Better Home & Finance Holding Co. Q1 FY2024 earnings call

• Growth focus: Increased funded loan volume and revenue sequentially from Q4 2023. Purchase loan volume up 12%, refinance up 232%, HELOC up 54% sequentially.
• Revenue per loan: Seeing opportunities to increase revenue per loan while remaining cost competitive, with gain on sale margin increasing to 2.37% in Q1 2024.
• Operational efficiency: Adopted new operating model and compensation structure for sales teams. Hired experienced loan officers with positive early results on productivity.
• B2B channel: Continues to see demand for technology and origination capabilities from new partners.
• Leadership update: Chad Smith joined as President and COO of Better Mortgage Corporation, bringing extensive mortgage experience.

During the first quarter of 2024, Better Home & Finance Holding Company generated funded loan volume of $661 million, which was above the high end of prior guidance. Revenue was approximately $22 million and adjusted EBITDA loss was approximately $31 million. Funded loan volume was 54% direct-to-consumer and 46% business-to-business. By dollar volume, it was 80% purchase loans, 12% refinance, and the remainder HELOC.

• Q2 2024 funded loan volume expected to be above $800 million, a quarter-over-quarter increase of more than 20% vs Q1 2024 and more than 50% vs Q4 2023.
• Full year 2024: Expect funded loan volume to increase compared to 2023 as they prudently increase customer acquisition spend in high-returning channels and increase origination capacity.
• Operating leverage: Expect total expenses to be approximately flat in 2024 compared to 2023 with revenue higher due to growth and expense reductions.

Q: Please provide additional color on the traction in expanding the B2B channel.

A: Kevin Ryan stated dialogues in B2B channel are strong, but B2B partnerships take time due to legacy contracts and other strategic priorities in banking.

Q: Elaborate on efforts to improve conversion.

A: Vishal Garg mentioned experienced loan officers have dramatically improved productivity, taking loan officers from 1-2 loans a month to 10 loans a month, and improving conversion from pre-approvals to funded loans.

Q: How aware are consumers of HELOC product and collaboration plans?

A: Vishal Garg said consumers need education on HELOCs, and they are collaborating with personal installment loan players and banks for HELOC as a service.

Q: Which product areas will drive volume growth in 2024 and beyond?

A: Kevin Ryan mentioned HELOC and Cash Out Refi are big parts, and Vishal Garg has high hopes for the purchase product with experienced loan officers and Realtor partnerships.