were made to improve 1 quarter.

They were made to improve the next decade. We believe those investments are now beginning to translate into measurable operating momentum. The rebuilding phase of Offerpad is largely behind us. The buying engine is back on. I’ll be walking through several visuals during the call. So I encourage you to follow along on your screen. First, the quarter itself. We guided to 300 to 350 transactions and $80 million to $90 million in revenue. We came in at 295 transactions and approximately $78 million in revenue, while still delivering another quarter of improved adjusted EBITDA. Alongside those numbers, I’ll walk you through some leading indicators, contract signs and acquisitions.

We think they’re helpful for understanding where the business is headed as we scale. For the past year, you’ve heard us talk about discipline. You’ve heard Peter walk through our cost structure. You’ve heard us talk about contribution margins, conversion, and the investments we’ve made in our operating platform. Those weren’t separate initiatives, they were always the same operating framework. The one that’s been guiding how we run this business. By sharing that framework with you today, we want to give you a clear view into how we make decisions, allocate capital, and measure progress. It’s also the context behind everything we’ve reported over the past year. That framework comes down to 3 objectives. Let’s start with the first.

Scale transactions through discipline growth. That’s straightforward. But here’s what it actually means. We’re not chasing volume for its own sake. We’re using better home selection, more precise pricing, and the data we built over the past several years to grow where we believe we can generate the strongest outcomes. Our target hasn’t changed, approximately 1,000 transactions a quarter, the level we believe our current cost structure supports at break-even. But that’s not where the plan stops. Beyond break-even, the plan illustrates the operating leverage available as we scale towards levels we have achieved before. For example, the company averaged approximately 3,500 quarterly transactions in 2022. Here’s the visual that helps illustrate how we get there.

Starting with the question you may have, how do we get from roughly 300 transactions today to our goal of around 1,000 a quarter? Start on the left. Every closed transaction starts as a signed contract. In April, we signed 129. That grew to 163 in May and 256 by June, nearly double where we started. Now take a look at the middle. Roughly 30 days after signing, approximately 90% of contracts become acquisitions. We acquired 268 homes in quarter 2, nearly 70% more than the quarter before. That momentum continued into July, where we acquired roughly 200 homes in a single month as the stronger June and July signings work their way through.

This growing pipeline is expected to drive higher transaction volumes in the second half of fiscal 2026, as homes typically sell within 120 to 150 days after signing. Think about it this way. We expect another meaningful step-up in acquisitions in the third quarter. And we can say that with real confidence because most of the activity is already signed. It’s sitting on the left side of this chart right now moving through the pipeline. Now let’s look at the right side. Roughly 90 to 120 days after acquisition, a home sells, which means the fourth quarter is largely being built right now, not in the fourth quarter itself.

Today’s signings become tomorrow’s acquisitions, and those acquisitions become tomorrow’s home sales. So when you look at our third quarter transaction guidance next to our longer-term target, remember, those quarter 3 closings were mostly locked in by contracts signed earlier in the year, before conversion improved. Quarter 4 is where you’ll really start to see today’s stronger performance show up. And 1 more thing to highlight, our platform is now broader than Cash Offer. Cash Offer Marketplace and Brokerage Services, shown in light blue on the chart, widen the pool of sellers we can serve and generate fee-based revenue with little to no balance sheet capital. What you’re seeing here is execution, not spending.

The growth in signs I just showed you happened without meaningful increase in marketing. It’s conversion. We’re converting demand we already had. The second objective is expanding contribution margin. And this is where we made some of our most meaningful progress this quarter. This chart shows the annual picture. Margins compressed through the market slowdown, bottomed out in loss in 2023, and have been recovering since, with 2025’s numbers still weighed down by the aged inventory we’ve been working through. But look at what’s happening inside this year, quarter to quarter. Contribution profit after interest reached $13,500 per real estate transaction in Q2, up from $5,500 in quarter 1, our strongest quarter since 2023. First we cleared the aged book.

It peaked at more than 100 homes in 2025. We slowed acquisitions, got it under 30 by quarter 1, and we’re at under 10 today. What remains consists primarily of homes acquired during the past 2 quarters. Second, we’re moving faster. Our aged homes have taken around 339 days to sell. Our quarter 2 non-aged homes sold in approximately 82 days, well ahead of our 100 to 120-day target. That velocity is what’s driving the stronger margins and putting us on the path toward adjusted EBITDA profitability. Our third objective is driving operating leverage. Over the past several years, we’ve fundamentally reset our cost structure, removing more than $140 million of annualized operating expense.

These weren’t cuts tied to the housing market. They were structural changes, and they’ve left us with a leaner, more efficient business. This chart shows what that means. At today’s volume, around 295 transactions a quarter, we’re on the steep part of the curve, where fixed costs aren’t yet fully absorbed. At a 1,000 transactions, the level our cost structure is built for, cost per transaction drops sharply because that cost base doesn’t grow in step with volume. Every transaction beyond the point should flow more directly to earnings. Those are the 3 objectives that guide how we run this business: disciplined transaction growth, expanding contribution margin, and operating leverage.

Today, they’re the framework behind every decision we make, every dollar we allocate, and every result we measure ourselves against. I’d encourage you to spend a few minutes with our full operating plan on our Investor Relations website. It goes deeper into each of these 3 objectives, the data behind them, and how they connect to our path to profitability. Peter will now take you through our financial results and guidance in detail.

Peter Knag: Thank you, Brian. For the past year, we’ve been telling you the model is getting healthier, better margins, tighter costs and a cleaner portfolio. This quarter, you can see it in the numbers themselves. The model is straightforward. Higher transaction volume multiplied by stronger contribution profit per transaction on a largely fixed cost base drives adjusted EBITDA. Let’s start with what we produced. Revenue was approximately $78 million on 295 real estate transactions. But the number I point you to this quarter isn’t the top line, it’s what each transaction earned. Gross profit was $7.1 million, up from $5.6 million in the first quarter and that gain came on slightly lower revenue.

Gross margin improved to 9.2% up from 6.9% last quarter, our best since third quarter of 2023. As Brian stated, contribution profit after interest reached $13,500 per real estate transaction, up 36% year-over-year and 145% quarter-over-quarter. Earning more gross profit on less revenue is exactly what you’d expect when the improvement comes from unit economics and mix rather than volume. Underneath the top line, our revenue base is diversifying. Brokerage Services and Cash Offer Marketplace drove much of the higher margin mix I just mentioned, and Renovate contributed $4.8 million of revenue this quarter. Together, these fee-based offerings deepen both our margins and our reach without adding balance sheet risk.

On the cost side, quarterly operating expenses, excluding property costs, were $13.3 million, down from $17 million a year ago, and down from a high of over $50 million per quarter in 2022. We’ve held that cost base largely fixed by design. That will drive incremental volume to convert into profit rather than overhead as we scale. Adjusted EBITDA loss for the second quarter was $6.2 million, an improvement from a $6.7 million loss in the first quarter. Another quarter of sequential improvement towards positive adjusted EBITDA before the year-end. We ended the quarter with $33.1 million in unrestricted cash, up 46% year-over-year and total liquidity of more than $55 million, including the fair market value of our inventory.

Cash Offer and Brokerage Services are leading the acceleration, while Cash Offer Marketplace has moved more slowly as some institutional buyers pull back. Our 2026 framework doesn’t require incremental capital. Our liquidity, facilities and growing fee-based revenue support the plan as it stands. If Cash Offer demand runs ahead of plan, we may bring in additional working capital to meet it. We have a clear path forward either way, and we’ll keep looking for opportunities that improve our flexibility or lower our cost of capital, which has already come down significantly over the past 2 years. Now to the outlook.

For the third quarter, we expect 350 to 400 real estate transactions across Cash Offer, Cash Offer Marketplace, and Brokerage Services. Total revenue of $90 million to $100 million and a narrower adjusted EBITDA loss compared to Q2, continuing our sequential progress towards positive adjusted EBITDA. Our full year objective is unchanged. Exit 2026 at a run rate of roughly 1,000 transactions a quarter and reach positive adjusted EBITDA before the year-end. It’s worth reiterating what’s compounding underneath those numbers. The signings that accelerated through the second quarter become acquisitions in the third quarter and closings in the fourth. And they’ll carry the stronger unit economics of a cleaner portfolio. So as volume grows, the effect compounds.

More transactions, each 1 worth more than it was a few quarters ago, landing on a cost base we’ve held largely fixed. Higher volume, higher margin per transaction, and disciplined costs are 3 forces building on each other. To close, margins are at multi-year highs, the cost base is disciplined, and leading indicators are moving in the right direction. The pieces are in place. Now it is about execution quarter after quarter. With that, we’re ready to take your questions.

Operator: [Operator Instructions] Your first question comes from the line of Ryan Tomasello with KBW.

Ryan Tomasello: Brian, congrats on the nice progress in the quarter. Regarding the 1,000 transaction target by year-end, understand the positive forward indicators here that you’re pointing to that give you confidence in that target, but can you just help us understand what are the main drivers of the meaningful step-up from 3Q to 4Q? And is that target of 1,000 transactions dependent on any concentrated volume from specific institutional partners or any other partnerships that might need to come online to hit that level?

Peter Knag: Hey, Ryan, it’s Peter. So I’ll take the last piece first so I don’t forget, but it is not driven by institutional partners. Among the 3 products, the 2 that are growing the most significantly, we talked about Cash Offer, that’s 1. But also our Brokerage Services is growing fairly rapidly, too. And you can begin to see some of that in the trending schedules that are on the IR site. So, yes, I’d point back to the — as Brian identified in his prepared remarks, there’s if you add up the 3 months in the quarter, there’s about 550 signs just for product number 1, just for the Cash Offer.

And those signs, if at a 100 to 110-day time to cash, those signs convert into a similar number of dispositions roughly 100 or 110 days later. So that’s 1 really important driver and the signs are up very significantly again. And then again, I’d point to the Brokerage Services, which is also growing rapidly. Both of those together, without any dependency on partners, will get us to the exit rate of 1,000 transactions.

Brian Bair: One thing that I’ll just add, Ryan, you and I have talked about this in the past. Our demand has stayed very, very strong. We still get thousands and thousands of sellers that are very engaged coming to us every month to sell their home. And so with less marketing spend, we’re seeing more and more demand for our products. And so, as we’ve talked about that, again, that’s a lot of leverage for pricing. And so, right now, as we look at some of the — we call it velocity areas that we’re buying, areas that we think are when we buy the home, it’s going to turn, we can buy, renovate it and sell it within 100 days.

So we’ve spent countless hours and data and trying to figure out where those markets are. We’ve made a lot of progress on that, but our demand is still there. Demand has always been there. It’s just dependent on what we want to pay for homes. And so we’ve been disciplined in the past, making sure with the uncertainty or when we see homes moving too slow in certain markets. But in the areas that we’re seeing, we’re getting smarter with our marketing spend, where those marketing dollars are spent, that it’s driving customers, we know we’re going to have a better, that homes that we want to buy, a better chance of buying that home.

And then we’re giving them a stronger offer, whether or not they take our offer, they’ll also then use our other products. They can use our listing services and some of the other products as well. So that’s where you’re seeing the growth come from. And we’ve been through a lot of playing defense. Now we’re focused on playing offense and buying homes, and we definitely have the demand to do that.

Ryan Tomasello: That’s all very helpful. And then on…

Operator: Your next question comes from the line of Dae Lee with JPMorgan.

Dae Lee: I have 2. First one, maybe for Brian. When you look at your June contract signing, I mean it is a very strong inflection relative to the prior month. Just wondering, I understand your business is running on all 4 cylinders and having great momentum. But was there anything else like product-wise or region-wise or from an underlying industrial or industry dynamic that drove that strong inflection? And do you have any update to share on how your July month might be trending?

Brian Bair: Sure. So we continue to see strong just across the board. I tell you the — but not really an inflection. Like I said, we’ve been — really for the last several months, we’ve been working on products like SCOUT and HENRY. And some of them are farther advanced than others as far as what we’re doing and to help us get smarter where and how we’re buying homes. And in this environment, we are hyper-focused on active inventory.

And so how the areas that are normally interior homes, like one of the things you’re going to see is you’re going to see our price point start to tick up a little bit because we’re buying more homes in the interior, high velocity, strong school scores, that, but also one of the other things we’re doing in some of those areas, we realized we don’t have to put as much renovation in some of those homes.

Not all of them, obviously it’s market specific, but because of the affordability, normally the playbook is when you see more supply, you want to put more renovations in there, have your home sell before the others because yours is the nicest on the block. It’s a little different there. Now you have velocity areas and desirable places that people want to live. So, but in general, I would tell you today, it’s specifically hyper-focused on our marketing dollars and marketing to areas that we want to buy homes that we feel strongly that they can move quickly.

One of the numbers I want to highlight is, we’ve got rid a lot of our aged inventory and that was weighing down the entire company, the entire portfolio is inventory weigh when — even when interest rates changed and just navigating this environment. And so we’re down to, I believe less than 10 of those homes right now. And so now, so that kind of got that — got off of our shoulders that was we rebuild our portfolio going forward. Some of our newer inventory is performing like in 85 and 90 days on the market. So we’re moving through our newer stuff very well, so the velocity stuff is working.

So a lot of it is discipline, analytics, but also just making sure that we’re buying homes that we feel that can move fairly quickly.

Peter Knag: Yes, and I just add some context on July. Our July signs was higher than June, so the trend continues to get even better. And we expect that to be the same going into September — in August and September.

Dae Lee: Got it. That’s great to hear. And then follow-up question to you, Peter. When you look at contribution profit after interest per transaction, it’s good to see those reaching multi-year highs. Like how would you describe the performance of that metric relative to your expectations and where do you expect that to trend going into the back half?

Peter Knag: Yes, it will continue to go up based on 2 drivers. Right now, we have, as Brian just highlighted, we have a very new and healthy portfolio of inventory and our expected ROIs across the rest of the year are quite high. The contribution margin after profit — and also the gross margin was a little bit temporarily depressed over the last couple quarters as we sold some aged inventory. So that’s one driver. And the second driver is, which is equally important is our mix. We’ve talked about moving — right now we’re at about 1/3 fee-based services or Brokerage Services or our Marketplace where we sell to other buyers and 2/3 are Cash Offer.

The margin dynamic on those is significantly higher. So as we move — shift to a higher percentage of fee-based services, that will push the margin up even further.

Brian Bair: Dae, one thing just for the question you asked me, and then you can do a follow-up to Peter, but just, I want to highlight this is, one thing that has changed, I think, a little bit, and this is just me and an assumption, but I think sellers’ expectations have changed as well. And if Offerpad’s doing their job, we’re doing all right, we should be 6 months to 9 months ahead of what the market is doing and what sellers know what the market is. And when we — over the last couple of years we’ve seen sellers’ expectations that continued to think we were in a post-COVID housing market that wasn’t there.

So staying disciplined and some of our offers with the lower conversion of what the market value of those homes are. But I think sellers’ expectations have changed a little bit as well as they’re seeing more inventory on the market. Months’ supply going up as well. And so being a buyer in a buyer’s market is a good place to be. And there’s an opportunity there that I think we’re seeing right now as well.

Operator: Your next question comes from the line of Ryan Tomasello with KBW.

Ryan Tomasello: Just in the operating framework here in the deck, you give an example of the transaction mix moving towards, I think, 2/3 capital light transactions from the Marketplace and Brokerage Services versus the 1/3 today. I realize it’s illustrative, but is that generally how you’re thinking about the evolution of the mix from here? And then a separate question on conversion, I guess, maybe dovetailing on what Dae was asking, but what exactly in your mind has been the primary driver of the conversion improvement?

Has it simply been feeling more comfortable leaning into pricing and expanding — I’m sorry, narrowing your margins, or is there something else that you feel like has been a primary driver of the conversion improvement?

Brian Bair: No, we’re staying pretty disciplined with our margins as well. I think it’s, again, it’s locations of areas that we have a high confidence score in our propensity models. That’s very important. The high likelihood that a home, we can buy, renovate it and sell it and what the percentage of that likely is that we can do that within 60 days on the market. We are doing a little bit less renovations in some of those high velocity areas. That’s we’re getting the homes on the market quicker — and because we’re not doing as much renovation. So we’re getting some time on that side of it. There are countless process changes that internally that we have been doing.

As you guys know, I brought in a new management team as we’ve been focused on different things, we’ve been really hyper-focused on conversion at all parts of it from — what — from the marketing dollars that we spend and where we’re spending those marketing dollars, but also the customer journey to the inspection process. So a lot of those processes operationally. I wouldn’t say there was 1 major thing I could say, hey, that’s changing, that’s why this, but all of those things as we get more efficient every day, I said something, we want to get better every day. It sounds cheesy, but we’re trying to figure this out.

And our conversion, I would also tell you that you guys know this isn’t new, but I’m just mentioning it, but we have something internally we call the Power Squad, but they’re our customer communication — our call center customer communication team. That’s been extremely helpful. And so we are continuing to have more conversation because we have 2 types of customers at Offerpad. The ones that come and they want more of a tech experience, like, hey, hands off, just tell me what the price of my home is, come inspect it, and then close. And then we have another seller, it’s a little bit different.

They maybe want to get 80% there through technology, but they need a little bit more hand-holding or answers or those. They want to talk about other products and some of those things. And so we’ve invested in the Power Squad a few months back, that’s been extremely helpful. We’ve always been really good at customer interaction and customer experience. We’ve really taken it to a new level of 7 days a week, trying to be there for customer support. And that is definitely — that’s definitely helping as well. So overall, it’s a lot of things you guys that we put in place over the last year or 2.

I would tell you right now, as we’re starting to see this — starting to finally see this maximized and capitalized on what we’re doing, probably the single biggest lever is our marketing spend and where and how we’re spending those marketing dollars coupled with the operations.

Peter Knag: Yes, if I could jump in and I’d highlight the marketing, that’s a big, tighter, operations and everything Brian talked about, but one of the focus areas of our new Chief Operating Officer has been marketing attribution and that’s also a big driver as well. We’re just getting — our top of funnel is stronger and healthier in addition to all the operational changes.

Brian Bair: And having — when we — we highlighted in the prepared remarks, is at our peak we were doing 3,500-plus transactions a quarter and just kind of what we’ve done in the past and that was only with one product. What’s exciting is when it comes from a conversion perspective is when customers were just making huge strides to when customers come to us, it’s not just — it’s a Cash Offer or no, it’s a Cash Offer, but then what’s the — if the Cash Offer doesn’t work or they want to explore the market, what can I get on the market?

We have some pretty cool listing products out that are different and not as traditional as what you could see, that we help the seller on that side as well. So we’re seeing a really good increase in conversion, a good customer experience on that side as well. And with the whole time, without putting the company more at risk, as far as what we do on our pricing side, we focus very heavily on making the best pricing, the best real estate decision. And what you don’t want to do is try to get volume by paying more than you want to in homes, especially in environments like this. There’s still 4 million transactions.

We want to buy our share of those 4 million transactions in the right areas, the ones that work for our pricing team. And if they don’t, then we’ll move into 1 of our other products.

Peter Knag: Okay. I didn’t hit the second question, the conversion question. So I’ll just hit that quickly, Ryan. You’re right, that’s illustrative. The product mix is super important because it helps us convert at a much higher level. And we are currently at 1/3, as I’ve mentioned, 1/3 the fee-based services and 2/3 Cash Offer. We expect that to move up to around 50%. And then the chart and the operating plan is down the road. Ultimately, we do expect to flip at some point. We’re not ready to talk about or forecast when, but we do expect a flip to a situation where we have higher fee-based services than Cash Offer longer term.

Operator: Your next question comes from the line of Gaurav Mehta with Alliance Global Partners.

Gaurav Mehta: I wanted to ask you on your renovation business. Can you maybe talk about what’s embedded in your ’26 guidance for renovation revenues?

Peter Knag: Hi, Gaurav. We don’t guide separately for Renovate, but what I would say about that business is, it’s a really — it used to be a cost center. And so it’s been a big win for us. It’s a cost center that we’ve converted starting about 2 years ago into a profit center. The financials for the Renovate business are really about double what we report because the work we do on our internal inventory is not part of the external reporting, but just the third-party business that you see information around in the segment reporting and the SEC filings, that is a profitable business at about 20% to 25% margin.

And you can also see some of the trends on the not forward-looking, but historical trends on the — trending schedules on the IR website.

Brian Bair: One thing I’ll add just to the Renovate business that I’m pretty proud of right now is, besides obviously doing Offerpad’s business, a lot of when we started renovation a couple years ago, or started our Renovate business doing it for third parties, we had a lot of large players in there. A lot of the SFRs, a lot of groups in there, we were doing single — we’re doing renovation for. Obviously with some of the new things that are happening with the regulatory side of it, some of those large funds have slowed down their acquisitions, but we at the same time in parallel, we have been focused on small to midsize renovation players.

And we’re doing renovations for very small fix and flippers who maybe do 1 to 5 homes a year to midsize family offices that own a few hundred homes, to across the board — there’s some other large players with different models. And so our renovation continues to grow. We’re still doing it for some — even the larger brands that we’ve mentioned before in the past. And so anyway, just very happy what we’re seeing there. And I always remind everyone, everyone that we’re doing renovation for is normally at their lowest volume. We can, as Renovate picks up, we expect when the market picks up, you see more transaction volume that will definitely grow with that as well.

So I think there is a lot of opportunity in front of Renovate.

Gaurav Mehta: Okay, that’s helpful. I also wanted to ask you on the operating leverage. With the current platform and the current cost structure, how much can you grow your portfolio and the volumes before you have to increase the cost?

Brian Bair: I’ll let Peter give you the smart answer. I’ll give you my answer. One of the things that I’m probably the most excited about what we’ve done is that, we have — we’ve been through a lot over the last couple of years and since the affordability crisis market hit, but I’ll tell you, like, growing this company the first time, how we grow it again to do that will be much, much different. We’re going to be a lot smarter. Obviously the implementation of a lot of the AI and initiatives we have internally. So we’re not going to need the — near the amount of resources to buy a similar amount of homes that we were doing before.

We’ve centralized more things and our logistics and operations is humming. And so from a platform perspective, and this is just from my perspective, is that with the team that we have right now, we have a lot — we could put a lot more volume on that same current team because we’re leveraging other factors of technology and AI and those other different things just as we get smarter. But…

Peter Knag: On the operating expense, it’s largely fixed. There are a few areas, for instance, third-party software platforms where there’s some components that cost will grow a little bit with revenue, but 90%, 95% of our OpEx are truly fixed costs. We’re very excited about the leverage that we’ll see when we get up to 1,000 and beyond.

Gaurav Mehta: All right, that’s helpful. And then lastly, just to clarify… [Technical Difficulty] 4Q number to be positive or you expect to exit the year on a run-rate basis to be faster?

Peter Knag: You cut out. Do you mind repeating the question?

Gaurav Mehta: Yes, I wanted to ask you on the adjusted EBITDA guidance for ’26, positive adjusted EBITDA. So are we expecting 4Q number to turn positive or do you expect the number to be positive on a run-rate basis?

Peter Knag: Right. It’s all run rate, both the 1,000 and the EBITDA are — run rate on exiting the year.

Operator: There are no further questions at this time. This concludes today’s conference call. You may now disconnect.