Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-40143 (State or other jurisdiction of incorporation or organization) 1 World Trade Center 285 Fulton Street, 80th Floor, Suite A New York, NY 10 ...

Shares of Better Home & Finance Holding Company (NASDAQ: BETR ) have lost about a third of their value this past year, even as they have risen about 50% from their recent lows. Better is one ofOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an article, just let me know!Analyst’s Disclosure: I/we have no stock, op ...

Better Home & Finance (BETR) Q1 2025 Earnings Call May 13, 2025 08:30 AM ET Speaker0 Hello, and welcome to the Better Home and Finance Holding Company First Quarter twenty twenty five Results Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. I would now like to turn the conference over to Tarek Afifi, Corporate Finance. You may begin. Speaker1 Welcome to Better Homeland Finance Holding Company's first quarter e ...

Better Home & Finance Holding Company (NASDAQ:BETR) Q4 2024 Earnings Conference Call March 19, 2025 8:30 AM ET Company Participants Hana Khosla - Vice President of Corporate Finance & Investor Relations Vishal Garg - Founder & Chief Executive Officer Kevin Ryan - Chief Financial Officer Ryan Grant - Co-Founder & President of Retail Lending at NEO Home Loans Conference Call Participants Eric Hagen - BTIG Jake Kooyman - Oppenheimer Alex Bond - KBW Reggie Smith - JP Morgan Michael Kaye - Wells Fargo Jamie Frie ...

Revenue and Business Operations - The company derives almost all of its revenue from its mortgage loan production business, referred to as Home Finance, and related services [182]. - Approximately 30% of the company's Funded Loan Volume for the fiscal year ended December 31, 2024, was secured by properties concentrated in California (12%), Texas (9%), and Florida (9%) [187]. - The company has invested significant resources in developing new products and refining existing offerings, focusing on long-term growth areas despite reductions in near-term spending [182]. - The company is expanding its Better Plus business lines, including partnerships with third-party real estate agents and insurance providers [182]. - The company has been expanding internationally, including operations in the United Kingdom [182]. Risks and Compliance - The company faces risks associated with non-conforming loans, which involve a high degree of business and financial risk, potentially leading to substantial losses [184]. - The company is subject to significant legal and reputational risks related to the privacy and security of customer information, with approximately 10,000 data points captured per customer during the loan transaction process [194]. - The company may experience increased claims and reputational damage due to risks associated with new product offerings and potential defects in technology [182]. - The company is required to comply with various cybersecurity regulations, including the NYDFS Cybersecurity Regulation, which mandates the establishment of a cybersecurity program [196]. - The company acknowledges that failure to accurately predict demand for new products could adversely affect its financial condition and results of operations [183]. - The company faces significant risks related to network security breaches, which could lead to increased costs, litigation, and reputational damage [197]. - Inappropriate access to customer information could result in financial liabilities and regulatory actions, potentially impacting the company's financial condition [198]. - The company operates in a heavily regulated industry, requiring compliance with a wide array of U.S. federal, state, and local laws, which may be inconsistent [234]. - The company is subject to various telecommunications, data protection, and consumer protection laws, with ongoing compliance and monitoring required as these laws evolve [237]. - Regulatory actions for noncompliance could result in fines, loss of licenses, and damage to the company's reputation, affecting its ability to operate [240]. Financial Condition and Performance - The company has incurred debt to finance operations and acquisitions, which may limit its ability to raise additional funds for working capital and other business activities [224]. - The company is dependent on warehouse lines of credit for funding loans, and any termination of these facilities could materially impact its liquidity [227]. - A decline in the performance of loans underlying warehouse lines could affect the company's ability to renew these lines [229]. - The company is exposed to interest rate risk due to variable rates on borrowings, which could increase debt service obligations and decrease net income [233]. - The company has experienced net losses in recent years, leading to lower advance rates under warehouse facilities [227]. - The company reported a net loss of $206,290 thousand for 2024, a decrease in loss of 61.6% from $536,420 thousand in 2023 [487]. - Total liabilities increased to $971,227 thousand in 2024, up 24% from $782,954 thousand in 2023 [486]. - Customer deposits surged to $134,130 thousand in 2024, compared to $11,839 thousand in 2023, marking an increase of 1,133% [486]. Technology and Innovation - The company relies on proprietary technology, including its loan operating system, Tinman, to deliver services and evaluate loan applicants, making technological adaptation critical for growth [199]. - The loan production process is increasingly dependent on technology, and failure to meet advertised processing times could adversely affect the company's reputation and financial performance [200]. - The integration of AI technology is ongoing, and the company must address ethical and legal challenges to maintain competitive advantage and financial performance [207]. - The use of third-party software and services poses risks, including potential errors or failures that could materially affect the company's operations and financial results [209]. Stock and Market Performance - The market price of Class A Common Stock has shown significant weakness, influenced by the company's ability to integrate operations and execute its business plan [281]. - Sales of substantial amounts of Class A Common Stock could adversely affect its market price and impair capital-raising efforts [283]. - CEO Vishal Garg controls approximately 20% of the voting power and could increase to about 34.9% as Class B shares convert to Class A shares [284]. - The company does not expect to pay any cash dividends for the foreseeable future, with future determinations at the discretion of the Board [291]. - The existence of multiple classes of common stock may adversely affect the value and liquidity of Class A Common Stock, potentially leading to a less active trading market [289]. Regulatory Environment - The company must maintain appropriate state licenses to produce or service loans, with risks of inadvertently conducting unlicensed activities [250]. - The evolving regulatory environment may lead to increased scrutiny and enforcement actions, impacting the company's business strategies and growth plans [245]. - Noncompliance with applicable laws could lead to civil and criminal liability, including class action lawsuits and diminished ability to sell loans [246]. - The CFPB has the authority to impose civil money penalties ranging from approximately $6,800 per day for ordinary violations to approximately $1,360,000 per day for knowing violations [262]. - The revised definition of "qualified mortgage" by the CFPB has created additional compliance burdens for lenders [258]. Growth and Future Outlook - The company anticipates that interest rates will remain its primary market risk for the foreseeable future [464]. - The company expects its exposure to foreign currency exchange risk to increase as it focuses growth on specific entities in the United Kingdom [478]. - The management team has limited experience in overseeing a public company, which could hinder effective management during the transition [292]. - The market opportunity estimates and growth forecasts presented are subject to significant uncertainty and may prove to be inaccurate [303].

Financial Data and Key Metrics Changes - For the full year 2024, the company achieved $3.6 billion in funded loan volume, $108 million in revenue, and an adjusted EBITDA loss of $121 million, with a year-over-year revenue growth of 50% and a 19% increase in funded loan volume [8][9] - In Q4 2024, funded loan volume was $936 million, representing a 77% year-over-year increase, although it decreased approximately 10% sequentially due to seasonal factors [8][11] - The adjusted EBITDA loss in Q4 was $28 million, with total GAAP net loss around $59 million [46][47] Business Line Data and Key Metrics Changes - Funded loan volume growth in Q4 was driven by home equity products and refinance loans, with purchase loan volume increasing by 25% and refinance loan volume surging by 611% year-over-year [10][11] - The company reported a gain on sale margin improvement from 1.95% in 2023 to 2.17% in 2024, indicating enhanced revenue per loan through pricing and marketing optimization [9][10] Market Data and Key Metrics Changes - The overall HELOC and HELOAN originations increased by 10% in the third quarter, while the company’s origination volume grew by 619%, indicating significant market outperformance [10] - The mortgage market saw improvements in Q4 compared to the same period in 2023, but 30-year fixed mortgage rates remained high, impacting mortgage demand [11] Company Strategy and Development Direction - The company aims to leverage AI and technology to enhance operational efficiency, reduce costs, and improve customer experience, with a focus on achieving profitability in the medium term [6][8][45] - The strategic priorities include continuing to grow the business, diversifying distribution channels, and enhancing the technology platform to streamline the mortgage process [8][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by low housing affordability and high mortgage rates but expressed optimism about the company's growth trajectory and market share gains [8][11] - The outlook for 2025 anticipates funded loan volume growth in the low to mid double digits, driven by initiatives like Neo powered by Better, despite macroeconomic headwinds [49][50] Other Important Information - The company is winding down its UK businesses, which contributed to lower volume in Q4, and expects to fully exit this segment by Q2 2025 [34][48] - The introduction of Betsy, an AI voice-based loan assistant, has significantly improved customer interaction efficiency, with a 20x increase in customer interactions since its launch [14][27] Q&A Session Summary Question: How does the AI technology adjust for high property insurance costs? - Management explained that their AI system integrates multiple data sources to provide instant homeowners insurance quotes during the loan process, significantly reducing the need for manual intervention [54] Question: How does profitability affect risk-taking? - Management clarified that they operate a marketplace model, ensuring loans are pre-committed to investors before origination, thus minimizing risk while focusing on efficiency and cost reduction to achieve profitability [58][62] Question: Can you elaborate on savings opportunities from Tin Man's AI application? - Management highlighted that AI-driven processes have reduced operational costs significantly, with potential savings of $2,000 per funded loan and $1,400 for AI-underwritten loans, contributing to improved margins [72][73] Question: How are gain on sale margins trending in Q1? - Management reported that gain on sale margins are trending higher in Q1, particularly with Neo loans performing better than the direct-to-consumer business, indicating improved efficiency and customer conversion [80][82] Question: Can you contextualize contribution profit per loan? - Management indicated that contribution margins have been improving, and they are focused on reducing costs in the mortgage business to enhance profitability while maintaining a balance with corporate cost reductions [93][94]

Core Insights - BetterLife Pharma Inc. has completed an IND-enabling cardiac safety study for BETR-001, showing minimal impact on the hERG channel, which is crucial for cardiac function [1][2] - The CEO of BetterLife expressed satisfaction with the hERG safety data, which aligns with previous in vivo cardiac safety telemetry studies and indicates that BETR-001 acts as an antagonist at the 5HT-2B receptor, unlike LSD and other psychedelics [2] - The clean cardiac safety profile of BETR-001 brings the company closer to completing full IND-enabling studies and initiating clinical trials [2] Company Overview - BetterLife Pharma is focused on developing and commercializing BETR-001 and BETR-002 for neuro-psychiatric and neurological disorders [3] - BETR-001 is a non-hallucinogenic LSD derivative that is unregulated and can be self-administered, with a synthesis patent that eliminates regulatory hurdles [4] - BETR-002, based on honokiol, is also in preclinical studies and targets anxiety-related disorders, including benzodiazepine dependency [5]

Financial Performance - Total net revenues for the three months ended September 30, 2024, reached $28,994 thousand, a significant increase of 489% compared to $4,907 thousand for the same period in 2023[212]. - Gain on loans, net for the three months ended September 30, 2024, was $21,503 thousand, representing a 74% of total net revenues, compared to $11,553 thousand in the same period of 2023, which was a 235% increase[213]. - Total net revenues for the nine months ended September 30, 2024, were $83.5 million, an increase from $54.6 million in the same period in 2023[254]. - Net loss for the three months ended September 30, 2024 was $(54,210), compared to $(353,889) in the same period of 2023[252]. - Earnings per share attributable to common stockholders (Basic) for the three months ended September 30, 2024 was $(3.58), compared to $(35.63) in the same period of 2023[252]. Loan Volume and Activity - Funded Loan Volume for the three months ended September 30, 2024, was $1,035 million, up approximately 42% from $731 million in the same period of 2023[223]. - Refinance Loan Volume increased by approximately 177% to $130 million in the three months ended September 30, 2024, from $47 million in the same period of 2023[224]. - D2C Loan Volume for the three months ended September 30, 2024, was $776 million, reflecting a 102% increase from $384 million in the same period of 2023[227]. - HELOC Loan Volume reached $166 million in the three months ended September 30, 2024, a substantial increase from $28 million in the same period of 2023[226]. - Total Loans funded in the three months ended September 30, 2024, amounted to 3,443, a 67% increase from 2,067 in the same period of 2023[229]. Revenue Sources - Better Plus revenue, which includes non-mortgage product offerings, accounted for 11% of total net revenues in the three months ended September 30, 2024[213]. - Gain on Sale Margin increased by approximately 50 basis points to 2.08% during the three months ended September 30, 2024 from 1.58% for the same period in 2023[233]. - Gain on sale of loans, net increased by $6.2 million or 65% to $15.8 million for the three months ended September 30, 2024, compared to $9.6 million for the same period in 2023[255]. - International lending revenue increased by $0.1 million or 11% to $1.2 million for the three months ended September 30, 2024, compared to $1.1 million for the same period in 2023[262]. - Mortgage interest income increased by $1.8 million or 51% to $5.4 million for the three months ended September 30, 2024, compared to $3.6 million for the same period in 2023[271]. Expenses and Cost Management - Total expenses for the three months ended September 30, 2024 were $83,078, down from $358,137 in the same period of 2023[252]. - Compensation and benefits expenses decreased by $46.6 million or 55% to $37.8 million for the three months ended September 30, 2024, compared to $84.3 million for the same period in 2023[279]. - General and administrative expenses decreased by $1.6 million or 11% to $12.6 million for the three months ended September 30, 2024, compared to $14.2 million for the same period in 2023[281]. - Technology expenses increased by $0.9 million or 14% to $7.2 million for the three months ended September 30, 2024, compared to $6.3 million for the same period in 2023[283]. - Marketing and advertising expenses increased by $7.0 million or 139% to $12.1 million for the three months ended September 30, 2024, compared to $5.1 million for the same period in 2023[286]. Cash Flow and Financing - The company experienced a significant increase in net cash used by operating activities, totaling $273.945 million for the nine months ended September 30, 2024, which is an increase of 245% compared to $79.416 million for the same period in 2023[308]. - Net cash used in investing activities rose to $111.825 million for the nine months ended September 30, 2024, a 166% increase from $42.066 million in the prior year[309]. - The company reported net cash provided by financing activities of $93.108 million for the nine months ended September 30, 2024, a decrease of 72% from $330.929 million for the same period in 2023[310]. - As of September 30, 2024, the company had an aggregate available amount of $425 million across three warehouse lines of credit[301]. - The company had an outstanding amount of $134.481 million on its warehouse lines of credit as of September 30, 2024, compared to $126.218 million at the end of 2023[302]. Strategic Focus and Challenges - The company plans to continue investing in technology to enhance customer experience and reduce operational costs through automation[211]. - The company aims to expand its B2B relationships, currently primarily with Ally Bank, to diversify revenue streams[215]. - The company is focused on expanding its customer base and growing market share in existing and new markets[315]. - The company is facing challenges due to elevated interest rates and lower home sales, impacting its financial performance[315]. - The company aims to restore growth and expand its business in the long term[315]. Compliance and Governance - The company executed a 1-for-50 reverse stock split on August 16, 2024, to comply with Nasdaq's minimum bid price requirement[303]. - The company regained compliance with Nasdaq listing requirements as of August 30, 2024, with the closing bid price of its common stock at $1.00 or greater for the preceding 10 consecutive business days[306]. - The company is focused on maintaining its listing on the Nasdaq Capital Market[316]. - The company acknowledges the risks associated with its capital structure and governance[316]. - The company is classified as a smaller reporting company and is not required to provide extensive market risk disclosures[319].

Financial Data and Key Metrics Changes - Funded loan volume increased to $1.035 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 $29 million, down from $32 million in the previous quarter but up from $5 million in the same quarter last year, with an adjusted EBITDA loss of approximately $39 million and a GAAP net loss of approximately $54 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]

Financial Performance - Q3 2024 funded loan volume reached $1.035 billion, representing a 42% increase year-over-year and an 8% increase quarter-over-quarter[1] - Revenue for Q3 2024 was $29.0 million, down from $32.3 million in Q2 2024 but up from $4.9 million in Q3 2023[2] - Net loss for Q3 2024 was $54.1 million, compared to $41.4 million in Q2 2024 and $353.9 million in Q3 2023[2] - Adjusted EBITDA loss for Q3 2024 was $38.7 million, compared to $23.3 million in Q2 2024 and $53.9 million in Q3 2023[2] - Adjusted EBITDA for the period was $(38,740) thousand, compared to $(53,897) thousand in the previous period, indicating an improvement of approximately 28%[15] Loan Volume and Metrics - Direct-to-consumer (D2C) loan volume was $776 million, a 102% increase year-over-year and a 16% increase quarter-over-quarter, making up 75% of funded loan volume[3] - Funded loan volume metrics include various categories such as purchase loans, refinance loans, and HELOC loans, which are critical for assessing the company's lending performance[17] - The total number of loans funded in the period, including purchase, refinance, and HELOC loans, is a key performance indicator for the company's growth strategy[17] Expenses and Cost Management - Total expenses increased by approximately $9.5 million quarter-over-quarter due to higher marketing spend and loan production team compensation[4] - Better aims to manage towards profitability in the midterm by balancing growth expenses with corporate cost reductions[1] Assets and Liabilities - Total assets as of September 30, 2024, amounted to $845,163 thousand, with cash and cash equivalents at $207,673 thousand[15] - Total liabilities were reported at $844,645 thousand, with a significant portion attributed to convertible notes totaling $518,012 thousand[15] - The company has an accumulated deficit of $(1,851,013) thousand, reflecting ongoing financial challenges[16] - Total stockholders' equity stands at $518 thousand, highlighting a minimal equity base relative to total liabilities[16] - The company has $54,414 thousand in short-term investments, providing liquidity for operational needs[15] - The company has $134,481 thousand in warehouse lines of credit, which is essential for managing liquidity and funding operations[15] Strategic Initiatives - The company launched Betsy™, the first voice-based AI loan assistant for the US mortgage industry, to enhance customer experience and improve loan-team efficiency[1] - The company plans to leverage Tinman™ to power local loan officers through 'NEO Powered by Better' to diversify distribution channels[4] - The company expects Q4 funded loan volume to be approximately in-line with Q3, driven by growth initiatives despite softer seasonality[1]