Executive Summary

Q2 2025 delivered material top-line growth and improved sequential losses: revenue rose 37% YoY to $44.1M, funded loan volume increased 25% YoY to $1.2B, and GAAP net loss improved QoQ to $(36.3)M from $(50.6)M in Q1; Adjusted EBITDA loss improved QoQ to $(26.6)M from $(40.4)M, though was worse YoY vs $(23.3)M in Q2’24 .
Management sharpened profitability timeline, now targeting Adjusted EBITDA breakeven by end of Q3 2026; they expect further 2025 Adjusted EBITDA improvement driven by AI-driven conversion gains, efficiency and corporate cost reductions .
Tinman AI Platform momentum accelerated: NEO Powered by Better funded ~$429M for ~1,009 families in Q2, with 40% contribution margins; D2C unit economics improved (revenue/loan $7,886, contribution margin 13%), supported by Betsy AI and higher gain-on-sale; company guides >$500M Tinman AI platform originations in Q3 .
Strategic and balance sheet catalysts: retirement of ~$521M convertible debt with SoftBank created >$210M positive pre-tax equity value; warehouse facilities totaled $575M capacity as of 6/30/25; management disclosed robust partner pipeline (banks, fintechs; later formalized via ATM program in Sep) .

What Went Well and What Went Wrong

What Went Well
- AI adoption and conversion: CEO highlighted “lead to lock conversion rate has increased by over 30%… from 3.3% to 4.4%,” and NPS rose from 39 to 64 as Betsy scaled to ~600k interactions in Q2 .
- Tinman AI economics: Tinman AI Platform loans generated revenue/loan $15,538, contribution profit ~$6,172, contribution margin ~40%; D2C contribution margin ~13% with revenue/loan $7,886 and cost/fund ~$6,822 .
- Sequential financial progress: revenue up ~36% QoQ, funded loan volume up ~39% QoQ; GAAP net loss and Adjusted EBITDA loss improved vs Q1 (helped by higher-margin NEO, pricing, and loan loss reserve release) .
What Went Wrong
- Adjusted EBITDA still negative YoY: Q2 Adjusted EBITDA loss $(26.6)M vs $(23.3)M in Q2’24; Adjusted Net Loss $(30.2)M vs $(33.1)M in Q2’24 .
- Operating expenses elevated YoY: total expenses rose to $80.3M vs $73.4M in Q2’24; interest expense was $10.1M vs $4.2M YoY, reflecting funding costs .
- NEO Q2 originations slightly below prior guidance: Q1 call guided >$450M for Q2; actual was ~$429M, though management still guiding >$500M for Q3 .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$25	$32.553	$44.144
GAAP Net Loss ($USD Millions)	$(59)	$(50.557)	$(36.270)
Adjusted EBITDA ($USD Millions)	$(28)	$(40.357)	$(26.605)
Funded Loan Volume ($USD Millions)	$936	$868	$1,200
Total Loans (units)	~3,300	~3,000	~4,032

Segment/Product Mix (Q2 2025):

Category	Volume ($USD Millions)	Mix (%)
Purchase	$803	67%
HELOC & Closed-End Second Liens	$240	20%
Refinance	$162	13%

Channel Mix (Q2 2025):

Channel	Volume ($USD Millions)	Mix (%)
D2C	$774	64%
Tinman AI Platform + B2B	$426	36%

Unit Economics (Q2 2025):

Metric	D2C	Tinman AI Platform
Revenue per Loan ($)	$7,886	$15,538
Cost per Fund ($)	$6,822	n/a
Contribution Profit ($)	~$1,064	~$6,172
Contribution Margin (%)	~13%	~40%

Non-GAAP Reconciliations:

Item ($000s)	Q2 2024	Q2 2025
Adjusted Net Loss	$(33,120)	$(30,240)
Adjusted EBITDA	$(23,259)	$(26,605)
Key adds (SBComp, D&A, Non-funding interest, FV change, restructuring)	see exhibit details	see exhibit details

Notes: CFO attributed QoQ revenue growth to NEO higher gain-on-sale, pricing, and reserve release; expenses down ~3% QoQ despite volume growth .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA breakeven	Timeline	“Midterm” profitability focus (no specific quarter)	Breakeven by end of Q3 2026	Clarified timeline
Tinman AI Platform originations	Q3 2025	n/a	>$500M expected	New
NEO originations	Q2 2025	>$450M guided	Actual ~$429M (1,009 families; $429M)	Slightly below prior guide
2025 funded loan volume	FY 2025	Increase YoY (vs 2024)	Increase YoY (tailwinds incl. Tinman AI Platform; Ally exit headwind)	Maintained
2025 Adjusted EBITDA losses	FY 2025	Further improvements vs 2024	Further improvements vs 2024	Maintained
UK non-core exits	H2 2025	Benefit to Adjusted EBITDA beginning H2 2025	Reiterated benefit starting H2 2025	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2: Q4 2024; Q-1: Q1 2025)	Current Period (Q2 2025)	Trend
AI/Betsy adoption, conversion, NPS	Betsy scaled >115k interactions (Feb); One Day Mortgage; costs down; demo; strong AI vision	~600k interactions in Q2; lead-to-lock +30% (3.3%→4.4%); NPS 39→64; aiming 75% AI underwriting	Strengthening
Tinman AI Platform (NEO ramp)	NEO early progress; $95M funded; NEO margins ~365 bps gain-on-sale	~$429M funded for 1,009 families; 40% contribution margin; guidance >$500M Q3	Accelerating
Tinman AI Software (bank licensing)	Announced bank partner; SaaS per funded loan model	Bank funding loans; ramp to ~$4M/month; $1,500 per funded loan fees; pipeline incl. top lenders/fintechs	Early traction
Macro/volatility	Persistent uncertainty; expense controls; AI as buffer	Path to breakeven “unlikely to be linear”; balance growth with cost reductions	Cautious
Product performance (HELOC)	HELOC volume grew 416% YoY in Q4’24	HELOC & second liens up 166% YoY; total HELOC $240M in Q2	Strong growth
Partnerships/pipeline	Inbound from servicers/lead-gen/community bank	Partners: robo-advisors, fintech lenders, mega fintechs; beta launches ongoing	Building
UK portfolio actions	Exiting non-core assets; Birmingham Bank ramp	Bank loan book +90% QoQ; disposals expected to benefit Adjusted EBITDA H2’25	Progressing

Management Commentary

“We are uniquely positioned to win in the current environment through substantial technology advantages in our Tinman AI Platform… paired with continued strengthening of unit economics primarily driven by AI efficiencies.” — Vishal Garg, CEO .
“We now have the pathway and visibility to guide to adjusted EBITDA breakeven by Q3 2026… driven by volume growth… higher margin channels… pricing improvements and continued corporate and vendor cost reductions.” — Kevin Ryan, CFO .
“Since we launched Betsy AI, our lead to lock conversion rate has increased by over 30%… and our net promoter score has increased from 39 to 64.” — Vishal Garg .
“For every loan funded on the Tinman AI platform… contribution profit of $6,172… contribution margin of 40%.” — Vishal Garg (NEO/Tinman Platform economics) .
“We retired approximately $521 million of convertible debt with Softbank… creating over $210 million of positive pre-tax equity value.” — Press release .

Q&A Highlights

Partner characterizations: pipeline includes robo-advisors (wealth platforms), fintech lenders expanding to home equity, and mega fintechs; multiple betas underway, seeking scalable AI-enabled mortgage solutions .
Cost-to-originated dynamics and breakeven: D2C labor cost/fund under ~$2,500 vs industry $6,500–$7,000; data cost/fund falling ($1,200→$800); gain-on-sale improved QoQ; breakeven path levered by higher-margin platform channel .
Betsy’s impact on conversion and process: expanded functionality takes customers through lock, re-underwrites loans to find workarounds; improves approvals; tailored routing to top-performing human LOs when needed .
Tinman AI Software economics: bank partner live; ~$1,500/software fees per funded loan; rapid deployment (<90 days) across conforming and niche products; outcome-as-a-service pricing aligns costs with funding events .
HELOC growth drivers: Q2 home equity volume ~$240M (+~260% YoY across certain measures discussed), strong consumer acceptance; HELOC customers form zero-CAC refi pipeline when rates decline .
Rate responsiveness and pricing engine: AI reprices instantly across 45 investors/products, enabling “best execution” and faster rate updates than traditional rate-sheet workflows .

Estimates Context

Wall Street consensus (S&P Global) for Q2 2025 revenue and EPS was unavailable for BETR at time of retrieval; no beats/misses vs estimates can be assessed from S&P Global data. Values retrieved from S&P Global.*

Key Takeaways for Investors

AI flywheel is translating into measurable conversion and satisfaction gains (lead-to-lock +30%, NPS 39→64), supporting improved D2C unit economics and pricing power .
Tinman AI Platform is scaling with attractive contribution margins (~40%), and Q3 originations are guided >$500M, a positive mix shift toward higher-margin channels .
Sequential operating leverage is evident: revenue and volume rose ~36%/~39% QoQ while total expenses fell ~3% QoQ; GAAP and Adjusted EBITDA losses narrowed QoQ .
Balance sheet and funding readiness improved: SoftBank convertible retirement added >$210M pre-tax equity value; three warehouse facilities totaling $575M capacity as of 6/30/25 .
NEO came in modestly below Q2 guidance ($429M vs >$450M) but the platform is ramping and management expects >$500M in Q3; monitor execution and margin sustainability .
2025 outlook: management reiterates YoY funded loan volume growth and further Adjusted EBITDA improvement vs 2024, but cautions the breakeven path will not be linear amid macro volatility .
Medium-term thesis: clarity on Adjusted EBITDA breakeven by end of Q3 2026, with multiple monetization vectors (D2C, Platform, Software) and growing partner pipeline (banks/fintechs) .

Sources

Press release and 8-K:
Q2 2025 earnings call transcript:
Q1 2025 8-K & transcript:
Q4 2024 transcript:
Other Q2-period 8-Ks: director appointments ; Sep 29 ATM program and partner announcements

*Values retrieved from S&P Global.

Better Home & Finance Holding Co (BETR)·Q2 2025 Earnings Summary