Opendoor Shares Surge On Q3 Earnings, Guidance: What Investors Should Know

Online home buying and selling company Opendoor Technologies Inc OPEN reported quarterly results after market close Wednesday.

Here are the key highlights.

What Happened: Opendoor reported third-quarter revenue of $2.3 billion, up 91% year-over-year. Revenue beat the consensus target of $2 billion.

Opendoor sold 5,988 homes in the third quarter, up 72% year-over-year and more than the previous two quarters combined (5,943).

The company purchased 15,181 homes in the third quarter, up 79% year-over-year. Opendoor bought more homes in the quarter than the previous two quarters combined. The company ended the quarter with 17,164 homes owned, up 130% year-over-year.

Opendoor launched in five additional markets, bringing its total to 44 markets.

The company had gross margins of 8.9% and contributing margins of 7.5% in the quarter. This marked the 19th straight quarter of positive contributing margins.

Related Link: Could Opendoor, Offerpad See Surge With Zillow Exiting Homebuying?

What’s Next: Opendoor is guiding for fourth-quarter revenue of $3.1 billion to $3.2 billion, versus a consensus estimate of $2.92 billion.

“We continue to see strong consumer demand and are reiterating the expectations that we laid out last quarter, effectively pulling forward our original three-year financial plan by two years,” the company said.

Opendoor expects to sell fewer houses in the fourth quarter due to seasonality.

The positive margins and record buying and selling activities come as rival Zillow Group Z announced it was exiting the home buying and selling market, citing the ability to generate a profit.

Price Action: OPEN shares are up 16% to $22.67 in after-hours trading.