Core Insights - Better Home & Finance Holding Company has successfully amended and renewed a $175 million warehouse credit facility, enhancing liquidity and operational flexibility [1][2] - The company expects monthly origination volumes to exceed $1 billion by May 2026, a more than 100% increase from the average monthly origination volume of approximately $400 million for the quarter ended September 30, 2025 [3] - Better.com aims to achieve adjusted EBITDA profitability by the end of the third quarter of 2026 [3] Financial Developments - The amended credit facility features reduced cash deposit requirements, expanded leverage capacity, and higher advance rates on certain non-GSE loans, significantly lowering ongoing equity capital requirements [2] - The enhancements improve equity capital efficiency by reducing the required amount of equity capital for the facility [4] Business Strategy - The company is deploying its Tinman AI platform across the mortgage ecosystem, which is expected to drive business evolution and improve customer experience [4] - New partnership channels are generating lead flow comparable to the company's established direct-to-consumer channel [4] Company Background - Better Home & Finance Holding Company is recognized as the first AI-native mortgage and home equity finance platform, having funded over $100 billion in loan volume since its inception in 2016 [5] - The company has received multiple awards for digital mortgage innovation and is noted for its customer service across all 50 US states and the UK [5]

Core Insights - Better Home & Finance has leveraged generative AI alongside its existing machine learning capabilities to enhance operational efficiency and pursue growth in a challenging mortgage market [3][6][18] Business Performance - The company has experienced a year-over-year increase in loan volume by approximately 20% and revenue growth of about 50% [6][9] - Home equity business has surged more than 10 times, positioning Better as the fastest-growing home equity platform in America [9] - Revenue per loan has risen from $7,400 to $8,500, while contribution margin improved from around $500 to $1,700 per loan [6][7] Technological Advancements - Better's end-to-end mortgage platform, Tinman, is trained on over $110 billion of loans and consolidates multiple systems into a single workflow, currently accounting for about 45% of total revenue with a target of 80-90% [5][13] - The platform enables operational efficiencies, with 70% of loans processed as "one-day mortgages" and expectations for over 90% of loans to be AI-driven in the coming years [12][18] Market Strategy - Better is focusing on large enterprise partnerships and aims to double loan volume over the next six months, with a goal of achieving adjusted EBITDA profitability by the end of Q3 2026 [4][18] - The company is monetizing its Tinman platform by providing software and back-office support to mortgage brokers and retail lenders, expanding its market reach [13] Competitive Landscape - Key competitors include Rocket Mortgage and loanDepot in the direct-to-consumer space, while Better's AI-driven solutions differentiate it in the market [15] - Better's unique offering combines various mortgage functions into a unified platform, setting it apart from competitors like ICE-owned Encompass and Black Knight [16]

Summary of Better Home & Finance FY Conference Company Overview - **Company**: Better Home & Finance (NasdaqGM: BETR) - **Industry**: Home finance and mortgage industry - **Founded**: Approximately 10 years ago by CEO Vishal Garg - **Business Model**: Utilizes a machine learning-driven AI matching engine to connect consumer credit, income, asset, and property data with investor preferences for mortgage and home equity loans Key Financial Metrics - **Growth in Loan Volume**: Increased by approximately 20% in the past year [4] - **Revenue Growth**: Grew by about 50% [4] - **Home Equity Business Growth**: Expanded over 10X, becoming the fastest-growing home equity platform in America [4] - **Revenue per Loan**: Increased from $7,400 to $8,500 [4] - **Contribution Margin**: Improved from $500 to $1,700 per loan [4] - **Labor Cost per Fund**: Reduced from $2,900 to $2,500, significantly lower than the industry average of over $9,000 [5] Product and Technology Developments - **AI Integration**: The company has integrated GenAI into its existing machine learning engine, enhancing efficiency and unit economics [3] - **Tinman Platform**: Represents a comprehensive end-to-end solution for the mortgage industry, consolidating multiple systems into one workflow [9][10] - **AI Loan Processing**: 70% of loans can be processed as one-day mortgages, with 44% going from lock to commitment letter in under a minute [10] - **Future Projections**: Anticipates that over 90% of loans will be processed entirely via AI in the coming years, potentially reducing labor costs to below $1,000 per loan [11] Market Position and Competitive Landscape - **Market Size**: U.S. homes represent a total asset value of approximately $34 trillion, with a mortgage market of about $15 trillion [6] - **Market Share**: At peak in 2021, Better held nearly 2% market share in the overall mortgage market [6] - **Competitors**: Direct competitors include Rocket Mortgage and loanDepot, with a shift towards a platform-based model rather than direct-to-consumer [26] - **Unique Selling Proposition**: Better's platform offers a unique per-funded loan pricing model, which is attractive to mortgage brokers and lenders [29] Strategic Partnerships and Growth Initiatives - **Partnerships**: Collaborations with major financial institutions and mortgage originators to implement the Tinman platform [15][17] - **Market Trends**: The company is positioned to benefit from a potential increase in refinancing as interest rates stabilize [27] - **Consumer Demand**: Over 2 million pre-approved consumers are waiting to purchase homes, indicating significant future demand [33] Challenges and Concerns - **Affordability Issues**: Concerns about housing affordability and the availability of homes to meet demand [33] - **Scaling Operations**: The need to scale operations effectively to handle increased demand when market conditions improve [34] - **Regulatory Changes**: Potential changes in capital gains tax thresholds could incentivize homeowners to sell, impacting market dynamics [34] Conclusion - Better Home & Finance is positioned for significant growth in the home finance sector, leveraging advanced AI technology and strategic partnerships to enhance its competitive edge. The company anticipates a favorable macroeconomic environment that could stimulate demand for its services in the coming years.

Core Viewpoint - Better Home & Finance Holding Company has appointed Barry Feierstein as the new Chief Operating Officer to enhance organizational alignment and efficiency [1] Company Summary - Barry Feierstein will oversee Better's core Corporate Operations [1] - The company expresses enthusiasm about Feierstein's appointment, highlighting his unique blend of entrepreneurial spirit and operational discipline [1]

Core Viewpoint - The Russell 2000 index is positioned to potentially be the second-best-performing index in the U.S. stock exchanges as 2025 approaches, driven by a significant shift towards small-cap stocks due to the Federal Reserve's easing cycle [1]. Interest Rate Impact - The Federal Reserve has reduced the benchmark federal funds rate by 25 basis points, bringing it to a range of 3.5-3.75%, down from a high of 5.25-5.5% in 2023 during a tightening cycle aimed at controlling post-pandemic inflation [2]. Small Business Financing - Lower interest rates are favorable for small businesses, particularly as the period from mid-December to early March is historically strong for the Russell 2000 due to tax-loss harvesting and increased investor risk appetite at the start of the new year [3]. Top Performers in Russell 2000 - **Celcuity (CELC)**: - Stock Price: $100 - YTD Return: +695% - Market Cap: $4.71 billion - The company focuses on cellular analysis and precision oncology, experiencing significant stock price increases due to breakthrough clinical trials [5][6]. - **Better Home & Finance (BETR)**: - Stock Price: $48 - YTD Return: +442% - Market Cap: $794.72 million - Operates as an AI-powered mortgage lender and fintech company, with projected annual sales growth of over 50% this year and 67% next year [9][12]. - **Cogent Biosciences (COGT)**: - Stock Price: $40 - YTD Return: +413% - Market Cap: $5.58 billion - Focused on precision therapies for genetically defined diseases, with strong clinical progress on its lead drug, bezuclastinib [13][14]. Earnings Projections - Celcuity is expected to report a loss of -$3.86 per share in FY25 and -$4.05 in FY26, despite positive EPS revisions [8]. - Better Home's EPS revisions for FY25 and FY26 have slightly decreased, indicating potential short-term momentum loss [12]. - Cogent is projected to have a narrower adjusted loss of -$1.77 per share in FY26, with modestly higher EPS revisions in the last 60 days [14]. Investment Considerations - The strong performance of the Russell 2000 suggests that these top-performing stocks may be worth monitoring, although better buying opportunities may arise in the future [16].

Core Viewpoint - Hedge fund manager Eric Jackson is highly optimistic about Better Home & Finance Holding Co. (NASDAQ:BETR), positioning it as an AI-driven company rather than just a mortgage lender, similar to the trajectory of Palantir Technologies Inc. (NASDAQ:PLTR) [1][3] Group 1: Business Transformation - Better has restructured its operations around two main technologies, enabling it to originate loans at significantly lower costs compared to competitors while enhancing speed, pricing, and accuracy [2] - The market currently perceives Better as a struggling mortgage lender, but Jackson argues it has transitioned into an AI operating system for housing finance, akin to Palantir's approach in its sector [3] Group 2: Market Performance and Predictions - Jackson previously predicted a substantial upside for Opendoor Technologies Inc. (NASDAQ:OPEN), which has since seen a 1,492% increase in stock value, reinforcing his reputation in retail trading communities [4][5] - Better's revenue is reportedly showing early signs of an S-curve with a 51% year-over-year growth, flat operating expenses, and increasing AI-driven automation [6] - Jackson anticipates a "full re-rating" of Better's stock within the next 12 to 18 months, emphasizing its AI transformation and long-term potential as his top stock pick for 2026 [7]

Financial Performance - For the three months ended September 30, 2025, the company reported total net revenues of $43.867 million, a significant increase from $28.994 million in the same period of 2024[191]. - Net revenues for the three months ended September 30, 2025, increased to $43.9 million, a 51.3% increase from $29.0 million in the same period of 2024[223]. - The gain on loans, net for the three months ended September 30, 2025, was $36.421 million, representing 83% of total net revenues, compared to $21.503 million or 74% in the prior year[191]. - Gain on loans, net for the three months ended September 30, 2025, increased by $20.4 million or 129% to $36.4 million compared to $15.8 million for the same period in 2024, driven by increased funded loan volume[225]. - International lending revenue for the three months ended September 30, 2025, increased by $1.1 million or 91% to $2.3 million compared to $1.2 million in the same period of 2024, primarily due to increased operations in U.K. brokerage businesses[231]. - The net loss for the three months ended September 30, 2025, was $39.1 million, compared to a net loss of $54.2 million in the same period of 2024[223]. - Adjusted Net Loss for Q3 2025 was $(28,459) thousand, compared to $(48,886) thousand in Q3 2024, representing a 42% improvement year-over-year[271]. - Adjusted EBITDA for Q3 2025 was $(24,915) thousand, compared to $(38,870) thousand in Q3 2024, indicating a 36% improvement year-over-year[271]. Loan and Revenue Metrics - Funded loan volume for the three months ended September 30, 2025, was $1.210 billion, up from $1.035 billion in the same period of 2024[198]. - The average loan amount for the three months ended September 30, 2025, was $296,159, slightly down from $300,589 in the same period of 2024[198]. - The company reported a total of 4,086 loans funded during the three months ended September 30, 2025, compared to 3,443 loans in the same period of 2024[198]. - The company achieved a gain on sale margin of 3.01% for the three months ended September 30, 2025, compared to 2.08% in the same period of 2024[198]. Expenses and Costs - Total expenses for the three months ended September 30, 2025, were $82.8 million, slightly down from $83.1 million in the same period of 2024[223]. - Compensation and benefits expenses for the three months ended September 30, 2025, were $41.3 million, up from $37.8 million in the same period of 2024[223]. - Other revenue for the three months ended September 30, 2025, was $2.8 million, a decrease from $3.1 million in the same period of 2024[231]. - Broker revenue decreased by $0.8 million or 34% to $1.6 million for the three months ended September 30, 2025, primarily due to the conclusion of the integrated relationship partnership with Ally[227]. - General and administrative expenses decreased by $2.4 million, or 19%, to $10.2 million for the three months ended September 30, 2025, primarily due to reductions in rent and insurance premiums[253]. - Other expenses increased by $5.7 million, or 429%, to $7.1 million for the three months ended September 30, 2025, driven by increased liability classified warrants[261]. Strategic Initiatives - The company expanded its Retail channel by hiring the executive team from NEO Home Loans to enhance its distribution strategy[188]. - The company executed multiple new strategic partnerships, including one with a top five U.S. personal financial services platform serving over 50 million customers[190]. - The company plans to continue investing in technology to improve customer experience and reduce operational costs through automation[185]. - The company plans to sell several entities in the U.K. as part of a strategic shift, with the sale of its digital mortgage broker in the U.K. completed by the end of the third quarter of 2025[213]. Capital and Liquidity - The company raised approximately $568 million in gross proceeds from the Business Combination in August 2023, with $528.6 million in Convertible Notes issued[277]. - As of September 30, 2025, the company had an aggregate available amount of $575.0 million across three warehouse lines of credit[275]. - The company believes that funds from various sources will be adequate to meet liquidity and capital resource needs for at least the next 12 months[279]. - The Company implemented an At-the-Market (ATM) Offering Program on September 26, 2025, for sales of up to $75.0 million of its Class A common stock[289]. - The Company intends to use net proceeds from the ATM Program for general corporate purposes, including working capital and increasing warehouse line capacity[291]. Cash Flow - Net cash used by operating activities was $109.3 million for the nine months ended September 30, 2025, a decrease of $165 million, or 60%, compared to $274 million for the same period in 2024[293]. - Net cash used in investing activities was $589.5 million for the nine months ended September 30, 2025, an increase of $478 million, or 427%, compared to $111.8 million for the same period in 2024[295]. - Net cash provided by financing activities was $555.4 million for the nine months ended September 30, 2025, an increase of $462 million, or 496%, compared to $93.1 million for the same period in 2024[296]. - The increase in cash provided by financing activities was primarily driven by an increase in customer deposits through the Company's U.K. banking entity[296]. - The increase in cash used in investing activities was primarily due to purchases exceeding maturities of short-term investments and loan originations held for investment[295]. - The Company does not have any off-balance sheet arrangements that are likely to materially affect its financial condition[297].

Financial Data and Key Metrics Changes - In Q3 2025, funded loan volume increased by 17% year-over-year to approximately $1.2 billion, while revenue grew by 51% to approximately $44 million [18][19]. - The adjusted EBITDA loss for Q3 2025 was approximately $25 million, down from $27 million in the previous quarter and $39 million a year ago [37]. Business Line Data and Key Metrics Changes - Funded loan volume growth by product included home equity volume increasing by 52%, refinance loan volume increasing by 41%, and purchase loan volume increasing by 5% year-on-year [18]. - The direct-to-consumer (D2C) channel saw revenue per fund increase to $8,300, while the labor cost per fund decreased to $2,500, resulting in a net contribution margin of $1,772 per fund, a 64% increase quarter-on-quarter [22]. Market Data and Key Metrics Changes - The company is positioned to fund $500 million in monthly volume, with expectations to double this to at least $1 billion in the next six months due to new partnerships [6][18]. - The home equity market is highlighted as a significant opportunity, with Americans sitting on $35 trillion of home equity, representing the largest untapped asset class in the country [18]. Company Strategy and Development Direction - The company is evolving from a direct-to-consumer model to a platform that powers the entire home finance ecosystem, focusing on partnerships with local mortgage lenders and financial institutions [5][6]. - The strategy includes diversifying distribution channels and leveraging AI technology to enhance efficiency and reduce costs, aiming for adjusted EBITDA profitability by Q3 2026 [21][36]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in scaling rapidly and profitably, citing past growth during favorable rate cycles and the potential for significant market share in the upcoming cycle [17][40]. - The company anticipates that the partnerships will ramp up over the next six months, contributing to substantial loan volume growth [51][53]. Other Important Information - The company ended Q3 2025 with $226 million in cash and investments, maintaining strong relationships with financing counterparties [37][38]. - The partnerships announced are expected to transform the company's revenue model, with a focus on integrating AI-driven solutions into existing financial institutions [23][24]. Q&A Session Summary Question: Can you dive deeper into the three recent partnership announcements and how you expect each of these to ramp as we head into 2026? - Management expects the large financial services platform partnership to ramp over the next six months as user penetration increases, with potential for multiple billions in monthly volume [51][52]. Question: How would you characterize the future partnership pipeline right now? - The partnership pipeline has exploded due to the demand for Better's solutions, especially as incumbents face integration challenges [55][56]. Question: Can you provide details on the volume opportunity with the top five U.S. personal financial services platform? - The addressable market could be significant, with estimates suggesting potential originations of around $24 billion if penetration rates are achieved [60]. Question: What underpins the outlook for increasing loan volume to $1 billion? - The outlook is primarily driven by partnerships, with expectations for D2C growth and stable interest rates [61]. Question: Does the anticipated $1 billion loan volume assume full ramp-up of partnerships? - Management indicated that the $1 billion could be exceeded once partnerships are fully integrated [66]. Question: What is the expectation for customer acquisition costs (CAC) as partnerships grow? - CAC is expected to trend lower as partnerships become a larger part of loan volume, with no upfront CAC for partners [68].

Financial Data and Key Metrics Changes - In Q3 2025, funded loan volume increased by 17% year-over-year to approximately $1.2 billion, while revenue grew by 51% to approximately $44 million [18][19]. - The Adjusted EBITDA loss decreased to approximately $25 million, down from $27 million in the previous quarter and $39 million a year ago [37]. Business Line Data and Key Metrics Changes - Funded loan volume growth by product included home equity volume increasing by 52%, refinance loan volume increasing by 41%, and purchase loan volume increasing by 5% year-over-year [18]. - The direct-to-consumer (D2C) channel saw revenue per fund increase to $8,300, with a net contribution margin of $1,772 per fund, reflecting a 64% increase quarter-on-quarter [22]. Market Data and Key Metrics Changes - The company is positioned to fund $500 million in monthly volume, with expectations to double this to at least $1 billion in the next six months due to new partnerships [6][18]. - The marketplace for home equity lines of credit (HELOCs) is expected to be 100% of volume and revenue for the company, contrasting with incumbents who have a small portion of their volume from similar marketplaces [19][20]. Company Strategy and Development Direction - The company is evolving from a direct-to-consumer model to a platform that powers the home finance ecosystem through partnerships with local mortgage lenders and financial institutions [5][6]. - The strategy includes diversifying distribution channels and leveraging AI technology to enhance efficiency and reduce costs, aiming for break-even Adjusted EBITDA by Q3 2026 [21][36]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in scaling rapidly and profitably, citing past growth during favorable rate cycles and the potential for significant market share in the upcoming cycle [17][40]. - The company anticipates that the partnerships will ramp up over the next six months, contributing to substantial growth in loan volume and revenue [51][53]. Other Important Information - The company ended Q3 2025 with $226 million in cash and investments, maintaining strong relationships with financing counterparties [37][38]. - The company is focused on enhancing its go-to-market strategy while managing expenses and diversifying channels to achieve profitability [35][36]. Q&A Session Summary Question: Can you dive deeper into the three recent partnership announcements and how you expect each of these to ramp as we head into 2026? - Management expects the large financial services platform partnership to ramp over the next six months, with potential for multiple billions in monthly volume as user penetration increases [51][52]. Question: How would you characterize the future partnership pipeline right now? - The partnership pipeline has exploded due to the successful implementation of earlier partners and frustrations with incumbent solutions, leading to increased demand for the company's offerings [55][56]. Question: Can you provide detail on the volume opportunity with the top five U.S. personal financial services platform? - The addressable market could be significant, with estimates suggesting potential originations of around $24 billion if penetration rates are achieved [60][61]. Question: What is underpinning the outlook for increased loan volume? - The outlook assumes stable interest rates, with growth driven by partnerships and improvements in the D2C channel, which has seen organic growth of over 50% year-on-year [62][63]. Question: What is the anticipation for customer acquisition cost (CAC) as partnerships grow? - CAC is expected to trend lower as partnerships become a larger part of loan volume, with no upfront CAC associated with partner channels [70].

Financial Data and Key Metrics Changes - In Q3 2025, funded loan volume increased by 17% year-over-year to approximately $1.2 billion, while revenue grew by 51% to approximately $44 million, driven by increased loan funding through both direct-to-consumer (D2C) channels and the Tin Man AI platform [18][19] - The adjusted EBITDA loss for Q3 2025 was approximately $25 million, down from $27 million in the previous quarter and $39 million a year ago [37] Business Line Data and Key Metrics Changes - Funded loan volume growth by product showed home equity volume increasing by 52%, refinance loan volume increasing by 41%, and purchase loan volume increasing by 5% year-over-year [18] - The direct-to-consumer channel's revenue per fund increased to $8,300, while the labor cost per fund decreased to $2,500, resulting in a net contribution margin of $1,772 per fund, a 64% increase quarter-on-quarter [23] Market Data and Key Metrics Changes - The company is positioned to fund $500 million in monthly volume, with expectations to double this to at least $1 billion in the next six months due to new partnerships [6][18] - The marketplace for home equity lines of credit (HELOCs) is expected to grow significantly, with the company capturing 100% of volume and revenue in this space, unlike incumbents who have only a small portion [19][20] Company Strategy and Development Direction - The company is evolving from a direct-to-consumer model to a platform that powers the entire home finance ecosystem, focusing on partnerships with institutional lenders and financial institutions [5][6] - The strategy includes diversifying distribution channels and leveraging AI-driven platforms to reduce costs and improve customer experience, aiming for adjusted EBITDA profitability by Q3 2026 [21][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in scaling rapidly and profitably, citing strong unit economics and a robust pipeline of partnerships that will drive growth [17][36] - The company anticipates significant market share gains as the housing cycle turns and partnerships ramp up, with expectations of over $600 million in AI platform originations in Q4 2025 [39][40] Other Important Information - The company ended Q3 2025 with $226 million in cash and investments, maintaining strong relationships with financing counterparties [37][38] - The company is focused on enhancing its go-to-market strategy while managing expenses, with a goal of reaching break-even on an adjusted EBITDA basis by the end of Q3 2026 [35][36] Q&A Session Summary Question: Can you dive deeper into the three recent partnership announcements and how you expect each to ramp as we head into 2026? - Management expects the large financial services platform partnership to ramp over the next six months as user penetration increases, with potential for multiple billions in monthly volume [51][52] Question: What does the future partnership pipeline look like today? - The partnership pipeline has exploded due to the successful implementation of earlier partners and frustrations with incumbent solutions, leading to increased demand for the company's offerings [53] Question: Can you provide details on the volume opportunity with the top five U.S. personal financial services platform? - The addressable market could be around $24 billion based on a low average mortgage penetration rate, with potential for multiples of that through algorithmic mining of offers [55] Question: What underpins the outlook for increasing loan volume to $1 billion? - The outlook is primarily driven by partnerships, with expectations for significant growth in D2C as well, assuming interest rates remain stable [57][58] Question: How can AI efficiencies increase revenue per funded loan? - AI efficiencies are expected to enhance revenue per loan by allowing the AI platform to handle customer interactions and approvals more effectively than traditional loan officers [61]