Core Viewpoint - Hedge fund manager Eric Jackson has shifted focus to Better Home & Finance Holding, predicting significant upside potential and likening it to "the Shopify of mortgages" [1][2] Company Overview - Better Home is positioned to revolutionize the $15 trillion mortgage industry by utilizing artificial intelligence (AI) and blockchain technology [2] - The company offers various loan products, including GSE conforming loans, FHA-insured loans, and VA-guaranteed loans, along with real estate and insurance services [4] Financial Performance - Better Home's Q2 results showed a 25% year-over-year increase in funded loan volume to $1.2 billion and a 37% rise in sales to $44.1 million, despite challenging macroeconomic conditions [5] - The direct-to-consumer business has a 13% contribution margin with revenue per loan at $78.86, while the Tinman AI platform for retail loan officers boasts a 40% contribution margin [7] Technology and Efficiency - The company's AI assistant "Betsy" processed 600,000 consumer interactions in Q2, improving lead-to-lock conversion rates from 3.3% to 4.4% [6] - AI underwriting now manages 43% of locked loans, with a target of 75% penetration, significantly reducing the cost to originate to about half the industry average [6] Market Position and Valuation - Better Home is currently trading at 1x forward sales, in stark contrast to Figure Technology Solutions at 19x, despite Better Home's faster growth rate [2] - Jackson predicts that Better Home could become a "350-bagger" within two years, similar to early investments in Carvana and Opendoor [3]

Financial Data and Key Metrics Changes - In Q2 2025, the company achieved a funded loan volume of approximately $1.2 billion, representing a 25% year-over-year growth, while revenue increased by 37% to $44.1 million [14][34]. - The adjusted EBITDA loss for the quarter was approximately $27 million, with expectations to reach adjusted EBITDA breakeven by Q3 2026 [34][36]. - Total expenses decreased by approximately 3% in Q2 compared to Q1 2025 [35]. Business Line Data and Key Metrics Changes - Funded loan volume by product was composed of 67% purchase loans, 20% second lien, and 13% refinance loans [34]. - The home equity and HELOC loans saw a significant increase of 166% year-over-year, while refinance loan volume increased by 109% [14]. - The direct-to-consumer (D2C) model generated 64% of the funded loan volume, while the Tinman AI platform contributed 36% [34]. Market Data and Key Metrics Changes - The company reported a lead-to-lock conversion rate increase of over 30%, from 3.3% to 4.4%, attributed to the implementation of Betsy AI [10][46]. - The Birmingham Bank in the UK grew its loan book by 90% sequentially in Q2 2025 [38]. Company Strategy and Development Direction - The company aims to achieve profitability by focusing on AI-driven technology, reducing corporate costs, and diversifying product and distribution channels [7][14]. - The strategic priorities include driving growth opportunities independent of broader economic conditions, reducing expenses, and improving operational efficiency [14][16]. - The company is expanding its Tinman AI platform to serve local mortgage bankers and financial institutions, creating a unique market position [7][19]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving adjusted EBITDA breakeven by Q3 2026, driven by volume growth and improved contribution margins [34][36]. - The company highlighted the increasing consumer adoption of AI and its potential to enhance operational efficiency and profitability [10][16]. - Management noted that the mortgage market presents significant opportunities, particularly in home equity lending, which is expected to grow substantially [60][64]. Other Important Information - The company has built a comprehensive AI platform that integrates various mortgage processes, enhancing customer experience and operational efficiency [10][12]. - The company has a strong pipeline of partners interested in utilizing the Tinman AI software, indicating robust demand for its technology [23][28]. Q&A Session Summary Question: Can you characterize the partners trying to enter the space using your technology? - The company is engaging with next-gen wealth management firms, traditional fintech lenders, and mega fintechs looking to offer mortgage products to their customer bases [41][44]. Question: How much volume is needed to see meaningful benefits from cost reductions? - The company indicated that it already sees benefits from reduced costs, with labor costs per fund significantly lower than industry averages [46]. Question: What has driven the lead-to-lock conversion rate increase with Betsy? - The expanded functionality of Betsy, which now assists throughout the entire loan process, has significantly improved efficiency and customer outcomes [51][52]. Question: Can you provide updates on the B2B side, specifically regarding the Tinman AI software? - The company has successfully onboarded a small to medium-sized bank onto the Tinman AI platform, achieving rapid implementation and loan processing [54]. Question: Can you elaborate on the home equity business growth? - The company reported a 260% year-over-year growth in home equity volume, positioning itself as a leading home equity lender in the U.S. [60][61].

Financial Data and Key Metrics Changes - In Q1 2025, the company achieved a 31% year-over-year increase in funded loan volume to $868 million and a 46% increase in revenue to $33 million, driven by growth in both direct-to-consumer (DTC) and Tinman AI platform channels [7][21][22] - The adjusted EBITDA loss was $40.4 million, with a total GAAP net loss of approximately $50.6 million [21][22] - Funded loan volume was 71% generated through DTC and 29% through the Tinman AI platform [21] Business Line Data and Key Metrics Changes - Funded loan volume growth was driven by home equity products and refinance loans, with HELOC and home equity loan volume increasing by 207%, refinance loan volume by 64%, and purchase loan volume by 9% [9][21] - The company reported that the DTC business has seen increasing contribution margins as operating costs decrease due to AI implementation [11] Market Data and Key Metrics Changes - The total addressable market (TAM) for the mortgage industry is estimated at $2.1 trillion for 2025, with $1.4 trillion for purchases and $700 billion for refinancing [5][6] - The company aims to capture even a 1% market share, which would result in $14 billion of volume, approximately three times its current volume [6] Company Strategy and Development Direction - The company is focused on three strategic priorities: driving growth through AI, improving operational efficiency, and diversifying distribution channels [7][10] - The Tinman AI platform is being positioned as a disruptive technology in the mortgage industry, aiming to replace traditional systems and improve efficiency [12][18] - The company is also expanding its B2B partnerships, particularly with banks and fintechs, to license its software and enhance operational capabilities [56][58] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in the mortgage industry but emphasized the opportunities created by these dynamics, particularly through the use of AI technology [5][20] - The company expects funded loan volume to increase in Q2 2025, driven by efficiencies in the Tinman AI platform, with a projected growth of over 250% in Neo originations compared to Q1 [25][26] - The outlook for 2025 includes expectations for improved adjusted EBITDA losses due to efficiency gains and corporate cost reductions [26][27] Other Important Information - The company successfully retired approximately $530 million of convertible notes, creating about $200 million of positive pretax equity value [8][23] - The company is undergoing efforts to exit non-core UK assets while focusing on growing Birmingham Bank, expecting to double UK bank originations in 2025 [27] Q&A Session Summary Question: What is the expected timeline for loan officers to feel the impact of the Neo platform? - Management indicated that loan officers start seeing the impact within 30 days as the platform automates many of their tasks, allowing them to regain time and increase productivity [29][30] Question: How many more loan officers does the company plan to onboard in 2025? - The company aims to triple or quadruple the Neo channel, with plans to double it in the upcoming quarter [36] Question: How have unit economics trended year over year? - Unit economics have improved, with March showing a significant reduction in losses, indicating that the mortgage company was nearly breakeven [40][41] Question: What are the long-term leverage levels that make sense for the business? - The company operates a capital-light model and is comfortable with its current leverage, having restructured its debt to improve its balance sheet [49][52] Question: What opportunities exist for B2B partnerships? - The company is focusing on software-only partnerships with banks and fintechs, allowing them to utilize the Tinman platform without extensive integration costs [56][58]

Financial Data and Key Metrics Changes - In Q1 2025, funded loan volume increased by 31% year-over-year to $868 million, while revenue grew by 46% to $33 million, driven by funding more loans through both DTC and Tinman AI platform channels [6][19][20] - The adjusted EBITDA loss was $40.4 million, and the total GAAP net loss was approximately $50.6 million [19] - Funded loan volume by channel was 71% from direct-to-consumer (DTC) and 29% from Tinman AI platform [19] Business Line Data and Key Metrics Changes - Funded loan volume growth was driven by home equity products and refinance loans, with HELOC and home equity loan volume increasing by 207%, refinance loan volume by 64%, and purchase loan volume by 9% [8] - The DTC business continues to improve contribution margin as operating costs decrease due to AI implementation [10] Market Data and Key Metrics Changes - The mortgage industry is projected to have a total origination volume of $2.1 trillion for 2025, with approximately $1.4 trillion for purchases and $700 billion for refinancing [5] - The company aims to capture even a 1% market share, which would result in $14 billion of volume, approximately three times the current level [5] Company Strategy and Development Direction - The company is focused on three strategic priorities: driving growth through AI, improving operational efficiency, and diversifying distribution channels [6][9] - The Tinman AI platform is being expanded to serve local mortgage brokers and banks, aiming to disrupt traditional retail mortgage origination [11][14] - The company is also working on exiting non-core UK assets while focusing on growing Birmingham Bank [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges in the mortgage industry but sees significant opportunities for growth through technology and AI [5][6] - The company expects funded loan volume to increase in Q2 2025, driven by efficiencies in the Tinman AI platform, with a projected $450 million in Neo originations, representing over 250% growth compared to Q1 [23] - The outlook for 2025 includes expectations for year-over-year growth in funded loan volume, despite macro pressures and the loss of the Ally business [23] Other Important Information - The company successfully retired approximately $530 million of convertible notes, creating about $200 million of positive pretax equity value [7][21] - The company is focused on building a leading AI platform in the mortgage industry to enhance customer experience and drive down costs [17][22] Q&A Session Summary Question: What is the expected timeline for loan officers to feel the impact of the Neo platform? - Management believes loan officers will start seeing the impact within 30 days as the platform automates many of their tasks, allowing them to regain time and increase productivity [26][27] Question: How many more loan officers does the company plan to onboard in 2025? - The company aims to triple or quadruple the Neo channel, with plans to double it in the coming quarter [31][32] Question: How have unit economics trended year-over-year? - Unit economics have improved, with March showing a significant reduction in losses and approaching breakeven for the mortgage company [36][38] Question: What is the long-term leverage level that makes sense for the business? - The company operates a capital-light model and is comfortable with its current leverage, having reduced debt and improved its balance sheet [45][48] Question: What opportunities exist for B2B partnerships? - The company sees potential in software-only partnerships with banks and fintechs looking to enter the mortgage business, with a strong pipeline of interest [50][54]