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]
Better Home & Finance pany(BETR) - 2025 Q1 - Earnings Call Transcript