Financial Data and Key Metrics Changes - The company reported funded volume of $561 million in Q1 2025, exceeding guidance and marking a 32% increase from Q1 2024 [5][15] - GAAP net income for Q1 2025 was $80 million, or $3.17 per share, compared to a net loss of $16 million, or $0.58 per share in Q1 2024 [6][16] - Adjusted net income improved to $13 million, or $0.52 per share, a $20 million improvement year-over-year [7][17] - Adjusted EBITDA totaled $29 million, representing a significant increase from breakeven in Q1 2024 [17] Business Line Data and Key Metrics Changes - The wholesale channel exceeded volume expectations, contributing to overall guidance being surpassed, although it carries lower margins [18] - The company saw a 40% increase in initial thirty-day sales conversion rates and a 12% reduction in cost per opportunity [12][19] Market Data and Key Metrics Changes - The company benefited from a lower rate environment, with the ten-year treasury falling approximately 35 basis points [6] - April 2025 was noted as the best month for submission and funded volume in the last two years, indicating strong market performance [26] Company Strategy and Development Direction - The company launched the "A Better Way with FOA" campaign to reposition reverse mortgages as a mainstream financial planning tool for homeowners aged 55 and up [8][10] - The strategic focus is on enhancing customer engagement and optimizing the customer journey, with a goal of improving lead conversion metrics [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its strategy, highlighting the increasing awareness among older homeowners regarding home equity [22] - The company reaffirmed its full-year guidance for funded volume between $2.4 billion and $2.7 billion and adjusted EPS between $2.6 and $3 [20] Other Important Information - The company has seen a 25% year-over-year reduction in general and administrative expenses, with a notable 35% decrease in communication and data processing expenses [19] - The leadership change with John Scarpatti being promoted to Chief Production Officer is expected to unlock growth potential [13] Q&A Session Summary Question: How did rate volatility in April impact volumes? - Management noted that April was the best month for submission and funded volume in the last two years, indicating strong performance despite rate volatility [26][27] Question: What is the outlook for expenses going forward? - Management indicated that the fixed cost base is relatively stable, with opportunities for cost reductions as contracts renew, while variable expenses may increase with production [28][29]

Financial Data and Key Metrics Changes - The company reported $561 million in funded volume for Q1 2025, exceeding guidance and marking a 32% increase compared to Q1 2024 [5][6][15] - GAAP net income was $80 million or $3.17 per basic share, a significant turnaround from a net loss of $16 million or $0.58 per share in Q1 2024 [6][16] - Adjusted net income improved to $13 million or $0.52 per share, up $20 million year-over-year from an adjusted net loss of $7 million in Q1 2024 [6][17] - Adjusted EBITDA totaled $29 million, reflecting an increase from breakeven in Q1 2024 and an $11 million improvement from Q4 2024 [17] Business Line Data and Key Metrics Changes - The company experienced a 5% increase in funded volume from Q4 2024, indicating consistent growth across its operations [15] - Product level margins improved quarter-over-quarter, although total Retirement Solutions revenue margin remained flat due to a shift in channel mix [18] Market Data and Key Metrics Changes - The company benefited from a lower rate environment, with the ten-year treasury falling approximately 35 basis points, contributing to a positive fair value environment [6] - The wholesale channel exceeded volume expectations, although it carries lower margins, impacting overall revenue margin [18] Company Strategy and Development Direction - The company launched the "A Better Way with FOA" campaign to reposition reverse mortgages as a mainstream financial planning tool for homeowners aged 55 and up [7][10] - The strategic focus is on enhancing customer engagement and optimizing the customer journey, with early results showing a 16% improvement in inquiry to lead conversion [11][12] - The company aims to introduce new solutions to address emerging customer needs amid economic uncertainties [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to meet its full-year guidance of $2.4 billion to $2.7 billion in funded volume and $2.6 to $3 in adjusted earnings per share [6][20] - The company noted that April was the best month for submission and funded volume in the last two years, indicating strong market performance [24] - Management acknowledged ongoing rate volatility but indicated it has not significantly impacted volumes thus far [25] Other Important Information - The company has seen a 25% year-over-year reduction in general and administrative expenses, highlighting ongoing cost management efforts [19] - Operational productivity improved, with a 33% increase in loans per employee compared to Q1 2024 [20] Q&A Session Summary Question: How did rate volatility in April impact volumes? - Management noted that April was the best month for submission and funded volume in the last two years, indicating strong performance despite rate volatility [24] Question: What is the outlook for expenses going forward? - Management indicated that the fixed cost base is relatively stable, with opportunities for cost reductions as contracts renew, while variable expenses may increase with production [26][27]

Strategic Goals - Finance of America aims to mainstream home equity for retirement by positioning reverse mortgages alongside common financing options[4] - The company intends to break the adoption barrier and increase customer numbers by elevating its brand and offering a customer-centric experience[4] - Finance of America is targeting homeowners 55+ to leverage their home equity for retirement[13] Key Initiatives - Finance of America is modernizing messaging, developing progressive digital experiences, and providing unparalleled customer care to attract a new kind of borrower[5] - The company launched the "A Better Way with FOA" campaign[6] - Finance of America is using performance ads to bring reverse mortgages from the fringe to the mainstream[8] - Finance of America is setting a new standard as the voice of the category through consumer education[11] Brand Positioning - The "Better Way" brand platform positions Finance of America as a trusted partner[13]

Financial Performance - Basic earnings per share for Q1 2025 were $3.17, resulting in $80 million of net income from continuing operations[1] - Adjusted earnings per share for the quarter were $0.52, with adjusted net income of $13 million, reflecting a $20 million improvement compared to Q1 2024[4] - Total revenues for the quarter were $166 million, a 121% increase compared to $75 million in Q1 2024[5] - Net income from continuing operations for Q1'25 was $79.8 million, compared to a loss of $142.6 million in Q4'24 and a loss of $15.8 million in Q1'24[16] - Basic earnings per share from continuing operations for Q1'25 was $3.17, a significant improvement from a loss of $5.95 in Q4'24 and a loss of $0.58 in Q1'24[17] - Adjusted net income for Q1'25 was $13 million, up from $5 million in Q4'24 and a loss of $7 million in Q1'24[17] - Total revenues for Q1'25 were $165.7 million, compared to a loss of $49.4 million in Q4'24 and $74.7 million in Q1'24[16] Equity and Assets - Total equity increased to $395 million as of March 31, 2025, representing a 25% growth from $316 million at the end of 2024[6] - Tangible equity grew by 89% from $99 million at the end of 2024 to $187 million as of March 31, 2025[6] - Total equity increased to $395 million in Q1'25 from $316 million in Q4'24 and $256 million in Q1'24[17] Segment Performance - The Retirement Solutions segment reported a pre-tax income of $3 million, with adjusted net income of $9 million, marking a 200% increase in pre-tax income compared to Q4 2024[11] - The Portfolio Management segment achieved a pre-tax income of $105 million, an increase from a loss of $168 million in Q4 2024, with adjusted net income of $20 million[12] Operational Metrics - Funded volume reached $561 million in Q1 2025, a 32% increase from $424 million in Q1 2024, exceeding the high end of the guidance range[4] - Adjusted EBITDA for the quarter was $29 million, a 61% increase from $18 million in Q4 2024[5] - Adjusted EBITDA for Q1'25 was $29 million, compared to $18 million in Q4'24[17] - Portfolio interest income for Q1'25 was $480.6 million, an increase from $473.2 million in Q4'24 and $464.0 million in Q1'24[16] Changes and Adjustments - The company reported net fair value changes on loans and related obligations of $103.8 million in Q1'25, compared to a loss of $169.1 million in Q4'24 and a gain of $6.3 million in Q1'24[16] - The company experienced a net loss from discontinued operations of $4.8 million in Q1'25, compared to no loss in Q4'24 and a loss of $4.5 million in Q1'24[16] - The company revised its definitions of adjusted net income (loss), adjusted EBITDA, and adjusted earnings (loss) per share to include all equity-based compensation starting from the third quarter of 2024[21] Company Strategy and Initiatives - The company launched a new brand platform, 'A Better Way with FOA,' along with a national advertising campaign to increase awareness of reverse mortgages[4] - The company is a leading provider of home equity-based financing solutions, focusing on optimizing the distribution of originated loans to investors[24] - Management considers adjusted earnings (loss) per share important for evaluating the company's overall performance[46] Conference and Reporting - The company will host a conference call on May 6, 2025, to discuss the results for the first quarter ended March 31, 2025[22]

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Financial Data and Key Metrics Changes - In 2024, the company recognized GAAP net income of $40 million, adjusted net income of $14 million, and adjusted EBITDA of $60 million, reflecting a $200 million increase in GAAP net income and nearly $100 million increase in adjusted net income from 2023 to 2024 [12][25][36] - The company funded more than $1.93 billion in loans, a 19% increase in volume year-over-year, with expectations for 2025 origination volumes to be between $2.4 billion to $2.7 billion, representing a 26% to 42% increase from 2024 [11][23] Business Line Data and Key Metrics Changes - The reverse loan volumes grew by 19%, with a 73% increase in non-agency reverse volume year-over-year and nearly 400% year-over-year growth in the HomeSafe Second product [27][28][19] - The revenue margin on originations increased from 9.2% in 2023 to 10.7% in 2024, reflecting a 16% increase driven by a shift towards higher-margin proprietary products [28][29] Market Data and Key Metrics Changes - The demand for loans among homeowners aged 55 and above represented over 31% of all second lien originations in 2023, with seniors accounting for roughly $50 million in second lien originations annually [19][20] - HomeSafe Second originations accounted for only one-tenth of 1% of the total lending to this demographic, indicating a significant market opportunity [20] Company Strategy and Development Direction - The company aims to make home equity a mainstream component of retirement planning, focusing on expanding its reach and driving value for customers and stakeholders [13][34] - Strategic initiatives include integrating the retail platform, enhancing operational efficiency, and launching a new advertising campaign to optimize marketing efforts [10][15][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term value of the business, citing favorable demographic trends and a growing retiree population with substantial home equity exceeding $14 trillion [36] - The company anticipates continued growth and profitability in 2025, supported by disciplined cost management and strategic initiatives [34][31] Other Important Information - The company completed the largest securitization from non-agency proprietary products in its history in February 2025, enhancing liquidity and supporting growth [33] - New leadership hires were made to drive transformation, including a Chief Information Officer and a Chief Customer Officer [18] Q&A Session Summary Question: Margin pressure due to rising rates - Management acknowledged that there was some headwind in Q4 due to rising rates, but they expect improvements in Q1 as rates stabilize [41][43] Question: Guidance on origination volumes - Management reaffirmed guidance, indicating expectations for a ramp in origination volumes throughout the year, particularly with the HomeSafe Second product [46][48] Question: Update on HECM 2.0 - Management provided an update on HECM 2.0, noting progress but no effective date yet for implementation [56]

Financial Performance - Net income from continuing operations for 2024 was $40 million, translating to $1.78 basic earnings per share[4]. - Adjusted net income for the year was $14 million, or $0.60 adjusted earnings per share, reflecting a $97 million improvement compared to 2023[4]. - Adjusted EBITDA for 2024 was $60 million, marking a significant recovery in profitability[4]. - Total revenue for 2024 increased by 44% compared to 2023, driven by higher funded volumes and improved margins[13]. - Total expenses decreased from $209 million in 2023 to $195 million in 2024, reflecting operational efficiencies[13]. - The Retirement Solutions segment achieved pre-tax income of $11 million and adjusted net income of $38 million for the year[10]. - The Portfolio Management segment recognized pre-tax income of $84 million, benefiting from positive fair value adjustments and increased yield on residual interests[12]. - For the year ended December 31, 2024, the company reported a pre-tax income of $11 million for Retirement Solutions, $84 million for Portfolio Management, and a loss of $52 million for Corporate & Other, totaling a pre-tax income of $43 million[29]. - The adjusted net income for the year 2024 was $38 million for Retirement Solutions, $42 million for Portfolio Management, and a loss of $66 million for Corporate & Other, resulting in a total adjusted net income of $14 million[29]. Quarterly Performance - Total revenues for Q4'24 were $(105.623) million, compared to $290.073 million in Q3'24 and $338.171 million in 2023, indicating a significant decline[18]. - Net income (loss) from continuing operations for Q4'24 was $(142.629) million, compared to $203.748 million in Q3'24 and $40.418 million in 2023[18]. - Basic earnings (loss) per share from continuing operations for Q4'24 was $(5.95), down from $8.48 in Q3'24 and $1.78 in 2023[20]. - Adjusted EBITDA for Q4'24 was $18 million, down from $32 million in Q3'24 and $(17) million in Q4'23[21]. - The company reported a net loss attributable to controlling interest of $(59.088) million in Q4'24, compared to a profit of $84.203 million in Q3'24[21]. - Total expenses for Q4'24 were $87.056 million, an increase from $80.308 million in Q3'24[18]. - For the three months ended December 31, 2024, adjusted net income for Retirement Solutions was $8 million, Portfolio Management was $13 million, and Corporate & Other reported a loss of $15 million, resulting in a total adjusted net income of $5 million[26]. - The adjusted earnings per share for the same period were $0.31 for Retirement Solutions, $0.52 for Portfolio Management, and $(0.61) for Corporate & Other, leading to an overall adjusted earnings per share of $0.21[26]. - The weighted average share count for the three months ended December 31, 2024, was 24,429,615 shares[26]. Capital and Equity - Total equity rose from $272 million in 2023 to $316 million in 2024, an increase of 16%[8]. - Tangible net worth improved by 421%, from $19 million at the end of 2023 to $99 million at the end of 2024[8]. - The weighted average shares outstanding for Q4'24 were 9,930,520, slightly up from 9,924,671 in Q3'24[20]. Operational Insights - Reverse mortgage funded volume increased by 19% year-over-year, with $534 million produced in Q4, exceeding guidance[4]. - The company emphasizes its focus on expanding its customer base and enhancing its digital capabilities to improve loan origination quality[36]. - The company is subject to various risks, including changes in interest rates and compliance with extensive regulations, which could impact future performance[36]. Non-GAAP Measures - The company has revised its definitions of adjusted net income (loss), adjusted EBITDA, and adjusted earnings (loss) per share to include all non-cash equity-based compensation starting from Q3 2024[43]. - Adjusted net income (loss) is utilized by management to assess the underlying key drivers and operational performance of the continuing operations of the business[46]. - Adjusted EBITDA provides visibility to the underlying operating performance by excluding certain items that management does not believe are representative of core earnings[50]. - Adjusted earnings (loss) per share is calculated as adjusted net income (loss) divided by the weighted average shares outstanding, including various classes of stock[52]. - The company emphasizes that non-GAAP financial measures should not be considered as alternatives to net income (loss) or other performance measures determined in accordance with U.S. GAAP[41]. - Management believes that the presentation of non-GAAP measures enhances investors' understanding of certain aspects of financial performance[40]. - Adjusted EBITDA includes adjustments for income taxes, changes in fair value of loans and securities, and certain non-recurring costs[48]. - The company cautions users of its financial statements not to place undue reliance on non-GAAP financial measures due to their limitations[42]. - Adjusted net income (loss) may include other adjustments based on facts and circumstances to provide a supplemental means of evaluating operating performance[47]. - The company’s management evaluates performance through non-GAAP measures to maintain and grow the business[39]. Future Outlook - The company plans to host a conference call on March 11, 2025, to discuss the results for the fourth quarter and full year ended December 31, 2024[32].

Industry Overview - The Zacks Mortgage & Related Services industry is facing challenges due to mortgage rate volatility and macroeconomic factors, leading to a tightening purchase market and declining refinancing volumes [1][5] - The industry consists of providers of mortgage-related loans, refinancing, and loan-servicing, with non-banks gaining market share as banks retreat due to higher compliance and capital requirements [3] Current Trends - High mortgage rates have kept homebuyers sidelined, with the 30-year fixed rate remaining between 6% and 7% for over two years, affecting mortgage demand and origination [4] - Mortgage rates are expected to remain elevated due to strong U.S. economic fundamentals, leading to a negative trend in mortgage originations and refinancing activities [5] - The competitive landscape is intensifying, with forecasts indicating an increase in U.S. single-family mortgage debt outstanding, driven by house price appreciation, but tighter margins may challenge profitability for many originators [6] Servicing Segment Insights - The servicing segment is expected to provide support as companies face declines in gain-on-sale margins and lower loan origination volumes, with slow prepayment speeds creating tailwinds for mortgage service rights (MSR) [7] - The U.S. single-family mortgage debt outstanding is projected to reach $14.7 trillion by the end of 2025, presenting significant growth opportunities in servicing portfolios [7] Industry Performance - The Zacks Mortgage & Related Services industry currently holds a Zacks Industry Rank of 141, placing it in the bottom 43% of over 249 Zacks industries, indicating bleak near-term prospects [8][9] - The industry has underperformed the broader Zacks Finance sector and the S&P 500, gaining 13.8% over the past year compared to 28.8% and 25.2% for the sector and index, respectively [11] Valuation Metrics - The industry trades at a price-to-book (P/B) ratio of 4.77X, compared to the S&P 500's 8.89X, with historical trading ranges showing a high of 11.62X and a low of 1.18X over the past five years [13] - The Zacks Finance sector's trailing 12-month P/B ratio is 4.16X, indicating that the mortgage and related services industry is trading at a premium compared to its broader sector [15] Company Highlights - **PennyMac Financial Services, Inc. (PFSI)**: Focuses on mortgage origination and servicing, with a projected earnings estimate of $14.02 per share for 2025, reflecting a 21.7% increase year-over-year [19] - **Lending Tree, Inc. (TREE)**: Operates an online marketplace and is diversifying its offerings, with a 2025 earnings estimate of $3.37 per share, indicating a 26.4% rise from the previous year [24] - **Finance of America Companies (FOA)**: A diversified consumer lending platform with a focus on mortgages and innovative products, projecting a 256% increase in earnings to $2.67 per share for 2025 [28]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" approach, aiming for quicker profits [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum if their valuations exceed future growth potential, leading to potential losses for investors [2] - A safer strategy involves investing in bargain stocks that exhibit recent price momentum, which can be identified using tools like the Zacks Momentum Style Score [3] Group 2: Finance of America Companies Inc. (FOA) Analysis - FOA has shown significant recent price momentum with a four-week price change of 54.2%, indicating growing investor interest [4] - Over the past 12 weeks, FOA's stock has gained 184.1%, demonstrating its ability to deliver positive returns over a longer timeframe [5] - FOA has a Momentum Score of B, suggesting it is an opportune time to invest in the stock to capitalize on its momentum [6] Group 3: Earnings Estimates and Valuation - FOA has received a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which typically attract more investors and drive prices higher [7] - The stock is currently trading at a Price-to-Sales ratio of 0.39, indicating it is undervalued, as investors pay only 39 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides FOA, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Core Viewpoint - Finance of America Companies Inc. (FOA) shows a significant improvement in earnings outlook, making it an attractive investment option as analysts continue to raise earnings estimates for the company [1][3]. Estimate Revisions - The rising trend in estimate revisions reflects growing analyst optimism regarding the company's earnings prospects, which is expected to positively impact its stock price [2]. - For the current quarter, the earnings estimate is projected at $0.45 per share, indicating a year-over-year increase of +150%. The Zacks Consensus Estimate has risen by 28.57% due to one upward revision and no negative revisions in the last 30 days [4]. - For the full year, the earnings estimate stands at $0.75 per share, representing a change of +118.75% from the previous year. The consensus estimate has surged by 581.82% following one upward revision and no negative revisions [5]. Zacks Rank - The positive estimate revisions have led Finance of America Companies to achieve a Zacks Rank 1 (Strong Buy), indicating strong agreement among analysts on the upward revisions [6]. - Stocks with a Zacks Rank 1 (Strong Buy) and 2 (Buy) have historically outperformed the S&P 500, suggesting a favorable investment environment for FOA [6]. Stock Performance - Finance of America Companies shares have increased by 14.6% over the past four weeks, indicating investor confidence in the company's earnings growth prospects [7].