Finance of America Companies Inc. Q1 FY2025 earnings call

• Graham Fleming noted the first quarter marked a step forward in strategy, with $561 million in funded volume exceeding guidance, fourth consecutive quarter of volume growth, and $80 million in GAAP net income. The new A Better Way with FOA campaign was launched for repositioning reverse mortgages.
• Kristen Sieffert discussed the new campaign, operational metrics improvement (doubled retail loans funded in 30 days, 40% increase in sales conversion, 12% reduction in cost per opportunity), and promotion of Jon Scarpati to Chief Production Officer.
• Matt Engel detailed financial results (GAAP net income up, adjusted net income in line, EBITDA improvement, margin details, cost structure improvements with 25% year-over-year reduction in G&A expenses, 33% increase in loans per employee).

During the first quarter, Finance of America delivered $561 million in funded volume, exceeding the guidance range of $525 million to $550 million. GAAP net income was $80 million or $3.17 basic earnings per share. On an adjusted basis, the company earned $13 million in adjusted net income or $0.52 per share, an improvement of $20 million from the first quarter of 2024. Revenue contribution: Funded volume was $561 million, with GAAP net income and adjusted net income contributing to financial performance.

• Full year guidance: $2.4 billion to $2.7 billion in funded volume and $2.60 to $3 in adjusted earnings per share.
• Second quarter guidance: Funded volume in the range of $575 million to $600 million.

• Comments on the call may be forward-looking statements subject to risks described in the Risk Factors section of Finance of America's Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC, and actual results may differ materially from forward-looking statements due to various factors.

Q: How did rate volatility, particularly in April, impact volumes and the market so far this quarter?

A: April was actually our best submission and funded volume month in the last two years. Rates are bouncing around a bit, but we haven't seen any significant movement yet in terms of rate impacting our volume at this point.

Q: What is the outlook for expenses?

A: Our fixed cost base is relatively fixed. As production increases, variable expenses will increase along with it. On the fixed side, we see opportunities to reduce expenses as contracts renew, like getting lower e-counts or licenses. Our platform can handle significantly more production without putting much pressure on the fixed cost base.