UWM (US:UWMC)2025-11-06 19:56Financial Performance - For the three months ended September 30, 2025, the company originated $41.7 billion in loans, an increase of $2.2 billion, or 5.6%, from $39.5 billion in the same period of 2024[129]. - The net income for the three months ended September 30, 2025, was $12.1 million, a decrease of $19.9 million compared to $31.9 million for the same period in 2024[129]. - Adjusted EBITDA for the three months ended September 30, 2025, was $211.1 million, compared to $107.2 million for the same period in 2024[129]. - For the nine months ended September 30, 2025, the company originated $113.8 billion in loans, an increase of $13.1 billion, or 13.0%, from $100.8 billion in the same period of 2024[131]. - The net income for the nine months ended September 30, 2025, was $79.5 million, a decrease of $209.2 million compared to $288.8 million for the same period in 2024[131]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $464.6 million, compared to $341.8 million for the same period in 2024[131]. - Total revenue for Q3 2025 was $843,252,000, a 13.1% increase from $745,598,000 in Q3 2024[136]. - Loan production income for Q3 2025 reached $542,144,000, up 16.5% from $465,548,000 in Q3 2024[139]. - Total loan production income for the nine months ended September 30, 2025 was $1,294,777,000, a 15.4% increase from $1,121,611,000 in the same period of 2024[145]. Loan Origination and Sales - 93% of loans originated in the three months ended September 30, 2025, were sold to Fannie Mae or Freddie Mac, or transferred to Ginnie Mae pools[122]. - The company retains the MSRs associated with the majority of its production but intends to opportunistically sell MSRs depending on market conditions[123]. - The company focuses exclusively on the wholesale channel, which aligns its interests with clients and enhances customer service[124]. - Total loan origination volume for Q3 2025 was $41,742,070,000, a 5.6% increase from $39,536,046,000 in Q3 2024[141]. - Loan origination fees increased by approximately $17,764,000 for Q3 2025, reflecting a 13.2% rise from Q3 2024[139]. - The weighted average loan to value ratio for originated loans was 81.90% for the three months ended September 30, 2025, with a weighted average FICO score of 736[239]. Income and Expenses - Loan servicing income for Q3 2025 was $169.0 million, an increase of $34.3 million or 25.4% compared to $134.8 million in Q3 2024[147]. - Servicing costs for Q3 2025 increased by $8.9 million to $33.9 million, a rise of 35.7% from $25.0 million in Q3 2024[148]. - For the nine months ended September 30, 2025, loan servicing income was $538.3 million, up $75.0 million or 16.2% from $463.4 million in the same period of 2024[149]. - Net interest income for Q3 2025 was $51.8 million, an increase of $16.1 million or 45.0% from $35.7 million in Q3 2024[152]. - Other costs for Q3 2025 totaled $384.6 million, an increase of $56.5 million or 17.2% compared to $328.0 million in Q3 2024[164]. - Salaries, commissions, and benefits for Q3 2025 increased by $41.3 million or 22.8% to $222.8 million, driven by an increase in team member count[164]. Cash Flow and Liquidity - Net cash used in operating activities decreased to $2.75 billion for the nine months ended September 30, 2025, compared to $5.70 billion for the same period in 2024[214]. - Net cash provided by investing activities was $2.10 billion for the nine months ended September 30, 2025, down from $2.58 billion in 2024[215]. - Net cash provided by financing activities was $1.02 billion for the nine months ended September 30, 2025, compared to $3.26 billion for the same period in 2024[217]. - As of September 30, 2025, cash and cash equivalents totaled $870.70 million, an increase from $636.33 million at the end of September 2024[213]. - The company believes its cash on hand and liquidity sources will be sufficient to maintain operations and fund loan originations for the next twelve months[177]. Risk Management - The company is exposed to counterparty risk from financing facilities and interest rate risk hedging activities, which could lead to financial loss if a counterparty defaults[240]. - The company manages counterparty risk by selecting financially strong counterparties and spreading risk among multiple entities[240]. - The company executes trading agreements with material trading partners to limit overall counterparty exposure through margin requirements[241]. - Master netting agreements are in place, allowing the company to offset amounts due to and from the same counterparty[241]. - The company mitigates financing risk by ensuring sufficient borrowing capacity with well-established counterparties[242]. - Long-term relationships with counterparties are fostered to meet the company's funding needs[242]. Debt and Financing - UWM issued $1.0 billion in aggregate principal amount of senior unsecured notes due March 15, 2031, with a 6.25% interest rate[196]. - As of September 30, 2025, UWM had $87.1 million outstanding under sale and repurchase agreements collateralized by retained investment securities[210]. - The weighted average interest rate for borrowings under MSR facilities was 7.17% for the three months ended September 30, 2025, down from 8.14% in 2024[206]. - UWM entered into a Loan and Security Agreement with Citibank, providing up to $1.5 billion of uncommitted borrowing capacity for mortgage servicing rights[200]. - The total uncommitted borrowing capacity of the Conventional MSR Facility and warehouse facility was increased to $2.0 billion as of June 27, 2024[202]. - As of September 30, 2025, the total advanced against warehouse facilities was $9.78 billion, with $900 million of these line amounts committed[186][187]. Dividends and Commitments - The Board declared a dividend of $0.10 per share of Class A common stock for an aggregate amount of $23.4 million, paid on October 9, 2025[219]. - As of September 30, 2025, the total interest rate lock commitments were $17.16 billion for fixed rate and $590.68 million for variable rate[225]. - Commitments to sell loans amounted to $3.66 billion, while forward commitments to sell mortgage-backed securities were $18.84 billion as of September 30, 2025[225].