The report sent Opendoor shares down 9% in late trading. Following the report, CFO Carrie Ann Wheeler spoke to ZDNet by phone, stating “2021 was an important breakout year for us, a record performance, and proof positive that customers are craving a certain solution, and that two, we can deliver, at scale, managing a complicated system.” Added Wheeler, “we met all the expectations, and we’re set up for more of the same in 2022; given what we guided to in Q1, we’re off to a very good start. " The only obviously troubling element for investors in the report was the decline in Opendoor’s “contribution margin,” a key measure of profitability. The company defines contribution margin as adjusted gross profit minus holding costs for its inventory of homes, and selling costs. That percentage declined from 12.6% in the December, 2020, quarter, to 4%. Wheeler told ZDNet that the company has several times alerted investors that the contribution profit margin would decline this year from an artificially high level. Contribution margin had been boosted at the end of 2020 as the company was low on homes inventory, which meant that its holding costs were also much lower. “We’ve been talking about this all year, and we’ve called out that our margins would moderate,” she said. “What’s most important is that we’ve been very clear that we can definitely deliver the business within the 4% to 6% contribution margin baseline,” said Wheeler. Wheeler said the company has been tracking ahead of its near-term goals by reporting a full-year contribution margin for 2021 of 6.5%. In addition, the company is on a path to a long-term goal of contribution margin in a range of 7% to 9%, and Ebitda margin of 4% to 6%, she said. The higher margin will be a result of adding services to the business, including mortgage financing, and “Opendoor Complete,” which is the company’s offer to combine in a single transaction buying a consumer’s home and helping them find a new home to buy. “We’re well on our way to getting there,” she said of the long-term goal. Asked about rising interest rates, Wheeler said, “Our outlook for 2022 housing remains really quite robust.” Wheeler said the company is “not dismissive of the fact that rates are expected to rise, but there are some really important counter-balancing forces in housing right now, one being that inventory is as low as it’s ever been.” Revenue in the three months ended in December rose to $3.8 billion, yielding a net loss of 13 cents a share, excluding some costs. Analysts had been modeling $3.17 billion and an 18-cent loss per share. Opendoor said its total inventory of homes at quarter’s end rose by 1,208%, year over year, to 17,009 homes. For the current quarter, the company sees revenue of $4.1 billion to $4.3 billion, and adjusted Ebitda of $30 million to $40 million. That compares to consensus for $3.3 billion and $12 million in Ebitda. In prepared remarks, Opendoor CEO and co-founder Eric Wu remarked, “In 2021, we saw a significant and durable shift in demand for our digital product, demonstrated our market leadership, and delivered exceptional results. “By consistently outperforming expectations, we pulled forward our financial targets by years, growing revenue 211% year-on-year and exiting 2021 at a revenue run-rate of over $15 billion.” Added Wu,
