Financial Performance - For the three months ended March 31, 2025, the company reported total net revenues of $32,553,000, a 46.4% increase from $22,251,000 in the same period of 2024[165] - Total net revenues for the three months ended March 31, 2025, were $32,553,000, an increase of 46% compared to $22,251,000 for the same period in 2024[196] - Gain on loans, net for the same period was $24,576,000, representing 75% of total net revenues, up from 70% in the prior year[165] - Gain on loans, net increased by $8,924,000 or 57% to $24,576,000 for the three months ended March 31, 2025, compared to $15,652,000 for the same period in 2024[196] - Mortgage interest income rose by $3,473,000 or 117% to $6,437,000 for the three months ended March 31, 2025, compared to $2,964,000 for the same period in 2024[204] - Other revenue increased by $1,213,000 or 43% to $4,030,000 for the three months ended March 31, 2025, compared to $2,817,000 for the same period in 2024[203] Loan and Investment Activity - Funded loan volume increased to $868,000,000 in Q1 2025, compared to $661,000,000 in Q1 2024, marking a 31.4% growth[172] - Direct-to-consumer (D2C) loan volume rose to $614,000,000, a significant increase from $360,000,000 in the previous year[172] - The average loan amount decreased to $291,909 from $332,111 year-over-year, indicating a shift in loan size[172] - Loans held for investment grew to $207.2 million as of March 31, 2025, up from $111.5 million as of December 31, 2024[229] - Net cash used in investing activities surged by $125 million, or 376%, to $159 million in Q1 2025, primarily due to increased loan originations[242] Expenses and Losses - Compensation and benefits expenses increased by $8,595,000 or 23% to $46,668,000 for the three months ended March 31, 2025, compared to $38,073,000 for the same period in 2024[210] - Marketing and advertising expenses increased by $4,133,000 or 91% to $8,687,000 for the three months ended March 31, 2025, compared to $4,554,000 for the same period in 2024[213] - Total expenses for the three months ended March 31, 2025, were $82,965,000, an increase of 13% compared to $73,600,000 for the same period in 2024[210] - Net loss for the three months ended March 31, 2025, was $50,557,000, compared to a net loss of $51,492,000 for the same period in 2024[196] - Adjusted Net Loss for Q1 2025 was $46.2 million, compared to $42.8 million in Q1 2024, reflecting an increase of 8%[223] - Adjusted EBITDA for Q1 2025 was $(40.4) million, compared to $(31.0) million in Q1 2024, indicating a decline of 30%[223] Strategic Initiatives - The company plans to continue investing in technology to enhance customer experience and reduce operational costs through automation[163] - The company aims to expand its market presence and diversify revenue streams through new product offerings and strategic partnerships[163] - The company is winding down its integrated relationship with Ally Bank, which has been a primary source of B2B loan volume[166] Cash Flow and Financing - Net cash used in operating activities increased by $14 million, or 34%, to $57 million in Q1 2025 from $43 million in Q1 2024[241] - Net cash provided by financing activities increased to $118.8 million for the three months ended March 31, 2025, a rise of $120 million or 10450% compared to $1 million for the same period in 2024[243] - The company raised approximately $568 million in gross proceeds from the Business Combination in August 2023, with $528.6 million in the form of a Convertible Note[230] - The company entered into a Note Exchange Agreement to exchange $532.5 million of existing Convertible Notes for $155 million in New Notes and a cash payment of $110 million[234] - The New Notes will accrue interest at a rate of 6.00% per annum, payable semi-annually, with the first payment due on June 30, 2025[238] Risk Factors and Accounting - Forward-looking statements indicate potential risks including the ability to expand customer base and market share, and to respond to economic conditions[246] - The company emphasizes the importance of maintaining profitability and the ability to raise additional financing in the future[246] - Risks discussed in the 2024 Annual Report may cause actual results to differ materially from forward-looking statements[247] - The company is classified as a smaller reporting company and is not required to provide additional market risk disclosures[248] - There have been no significant changes in critical accounting policies and estimates during the three months ended March 31, 2025, compared to the previous year[245]
Better Home & Finance pany(BETR) - 2025 Q1 - Quarterly Report