Financial Data and Key Metrics Changes - In Q3 2025, funded loan volume increased by 17% year-over-year to approximately $1.2 billion, while revenue grew by 51% to approximately $44 million [18][19]. - The adjusted EBITDA loss for Q3 2025 was approximately $25 million, down from $27 million in the previous quarter and $39 million a year ago [37]. Business Line Data and Key Metrics Changes - Funded loan volume growth by product included home equity volume increasing by 52%, refinance loan volume increasing by 41%, and purchase loan volume increasing by 5% year-on-year [18]. - The direct-to-consumer (D2C) channel saw revenue per fund increase to $8,300, while the labor cost per fund decreased to $2,500, resulting in a net contribution margin of $1,772 per fund, a 64% increase quarter-on-quarter [22]. Market Data and Key Metrics Changes - The company is positioned to fund $500 million in monthly volume, with expectations to double this to at least $1 billion in the next six months due to new partnerships [6][18]. - The home equity market is highlighted as a significant opportunity, with Americans sitting on $35 trillion of home equity, representing the largest untapped asset class in the country [18]. Company Strategy and Development Direction - The company is evolving from a direct-to-consumer model to a platform that powers the entire home finance ecosystem, focusing on partnerships with local mortgage lenders and financial institutions [5][6]. - The strategy includes diversifying distribution channels and leveraging AI technology to enhance efficiency and reduce costs, aiming for adjusted EBITDA profitability by Q3 2026 [21][36]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in scaling rapidly and profitably, citing past growth during favorable rate cycles and the potential for significant market share in the upcoming cycle [17][40]. - The company anticipates that the partnerships will ramp up over the next six months, contributing to substantial loan volume growth [51][53]. Other Important Information - The company ended Q3 2025 with $226 million in cash and investments, maintaining strong relationships with financing counterparties [37][38]. - The partnerships announced are expected to transform the company's revenue model, with a focus on integrating AI-driven solutions into existing financial institutions [23][24]. Q&A Session Summary Question: Can you dive deeper into the three recent partnership announcements and how you expect each of these to ramp as we head into 2026? - Management expects the large financial services platform partnership to ramp over the next six months as user penetration increases, with potential for multiple billions in monthly volume [51][52]. Question: How would you characterize the future partnership pipeline right now? - The partnership pipeline has exploded due to the demand for Better's solutions, especially as incumbents face integration challenges [55][56]. Question: Can you provide details on the volume opportunity with the top five U.S. personal financial services platform? - The addressable market could be significant, with estimates suggesting potential originations of around $24 billion if penetration rates are achieved [60]. Question: What underpins the outlook for increasing loan volume to $1 billion? - The outlook is primarily driven by partnerships, with expectations for D2C growth and stable interest rates [61]. Question: Does the anticipated $1 billion loan volume assume full ramp-up of partnerships? - Management indicated that the $1 billion could be exceeded once partnerships are fully integrated [66]. Question: What is the expectation for customer acquisition costs (CAC) as partnerships grow? - CAC is expected to trend lower as partnerships become a larger part of loan volume, with no upfront CAC for partners [68].
Better Home & Finance pany(BETR) - 2025 Q3 - Earnings Call Transcript