Better Home & Finance (BETR) Q3 2024 earnings summary

Executive summary

• Q3 2024 funded loan volume reached $1.04 billion, up 42% year-over-year and 8% quarter-over-quarter, with 3,443 total loans funded, surpassing guidance.

• Revenue was $29 million, compared to $32 million in Q2 and $5 million in Q3 2023; excluding a $5.5 million non-recurring Q2 benefit, revenue grew 8% sequentially.

• Net loss for Q3 2024 was $54 million, a significant improvement from $353.9 million in Q3 2023, driven by higher revenue and lower non-recurring expenses.

• Launched Betsy, a voice-based AI loan assistant, now handling 100% of inbound calls, improving efficiency and customer experience.

• Expanded distribution channels by integrating NEO Home Loans' executive team and leveraging Tinman™ technology for local loan officers.

Financial highlights

• Funded loan volume: $1.04 billion (75% D2C, 25% B2B); 71% purchase, 16% HELOC, remainder refinance; total loans funded up 67% to 3,443.

• Revenue was $29 million, up from $4.9 million in Q3 2023; gain on sale margin improved from 1.58% to 2.08%.

• Net loss: ~$54 million; adjusted EBITDA loss: ~$39 million for Q3 2024.

• Ended Q3 with $480 million in cash, restricted cash, short-term investments, and self-funded loans.

• Compensation and benefits expense dropped 55% to $37.8 million in Q3 2024.

Outlook and guidance

• Q4 funded loan volume expected to be in line with Q3, reflecting higher mortgage rates and seasonal slowdown, offset by growth initiatives.

• 2025 outlook anticipates gradual improvement in the operating environment, with a slow decline in mortgage rates and continued focus on purchase mortgages.

• Ongoing investments in efficiency, cost management, and channel diversification to drive operating leverage and target medium-term profitability.