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 $54.2 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 to improve 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 in Q3 2024, up 42% year-over-year and 8% quarter-over-quarter; nine-month volume $2.66 billion, up 7%.

• Revenue: $29 million in Q3 2024, up from $5 million in Q3 2023.

• Adjusted EBITDA loss: approximately $39 million; net loss: approximately $54 million.

• Gain on loans, net, increased 86% year-over-year to $21.5 million in Q3 2024; gain on sale margin rose to 2.08% from 1.58%.

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

Outlook and guidance

• Q4 funded loan volume expected to be in line with Q3, reflecting higher mortgage rates and seasonally slower period.

• Continued focus on operating leverage, efficiency, and channel diversification, targeting medium-term profitability.

• 2025 outlook assumes gradual improvement in mortgage rates and operating environment, with ongoing investment in growth and efficiency.

• Management expects restructuring initiatives and cost controls to continue through year-end 2024.

• Focus on increasing funnel conversion, diversifying acquisition channels, and leveraging automation and AI for cost reduction.