Better Home & Finance (BETR) Q4 2024 earnings summary

Executive summary

• Achieved 19% year-over-year growth in funded loan volume and 50% revenue growth in 2024, reaching $108 million, with Adjusted EBITDA losses reduced by 26% year-over-year.

• Launched Tin Man AI and Neo Home Loans powered by Better, driving early positive momentum, diversification of distribution channels, and higher gain on sale margins.

• Despite macroeconomic headwinds, including high mortgage rates and low affordability, made significant progress on technology and operational efficiency.

• Proprietary AI-powered origination technology and Betsy AI agent are enabling faster, lower-cost, and higher-quality mortgage processing.

• Net loss narrowed to $206 million for 2024, compared to $536 million in 2023, reflecting improved operational efficiency.

Financial highlights

• Full-year 2024: $3.6B funded loan volume, $108M revenue, Adjusted EBITDA loss of $121M, net loss of $206M.

• Q4 2024: $936M funded loan volume (up 77% YoY), $25M revenue (up from $18M YoY), Adjusted EBITDA loss of $28M, GAAP net loss of $59M.

• Gain on sale margin improved from 1.95% in 2023 to 2.17% in 2024; Q4 2024 margin was 1.78%.

• Q4 expenses included $17M in non-recurring restructuring and $4M in lease termination; excluding these, expenses fell 24% sequentially.

• D2C loan volume for 2024 was $2.6B, a 55% YoY increase, representing 71% of total funded volume.

Outlook and guidance

• Q1 2025 funded loan volume expected to decline 10-15% sequentially due to seasonality and Ally business wind-down.

• Full-year 2025 guidance: low to mid double-digit % growth in funded loan volume, further reduction in Adjusted EBITDA losses, and continued cost reductions.

• Focus on driving operating leverage, cost management, and diversifying distribution channels, with Neo Home Loans expected to offset Ally volume loss.

• Adjusted EBITDA loss expected to improve in the second half of 2025 following exit from non-core UK assets.

• Continued investment in automation, AI, and product enhancements to drive profitability over the next 24 months.