loanDepot, Inc. Q1 FY2025 earnings call

• Frank Martell announces his plan to step down as CEO, expressing pride in his time with loanDepot and thanking the team. - Anthony Hsieh returns, discussing the multi-channel origination model (end market retail, joint venture, consumer direct), servicing business with $117 billion unpaid principal balance, proprietary mello tech stack, and brand muscle. - Dave Hayes details financial results: adjusted net loss improved, lock volume and origination volume within guidance, gain on sale margin higher due to home equity products and government loans, expenses increased by $12 million with non-volume related expenses decreasing.

For the first quarter of 2025, pull-through weighted rate lock volume was $5.4 billion, a 15% increase from the prior year's $4.7 billion. Loan origination volume was $5.2 billion, an increase of 14% from the prior year's $4.6 billion. Servicing fee income decreased from $124 million in Q1 2024 to $104 million in Q1 2025, primarily due to the impact of 2024 bulk sales. Pull-through weighted gain on sale margin for Q1 was 355 basis points, above guidance, with home equity-linked products and a higher proportion of government loans contributing. Home equity-linked products contributed to the higher gain on sale margin. Revenue contribution: Adjusted total revenue was $278 million in Q1 2025 compared to $231 million in Q1 2024, driven by higher lock volume and gain on sale margin offset by some higher expenses.

• Expect pull-through weighted lock volume for Q2 to be between $5.5 billion and $8 billion and origination volume between $5 billion and $7.5 billion. - Second quarter pull-through weighted gain on sale margin expected to be between 300 and 350 basis points. - Total expenses expected to increase in Q2 primarily due to higher volume-related expenses.

Q: Can you talk about the outlook for the home equity business?

A: Yes. The second mortgage product is a proper hedge to the interest rate environment. As rates stay somewhat elevated, they continue to scale the home equity business by increasing marketing and cross-sell opportunities. With record home equity out in the country, low loan-to-value, and consumers protecting low interest rates, there's strong demand. When rates decrease, there will be opportunities with cash out refinance.