BETRW Better Home and Finance Holding Company

• Reporting first annual financial results as a public company, after closing business combination in August 2023, which unlocked approximately $565 million of capital
• Maintaining conviction in large addressable market and favorable consumer trends towards digitization and price transparency
• Continued strategic investments in Better’s leading proprietary technology platform, Tinman, to improve mortgage fulfillment efficiency
• Continued launching innovative products to improve customer experience, including One Day Mortgage, One Day HELOC and digital VA loans
• Continued execution of cost reduction initiatives
• Leaning into growth in a more favorable macro environment in 2024, while maintaining cost discipline

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 ended December 31, 2023.

“Through 2023 we navigated a very challenging market environment, and we are now beginning to see green shoots in 2024 and beyond. The addressable opportunity in our market continues to be massive, and we believe the megatrend towards digitization positions us favorably. A critical driver of our planned growth in 2024 is a fundamental change in our commercial operating model, which we tested in the fourth quarter of 2023 and implemented across the company in the first quarter. We have pivoted to hiring experienced Loan Officers on commission-based compensation plans, a significant deviation from our prior model. We are pleased to see early conversion improvements from this operating model pivot and the seasoned sales talent we are hiring, as well as greater alignment between our production volume and costs. Further, the experienced Loan Officers are providing our customers with an increased level of service, which enables us to improve revenue per loan while remaining market competitive.” said Vishal Garg, CEO and Founder of Better.

Fourth Quarter 2023 Financial Highlights:

GAAP Results:

• Revenue of $9 million
• Net loss of $59 million
• Ended 2023 with $554 million of cash, restricted cash, and short-term investments

Key Operating Metrics and Non-GAAP Results:

• Funded Loan Volume of $527 million across 1,633 Total Loans
• Adjusted EBITDA loss of $26 million

Full Year 2023 Financial Highlights:

GAAP Results:

• Revenue of $77 million
• Net loss of $534 million

Key Operating Metrics and Non-GAAP Results:

• Funded Loan Volume of $3 billion across 8,569 Total Loans
• Adjusted EBITDA loss of $163 million

“Given the additional capital raised in 2023, we are excited to grow and continue strategically investing in our technology and innovative products, such as digital One Day HELOC and One Day Mortgage. Through Better’s history, we have proven our ability to scale to over $100 billion of origination volume, reaching almost 2% in refinance market share at our peak in 2021. In 2023, with 91% of volume comprised of purchase loans, we have also demonstrated our digital purchase product resonates with consumers, creating an opportunity for us to further lean into purchase as we pivot to our new operating model. We expect to drive increased volume in 2024 compared to 2023, while seeking to manage expenses to be in-line with 2023. For the first quarter of 2024, we expect to generate Funded Loan Volume of approximately $600-650 million.” said Kevin Ryan, President and CFO of Better.

Full Year 2023 Business Highlights:

• Continued navigating through one of the most challenging mortgage macro environments in recent history with average 30-year fixed mortgage rates around 7% in 2023
• Continued to deliberately depress volumes by throttling marketing expenses to reduce losses in 2023
• D2C business comprised 55% of Funded Loan Volume in 2023, with B2B the remainder
• Purchase loans comprised 91% of Funded Loan Volume in 2023, refinance comprised 7%, and HELOC the remainder
• Launched new innovative products, including One Day HELOC, with weekly HELOC lock volume scaling 470% from Q1 2023 to Q4 2023, and One Day Mortgage with an average commitment letter turnaround time of 8.5 hours since Q1 2023
• Reduced Total Expenses by 71% year-over-year, with overall $1.1+ billion reduction in annual Total Expenses in 2023 compared to 2021
• Net loss improved 39% year-over-year in 2023 and 83% quarter-over-quarter in Q4 2023
• Adjusted EBITDA loss improved 69% year-over-year in 2023 and 53% quarter-over-quarter in Q4 2023
• Announced new partnerships with Infosys and Beyond.com, providing Better’s seamless digital mortgage experience to partners’ customers
• Continued loan quality with lower defect rates and delinquency rates on funded loans versus industry average

For more information, please see the detailed financial data and other information available in the Company’s annual report on Form 10-K, when filed with the Securities and Exchange Commission (the “SEC”). Amounts presented as of and for the year ended December 31, 2023 represent a preliminary estimate as of the date of this earnings release and may be revised upon filing our Annual Report on Form 10-K with the SEC. More information as of and for the year ended December 31, 2023 will the provided upon filing our Annual Report on Form 10-K with SEC.

Webcast

Better will host a live webcast of its earnings conference call beginning at 8:30am ET on March 28, 2024. To access the webcast, 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 Fourth Quarter and Full Year 2023 Results

Event Date: March 28, 2024 08:30 AM (GMT-04:00) Eastern Time (US and Canada)

Attendee Registration Link:

https://events.q4inc.com/attendee/821111407

About Better

Since 2017, Better Home & Finance Holding Company (NASDAQ: BETR; BETRW) has leveraged its industry-leading technology 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. 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. From 2019-2022, Better completed approximately $98 billion in mortgage volume and $39 billion in coverage written through its insurance arm. Better was named Best Online Mortgage Lender by Forbes and Best Mortgage Lender for Affordability by WSJ in 2023, and 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 predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this communication. Such factors can be found in the Registration Statement on Form S-1 filed with the SEC by the Company on December 20, 2023, as well as, when filed, the Company’s annual report on Form 10-K, the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K, which are 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.

    Results of Operations   Year Ended December 31, Three Months EndedDecember 31, 2023 Three Months EndedSeptember 30, (Amounts in thousands, except per share amounts)

 

2023

 

 

2022

 

 

 

2023

 

 

 

2023

 

Revenues: Mortgage platform revenue, net

$

61,328

 

$

106,144

 

$

6,401

 

$

14,207

 

Cash offer program revenue

 

304

 

 

228,721

 

 

—

 

 

—

 

Other platform revenue

 

11,293

 

 

38,362

 

 

1,938

 

 

1,333

 

Net interest income (expense):

 

—

 

 

—

 

Interest income

 

15,575

 

 

26,714

 

 

3,048

 

 

3,667

 

Warehouse interest expense

 

(11,680

)

 

(17,059

)

 

(2,136

)

 

(2,758

)

Net interest income (expense)

 

3,895

 

 

9,655

 

 

912

 

 

909

 

Total net revenues

 

76,820

 

 

382,882

 

 

9,251

 

 

16,449

 

Expenses: Mortgage platform expenses

 

84,664

 

 

326,480

 

 

13,855

 

 

19,166

 

Cash offer program expenses

 

397

 

 

230,144

 

 

(1

)

 

—

 

Other platform expenses

 

13,076

 

 

59,501

 

 

1,289

 

 

3,161

 

General and administrative expenses

 

146,394

 

 

187,232

 

 

33,002

 

 

59,189

 

Marketing and advertising expenses

 

22,083

 

 

69,008

 

 

4,961

 

 

5,128

 

Technology and product development expenses

 

84,053

 

 

124,308

 

 

17,414

 

 

20,732

 

Restructuring and impairment expenses

 

15,375

 

 

247,693

 

 

3,577

 

 

679

 

Total expenses

 

366,042

 

 

1,244,366

 

 

74,097

 

 

108,055

 

Loss from operations

 

(289,222

)

 

(861,484

)

 

(64,846

)

 

(91,606

)

Interest and other expense, net: Other income (expense)

 

13,614

 

 

3,556

 

 

8,427

 

 

977

 

Interest and amortization on non-funding debt

 

(19,916

)

 

(13,450

)

 

(1,679

)

 

(11,939

)

Interest on Bridge Notes

 

—

 

 

(272,667

)

 

—

 

 

—

 

Change in fair value of warrants

 

(507

)

 

—

 

 

(1,368

)

 

861

 

Change in fair value of convertible preferred stock warrants

 

266

 

 

28,901

 

 

—

 

 

—

 

Change in fair value of bifurcated derivative

 

(236,603

)

 

236,603

 

 

—

 

 

(237,667

)

Total interest and other expenses, net

 

(243,146

)

 

(17,057

)

 

5,380

 

 

(247,768

)

Loss before income tax expense

 

(532,368

)

 

(878,541

)

 

(59,466

)

 

(339,374

)

Income tax expense / (benefit)

 

1,998

 

 

1,100

 

 

(541

)

 

659

 

Net loss

 

(534,366

)

 

(879,641

)

 

(58,925

)

 

(340,033

)

        Reconciliation of Non-GAAP Metrics:   Year Ended December 31, Three Months EndedDecember 31, 2023 Three Months EndedSeptember 30, (Amounts in thousands, except share and per share amounts)

 

2023

 

 

2022

 

 

 

2023

 

 

 

2023

 

Adjusted Net (Loss) Income Net (loss) income

$

(534,366

)

$

(879,641

)

$

(58,925

)

$

(340,033

)

Stock-based compensation expense

 

54,412

 

 

30,542

 

 

17,014

 

 

25,044

 

Change in fair value of warrants

 

507

 

 

—

 

 

1,368

 

 

(861

)

Change in fair value of convertible preferred stock warrants

 

(266

)

 

(28,901

)

 

—

 

 

—

 

Change in fair value of bifurcated derivative

 

236,603

 

 

(236,603

)

 

—

 

 

237,667

 

Interest on Pre-Closing Bridge Notes

 

—

 

 

272,667

 

 

—

 

 

—

 

Restructuring, impairment, and other expenses

 

15,375

 

 

247,693

 

 

3,577

 

 

679

 

Adjusted Net (Loss) Income

 

(227,735

)

 

(500,219

)

 

(36,966

)

 

(77,504

)

Adjusted EBITDA Net (loss) income

 

(534,366

)

 

(879,641

)

 

(58,925

)

 

(340,033

)

Income tax expense / (benefit)

 

1,998

 

 

1,100

 

 

(541

)

 

659

 

Depreciation and amortization expense

 

42,891

 

 

49,042

 

 

10,100

 

 

10,491

 

Stock-based compensation expense

 

54,412

 

 

30,542

 

 

17,014

 

 

25,044

 

Interest and amortization on non-funding debt

 

19,916

 

 

13,450

 

 

1,679

 

 

11,939

 

Interest on Pre-Closing Bridge Notes

 

—

 

 

272,667

 

 

—

 

 

—

 

Restructuring, impairment, and other expenses

 

15,375

 

 

247,693

 

 

3,577

 

 

679

 

Change in fair value of warrants

 

507

 

 

—

 

 

1,368

 

 

(861

)

Change in fair value of convertible preferred stock warrants

 

(266

)

 

(28,901

)

 

—

 

 

—

 

Change in fair value of bifurcated derivative

 

236,603

 

 

(236,603

)

 

—

 

 

237,667

 

Adjusted EBITDA

 

(162,930

)

 

(532,011

)

 

(25,728

)

 

(54,415

)

    Summary Condensed Balance Sheet:     (Amounts in thousands, except share and per share amounts) December 31, December 31,

 

2023

 

 

2022

 

Assets Cash and cash equivalents

$

503,591

 

$

317,959

 

Mortgage loans held for sale, at fair value

 

170,150

 

 

248,826

 

Bifurcated derivative

 

—

 

 

236,603

 

Loan commitment asset

 

—

 

 

16,119

 

Other combined assets

 

233,001

 

 

266,563

 

Total Assets

 

906,742

 

 

1,086,070

 

Liabilities, Convertible Preferred Stock, and Stockholders’ Equity (Deficit) Liabilities Warehouse lines of credit

 

127,085

 

 

144,049

 

Corporate line of credit, net

 

—

 

 

144,403

 

Convertible Note

 

514,644

 

 

—

 

Pre-Closing Bridge Notes

 

—

 

 

750,000

 

Other combined liabilities

 

144,473

 

 

216,844

 

Total Liabilities

 

786,202

 

 

1,255,296

 

Convertible preferred stock

 

—

 

 

436,280

 

Stockholders’ Equity (Deficit) Additional paid-in capital

 

1,836,796

 

 

618,890

 

Accumulated deficit

 

(1,703,449

)

 

(1,169,083

)

Other combined equity

 

(12,807

)

 

(55,313

)

Total Stockholders’ Equity (Deficit)

 

120,540

 

 

(605,506

)

Total Liabilities, Convertible Preferred Stock, and Stockholders’ Equity (Deficit)

 

906,742

 

 

1,086,070

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240328910287/en/

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