Guild pany(GHLD) - 2025 Q2 - Quarterly Results

Executive Summary & Company Overview Second Quarter 2025 Highlights Guild Holdings Company reported strong Q2 2025 results, achieving its best adjusted net income, adjusted EBITDA, and adjusted return on average equity since 2021. The company saw significant origination growth both quarter-over-quarter and year-over-year, with a strong focus on purchase business - Guild delivered its best adjusted net income, adjusted EBITDA, and adjusted return on average equity since 2021, despite a constrained market[3] | Metric | 2Q'25 | 1Q'25 | 2Q'24 | | :---------------------------------- | :------ | :------ | :------ | | Total originations | $7,500M | $5,200M | $6,500M | | Net revenue | $279.4M | $198.5M | $285.7M | | Net income attributable to Guild | $18.7M | ($23.9M) | $37.6M | | Adjusted net income | $41.4M | $21.6M | $30.7M | | Adjusted EBITDA | $58.0M | $36.4M | $41.6M | | Adjusted return on average equity | 13.7% | 7.0% | 10.1% | - Origination growth was 44% quarter-over-quarter and 15% year-over-year[3] - 89% of closed loan origination volume came from purchase business, significantly higher than the MBA industry estimate of 67%[3][4] Company Profile Guild Holdings Company, through its subsidiary Guild Mortgage Company, is a nationally recognized independent mortgage lender established in 1960. It operates across 49 states and D.C., focusing on a relationship-based loan sourcing strategy to deliver homeownership, specializing in government-sponsored and other specialized loan programs - Founded in 1960, Guild Mortgage Company is a nationally recognized independent mortgage lender[17] - Employs a relationship-based loan sourcing strategy to deliver homeownership in 49 states and the District of Columbia[17] - Specializes in government-sponsored programs (FHA, VA, USDA) and other specialized loan programs[17] Financial Performance Consolidated Financial Highlights Guild Holdings Company reported a significant turnaround in Q2 2025, moving from a net loss in Q1 2025 to a net income of $18.7 million. Adjusted metrics showed strong quarter-over-quarter and year-over-year growth, reflecting improved operational efficiency and a growing servicing portfolio | Metric | 2Q'25 | 1Q'25 | 2Q'24 | YTD'25 | YTD'24 | | :---------------------------------- | :------ | :------ | :------ | :------- | :------- | | Total originations | $7,474.8M | $5,204.6M | $6,525.9M | $12,679.4M | $10,378.4M | | Net revenue | $279.4M | $198.5M | $285.7M | $477.9M | $517.5M | | Net income (loss) attributable to Guild | $18.7M | ($23.9M) | $37.6M | ($5.2M) | $66.1M | | Adjusted net income | $41.4M | $21.6M | $30.7M | $63.1M | $38.8M | | Adjusted EBITDA | $58.0M | $36.4M | $41.6M | $94.4M | $57.5M | | Adjusted return on average equity | 13.7% | 7.0% | 10.1% | 10.2% | 6.4% | - Servicing portfolio unpaid principal balance (UPB) grew to $96.3 billion as of June 30, 2025, up from $94.0 billion in Q1 2025 and $89.1 billion in Q2 2024[3][6] Origination Segment Results The origination segment achieved a net income of $23.4 million in Q2 2025, a significant improvement from losses in the prior two quarters, driven by a substantial increase in total originations. Gain on sale margins saw a quarter-over-quarter decrease but a slight year-over-year increase | Metric | 2Q'25 | 1Q'25 | 2Q'24 | YTD'25 | YTD'24 | | :---------------------------------- | :------ | :------ | :------ | :------- | :------- | | Total originations | $7,474.8M | $5,204.6M | $6,525.9M | $12,679.4M | $10,378.4M | | Net income (loss) allocated to origination | $23.4M | ($2.9M) | ($3.1M) | $20.5M | ($27.3M) | | Gain on sale margin on originations (bps) | 329 | 376 | 326 | 349 | 340 | | Total pull-through adjusted locked volume | $7.5 billion | $5.9 billion | $6.5 billion | $13.4 billion | $11.1 billion | - Origination segment net income was $23.4 million in Q2 2025, compared to a net loss of $2.9 million in Q1 2025 and $3.1 million in Q2 2024[7][8] - Gain on sale margins on originations decreased 47 bps quarter-over-quarter but increased 3 bps year-over-year to 329 bps[7] Servicing Segment Results The servicing segment achieved a net income of $27.3 million in Q2 2025, a significant recovery from a net loss in Q1 2025, despite a substantial MSR valuation adjustment loss due to interest rate volatility. The company maintained strong refinance and purchase recapture rates | Metric | 2Q'25 | 1Q'25 | 2Q'24 | YTD'25 | YTD'24 | | :---------------------------------- | :------ | :------ | :------ | :------- | :------- | | Net income (loss) allocated to servicing | $27.3M | ($4.6M) | $69.5M | $22.8M | $153.5M | | UPB of servicing portfolio (period end) | $96,275.8M | $94,005.7M | $89,092.9M | $96,275.8M | $89,092.9M | | Valuation adjustment of MSRs | ($41.3M) | ($69.9M) | $2.1M | ($111.2M) | $22.9M | | Loan servicing and other fees | $72.7M | $72.8M | $67.7M | $145.5M | $133.5M | - The Company retained mortgage servicing rights (MSRs) for 61% of total loans sold in Q2 2025[9] - Refinance recapture rate was strong at 37% in Q1 2025, and purchase recapture rate was 27% in Q2 2025[10] Shareholder Returns & Capital Management Share Repurchase Program Guild repurchased 61,221 shares of Class A common stock in Q2 2025, terminating the program due to a pending merger agreement - Repurchased and retired 61,221 shares of Class A common stock at an average price of $13.24 per share during Q2 2025[12] - The share repurchase plan was terminated on June 18, 2025, due to a pending merger agreement with Gulf MSR HoldCo, LLC[12] Dividends Guild declared a special cash dividend of $0.25 per share on Class A and Class B common stock, payable on September 2, 2025 - Declared a special cash dividend of $0.25 per share on Class A and Class B common stock on August 6, 2025[13] - The dividend is payable on September 2, 2025, to stockholders of record as of August 18, 2025[13] Balance Sheet and Liquidity As of June 30, 2025, Guild maintained a solid liquidity position with $107.4 million in cash and significant unutilized loan funding and MSR lines of credit. Total stockholders' equity saw a slight decrease from the end of 2024 | Metric | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $107.4M | $118.2M | | Mortgage servicing rights, at fair value | $1,303.6M | $1,343.8M | | Warehouse lines of credit, net | $1,670.3M | $1,414.6M | | Total stockholders' equity | $1,218.1M | $1,254.0M | | Tangible net book value per share | $16.01 | $16.59 | - Unutilized loan funding capacity was $1.1 billion, and unutilized MSR lines of credit were $315.0 million[14] - The Company's leverage ratio was 2.0x as of June 30, 2025[14] Financial Statements Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $5,033.6 million, primarily driven by an increase in mortgage loans held for sale. Total liabilities also rose, while total stockholders' equity experienced a slight decrease compared to December 31, 2024 | Item | Jun 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | | :---------------------------------- | :-------------------------- | :-------------------------- | | Total assets | $5,033,555 | $4,768,303 | | Mortgage loans held for sale, at fair value | $1,821,187 | $1,523,447 | | Mortgage servicing rights, at fair value | $1,303,599 | $1,343,829 | | Total liabilities | $3,815,457 | $3,514,293 | | Warehouse lines of credit, net | $1,670,303 | $1,414,563 | | Total stockholders' equity | $1,218,098 | $1,254,010 | Condensed Consolidated Statements of Operations For Q2 2025, Guild reported net revenue of $279.4 million and net income attributable to Guild of $18.7 million, a significant improvement from a net loss in the prior quarter. Year-to-date, the company recorded a net loss, largely influenced by Q1 performance and MSR valuation adjustments | Metric | Three Months Ended Jun 30, 2025 | Three Months Ended Mar 31, 2025 | Three Months Ended Jun 30, 2024 | Six Months Ended Jun 30, 2025 | Six Months Ended Jun 30, 2024 | | :---------------------------------- | :------------------------------ | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net revenue | $279,445 | $198,486 | $285,685 | $477,931 | $517,467 | | Net income (loss) attributable to Guild | $18,661 | ($23,897) | $37,583 | ($5,236) | $66,081 | | Loan origination fees and gain on sale of loans, net | $236,001 | $185,213 | $205,848 | $421,214 | $339,908 | | Valuation adjustment of mortgage servicing rights | ($41,313) | ($69,936) | $2,134 | ($111,249) | $22,912 | | Basic EPS | $0.30 | ($0.39) | $0.61 | ($0.08) | $1.08 | | Diluted EPS | $0.30 | ($0.39) | $0.60 | ($0.08) | $1.06 | Key Performance Indicators Key Performance Indicators Summary Guild's key performance indicators for Q2 2025 demonstrate robust origination growth, with total originations reaching $7.5 billion. The company maintained a high percentage of purchase originations and significantly improved its refinance recapture rate, reflecting effective business strategies | Metric | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | YTD Jun 30, 2025 | YTD Jun 30, 2024 | | :---------------------------------- | :----------- | :----------- | :----------- | :--------------- | :--------------- | | Total originations ($ thousands) | $7,474,794 | $5,204,565 | $6,525,898 | $12,679,359 | $10,378,437 | | Total originations (units) | 21.4 | 15.3 | 19.2 | 36.7 | 31.1 | | Gain on sale margin (bps) | 329 | 376 | 326 | 349 | 340 | | Purchase recapture rate | 27% | 26% | 27% | 27% | 27% | | Refinance recapture rate | 37% | 31% | 22% | 35% | 25% | | Purchase origination % | 89% | 88% | 92% | 88% | 92% | | UPB (period end) ($ thousands) | $96,275,766 | $94,005,693 | $89,092,933 | $96,275,766 | $89,092,933 | | Loans serviced (000's) (period end) | 381 | 373 | 358 | 381 | 358 | - Total originations increased by 44% quarter-over-quarter and 15% year-over-year[3][37] - The refinance recapture rate improved significantly to 37% in Q2 2025 from 31% in Q1 2025 and 22% in Q2 2024[37] Non-GAAP Financial Measures & Reconciliations Non-GAAP Definitions This section provides definitions for Guild's non-GAAP financial measures, including Adjusted Net Income, Adjusted Earnings Per Share, Adjusted EBITDA, Adjusted Return on Average Equity, and Tangible Net Book Value Per Share. These metrics are used to offer a clearer view of core operating performance by excluding non-cash or non-recurring items - Adjusted Net Income excludes non-cash items like MSR fair value changes, contingent liability changes, amortization of acquired intangibles, stock-based compensation, and merger-related expenses, adjusted for tax[24] - Adjusted EBITDA adjusts net income for interest expense on non-funding debt, taxes, depreciation & amortization, non-controlling interests, and the same non-cash/non-recurring items as Adjusted Net Income[26] - Tangible Net Book Value Per Share is calculated by subtracting goodwill and intangible assets from total stockholders' equity attributable to Guild[28] GAAP to Non-GAAP Reconciliations Adjusted Net Income and EPS Reconciliation GAAP net income and EPS are reconciled to adjusted non-GAAP figures, detailing MSR fair value changes and merger-related expenses | Metric | Three Months Ended Jun 30, 2025 | Three Months Ended Mar 31, 2025 | Three Months Ended Jun 30, 2024 | Six Months Ended Jun 30, 2025 | Six Months Ended Jun 30, 2024 | | :---------------------------------- | :------------------------------ | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net income (loss) attributable to Guild | $18.7 | ($23.9) | $37.6 | ($5.2) | $66.1 | | Change in fair value of MSRs due to model inputs and assumption | 19.5 | 55.0 | (20.6) | 74.5 | (53.5) | | Merger-related expenses | 4.4 | — | — | 4.4 | — | | Tax impact of adjustments | (7.2) | (15.3) | 2.4 | (22.5) | 9.4 | | Adjusted net income | $41.4 | $21.6 | $30.7 | $63.1 | $38.8 | | Earnings (loss) per share—Diluted | $0.30 | ($0.39) | $0.60 | ($0.08) | $1.06 | | Adjusted earnings per share—Diluted | $0.66 | $0.35 | $0.49 | $1.01 | $0.62 | - Q2 2025 GAAP net income of $18.7 million was adjusted to $41.4 million, primarily by adding back MSR fair value changes and merger-related expenses, net of tax[40] Adjusted EBITDA Reconciliation GAAP net income is reconciled to Adjusted EBITDA, adjusting for non-funding interest, taxes, depreciation, MSR valuation, and merger-related items | Metric | Three Months Ended Jun 30, 2025 | Three Months Ended Mar 31, 2025 | Three Months Ended Jun 30, 2024 | Six Months Ended Jun 30, 2025 | Six Months Ended Jun 30, 2024 | | :---------------------------------- | :------------------------------ | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net income (loss) | $18.7 | ($24.0) | $37.6 | ($5.3) | $66.0 | | Interest expense on non-funding debt | 6.1 | 5.7 | 4.7 | 11.9 | 8.0 | | Income tax expense (benefit) | 1.9 | (7.7) | 6.9 | (5.8) | 17.1 | | Depreciation and amortization | 3.6 | 3.6 | 4.0 | 7.3 | 7.7 | | Change in fair value of MSRs due to model inputs and assumptions | 19.5 | 55.0 | (20.6) | 74.5 | (53.5) | | Merger-related expenses | 4.4 | — | — | 4.4 | — | | Adjusted EBITDA | $58.0 | $36.4 | $41.6 | $94.4 | $57.5 | - Q2 2025 GAAP net income of $18.7 million was reconciled to an Adjusted EBITDA of $58.0 million, reflecting adjustments for non-funding interest, taxes, depreciation, MSR valuation, and merger-related expenses[42] Adjusted Return on Average Equity Reconciliation GAAP return on average equity is reconciled to its adjusted non-GAAP counterpart, reflecting the impact of non-GAAP adjustments on net income | Metric | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | YTD Jun 30, 2025 | YTD Jun 30, 2024 | | :---------------------------------- | :----------- | :----------- | :----------- | :--------------- | :--------------- | | Net income (loss) attributable to Guild | $18.7 | ($23.9) | $37.6 | ($5.2) | $66.1 | | Adjusted net income | $41.4 | $21.6 | $30.7 | $63.1 | $38.8 | | Return on average equity | 6.2% | (7.8%) | 12.3% | (0.8%) | 11.0% | | Adjusted return on average equity | 13.7% | 7.0% | 10.1% | 10.2% | 6.4% | - The GAAP return on average equity of 6.2% for Q2 2025 was adjusted to 13.7%, reflecting the impact of non-GAAP adjustments on net income[43] Tangible Net Book Value Per Share Reconciliation GAAP book value per share is reconciled to tangible net book value per share by subtracting goodwill and intangible assets | Metric | Jun 30, 2025 | Dec 31, 2024 | | :---------------------------------- | :----------- | :----------- | | Total stockholders' equity attributable to Guild | $1,217.7M | $1,253.5M | | Goodwill | ($198.7M) | ($198.7M) | | Intangible assets, net | ($22.8M) | ($27.3M) | | Tangible common equity | $996.1M | $1,027.5M | | Book value per share | $19.57 | $20.24 | | Tangible net book value per share | $16.01 | $16.59 | - As of June 30, 2025, the GAAP book value per share of $19.57 was adjusted to a tangible net book value per share of $16.01 after subtracting goodwill and intangible assets[45] Additional Information Webcast and Conference Call Guild Holdings Company announced that it will not host a conference call in conjunction with this quarterly earnings release due to a pending merger agreement - No conference call will be hosted for this quarterly earnings release[16] - The decision is due to the pending Merger Agreement with Gulf MSR HoldCo, LLC[16] Forward-Looking Statements This section contains a standard disclaimer, indicating that forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially. Key risks include market conditions, regulatory changes, interest rate fluctuations, and factors related to the pending merger - Forward-looking statements reflect current expectations and judgments about future events and financial performance[20] - Important factors that could cause actual results to differ materially include disruptions in the secondary home loan market, changes in macroeconomic conditions, regulatory environment changes, interest rate fluctuations, and risks related to the pending Merger[21] - The company undertakes no obligation to update any forward-looking statement unless required by law[22] Contacts This section provides contact information for investor relations and media inquiries for Guild Holdings Company - Investors can contact investors@guildmortgage.net or 858-956-5130[19] - Media inquiries can be directed to Melissa Rue at mkr@nstpr.com or 619-296-0605 Ext. 247[19]