Better Home & Finance Holding Co. Q1 FY2025 earnings call

• Vishal Garg emphasized the company's mission to make homeownership better through technology, noting the mortgage industry is massive with $2.1 trillion in total origination volume for 2025. • Growth in funded loan volume was driven by Home Equity products (207% growth), Refinance Loans (64% growth), and Purchase Loans (9% growth) due to strategic investments in technology, product innovation, and distribution expansion. • Kevin Ryan discussed the retirement of approximately $530 million of convertible notes, creating ~$200 million of positive pre-tax equity value, and highlighted expenses decreased ~11% in Q1 vs Q4 2024, with loan origination expenses down sequentially. • Focus on profitability in the mid-term, leveraging Tinman AI platform, with Betsy AI Loan Assistant executing 127,000 consumer interactions in March, AI underwriting growing to 75% of lock loans, and increasing loan officer productivity.

In the first quarter of 2025, year-over-year, funded loan volume grew 31% to $868 million and revenue grew 46% to $33 million. By channel, first quarter funded loan volume was 71% generated through direct to consumer and 29% generated through the Tinman AI platform, along with B2B home equity and 15% refinance.

• Expect funded loan volume to be up in Q2 2025 vs Q1, driven by Tinman AI platform efficiencies, with over $450 million of NEO originations in Q2 (250% growth vs Q1). • Full-year 2025 expects funded loan volume growth year-over-year, offset by macro pressure and loss of Ally business (~$1 billion headwind), with growth expected in Q2 and Q3 as NEO Powered by Better ramps up. • Expect further improvements to adjusted EBITDA losses in 2025 due to efficiency gains and corporate cost reductions. • Aim to more than double UK bank originations in 2025 with AI deployment, and exiting non-core UK assets to benefit adjusted EBITDA losses in H2 2025.

Q: Kartik Mehta asked about when loan officers would feel the impact of the NEO platform and future onboarding of loan officers.

A: Vishal Garg said loan officers start seeing impact within 30 days with time saved from automated tasks, and expects to triple or quadruple the NEO channel.

Q: Brendan McCarthy inquired about unit economics, AI functionality impact, and balance sheet leverage.

A: Kevin Ryan mentioned unit economics improved, with savings in compensation/benefits and loan origination expenses, and discussed balance sheet leverage being comfortable with $155 million debt due 2028.

Q: Unidentified Analyst asked about B2B partnership economics and go-to-market for bank partners.

A: Vishal Garg explained the B2B partnership works with one platform replacing multiple systems, costing ~$1,500 per funded loan, and has a strong pipeline of fintechs and banks.

Q: Eric Hagen asked about restructuring's impact on negotiating terms with lenders and counterparty relationships.

A: Kevin Ryan said the restructuring fixed the balance sheet, improving pitch to counterparties as a strong counterparty.

Q: Bose George asked about companies using Encompass and Tinman as an alternative.

A: Vishal Garg noted companies on Encompass are looking for lower cost and higher efficiency alternatives, with AI making old systems obsolete.