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].
Better Home & Finance pany(BETR) - 2025 Q2 - Earnings Call Transcript