Financial Performance - Total net revenues for the year ended December 31, 2025, were $164.872 million, a 52% increase from $108.488 million in 2024[314]. - Gain on loans, net increased to $136.148 million in 2025, representing 82% of total revenue, up from $78.098 million (72%) in 2024[314]. - Funded Loan Volume for the year ended December 31, 2025 was $4,744 million, a 32% increase from $3,594 million in 2024[339]. - D2C Loan Volume increased by 14% to $2,928 million for the year ended December 31, 2025, up from $2,562 million in 2024[340]. - B2B Loan Volume decreased by 91% to $95 million for the year ended December 31, 2025, down from $1,032 million in 2024[341]. - Total Loans funded increased by 31% to 15,386 for the year ended December 31, 2025, compared to 11,755 in 2024[343]. - Total net revenues for the year ended December 31, 2025 were $164,872 thousand, compared to $108,488 thousand in 2024[367]. - Gain on loans, net increased by 74% to $136,148 thousand for the year ended December 31, 2025, from $78,098 thousand in 2024[368]. - Total Expenses for the year ended December 31, 2025 were $330,691 thousand, compared to $313,928 thousand in 2024[367]. - Net loss for the year ended December 31, 2025 was $165,872 thousand, compared to a net loss of $206,290 thousand in 2024[367]. - Adjusted Net Loss for the year ended December 31, 2025, was $131.7 million, improving from a loss of $162.8 million in 2024[408]. - Adjusted EBITDA for the year ended December 31, 2025, was a loss of $115.8 million, compared to a loss of $121.0 million in 2024[408]. Loan Volume and Types - Refinance loan volume surged by approximately 119% to $1.015 billion in 2025 from $463 million in 2024[336]. - Purchase loan volume rose by approximately 8% to $2.875 billion in 2025 from $2.652 billion in 2024[337]. - HELOC loan volume increased by approximately 78% to $854 million in 2025 from $479 million in 2024[338]. - The average loan amount increased slightly to $308,321 in 2025 from $305,757 in 2024[335]. - Average Loan Amount increased by approximately 1% to $308,321 for the year ended December 31, 2025, from $305,757 in 2024[346]. Operational Changes and Strategy - The company plans to continue investing in technology to enhance customer experience and reduce operational costs through automation[313]. - The company aims to expand its homeownership product offerings, providing a comprehensive solution for customers[331]. - The company is winding down its non-core international operations, with plans to complete several entity sales by 2026[319]. - The company intends to use net proceeds from the ATM Program for general corporate purposes, including working capital and increasing warehouse line capacity[431]. Financial Position and Assets - Total assets increased by $592.4 million, or 65%, to $1.5 billion as of December 31, 2025, compared to $913.1 million as of December 31, 2024[390]. - Cash and cash equivalents decreased by $111.3 million, or 53%, to $99.8 million as of December 31, 2025, compared to $211.1 million as of December 31, 2024[390]. - Customer deposits increased by $628.9 million, or 469%, to $763.0 million as of December 31, 2025, compared to $134.1 million as of December 31, 2024[390]. - Loans held for investment increased by $611.9 million, or 549%, to $723.3 million as of December 31, 2025, compared to $111.5 million as of December 31, 2024[393]. - Senior notes carrying value was $198.8 million as of December 31, 2025, following the exchange of Convertible Notes for Senior Notes in April 2025[396]. - Additional paid-in capital rose by $246.5 million, or 13%, to $2,109.8 million as of December 31, 2025, from $1,863.3 million as of December 31, 2024[398]. - Accumulated deficit increased by $165.9 million, or 9%, to $2,076.2 million as of December 31, 2025, compared to $1,910.4 million as of December 31, 2024[399]. Cash Flow and Financing Activities - Net cash used in operating activities decreased by $213 million, or 56%, to $167 million for the year ended December 31, 2025, compared to $380 million in 2024[433]. - Net cash used in investing activities increased by $518 million, or 360%, to $662 million for the year ended December 31, 2025, primarily due to loan originations[434]. - Net cash provided by financing activities increased by $475 million, or 199%, to $714 million for the year ended December 31, 2025, driven by increased customer deposits[435]. - The company raised approximately $568 million in gross proceeds from the Business Combination in August 2023, including $528.6 million in Convertible Notes[414]. - The company has an aggregate available amount of $575.0 million from warehouse lines of credit as of December 31, 2025[412]. - The company entered into a Note Exchange Agreement to exchange $532.5 million of existing Convertible Notes for $155.0 million in Senior Notes and a cash payment of $110.0 million[422]. Risk Management - The company expects to face fluctuations in performance due to interest rate changes, impacting loan origination volumes[320]. - The company manages interest rate risk through hedging instruments, expecting these to reduce earnings volatility[466]. - The company anticipates that interest rates will remain the primary market risk for the foreseeable future, impacting production volume and revenue[461]. - The company is classified as an emerging growth company (EGC) and will cease to be an EGC when total annual gross revenue exceeds $1.235 billion or by March 8, 2026[459]. - The company has limited exposure to foreign currency exchange risk, primarily generating revenue in U.S. dollars, but expects this exposure to increase due to expansion in the United Kingdom[476][477]. - The company employs stringent underwriting standards to mitigate credit risk, which includes monitoring loan performance through subservicing agents[471]. - As of December 31, 2025, the company was exposed to interest rate risk on $466.7 million of loans held for sale (LHFS) and $4.0 million of net interest rate lock commitments (IRLCs)[467]. - A hypothetical decrease in interest rates by 100 basis points would result in a $6.6 million increase in the combined fair value of LHFS and IRLCs[468]. Lease and Operational Costs - Operating lease costs decreased from $10 million in 2024 to $5 million in 2025 due to real estate footprint reduction initiatives[437]. - As of December 31, 2025, the company had lease liabilities of $4.6 million, reflecting remaining contractual obligations for future lease payments[438]. - The average holding period of loans from funding to sale was approximately 30 days in 2025[464].
Better Home & Finance pany(BETR) - 2025 Q4 - Annual Report