- Strong quarter with Funded Loan Volume up 25% and Revenue up
26% in Q1’24 as compared to Q4’23
- Maintaining conviction in large addressable market and
favorable consumer trends towards digitization and price
transparency
- Continued leaning into growth opportunities and expect Q2’24
Funded Loan Volume above $800 million
- Continued strategic investments in Better’s leading proprietary
technology platform, Tinman™, to improve mortgage fulfillment
efficiency
- Focused on managing towards profitability while growing through
improved technology efficiency and corporate cost reductions to
offset increased growth expenses
Better Home & Finance Holding Company (NASDAQ: BETR; BETRW)
(“Better” or the “Company”), a New York-based digitally native
homeownership company, today reported financial results for its
first quarter ended March 31, 2024.
“We are pleased to announce strong first quarter sequential
funded loan volume and revenue growth, which we believe sets the
stage for the continued growth we expect through the rest of 2024.
While we believe it is likely the purchase and refinance markets
may continue to remain challenging in the near term, we are seeing
increased demand from homeowners looking to tap into their home
equity, as well as from new homebuyers looking to make a move this
purchase season. We expect these green shoot opportunities to help
us achieve our growth goals for the year,” said Vishal Garg, CEO
and Founder of Better.
First Quarter 2024 Financial Highlights:
GAAP Results:
- Revenue of $22 million, an increase of 26% from $18 million in
Q4’23, as presented in our revised financial statement
presentation
- Net loss of $51 million, flat from $51 million in Q4’23
- Ended Q1’24 with $509 million of cash, restricted cash, and
short-term investments
Key Operating Metrics and Non-GAAP Financial Measures:
- Funded loan volume of $661 million, an increase of 25% from
Q4’23, across 1,991 Total Loans
- Purchase loan volume grew 12% quarter-over-quarter and
comprised 80% of Funded loan volume; Refinance loan volume grew
232% quarter-over-quarter and comprised 12% of Funded loan volume;
and HELOC loan volume grew 54% quarter-over-quarter and comprised
the remainder of Funded loan volume
- D2C business comprised 54% of Funded loan volume, with B2B
comprising the remainder
- Adjusted EBITDA loss of $31 million, compared to $27 million in
Q4’23
“We are excited to report that Better is growing funded loan
volume and revenue sequentially while continuing to be laser
focused on maximizing operating efficiency. Total Expenses were
down by approximately 30% year-over-year in the first quarter,
while growing revenue year-over-year. Going forward, we continue to
thoughtfully lean into certain growth expenses to drive increased
market share and efficiency, which will be balanced by continued
cost discipline to target reaching profitability in the medium
term,” said Kevin Ryan, CFO of Better.
First Quarter 2024 Highlights:
- Funded loan volume and revenue growth driven by HELOC and Cash
Out Refinance products, with borrowers seeking to tap into their
home equity, as well as improved conversion of purchase
customers
- Launched Better Home Equity Loan, the latest addition to a
suite of digital home equity products including a cash-out
refinance and HELOC. The addition of this fully digital offering
enables qualified homebuyers to access up to 90% of their home
equity as cash at a fixed annual percentage rate
- Total Expenses increased less than Revenue grew
quarter-over-quarter, demonstrating that while leaning into certain
growth expenses to produce higher volumes, the Company managed
other expenses to maintain losses approximately in line
quarter-over-quarter
- Shift from fixed compensation plans to commission-based
compensation plans for loan officers has yielded positive early
results with respect to loan officer productivity and customer
conversion
- Hired mortgage industry veteran Chad Smith as President and
Chief Operating Officer of Better Mortgage Corporation to drive
further growth and efficiency
Amounts presented as of and for the quarter ended March 31, 2024
represent a preliminary estimate as of the date of this earnings
release and may be revised upon filing our Quarterly Report on Form
10-Q with the SEC. More information as of and for the quarter ended
March 31, 2024 will be provided upon filing our Quarterly Report on
Form 10-Q with the SEC.
Webcast
Better will host a live webcast of its earnings conference call
beginning at 8:30am ET on May 14, 2024. To access the webcast, or
to register to listen to the call by phone, go to the investor
relations section of the Company’s website at investors.better.com
or click the “Attendee Registration Link” below. Please join the
webcast at least 10 minutes prior to start time. A replay will be
available on the investor relations website shortly after the call
ends.
* Webcast Details *
Event Title: Better Home & Finance Holding Company First
Quarter 2024 Results
Event Date: May 14, 2024 08:30 AM (GMT-04:00) Eastern Time (US
and Canada)
Attendee Registration Link:
https://events.q4inc.com/attendee/784767542
About Better
Since 2017, Better Home & Finance Holding Company (NASDAQ:
BETR; BETRW) has leveraged its industry-leading technology
platform, Tinman™, to fund more than $100 billion in mortgage
volume. Tinman™ allows customers to see their rate options in
seconds, get pre-approved in minutes, lock in rates and close their
loan in as little as three weeks. Better’s mortgage offerings
include GSE-conforming mortgage loans, FHA and VA loans, and jumbo
mortgage loans. Better launched its “One Day Mortgage” program in
January 2023, which allows eligible customers to go from click to
Commitment Letter within 24 hours. Better was named Best Online
Mortgage Lender by Forbes and Best Mortgage Lender for
Affordability by WSJ in 2023, ranked #1 on LinkedIn’s Top Startups
List for 2021 and 2020, #1 on Fortune’s Best Small and Medium
Workplaces in New York, #15 on CNBC’s Disruptor 50 2020 list, and
was listed on Forbes FinTech 50 for 2020. Better serves customers
in all 50 US states and the United Kingdom.
Forward-looking Statements
This press release contains certain forward-looking statements
within the meaning of federal securities laws. Forward-looking
statements are predictions, projections and other statements about
future events that are based on current expectations and
assumptions and, as a result, are subject to risks and
uncertainties. Many factors could cause actual future events to
differ materially from the forward-looking statements in this
communication. Such factors can be found in the Company’s annual
report on Form 10-K and the Company’s quarterly reports on Form
10-Q, which are available, free of charge, at the SEC’s website at
www.sec.gov. New risks and uncertainties arise from time to time,
and it is impossible for Better to predict these events or how they
may affect us. You are cautioned not to place undue reliance upon
any forward-looking statements, which speak only as of the date
made, and Better undertakes no obligation, except as required by
law, to update or revise the forward-looking statements, whether as
a result of new information, changes in expectations, future events
or otherwise.
SELECTED FINANCIAL
DATA, NON-GAAP MEASURES AND DEFINITIONS
Following are tables that present selected financial data of the
Company. Also included are reconciliations of non-GAAP measures to
their most comparable GAAP measures and definitions of certain key
metrics used herein.
Results of Operations
Three Months Ended March
31,
Three Months Ended December
31,
(Amounts in thousands)
2024
2023
2023
Revenues:
Gain on loans, net
$15,652
$12,761
$8,018
Other revenue
2,817
4,944
2,445
Net interest income
Interest income
8,636
6,390
11,025
Interest expense
(4,854)
(5,469)
(3,815)
Net interest income
3,782
921
7,210
Total net revenues
22,251
18,626
17,673
Expenses:
Compensation and benefits
38,073
38,112
25,298
General and administrative
14,047
16,762
17,632
Technology
5,458
14,446
7,473
Marketing and advertising
4,554
7,760
3,599
Loan origination expense
2,577
5,202
(970)
Depreciation and amortization
9,074
11,477
10,100
Other expenses
(183)
11,065
5,946
Total expenses
73,600
104,824
69,077
Loss before income tax expense
(51,349)
(86,198)
(51,404)
Income tax expense/(benefit)
143
1,424
(533)
Net loss
($51,492)
($87,622)
($50,872)
Summary Condensed Balance Sheet
March 31,
December 31,
(Amounts in thousands)
2024
2023
Assets
Cash and cash equivalents
$424,528
$503,591
Mortgage loans held for sale, at fair
value
166,214
170,150
Other combined assets
250,844
231,813
Total Assets
$841,586
$905,554
Liabilities, Convertible Preferred
Stock, and Stockholders’ Equity (Deficit)
Liabilities
Warehouse lines of credit
$126,161
$126,218
Accounts payable and accrued expenses
55,721
66,558
Convertible Note
514,758
514,644
Other combined liabilities
68,657
75,534
Total Liabilities
765,297
782,954
Stockholders’ Equity (Deficit)
Total Stockholders’ Equity (Deficit)
76,289
122,600
Total Liabilities, Convertible Preferred
Stock, and Stockholders’ Equity (Deficit)
$841,586
$905,554
Use of Non-GAAP Measures and Other Financial Metrics
We include certain financial measures not presented in
accordance with generally accepted accounting principles (“GAAP”)
including Adjusted EBITDA, Adjusted Net Income (Loss) and other key
metrics.
We calculate Adjusted Net Income (Loss) as net income (loss)
adjusted for the impact of stock-based compensation expense, change
in the fair value of warrants, change in the fair value of
bifurcated derivative, and other non-core operational expenses. We
calculate Adjusted EBITDA as net income (loss) adjusted for the
impact of stock-based compensation expense, change in the fair
value of warrants, change in the fair value of bifurcated
derivative, and other non-recurring or non-core operational
expenses, as well as interest and amortization on non-funding debt
(which includes interest on the Convertible Note (as defined in our
Form 10-Q)), depreciation and amortization expense, and income tax
expense. These non-GAAP financial measures should not be considered
in isolation and are not intended to be a substitute for any GAAP
financial measures. These non-GAAP measures provide supplemental
information that we believe helps investors better understand our
business, our business model and how we analyze our performance. We
also believe these non-GAAP financial measures improve investors’
and analysts’ ability to compare our results with those of our
competitors and other similarly situated companies, which commonly
disclose similar performance measures.
However, our calculation of Adjusted EBITDA and Adjusted Net
Income (Loss) may not be comparable to similarly titled performance
measures presented by other companies. Further, although we use
these non-GAAP measures to assess the financial performance of our
business, these measures exclude certain substantial costs related
to our business, and investors are cautioned not to use such
measures as a substitute for financial results prepared according
to GAAP. Non-GAAP financial measures have limitations in their
usefulness to investors because they have no standardized meaning
prescribed by GAAP and are not prepared under any comprehensive set
of accounting rules or principles. As a result, non- GAAP financial
measures should be viewed as supplementing, and not as an
alternative or substitute for, our financial results prepared and
presented in accordance with GAAP.
Reconciliation of Non-GAAP
Metrics
Three Months Ended March
31,
Three Months Ended December
31,
(Amounts in thousands)
2024
2023
2023
Adjusted Net Loss
Net (loss) income
($51,492)
($87,622)
($50,872)
Stock-based compensation expense
8,760
4,408
5,694
Change in fair value of warrants and
equity related liabilities
(823)
—
1,368
Change in fair value of convertible
preferred stock warrants
—
(553)
—
Change in fair value of bifurcated
derivative
—
1,887
—
Restructuring, impairment, and other
expenses
721
9,137
5,956
Adjusted Net Loss
($42,834)
($72,743)
($37,853)
Adjusted EBITDA
Net (loss) income
($51,492)
($87,622)
($50,872)
Income tax expense / (benefit)
143
1,424
(533)
Depreciation and amortization expense
9,074
11,477
10,100
Stock-based compensation expense
8,760
4,408
5,694
Interest and amortization on non-funding
debt
2,664
2,690
1,679
Restructuring, impairment, and other
expenses
721
9,137
5,956
Change in fair value of warrants and
equity related liabilities
(823)
—
1,368
Change in fair value of convertible
preferred stock warrants
—
(553)
—
Change in fair value of bifurcated
derivative
—
1,887
—
Adjusted EBITDA
($30,953)
($57,152)
($26,607)
Key Metrics
This press release refers to the following key metrics:
Funded Loan Volume represents the aggregate dollar amount of all
loans funded in a given period based on the principal amount of the
loan at funding. Purchase Loan Volume represents the aggregate
dollar amount of purchase loans funded in a given period based on
the principal amount of the loan. Refinance Loan Volume represents
the aggregate dollar amount of refinance loans funded in a given
period based on the principal amount of the loan. D2C represents
the aggregate dollar amount of loans funded in a given period based
on the principal amount of the loan at funding that have been
generated from direct interactions with customers using all
marketing channels other than our B2B partner relationships. HELOC
loan volume represents the aggregate dollar amount of HELOC loans
funded in a given period based on the principal amount of the loan
at funding. B2B represents the aggregate dollar amount of loans
funded in a given period based on the principal amount of the loan
at funding that have been generated through one of our B2B partner
relationships. Total Loans represents the total number of loans
funded in a given period, including purchase loans, refinance loans
and HELOC loans.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240513410188/en/
For Investor Relations inquiries please email ir@better.com
Better Home and Finance (NASDAQ:BETR)
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Better Home and Finance (NASDAQ:BETR)
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