Better Home & Finance Holding Company Announces 2024 Fourth Quarter and Full Year Results

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 fourth quarter and full year 2024.

“We are pleased with the growth we achieved in 2024 through a challenged environment and the early traction our AI and ‘NEO Powered by Better’ initiatives are seeing. Our team delivered growth and continued improvements towards profitability despite another year of continued macro headwinds,” said Vishal Garg, CEO and Founder of Better.

Full Year 2024 Financial Highlights:

GAAP Results:

• Revenue of $108 million, compared to $72 million in 2023
• Net loss of $206 million, compared to a loss of $536 million in 2023

Key Operating Metrics and Non-GAAP Financial Measures:

• Adjusted EBITDA loss of $121 million, compared to a loss of $163 million in 2023
• Funded Loan Volume of approximately $3.6 billion, compared to $3.0 billion in 2023
• Approximately 11,800 Total Loans, compared to approximately 8,600 in 2023
• Purchase loan volume of $2.7 billion comprised approximately 74% of Funded Loan Volume; HELOC loan volume (which includes home equity lines of credit and closed-end second lien loans) of $479 million comprised approximately 13% of Funded Loan Volume; and refinance loan volume of $463 million comprised the remainder of Funded Loan Volume
• D2C loan volume of $2.6 billion, an increase of 55% year-over-year, comprised approximately 71% of Funded Loan Volume, with B2B comprising the remainder

Fourth Quarter 2024 Financial Highlights:

GAAP Results:

• Revenue of $25 million, compared to $18 million in Q4’23 and $29 million in Q3’24
• Net loss of $59 million, compared to a loss of $51 million in Q4’23 and a loss of $54 million in Q3’24

Key Operating Metrics and Non-GAAP Financial Measures:

• Adjusted EBITDA loss of $28 million, compared to a loss of $27 million in Q4’23 and a loss of $39 million in Q3’24
• Funded Loan Volume of $936 million, compared to $531 million in Q4’23 and $1.0 billion in Q3’24
• Approximately 3,300 Total Loans, compared to 1,600 in Q4’23 and 3,400 in Q3’24
• Purchase loan volume of $591 million comprised 63% of Funded Loan Volume; HELOC loan volume (which includes home equity lines of credit and closed-end second lien loans) of $172 million comprised 18% of Funded Loan Volume; and refinance loan volume of $174 million comprised the remainder of Funded Loan Volume
• D2C loan volume of $757 million, an increase of 191% year-over-year and decrease of 2% quarter-over-quarter, comprised 81% of Funded Loan Volume, with B2B comprising the remainder

“We believe we are moving in the right direction from a profitability perspective, with the improvements in Adjusted EBITDA in the fourth quarter compared to the third quarter of 2024. Looking forward, while we remain hopeful for an improved rate environment, there remains a great deal of uncertainty, and our operational plan includes limited rate relief in 2025. As such, we remain focused on driving operating leverage through continued investments in efficiency, corporate cost management, and diversifying our distribution channels.” said Kevin Ryan, CFO of Better.

Fourth Quarter 2024 Highlights:

• In Q4’24, year-over-year Funded Loan Volume growth was driven by increases in all three main product categories, purchase (25% growth), refinance (611% growth) and home equity products (416% growth, including HELOCs and closed-end second lien loans) versus Q4’23.
• On a quarter-over-quarter sequential basis, Funded Loan Volume from refinance and home equity products grew in Q4’24, however, due to the seasonal slowness of the fourth quarter and continued market volatility, this growth was offset by declines in purchase Funded Loan Volume as well as reduced volume from the Ally business winding down.
• Total Expenses remained approximately flat quarter-over-quarter sequentially, however, included in Q4’24 Total Expenses were approximately $17 million of non-recurring restructuring expenses attributed primarily to the wind-down of our U.K. businesses, as well as approximately $4 million associated with the termination of certain facility leases. Excluding these restructuring expenses, Total Expenses decreased approximately 24%.
• As a result of expense management initiatives in all major categories (i.e. Compensation and benefits, General and administrative, Technology, Marketing and advertising, Loan origination expense, and Depreciation and amortization), quarter-over-quarter Adjusted EBITDA losses were reduced by approximately $11 million or 28% sequentially compared to Q3’24 even with lower revenue due to a seasonally slower quarter.
• We continue to see increased productivity resulting from AI program investments, including further expansion of Betsy™, which leverages AI and large language models to take a customer through pre-approval, rate quote, and rate lock autonomously. Betsy™ is programmed to verbally communicate with customers to answer mortgage application inquiries and to collect and verify outstanding application data.
• We are making early progress toward the goal of diversifying Better’s offering, and leveraging Tinman™ to power local loan officers through ‘NEO Powered by Better’:
  • Onboarded approximately 110 NEO loan officers across 53 branches
  • Since beginning production in January 2025, ‘NEO Powered by Better’ has served a total of approximately 220 families equating to approximately $95 million of Funded Loan Volume
  • For loans funded to-date, average Gain on Sale Margin for ‘NEO powered by Better’ loans of approximately 365 bps, compared to Better’s Gain on Sale margin of 217 bps in 2024
  • Seeing traction in proving out Tinman’s efficiency in the distributed retail channel by providing leading technology to local loan officers to remove friction from their fulfillment process and expand their capacity to serve more customers
  • Leveraging Better’s AI technology and digital lead funnel to empower NEO’s Loan Officer teams, who have demonstrated track records in customer service excellence and strong reputations within the communities they serve
  • Continue to see a unique opportunity to expand our distribution capabilities and unlock key parts of the market that have historically been challenging for direct-to-consumer digital originators without established local footprints to serve (i.e. Purchase, FHA, VA, Downpayment Assistance Programs, Buydown programs)
• We are undergoing efforts to exit non-core U.K. assets while continuing to focus on growing the Bank of Birmingham. We are in active disposition on three smaller U.K. businesses, and expect Adjusted EBITDA loss to improve starting in the second half of 2025 as a result of these dispositions.

For more information, please see the detailed financial data and other information available in the Company’s Annual Report on Form 10-K, to be filed with the Securities and Exchange Commission (the “SEC”), and the investor presentation on the investor relations section of the Company’s website at https://investors.better.com.

Webcast

Better will host a live webcast of its earnings conference call beginning at 8:30am ET on March 19, 2024. To access the webcast and the related presentation, 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 2024 Fourth Quarter and Full Year Results

Event Date: March 19, 2025 08:30 AM (GMT-05:00) Eastern Time (US and Canada)

Attendee Registration Link:

https://events.q4inc.com/attendee/885679637

About Better Home & Finance Holding Company

Since 2016, Better Home & Finance Holding Company (NASDAQ: BETR; BETRW) has leveraged its industry-leading AI 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. In addition, Betsy™, the first voice-based AI loan assistant built exclusively for the mortgage industry, is revolutionizing the homebuying journey by delivering timely application status updates to consumers, as well as answering questions and helping move their loan application along 24/7. 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 all statements other than those of historical fact, and include predictions, projections and other statements about future events that are based on current expectations and assumptions. Forward-looking statements are inherently subject to risks and uncertainties which could cause actual future events to differ materially from those expressed or implied by the forward-looking statements in this communication. These risks and uncertainties include: our ability to operate under and maintain or improve our business model; the effect of interest rates on our business, results of operations, and financial condition; our ability to expand our customer base, grow market share in our existing markets and enter into new markets; our ability to respond to general economic conditions, particularly elevated interest rates and lower home sales and refinancing activity; our ability to restore our growth and our expectations regarding the development and long-term expansion of our business; our ability to comply with laws and regulations related to the operation of our business, including any changes to such laws and regulations; our ability to achieve and maintain profitability in the future; our ability and requirements to raise additional financing in the future; our estimates regarding expenses, future revenue, capital and additional financing requirements; our ability to maintain, expand and be successful in our strategic relationships with third parties; our ability to remediate existing material weaknesses and implement and maintain an effective system of internal controls over financial reporting; our ability to develop new products, features and functionality that meet market needs and achieve market acceptance; our ability to retain, identify and hire individuals for the roles we seek to fill and staff our operations appropriately; the involvement of our CEO in litigation related to prior business activities, our business activities and associated negative media coverage; our ability to recruit and retain additional directors, members of senior management and other team members, including our ability in general, and our CEO’s ability in particular, to maintain an experienced executive team; our ability to successfully manage our international and banking operations our ability to maintain and improve morale and workplace culture and respond effectively to the effects of negative media coverage; and our ability to maintain, protect, assert and enhance our intellectual property rights. More information on these risks and other potential factors that could affect the Company’s business, reputation, results of operations, financial condition, and stock price can be found in the Company’s Annual Report on Form 10-K, which is 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

	Year Ended December 31,		Quarter Ended December 31,		Quarter Ended September 30,
<>(Amounts in $ thousands)	2024	2023		2024	2023		2024
Revenues:
Gain on loans, net	78,098	58,796		16,714	8,018		21,503
Other revenue	12,888	16,109		4,120	2,445		3,070
Net interest income
Interest income	38,990	29,031		11,090	11,025		9,867
Interest expense	(21,488)	(31,596)		(6,943)	(3,815)		(5,446)
Net interest income/(loss)	17,502	(2,565)		4,147	7,210		4,421
Total net revenues	108,488	72,340		24,981	17,673		28,994
Expenses:
Compensation and benefits	141,089	181,735		30,010	25,298		37,752
General and administrative	52,230	60,150		10,417	17,632		12,611
Technology	26,110	39,431		6,821	7,473		7,249
Marketing and advertising	33,984	19,523		8,798	3,599		12,101
Loan origination expense	9,864	9,476		2,722	(970)		3,774
Depreciation and amortization	33,227	42,891		7,904	10,100		8,259
Other expenses/(Income)	17,424	253,556		17,154	5,946		1,332
Total Expenses	313,928	606,762		83,826	69,077		83,078
Loss before income tax (benefit)/expense	(205,440)	(534,422)		(58,845)	(51,404)		(54,084)
Income tax expense (benefit)	850	1,998		378	(533)		126
Net loss	(206,290)	(536,420)		(59,223)	(50,872)		(54,210)

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-K)), 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

<>(Amounts in $ thousands)	Year Ended December 31,		Quarter Ended December 31,		Quarter Ended September 30,
Adjusted Net Loss	2024	2023		2024	2023		2024
Net (loss) income	(206,290)	(536,420)		(59,223)	(50,872)		(54,210)
Stock-based compensation expense	26,753	54,160		4,547	5,694		5,487
Change in fair value of warrants and equity related liabilities	(924)	507		3	1,368		(206)
Change in fair value of convertible preferred stock warrants	—	(266)		—	—		—
Change in fair value of bifurcated derivative	—	236,603		—	—		—
Restructuring, impairment, and other expenses	17,659	17,459		16,711	5,956		43
Adjusted Net Loss	(162,802)	(227,957)		(37,962)	(37,853)		(48,886)
	Year Ended December 31,		Quarter Ended December 31,		Quarter Ended September 30,
Adjusted EBITDA	2024	2023		2024	2023		2024
Net (loss) income	(206,290)	(536,420)		(59,223)	(50,872)		(54,210)
Income tax expense / (benefit)	850	1,998		378	(533)		126
Depreciation and amortization expense	33,227	42,891		7,904	10,100		8,259
Stock-based compensation expense	26,753	54,160		4,547	5,694		5,487
Interest and amortization on non-funding debt	7,722	19,916		1,759	1,679		1,631
Restructuring, impairment, and other expenses	17,659	17,459		16,711	5,956		43
Change in fair value of warrants and equity related liabilities	(924)	507		3	1,368		(206)
Change in fair value of convertible preferred stock warrants	—	(266)		—	—		—
Change in fair value of bifurcated derivative	—	236,603		—	—		—
Adjusted EBITDA	(121,003)	(163,152)		(27,921)	(26,607)		(38,870)

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 Loan Volume 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 Loan Volume 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.

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