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Better Home & Finance pany(BETR) - 2024 Q3 - Earnings Call Transcript
BETRBetter Home & Finance pany(BETR)2024-11-13 15:53
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Financial Data and Key Metrics Changes - Funded loan volume increased to 1.035billion,representinga421.035 billion, representing a 42% year-over-year increase and an 8% quarter-over-quarter increase, exceeding the guidance of 1 billion [10] - Q3 revenue was 29million,downfrom29 million, down from 32 million in the previous quarter but up from 5millioninthesamequarterlastyear,withanadjustedEBITDAlossofapproximately5 million in the same quarter last year, with an adjusted EBITDA loss of approximately 39 million and a GAAP net loss of approximately 54million[11][37]−Year−over−yeargainonsalemarginimprovedfrom1.5854 million [11][37] - Year-over-year gain on sale margin improved from 1.58% in Q3 last year to 2.08% in Q3 this year [12] Business Line Data and Key Metrics Changes - Funded loan volume growth was driven by increases across all product categories: purchase loans increased by 13%, home equity loans increased by 493%, and refinance loans increased by 177% year-over-year [14] - 75% of funded loan volume was generated through the direct-to-consumer (D2C) channel, while 25% was generated through the B2B partner channel [37] Market Data and Key Metrics Changes - The company noted that the 30-year fixed mortgage rates remained above 7%, impacting customer affordability [14] - The direct-to-consumer segment grew significantly during the COVID refi boom but has since stabilized at around 20% of total mortgage originations, while the distributed retail channel accounted for approximately 40% to 45% of the market from 2021 to 2023 [33] Company Strategy and Development Direction - The company aims to enhance growth while managing costs, targeting profitability in the medium term [9] - Strategic priorities for 2024 include increasing conversion through additional products and services, improving operational efficiency, and diversifying distribution channels [13][25] - The launch of Betsy, an AI loan assistant, is expected to enhance operational efficiency and customer experience [20][24] Management Comments on Operating Environment and Future Outlook - Management expects continued improvement in the market environment, with a slow grind lower in mortgage rates anticipated throughout 2025 [58] - The company has pivoted to focus more on purchase mortgages, with 71% of volume now being purchase mortgages, which is a significant shift from previous years [60] - The outlook for 2025 includes modest improvements in the operating environment, with a focus on leveraging technology to enhance customer acquisition and operational efficiency [59][62] Other Important Information - The company ended Q3 2024 with 480 million in cash and investments, indicating strong capital positioning for growth [38] - A reverse stock split was completed to regain compliance with NASDAQ listing requirements, resulting in approximately 15.1 million shares outstanding post-split [39][40] Q&A Session Summary Question: Differentiation of AI loan assistant Betsy - Betsy is advanced compared to other AI technologies in the lending space, integrating directly into the company's platform and automating significant parts of the mortgage process, unlike traditional chatbots [44][47] Question: Outlook for 2025 and operating environment - The company expects a slow improvement in the market environment, with a focus on purchase mortgages and leveraging technology to enhance efficiency and customer service [58][62]