Better Home & Finance (NasdaqGM:BETR) FY Conference March 24, 2026 05:00 PM ET Company ParticipantsVishal Garg - Founder and CEOConference Call ParticipantsRohit Kulkarni - Managing Director and Senior Research AnalystRohit KulkarniAll right. Hello, everyone. My name is Rohit Kulkarni. I'm really excited to welcome Vishal Garg, Founder and CEO of Better.com. Ticker is BETR. I think Better has been one of the most disruptive AI native companies in digital mortgage and right now as we move forward, they're mo ...

Core Viewpoint - Better Home & Finance Holding Company is set to participate in the 38th Annual ROTH Conference, highlighting its position as an AI-powered homeownership company and its innovative approach to mortgage and home equity finance [1][2]. Company Overview - Better Home & Finance Holding Company (NASDAQ: BETR) is recognized as the first AI-native mortgage and home equity finance platform, having funded over $110 billion in loan volume [3]. - The company utilizes its AI platform, Tinman®, to streamline the homeownership process, allowing customers to see rate options quickly, get pre-approved in minutes, and close loans in as little as three weeks [3]. - Better's offerings include GSE-conforming mortgage loans, FHA and VA loans, jumbo mortgage, and home equity loans, serving customers across all 50 US states and the United Kingdom [3]. Upcoming Events - CEO Vishal Garg will engage in a fireside chat at the ROTH Conference on March 24, 2026, at 2:00 PM PT / 5:00 PM ET, which will be available via live webcast [1][2]. - Virtual one-on-one investor meetings will be hosted throughout the day, with registration available through ROTH representatives [2]. Technological Innovations - Better has launched the first conversational credit decision engine for mortgages and home equity loans in collaboration with OpenAI's ChatGPT, enhancing the efficiency of loan approvals [9].

Better Home & Finance Holding Company, trading as NASDAQ:BETR, is a prominent player in the mortgage and home equity finance sector. The company is recognized for its AI-native solutions, which aim to streamline the lending process. Recently, Smith Chad M., the President and COO, sold 2,374 shares of BETR's Class A Common Stock at $28.51 each, retaining 18,575 shares.In the fourth quarter of 2025, Better announced a strategic shift from a direct-to-consumer originator to an AI-native lending platform. This ...

Core Insights - Better Home & Finance (BETR) shares have tripled in value over the past year, driven by expectations that its AI and tech-oriented platform could disrupt the mortgage market [1] Company Performance - The stock has shown remarkable performance, with a threefold increase in value within a year, indicating strong market interest and investor confidence in its technology-driven approach [1] Market Potential - There are significant hopes that the company's innovative platform will have a disruptive impact on the traditional mortgage market, suggesting potential for future growth and market share expansion [1]

Core Insights - Better Home & Finance Holding Company (BETR) is transitioning to an AI-native lending platform, enhancing its distribution network through a partnership with Intuit Credit Karma [1][5] Financial Performance - BETR reported an EPS of -$2.07, missing the estimated EPS of -$2.01, but showed improvement from a loss of $2.51 per share in the same quarter last year [2][6] - The company's revenue for the quarter was approximately $44.31 million, below the estimated $50.44 million, but it represents growth from $24.98 million in the same period last year [3][6] Financial Metrics - BETR has a P/E ratio of -2.84 and an earnings yield of -35.22%, indicating negative earnings [4] - The debt-to-equity ratio stands at 10.84, suggesting a high reliance on debt financing [4] - A current ratio of 0.75 indicates potential liquidity concerns, as the company may struggle to cover current liabilities with available assets [4] Strategic Initiatives - The partnership with Intuit Credit Karma and the focus on AI technology are key strategies for BETR to strengthen its market position and improve financial performance [5][6]

分组1 - Better Home & Finance Holding Company (BETR) reported a quarterly loss of $1.7 per share, which was better than the Zacks Consensus Estimate of a loss of $1.88, and improved from a loss of $2.51 per share a year ago, resulting in an earnings surprise of +9.57% [1] - The company achieved revenues of $44.31 million for the quarter ended December 2025, exceeding the Zacks Consensus Estimate by 12.69%, and showing significant growth from year-ago revenues of $24.98 million [2] - The stock has increased approximately 12.5% since the beginning of the year, contrasting with a 2.5% decline in the S&P 500 [3] 分组2 - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The trend of estimate revisions for Better Home & Finance Holding Company was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] - The current consensus EPS estimate for the upcoming quarter is -$1.25 on revenues of $48.71 million, and for the current fiscal year, it is -$1.86 on revenues of $262.31 million [7] 分组3 - The Financial - Mortgage & Related Services industry, to which Better Home & Finance Holding Company belongs, is currently ranked in the bottom 12% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

Financial Performance - Total net revenues for the year ended December 31, 2025, were $164.872 million, a 52% increase from $108.488 million in 2024[314]. - Gain on loans, net increased to $136.148 million in 2025, representing 82% of total revenue, up from $78.098 million (72%) in 2024[314]. - Funded Loan Volume for the year ended December 31, 2025 was $4,744 million, a 32% increase from $3,594 million in 2024[339]. - D2C Loan Volume increased by 14% to $2,928 million for the year ended December 31, 2025, up from $2,562 million in 2024[340]. - B2B Loan Volume decreased by 91% to $95 million for the year ended December 31, 2025, down from $1,032 million in 2024[341]. - Total Loans funded increased by 31% to 15,386 for the year ended December 31, 2025, compared to 11,755 in 2024[343]. - Total net revenues for the year ended December 31, 2025 were $164,872 thousand, compared to $108,488 thousand in 2024[367]. - Gain on loans, net increased by 74% to $136,148 thousand for the year ended December 31, 2025, from $78,098 thousand in 2024[368]. - Total Expenses for the year ended December 31, 2025 were $330,691 thousand, compared to $313,928 thousand in 2024[367]. - Net loss for the year ended December 31, 2025 was $165,872 thousand, compared to a net loss of $206,290 thousand in 2024[367]. - Adjusted Net Loss for the year ended December 31, 2025, was $131.7 million, improving from a loss of $162.8 million in 2024[408]. - Adjusted EBITDA for the year ended December 31, 2025, was a loss of $115.8 million, compared to a loss of $121.0 million in 2024[408]. Loan Volume and Types - Refinance loan volume surged by approximately 119% to $1.015 billion in 2025 from $463 million in 2024[336]. - Purchase loan volume rose by approximately 8% to $2.875 billion in 2025 from $2.652 billion in 2024[337]. - HELOC loan volume increased by approximately 78% to $854 million in 2025 from $479 million in 2024[338]. - The average loan amount increased slightly to $308,321 in 2025 from $305,757 in 2024[335]. - Average Loan Amount increased by approximately 1% to $308,321 for the year ended December 31, 2025, from $305,757 in 2024[346]. Operational Changes and Strategy - The company plans to continue investing in technology to enhance customer experience and reduce operational costs through automation[313]. - The company aims to expand its homeownership product offerings, providing a comprehensive solution for customers[331]. - The company is winding down its non-core international operations, with plans to complete several entity sales by 2026[319]. - The company intends to use net proceeds from the ATM Program for general corporate purposes, including working capital and increasing warehouse line capacity[431]. Financial Position and Assets - Total assets increased by $592.4 million, or 65%, to $1.5 billion as of December 31, 2025, compared to $913.1 million as of December 31, 2024[390]. - Cash and cash equivalents decreased by $111.3 million, or 53%, to $99.8 million as of December 31, 2025, compared to $211.1 million as of December 31, 2024[390]. - Customer deposits increased by $628.9 million, or 469%, to $763.0 million as of December 31, 2025, compared to $134.1 million as of December 31, 2024[390]. - Loans held for investment increased by $611.9 million, or 549%, to $723.3 million as of December 31, 2025, compared to $111.5 million as of December 31, 2024[393]. - Senior notes carrying value was $198.8 million as of December 31, 2025, following the exchange of Convertible Notes for Senior Notes in April 2025[396]. - Additional paid-in capital rose by $246.5 million, or 13%, to $2,109.8 million as of December 31, 2025, from $1,863.3 million as of December 31, 2024[398]. - Accumulated deficit increased by $165.9 million, or 9%, to $2,076.2 million as of December 31, 2025, compared to $1,910.4 million as of December 31, 2024[399]. Cash Flow and Financing Activities - Net cash used in operating activities decreased by $213 million, or 56%, to $167 million for the year ended December 31, 2025, compared to $380 million in 2024[433]. - Net cash used in investing activities increased by $518 million, or 360%, to $662 million for the year ended December 31, 2025, primarily due to loan originations[434]. - Net cash provided by financing activities increased by $475 million, or 199%, to $714 million for the year ended December 31, 2025, driven by increased customer deposits[435]. - The company raised approximately $568 million in gross proceeds from the Business Combination in August 2023, including $528.6 million in Convertible Notes[414]. - The company has an aggregate available amount of $575.0 million from warehouse lines of credit as of December 31, 2025[412]. - The company entered into a Note Exchange Agreement to exchange $532.5 million of existing Convertible Notes for $155.0 million in Senior Notes and a cash payment of $110.0 million[422]. Risk Management - The company expects to face fluctuations in performance due to interest rate changes, impacting loan origination volumes[320]. - The company manages interest rate risk through hedging instruments, expecting these to reduce earnings volatility[466]. - The company anticipates that interest rates will remain the primary market risk for the foreseeable future, impacting production volume and revenue[461]. - The company is classified as an emerging growth company (EGC) and will cease to be an EGC when total annual gross revenue exceeds $1.235 billion or by March 8, 2026[459]. - The company has limited exposure to foreign currency exchange risk, primarily generating revenue in U.S. dollars, but expects this exposure to increase due to expansion in the United Kingdom[476][477]. - The company employs stringent underwriting standards to mitigate credit risk, which includes monitoring loan performance through subservicing agents[471]. - As of December 31, 2025, the company was exposed to interest rate risk on $466.7 million of loans held for sale (LHFS) and $4.0 million of net interest rate lock commitments (IRLCs)[467]. - A hypothetical decrease in interest rates by 100 basis points would result in a $6.6 million increase in the combined fair value of LHFS and IRLCs[468]. Lease and Operational Costs - Operating lease costs decreased from $10 million in 2024 to $5 million in 2025 due to real estate footprint reduction initiatives[437]. - As of December 31, 2025, the company had lease liabilities of $4.6 million, reflecting remaining contractual obligations for future lease payments[438]. - The average holding period of loans from funding to sale was approximately 30 days in 2025[464].

Core Viewpoint - Better Home & Finance is undergoing a significant transformation from a direct-to-consumer (D2C) mortgage originator to an AI-native mortgage platform, focusing on enterprise partnerships that promise greater volume potential and improved marginal economics compared to the legacy D2C model [4][2]. Financial Performance - For Q4 2025, Better reported a funded loan volume of approximately $1.5 billion and revenue of around $44 million, reflecting year-over-year increases of 56% and 77% respectively [5][13]. - The Tinman AI platform contributed $646 million, accounting for over 40% of the total volume in Q4 2025, surpassing prior guidance [13]. - The company reported an adjusted EBITDA loss of approximately $24 million in Q4 2025, an improvement from a $28 million loss in Q4 of the previous year [15]. - Better ended Q4 2025 with $227 million in liquidity and has three warehouse facilities with a total capacity of $575 million [16]. Strategic Shift - The company is shifting its focus to enterprise partnerships, with notable collaborations including Credit Karma, Neo, and a top-five U.S. non-bank mortgage originator [6][9]. - The Tinman AI platform's contribution to loan volume is expected to rise from 0% in 2024 to over 60% by 2026, indicating a clear growth trajectory [7][1]. Partnership Developments - Better's partnership with Credit Karma went live in October 2025, with plans to expand services beyond refinancing to include HELOC and purchase options [8]. - Neo's run rate increased from $1.5 billion to $2.4 billion on the Tinman platform, with significant improvements in funded loans per mortgage advisor and processor [9]. - The company is also working with Finance of America to launch HELOC and HELOAN offerings powered by Tinman AI [9]. Technological Integration - Better introduced the first conversational credit decision engine integrated into ChatGPT via the Tinman AI app, which can provide credit decisions in approximately 47 seconds, significantly reducing origination timelines [11][12]. - The integration has generated interest from over 40 financial institutions shortly after the announcement, highlighting the potential for accelerated implementation timelines [12]. Future Outlook - For Q1 2026, Better anticipates total loan volume between $1.4 billion and $1.55 billion, representing a 70% year-over-year growth from Q1 2025 [17]. - Management aims to achieve adjusted EBITDA breakeven by the end of Q3 2026, although progress may vary due to different partnership ramp timelines [15].

Financial Data and Key Metrics Changes - In Q4 2025, the company generated $1.5 billion in funded loan volume and $44 million in revenue, representing year-over-year increases of 56% in loan volume and 77% in revenue [20][21] - For the full year 2025, funded loan volume reached $4.7 billion, up 32% year-over-year, while revenue increased by 52% to $165 million [22][31] - The company achieved a loan processing cost of approximately $800 per loan, significantly lower than industry averages [24][66] Business Line Data and Key Metrics Changes - The Tinman AI platform generated $646 million in volume in Q4 2025, accounting for over 40% of total volume, surpassing prior guidance of $600 million [21] - By product, refinance grew by 119%, home equity increased by 78%, and purchase rose by 14% in 2025 [32] - The contribution margin improved from approximately $1,800 to $2,300 per loan quarter-over-quarter [33] Market Data and Key Metrics Changes - The total residential funded loan volume in the industry increased by 4% year-over-year, while the company's funded loan volume grew by 56% over the same period [21] - The company expects to reach $1 billion in monthly loan volume by May 2026, indicating strong market positioning [22][35] Company Strategy and Development Direction - The company is transitioning from a direct-to-consumer model to an AI-native platform that powers the broader mortgage ecosystem, which is expected to enhance volume potential and marginal economics [29][30] - Partnerships with major players like Credit Karma and OpenAI are central to the company's strategy, aiming to leverage their large customer bases for growth [19][30] - The company is focused on reducing operational costs and improving customer acquisition costs through its partnerships, which provide embedded distribution advantages [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving Adjusted EBITDA breakeven by the end of Q3 2026, driven by volume growth and improved contribution margins [35] - The company highlighted the importance of adapting to changing market conditions and leveraging AI to enhance operational efficiency [26][27] - Management noted that the mortgage industry is undergoing significant transformation, with a shift towards AI-driven solutions that can lower costs and improve service delivery [18][19] Other Important Information - The company ended Q4 2025 with $227 million in cash and investments, maintaining strong relationships with financing counterparties [34] - The launch of a conversational credit decision engine integrated with ChatGPT is expected to open new distribution channels and enhance customer engagement [15][16] Q&A Session Summary Question: Guidance on Q1 loan volume - Management indicated that the flat guidance for Q1 loan volume is due to seasonality, reflecting growth in the platform [39] Question: Medium-term profitability outlook - Management confirmed the target to reach Adjusted EBITDA profitability by Q3 2026, with a focus on evaluating growth opportunities post-breakeven [40] Question: Partnership metrics and funding expectations - Management noted that approximately 5% of pre-approvals typically convert to funded loans, with variations based on partner integration [48] Question: Credit Karma partnership scope - Currently, the partnership with Credit Karma focuses on refinancing, with plans to expand to HELOC and purchase products [55] Question: Cost to underwrite loans - Management stated that savings from lower underwriting costs are being passed on to borrowers, with competitive rates compared to industry averages [66]

Financial Data and Key Metrics Changes - In Q4 2025, the company generated $1.5 billion in funded loan volume and $44 million in revenue, representing year-over-year increases of 56% in loan volume and 77% in revenue [20][21] - For the full year 2025, funded loan volume reached $4.7 billion and revenue was $165 million, up 32% and 52% year-over-year respectively [22][31] - The company achieved a loan processing cost of approximately $800 per loan, significantly lower than industry averages [24][66] Business Line Data and Key Metrics Changes - The Tinman AI platform generated $646 million in volume in Q4 2025, accounting for over 40% of total volume [21] - By product, refinance grew by 119%, home equity increased by 78%, and purchase rose by 14% in 2025 [32] - The contribution margin improved from approximately $1,800 to $2,300 per loan quarter-over-quarter [33] Market Data and Key Metrics Changes - The overall residential funded loan volume increased by 4% year-over-year, while the company's loan volume grew by 56% [22] - The company has less than 1% market share in a large savings and loan market, indicating significant growth potential [30] Company Strategy and Development Direction - The company is transitioning from a direct-to-consumer model to an AI-native platform that powers the broader mortgage ecosystem [29] - Partnerships with major players like Credit Karma and OpenAI are central to the company's strategy, aiming to reach tens of millions of consumers [19] - The company expects to achieve $1 billion in monthly loan volume by May 2026 and aims for Adjusted EBITDA breakeven by the end of Q3 2026 [22][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory despite macroeconomic challenges, highlighting the resilience of its model [22][30] - The company anticipates that the integration of AI will continue to lower costs and improve efficiency, enhancing its competitive position [25][27] - Management noted that the mortgage industry is undergoing significant changes, with increasing interest from banks and fintechs in leveraging the company's technology [60] Other Important Information - The company has onboarded 28 new loan officer teams onto the Tinman platform in 2025, demonstrating rapid growth in its retail mortgage lender partnerships [11] - The launch of a conversational credit decision engine integrated with ChatGPT is expected to open new distribution channels [15][16] Q&A Session Summary Question: Guidance on Q1 loan volume - The guidance for Q1 loan volume is flat due to seasonality, reflecting growth in the platform [38][39] Question: Medium-term profitability outlook - The target is to reach Adjusted EBITDA profitability by Q3 2026, with a focus on contribution margins of 10%-30% for new partnerships [40] Question: Metrics from pre-approvals to funded loans - The company sees a funding rate of about 5% from pre-approvals, with variations based on partner integration [48][49] Question: Status of stablecoin ecosystem for funding - The company is approximately six months away from implementing stablecoin funding [50][51] Question: Credit Karma partnership scope - Currently, the partnership focuses on refinancing, with plans to expand to HELOC and purchase products [55] Question: Contribution margin comparison - The contribution margin varies by product and partnership, with a focus on achieving profitability through increased penetration rates [79]