Better Home & Finance Holding Company (BETR) Earnings

Management highlights

- Leadership Transition and Alignment * Daniel Lewis appointed interim CEO, a long-term significant shareholder with 30 years of experience at regulated financial institutions who has worked with the business for the past 3 months * Daniel receives only the legal minimum salary, no cash bonus, with compensation consisting entirely of performance-based equity; all board members also elected to receive compensation in equity, aligning all leadership incentives with shareholder interests * The board is conducting a search for a permanent CEO, and the interim designation provides flexibility while allowing full focus on executing the current strategic plan * No formal strategic alternative process (including sale of the whole company) is underway at this time - Core Strategic Priorities * Distribution: Focus on aligned enterprise partners for the API-driven Tinman platform, prioritizing consistent implementation and long-term growth over just partnership announcements; the wholesale independent broker channel is a key near-term focus, with a Tinman launch for brokers planned, and existing partners including Credit Karma and Coinbase * Product: Aggressive, thoughtful continued investment in HELOC, which has outperformed expectations for wholesale market interest; HELOC is currently primarily direct-to-consumer, with plans to expand it into a major enterprise product * Tinman Technology: Advance the AI-native, end-to-end in-house mortgage platform, with near-term focus on improving the loan officer experience and expanding automation; the direct-to-consumer and Neo channels provide continuous user feedback to refine the platform; a board member with deep AI enterprise experience will stay on as strategic AI advisor * Operational Simplification: Combine Neo and Better Mortgage operations to improve execution and create cost efficiencies; narrow organizational priorities to improve execution speed, which already resulted in July 2026 being the most productive engineering month in recent memory - Operational Progress and Balance Sheet * Annual cost savings are now expected to exceed $45 million, up from the original target of $25 million; cost reductions will continue to flow through the income statement through the end of 2026 * Ended Q2 with $102 million in cash and cash equivalents, plus $10 million in restricted cash; total warehouse capacity increased 48% from year-end 2025 to $850 million, reflecting vendor confidence in the business * The sale process for UK subsidiary Birmingham Bank is ongoing, led by FD Partners, with updates to come when there is material progress

Guidance

- Third quarter 2026 guidance expects loan volume of $1.375 billion to $1.525 billion, total net revenues of $49 million to $52 million, and an adjusted EBITDA loss of $18 million to $15 million. The midpoints of these ranges represent 20% YoY loan volume growth, 22% YoY total net revenue growth, and 28% YoY improvement in adjusted EBITDA loss. - The guidance range is wider than prior quarters due to higher rate sensitivity of refinance volume at current interest rates and an ongoing active shift in revenue mix toward HELOC, which will become more predictable as partnerships ramp. - The prior target of reaching adjusted EBITDA breakeven by September 2026 is withdrawn; management will not commit to a new specific month target, as breakeven depends on transaction volumes, revenue mix, and the timing of cost reductions. Sustainable profitability remains a core company priority, and progress will be reported quarterly. - No revenue impact from unlaunched HELOC enterprise partnerships was included in the third quarter guidance; management expects these partnerships to begin contributing meaningfully in the fourth quarter of 2026.

Segment performance

By product: Total Q2 2026 loan volume grew 38% YoY to $1.67 billion. Refinance loan volume grew 239% YoY to $549 million, making up 33% of total loan volume. Home equity (HELOC) volume grew 23% YoY to $294 million, making up 18% of total loan volume, up from 12% last quarter. Purchase loan volume grew 3% YoY to $824 million, making up 49% of total loan volume. Total net revenue increased 28% YoY and 15% QoQ to $54.7 million. Adjusted EBITDA loss was $14 million, a 39% improvement YoY and 26% improvement QoQ, including a one-time $6.5 million trade reserve release. By channel: Neo business loan volume grew 60% YoY, and continues recruiting top loan officer teams nationwide. 55% of Q2 loan volume came from the Tinman AI platform, and 45% came from direct-to-consumer.

Risks & headwinds

- Industry-wide mortgage application activity has softened as interest rates rose through Q2, and management expects an elevated interest rate environment to persist over the medium term, creating ongoing headwinds for refinance volume. - Large enterprise partnership launch timelines and lead allocation are controlled by partner companies, creating uncertainty around revenue timing that makes near-term forecasting less accurate. - Complex long-cycle enterprise integrations have historically produced low material results relative to the high customer support and integration costs they require, a risk management has addressed by deprioritizing this category of partnership. - HELOC revenue contribution is still ramping and less predictable than more mature product lines, adding near-term forecasting volatility.

Analyst Q&A

• Q: How much of the cost savings from current initiatives are visible in Q3 guidance versus future realization over the next 12 months? Also, why are some partnerships delayed — is it implementation time or weaker demand? /

  A: Q2 adjusted operating expense was ~$75 million after adjusting for the one-time reserve release, and Q3 guidance midpoint is ~$67 million, representing $8 million in quarter-over-quarter savings. Most cost cuts were implemented late in Q2, so their full impact could not be reflected in Q2 results, and will show through meaningfully in Q3. Delays are only due to large enterprise partners' internal rollout schedules, not weak demand — the partnership pipeline remains robust. Most upcoming late-2026 launches are HELOC-focused, which are less exposed to current macro refinance headwinds, so they represent higher-quality growth than prior refinance-focused partnerships.

• Q: Can you provide additional detail on the Q2 to Q3 revenue bridge, especially product mix changes, and when will the Credit Karma HELOC partnership start contributing volume? /

  A: HELOC mix will increase meaningfully in Q3, rising from 18% of Q2 volume, but no specific target is provided. No HELOC enterprise partnerships are factored into Q3 guidance, so all HELOC growth in Q3 will come from the existing direct-to-consumer channel. Refinance volume uncertainty from macro conditions also adds variability to the top line. Multiple HELOC enterprise partnerships, including the Credit Karma partnership, are expected to begin contributing volume in Q4 2026.

• Q: Where is HELOC volume growth coming from in Q3 without new partner launches, and which channels will the company deemphasize moving forward? What is the current pricing strategy? /

  A: HELOC partnerships are already signed, they just have not launched or ramped yet, so growth in Q3 comes from existing direct-to-consumer channel momentum, driven by a very competitive HELOC product offering. The company will deemphasize complex, long-cycle enterprise integrations that require ripping out incumbent systems and high support costs, which have not delivered material results relative to cost. It will prioritize API-driven white-label partnerships including the wholesale broker channel and existing consumer platforms, which align with the company's efficient manufacturing model. Pricing remains targeted at a 20-25% incremental contribution margin across all products and channels, and management encourages investors to focus on contribution margin rather than just raw loan volume or revenue growth.

• Q: Why did the board make the CEO leadership change now, and is a permanent CEO search underway? Is the company exploring full strategic alternatives like a sale? /

  A: The change came as the company transitions from an early-stage founder mode focused on broad innovation and multiple projects to an enterprise execution stage focused on delivering for a small set of high-product-market-fit initiatives. The board is conducting an active search for a permanent CEO, and the interim title gives the board full flexibility while allowing immediate execution of the agreed strategic plan. There is no formal process for full company strategic alternatives underway at this time.