Company Overview - Better Home & Finance Holding Company is developing a next-generation AI mortgage platform aimed at simplifying and accelerating the mortgage process[11] - Mortgages originated with Better technology cost 43% less than the industry average[17] - The company's platform delivers a best-in-class experience with a 64 Net Promoter Score and a 4.1 out of 5 Trustpilot Score[21] Market Opportunity - The cumulative homeownership market size is estimated at $19+ trillion[19] - Home mortgages represent approximately 69% of total household debt[19] - Buyers pay fees to up to 10 intermediaries, accounting for ~10% of home price[21] Technology and Platform - The platform is powered by Tinman® AI, which enables faster rate quotes (3 seconds), pre-approvals (3 minutes), and loan closes (3 weeks)[21, 13] - The company's AI agent, Betsy, has led to a 3x increase in loan officer productivity[57] - The company retains loans on its balance sheet for approximately 26 days on average[30, 32] Financial Performance - In Q2 2025, the total mortgage revenue was $7886 thousand per fund[58] - In Q2 2025, the contribution margin per fund was $1064[58] - Adjusted EBITDA for Q2 2025 was $(26605) thousand, compared to $(23259) thousand in Q2 2024[79]

Financial Data and Key Metrics Changes - In 2024, the company achieved a 19% year-over-year increase in funded loan volume, totaling $3.6 billion, and a 50% increase in revenue, reaching $108 million [10][11] - The adjusted EBITDA loss was reduced by 26% year-over-year, amounting to $121 million [10] - For Q4 2024, funded loan volume was $936 million, a 77% year-over-year increase, while revenue was $25 million, up from $18 million in Q4 2023 [12][49] Business Line Data and Key Metrics Changes - Funded loan volume growth in Q4 was driven by home equity products and refinance loans, with purchase loan volume increasing by 25% and refinance loan volume surging by 611% year-over-year [14] - Home equity loan volume increased by 416% in Q4 2024 compared to the previous year [14] - The company reported that 81% of funded loan volume in Q4 was generated through the direct-to-consumer (D2C) channel, with 62% being purchase loans [50] Market Data and Key Metrics Changes - The overall mortgage market saw improvements in Q4 2024, but 30-year fixed mortgage rates remained high, impacting mortgage demand [16] - The company outperformed the market, with a reported 619% increase in HELOC originations compared to a 10% industry-wide increase [14] Company Strategy and Development Direction - The company aims to leverage AI and technology to enhance the home ownership experience, focusing on growth, efficiency improvements, and diversification of distribution channels [9][10] - The partnership with NEO Home Loans is expected to enhance local loan officer capabilities and improve conversion rates [33][45] - The company is committed to reducing expenses and improving operational efficiency to achieve profitability in the medium term [16][47] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in 2025, despite macroeconomic headwinds and the wind down of the Ally business [51][53] - The company anticipates a 10% to 15% decrease in funded loan volume in Q1 2025 due to seasonal slowness and the exit from non-core businesses [51] - Management highlighted the importance of AI in driving down operational costs and improving customer experience [18][30] Other Important Information - The company has implemented significant cost-saving measures, including reducing loan origination expenses by 28% and marketing expenses by 27% in Q4 [17] - The AI-driven assistant, Betsy, has significantly increased customer interactions, growing from 5,000 in June 2024 to over 115,000 by February 2025 [19][20] Q&A Session Summary Question: How does the underwriting and AI technology adjust for high property insurance costs? - Management explained that their technology integrates multiple data sources to provide instant homeowners insurance quotes, significantly reducing the need for manual processing [58] Question: How does profitability impact risk-taking? - Management clarified that their marketplace model does not involve holding loans on the balance sheet, thus minimizing risk while focusing on efficiency and cost reduction [62][68] Question: Can you walk through the savings opportunities from Tinman's AI application? - Management detailed that AI has reduced costs associated with loan officer tasks and improved customer service efficiency, leading to significant savings per funded loan [78] Question: How are gain on sale margins trending in Q1? - Management reported that gain on sale margins are trending higher, particularly with the NEO partnership, which is expected to enhance overall profitability [85][88] Question: Can you contextualize contribution profit per loan? - Management indicated that contribution margins have been improving, and they are focused on reducing costs in the mortgage business to drive profitability [98][100]

Financial Data and Key Metrics Changes - For the full year 2024, the company achieved $3.6 billion in funded loan volume, $108 million in revenue, and an adjusted EBITDA loss of $121 million, with a year-over-year revenue growth of 50% and a 19% increase in funded loan volume [8][9] - In Q4 2024, funded loan volume was $936 million, representing a 77% year-over-year increase, although it decreased approximately 10% sequentially due to seasonal factors [8][11] - The adjusted EBITDA loss in Q4 was $28 million, with total GAAP net loss around $59 million [46][47] Business Line Data and Key Metrics Changes - Funded loan volume growth in Q4 was driven by home equity products and refinance loans, with purchase loan volume increasing by 25% and refinance loan volume surging by 611% year-over-year [10][11] - The company reported a gain on sale margin improvement from 1.95% in 2023 to 2.17% in 2024, indicating enhanced revenue per loan through pricing and marketing optimization [9][10] Market Data and Key Metrics Changes - The overall HELOC and HELOAN originations increased by 10% in the third quarter, while the company’s origination volume grew by 619%, indicating significant market outperformance [10] - The mortgage market saw improvements in Q4 compared to the same period in 2023, but 30-year fixed mortgage rates remained high, impacting mortgage demand [11] Company Strategy and Development Direction - The company aims to leverage AI and technology to enhance operational efficiency, reduce costs, and improve customer experience, with a focus on achieving profitability in the medium term [6][8][45] - The strategic priorities include continuing to grow the business, diversifying distribution channels, and enhancing the technology platform to streamline the mortgage process [8][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by low housing affordability and high mortgage rates but expressed optimism about the company's growth trajectory and market share gains [8][11] - The outlook for 2025 anticipates funded loan volume growth in the low to mid double digits, driven by initiatives like Neo powered by Better, despite macroeconomic headwinds [49][50] Other Important Information - The company is winding down its UK businesses, which contributed to lower volume in Q4, and expects to fully exit this segment by Q2 2025 [34][48] - The introduction of Betsy, an AI voice-based loan assistant, has significantly improved customer interaction efficiency, with a 20x increase in customer interactions since its launch [14][27] Q&A Session Summary Question: How does the AI technology adjust for high property insurance costs? - Management explained that their AI system integrates multiple data sources to provide instant homeowners insurance quotes during the loan process, significantly reducing the need for manual intervention [54] Question: How does profitability affect risk-taking? - Management clarified that they operate a marketplace model, ensuring loans are pre-committed to investors before origination, thus minimizing risk while focusing on efficiency and cost reduction to achieve profitability [58][62] Question: Can you elaborate on savings opportunities from Tin Man's AI application? - Management highlighted that AI-driven processes have reduced operational costs significantly, with potential savings of $2,000 per funded loan and $1,400 for AI-underwritten loans, contributing to improved margins [72][73] Question: How are gain on sale margins trending in Q1? - Management reported that gain on sale margins are trending higher in Q1, particularly with Neo loans performing better than the direct-to-consumer business, indicating improved efficiency and customer conversion [80][82] Question: Can you contextualize contribution profit per loan? - Management indicated that contribution margins have been improving, and they are focused on reducing costs in the mortgage business to enhance profitability while maintaining a balance with corporate cost reductions [93][94]