Core Viewpoint - UWM Holdings Corporation is optimistic about its achievements in the first quarter of 2025 and plans to continue investing in technology to maintain a competitive edge in the mortgage industry [5]. Group 1: Company Overview - UWM Holdings Corporation held its first quarter 2025 earnings conference call, indicating a focus on financial performance and strategic direction [1][2]. - The call featured key participants including the Chief Business Officer, CEO, and CFO, highlighting the company's leadership engagement in discussing financial results [1][4]. Group 2: Financial Performance - The company is expected to provide insights into its financial results, including non-GAAP financial measures, which will be detailed in the earnings release [3].

Financial Data and Key Metrics Changes - In Q1 2025, the company reported revenue of $613 million and a net loss of $247 million, which included a $388 million reduction in the fair value of the MSR portfolio [14][10] - The adjusted EBITDA for the quarter was $58 million, with a gain margin of 94 basis points [14][10] - The company experienced a 17% year-over-year growth in production, closing $32.4 billion for the quarter [9][14] Business Line Data and Key Metrics Changes - The company originated over $20 billion in purchase volume for eight consecutive quarters, viewing this as a stable base [15] - Refinance volume nearly doubled year-over-year from $5.5 billion to $10.6 billion, despite a challenging rate environment [15][9] Market Data and Key Metrics Changes - The mortgage brokerage channel's share of the industry increased from approximately 19.7% to nearly 28% since 2022, marking the highest level since February 2008 [5][6] - The company maintained a strong liquidity position with $485 million in cash and $2.4 billion in total accessible liquidity as of the end of Q1 2025 [16] Company Strategy and Development Direction - The company announced a strategic decision to bring servicing in-house, aiming to leverage technology and AI for efficiency, with expected cost savings between $40 million and $100 million annually [7][8] - The focus remains on investing in technology to maintain a competitive edge, with plans to roll out significant technological advancements in the near future [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a volatile market, highlighting operational excellence that allowed for increased production without sacrificing quality [8][12] - The company anticipates Q2 production between $38 billion and $45 billion, with expectations to exceed $40 billion, driven by a strong purchase market [23][50] Other Important Information - The company plans to maintain its dividend of $0.40 per share, rewarding shareholders consistently over the past four years [21] - Management emphasized the importance of controlling the MSR process, which may lead to retaining more MSRs in the future [39][41] Q&A Session Summary Question: Timeline and costs for bringing servicing in-house - Management expects to start boarding loans in early 2026 and complete the transition by the end of next year, with no significant one-time costs anticipated [28][30] Question: Future of ARMs in the market - Management noted that while ARMs may become more appealing as rates rise, they do not expect a significant shift in consumer preference towards ARMs [32][34] Question: Impact of bringing servicing in-house on MSR disposal - Management indicated that bringing servicing in-house could lead to retaining more MSRs, allowing for better control and value capture [39][41] Question: GSE reform and market preparation - Management believes that potential GSE reforms are far off and expressed confidence in the current leadership in the mortgage market [42][44] Question: Second quarter outlook and competition - Management is optimistic about exceeding $40 billion in production, attributing this to investments and a strong broker channel [50][51] Question: Technology investments and expense impact - Management confirmed that while expenses may rise due to investments, revenue is also expected to increase, leading to a favorable outcome [62][65] Question: Leverage and financial ratios - Management emphasized that financial ratios are in a strong position and that the focus should be on business dominance rather than specific leverage metrics [71][72]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported revenue of $613 million and a net loss of $247 million, which included a $388 million reduction in the fair value of the MSR portfolio [12][14] - The adjusted EBITDA for the quarter was $58 million, with a gain margin of 94 basis points [9][12] - Year-over-year production growth was 17%, with total production reaching $32.4 billion [8][12] Business Line Data and Key Metrics Changes - The company closed $10.6 billion in refinance volume, nearly double the amount from Q1 2024 [8][13] - The company has maintained over $20 billion in quarterly purchase volume for eight consecutive quarters, indicating a strong base [13] Market Data and Key Metrics Changes - The mortgage brokerage channel's market share increased from approximately 19.7% to nearly 28% since 2022, marking the highest level since February 2008 [4][5] - The company’s Net Promoter Score (NPS) for the quarter was 87.3, reflecting industry-leading service levels [10] Company Strategy and Development Direction - The company announced a strategic decision to bring servicing in-house, aiming for significant cost savings estimated between $40 million and $100 million annually [6][7] - The focus remains on investing in technology to maintain a competitive edge, with plans to roll out new technological advancements soon [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a choppy macro environment and emphasized ongoing investments to support growth [11][14] - The company expects Q2 production to be between $38 billion and $45 billion, with hopes to exceed $40 billion [21][47] Other Important Information - The company plans to maintain its dividend of $0.40 per share, consistent with previous years [20] - The company is preparing for UWM Live, an event expected to showcase significant industry changes [20] Q&A Session Summary Question: Timeline for bringing servicing in-house and expected costs - The company expects to start boarding loans in-house by early 2026, with no significant one-time costs anticipated [25][29] Question: Future of ARMs in the market - Management indicated that while ARMs may become more appealing as rates rise, they do not expect a significant shift in consumer preference towards ARMs [30][32] Question: Impact of bringing servicing in-house on MSR disposal - The company plans to be more opportunistic with MSR retention and disposal, potentially holding more MSRs to capture value [36][39] Question: GSE reform and its implications - Management believes that any potential GSE reform is far off and expressed confidence in their ability to adapt to changes in the mortgage market [40][42] Question: Second quarter outlook and embedded assumptions - The company is optimistic about exceeding $40 billion in production, driven by investments and a strong broker channel [46][48] Question: M&A strategy and technology enhancements - The company prefers organic growth over acquisitions, focusing on building technology in-house rather than buying other companies [51][53] Question: Impact of technology changes on expenses - Management expects that while expenses will remain high due to investments, revenue will also increase, leading to a favorable outcome [58][61] Question: Leverage ratios and financial health - Management emphasized that leverage ratios are in a good position and that the focus should be on business dominance rather than specific financial metrics [65][66]

Financial Performance - Total revenue for Q1 2025 was $613.4 million, down from $720.6 million in Q4 2024 and up from $585.5 million in Q1 2024[4] - The company reported a net loss of $247.0 million in Q1 2025, compared to a net income of $40.6 million in Q4 2024 and $180.5 million in Q1 2024[4] - Adjusted EBITDA for Q1 2025 was $57.8 million, down from $118.2 million in Q4 2024 and $101.5 million in Q1 2024[4] - Adjusted net income for Q1 2025 was $(260,816) thousand, compared to $42,332 thousand in Q4 2024 and $184,264 thousand in Q1 2024[22] - Loan production income decreased to $304,751,000 in Q1 2025 from $407,229,000 in Q4 2024, a decline of 25.2%[30] - Total expenses for Q1 2025 were $485,601,000, down from $517,875,000 in Q4 2024, a reduction of 6.2%[30] - The change in fair value of mortgage servicing rights resulted in a loss of $388,585,000 in Q1 2025, compared to a gain of $309,149,000 in Q4 2024[30] - Basic earnings per share for Class A common stock was $(0.08) in Q1 2025, compared to $0.06 in Q4 2024[34] Loan Origination and Production - First quarter 2025 loan origination volume was $32.4 billion, a 17% increase year over year, marking the highest Q1 originations since 2022[2] - The company anticipates second quarter production to be in the range of $38 to $45 billion, with a gain margin of 90 to 115 basis points[13] Equity and Assets - Total equity decreased to $1.6 billion at March 31, 2025, from $2.1 billion at December 31, 2024[4] - UWM's total equity decreased to $1,635,349 thousand as of March 31, 2025, from $2,053,848 thousand at the end of 2024[28] - Total assets decreased to $14,048,433 thousand as of March 31, 2025, from $15,671,116 thousand at the end of 2024[28] - Total liabilities decreased to $12,413,084,000 as of March 31, 2025, from $13,617,268,000 as of December 31, 2024[32] Debt and Financial Ratios - Total non-funding debt as of March 31, 2025, was $3,149,687 thousand, a decrease from $3,401,066 thousand at the end of Q4 2024[22] - The company reported a non-funding debt to equity ratio of 1.93 in Q1 2025, up from 1.66 in Q4 2024[22] Cash and Dividends - A cash dividend of $0.10 per share was declared for the eighteenth consecutive quarter, payable on July 10, 2025[14] - Cash and cash equivalents decreased to $485,024,000 as of March 31, 2025, from $507,339,000 as of December 31, 2024[32] Market Position and Strategy - UWM remains the largest wholesale mortgage lender for ten consecutive years and the largest purchase lender in the nation[25] - The company is focused on technological innovation and enhancing client experience to maintain market leadership[25] - The company anticipates growth opportunities in 2025, particularly in the broker channel and operational profitability[23][24] Product and Service Expansion - The partnership with Sphere LOS provides brokers with a free all-in-one workflow platform for two years to enhance software adoption[9] - TRAC Lite, a cost-effective title option, has been expanded to 14 states, offered at a flat fee between $375 and $475[10] Mortgage Servicing Rights - The unpaid principal balance of mortgage servicing rights (MSRs) was $214.6 billion with a weighted average coupon (WAC) of 5.44% at March 31, 2025[4] - Mortgage loans at fair value decreased to $8,402,211 thousand in Q1 2025 from $9,516,537 thousand in Q4 2024[28]

Core Insights - The CEO of United Wholesale Holdings Corp. emphasized the company's commitment to investing in advanced technology, including artificial intelligence, and in its workforce during the earnings call on February 26 [1] Company Summary - United Wholesale Holdings Corp. is the parent company of United Wholesale Mortgage, which is actively investing in cutting-edge technology and human resources to enhance its operations [1]

Group 1 - The industry is expected to perform better over the next four years compared to the last two to three years, indicating a positive outlook [1] - There is a strong belief among investors that the current market conditions will improve, leading to increased confidence in stock investments [1] Group 2 - The strategy of deleveraging emergency funds by investing in stocks, real estate, and businesses is highlighted as a means to secure income [1] - A focus on high conviction in a portfolio of dividend-paying stocks and ETFs is emphasized, with selection criteria based on risk-adjusted performance, diversification, and sustainability [1]

Loan Origination and Production - For the year ended December 31, 2024, the company originated $139.4 billion in loans, an increase of $31.1 billion, or 28.8%, from $108.3 billion in 2023[224]. - For the year ended December 31, 2023, the company originated $108.3 billion in loans, a decrease of $19.0 billion, or 14.9%, from $127.3 billion in 2022[225]. - Loan production income rose to $1,528.8 million in 2024, up 52.8% from $1,000.5 million in 2023, driven by a loan origination volume increase of $31.1 billion, or 28.8%[2][3]. - The company has been the largest overall residential mortgage lender in the U.S. by closed loan volume for the last ten years, focusing exclusively on the wholesale channel[215]. - The weighted average loan-to-value ratio was 81.91% in 2024, slightly down from 82.89% in 2023[2]. - The average loan amount increased to $386, up from $368 in 2023, reflecting a shift in loan production dynamics[2]. Financial Performance - The company reported a net income of $329.4 million for the year ended December 31, 2024, compared to a net loss of $69.8 million in 2023, marking a $399.2 million improvement[224]. - Total revenue for the year ended December 31, 2024, was $2,163.7 million, an increase of 65.0% from $1,311.3 million in 2023[1]. - Net income attributable to UWM Holdings Corporation was $14.4 million for the year ended December 31, 2024, compared to a net loss of $13.2 million in 2023[1]. - Net income for the year ended December 31, 2024, was $329,375,000, a significant recovery from a net loss of $69,782,000 in 2023[373]. - The provision for income taxes for 2024 was $6.6 million, compared to a tax benefit of $6.5 million in 2023, reflecting an increase in pre-tax income[259]. Loan Servicing and Related Income - Loan servicing income decreased to $636.7 million in 2024, a decline of 22.2% from $818.7 million in 2023, primarily due to a reduction in the average servicing portfolio[4]. - The company retains the mortgage servicing rights (MSRs) associated with the majority of its production, with plans to opportunistically sell MSRs depending on market conditions[218]. - The company’s loan production income includes all components related to the origination and sale of mortgage loans, while loan servicing income consists of contractual fees earned for servicing the loans[221]. - The fair value of Mortgage Servicing Rights (MSRs) decreased by $295.0 million for the year ended December 31, 2024, compared to a decrease of $854.1 million for 2023, primarily due to cash flow realizations and market interest rate changes[249]. - The fair value of MSRs was evaluated using significant assumptions, including prepayment speeds and discount rates, which were deemed critical audit matters[351]. Expenses and Costs - The company’s operating expenses include salaries, commissions, direct loan production costs, and other administrative expenses[223]. - Other costs for the year ended December 31, 2024 were $1.2 billion, an increase of $290.4 million or 31.0% compared to $935.6 million in 2023, mainly due to higher salaries and direct loan production costs[257]. - Direct loan production costs increased by $86.0 million or 82.5% in 2024, primarily due to costs associated with new programs and increased loan production volume[257]. - The company reported a significant increase in salaries, commissions, and benefits, totaling $689.160 million in 2024, up from $530.231 million in 2023, a rise of 30%[366]. Cash Flow and Liquidity - Net cash used in operating activities was $6.2 billion for the year ended December 31, 2024, a significant decrease from $165.2 million in 2023[302]. - Net cash provided by investing activities increased to $2.7 billion in 2024 from $1.8 billion in 2023, driven by higher proceeds from sales of MSRs and excess servicing cash flows[304]. - Net cash provided by financing activities was $3.6 billion in 2024, compared to $2.2 billion used in financing activities in 2023, primarily due to net borrowings under warehouse lines of credit[306]. - The company anticipates sufficient liquidity to maintain operations and fund loan originations for the next twelve months[267]. Debt and Financing - The company issued $800 million in senior unsecured notes due February 1, 2030, accruing interest at 6.625% per annum[283]. - The company issued $700 million in senior unsecured notes due April 15, 2029, accruing interest at 5.500% per annum[279]. - The company issued $500 million in senior unsecured notes due June 15, 2027, accruing interest at 5.750% per annum[281]. - As of December 31, 2024, the company had $250 million outstanding under the Conventional MSR Facility[289]. - As of December 31, 2024, the company had $250 million outstanding under the Ginnie Mae MSR Facility[291]. Market and Operational Insights - The company’s unique model focuses on the wholesale channel, resulting in superior customer service and alignment with clients[219]. - The company utilizes forward agency or Ginnie Mae To Be Announced (TBA) securities as its primary hedge instrument to mitigate interest rate risk[336]. - The company incurred no losses due to nonperformance by any counterparties during the years ended December 31, 2024, 2023, or 2022[341]. - The company’s warehouse lenders conduct daily evaluations of the collateral based on the fair value of mortgage loans[272]. Stock and Shareholder Information - The company declared a dividend of $0.10 per share of Class A common stock, totaling $15.8 million, in the fourth quarter of 2024[309]. - The total balance of Class A common stock shares increased to 157,940,987 by December 31, 2024, from 93,654,269 in 2023, marking a growth of approximately 68%[369]. - The company paid dividends of $39,734,000 to Class A common stockholders in 2024, compared to $37,244,000 in 2023[373]. Miscellaneous - The company maintained effective internal control over financial reporting as of December 31, 2024, according to the audit opinion[356]. - The company has 10,624,987 public warrants and 5,250,000 private warrants outstanding, each entitling the holder to purchase one share of Class A common stock at an exercise price of $11.50[407].

UWM Holdings Corporation (NYSE:UWMC) Q4 2024 Results Conference Call February 26, 2025 11:00 AM ET Company Participants Blake Kolo - Chief Business Officer & Head, Investor Relations Mathew Ishbia - Chairman & Chief Executive Officer Andrew Hubacker - Chief Financial Officer Conference Call Participants Terry Ma - Barclays Eric Hagen - BTIG Derek Sommers - Jefferies Bose George - KBW Brad Capuzzi - Piper Sandler Doug Harter - UBS Jeff Adelson - Morgan Stanley Mikhail Goberman - Citizens Regina Good morning. ...

Financial Data and Key Metrics Changes - UWM Holdings Corporation reported a 29% year-over-year growth in overall production, reaching approximately $139 billion [7][13] - The gain on sale increased by 20%, with a gain margin of 110 basis points, up from 92 basis points the previous year [13][17] - The company achieved a net income of approximately $330 million for the year, with $40.6 million in net income for Q4 [13][16] Business Line Data and Key Metrics Changes - The refinance business tripled in 2024 compared to 2023, despite a challenging interest rate environment [12][38] - The purchase market was dominated by UWM, with over $96 billion in production, marking the best purchase year in the company's history [12][13] Market Data and Key Metrics Changes - The broker channel's share of all direct fundings reached 27.4% in Q3 2024, a significant increase from previous years [23] - The company retained its position as the largest mortgage company in the US for the third consecutive year and the largest purchase lender for the fourth consecutive year [9] Company Strategy and Development Direction - UWM is focused on investing in cutting-edge technology, including AI, to enhance operational efficiency and prepare for market changes [10][22] - The company aims to maintain its competitive advantage by providing world-class service and leveraging technology to support the broker channel [10][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the potential for significant market opportunities as interest rates shift [11][20] - The company is well-prepared for various market scenarios, including potential interest rate drops, which could lead to increased refinancing activity [11][38] Other Important Information - UWM maintained strong liquidity and capital ratios, with approximately $2.1 billion in total equity and over $500 million in cash at year-end [20] - The company is positioned to handle more than $100 billion in additional origination volume without increasing fixed expenses [19] Q&A Session Summary Question: Inquiry about operating expenses - Management clarified that the higher operating expenses were due to one-time investments aimed at business growth, not ongoing costs [31][32] Question: Discussion on refinancing initiatives - Management noted that they tripled their refinance share in 2024 and are prepared for further growth in this area [36][38] Question: Measurement of success for broker incentives - Management explained that success is measured through broker retention and the percentage of business they conduct with UWM [41][46] Question: Volume and margin guidance for Q1 - Management provided guidance of $28 to $35 billion for Q1, emphasizing that the first quarter is typically the lowest production quarter [28][50] Question: Expectations for purchase mix in 2025 - Management indicated that the purchase mix would depend on interest rates, with a focus on achieving significant purchase volume [57][60] Question: Approach to managing servicing levels - Management stated that they closely monitor servicing assets and are prepared to retain or sell based on market conditions [66][68] Question: Outlook on MSR sales and debt management - Management confirmed that decisions regarding MSR sales are tied to overall business strategy and market conditions [73][75] Question: Regulatory outlook and its impact on the industry - Management expressed optimism about the new administration's impact on the mortgage industry, anticipating positive changes [111][115] Question: Strategy for increasing float and potential acquisitions - Management indicated that they are exploring various strategies to increase float and are open to acquisition opportunities [116][118]

Group 1 - UWM Holdings Corporation reported $560.21 million in revenue for the quarter ended December 2024, reflecting a year-over-year decline of 588.9% [1] - The EPS for the same period was $0.00, compared to -$0.23 a year ago, indicating a significant improvement [1] - The reported revenue fell short of the Zacks Consensus Estimate of $647.08 million, resulting in a surprise of -13.43% [1] Group 2 - Key metrics indicate that UWM's loan production income was $407.23 million, exceeding the average estimate of $401.42 million by four analysts, representing an increase of +80.6% year-over-year [4] - Interest income was reported at $140.07 million, slightly above the average estimate of $139.13 million, with a year-over-year change of +59.4% [4] - Loan servicing income was $173.30 million, compared to the average estimate of $152.47 million, showing a year-over-year decline of -16.1% [4] - The change in fair value of mortgage servicing rights was reported at $309.15 million, significantly higher than the average estimate of -$92.58 million, reflecting a year-over-year change of -148.7% [4] Group 3 - UWM shares have returned +4.8% over the past month, outperforming the Zacks S&P 500 composite, which saw a decline of -2.3% [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]