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BH

Better Home & Finance Holding Co (BETR)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 results showed revenue of $44M, net loss of $39M, and Adjusted EBITDA loss of $25M; revenue was flat sequentially, while losses modestly increased QoQ but improved materially YoY; funded loan volume was $1.21B with purchase 64%, HELOC/second lien 21%, and refinance 15% .
  • Management announced three new strategic partnerships (including Finance of America) and guided to a $500M monthly funded loan volume run-rate in Q4 2025, doubling to ~$1B/month within six months; pipeline includes a top-5 personal finance platform, a top-5 non-bank originator, and additional banks/servicers—key catalysts for stock narrative re-rating .
  • D2C unit economics strengthened: revenue per fund ~$8,300, labor cost per fund ~$2,500, CAC per fund ~$3,200, contribution profit per loan ~$1,772 (vs $1,064 in Q2), with lead-to-lock conversion up to 6.1% as Betsy/Tinman scale .
  • Guidance reaffirmed: Adjusted EBITDA breakeven by end of Q3 2026; Tinman AI platform originations expected to exceed $600M in Q4 2025; management expects higher total funded loan volume in Q4 2025 vs Q4 2024 .

What Went Well and What Went Wrong

  • What Went Well

    • YOY growth and improved profitability metrics: total net revenues +51% YoY to $43.9M; net loss improved to $(39.1)M from $(54.2)M; Adjusted EBITDA loss improved to $(24.9)M from $(38.9)M; funded volume +17% YoY (or +56% ex-discontinued partnership) .
    • Strategic distribution wins: three partnerships (top-5 personal finance platform, top-5 non-bank originator, Finance of America reverse) now live, validating Tinman and expanding the platform/software revenue mix; CEO: “This was a pivotal quarter…Our three new strategic partnerships validate the strength of our platform and technology” .
    • AI-driven execution: lead-to-lock conversion +84% to 6.1%; AI underwriting approved 61% of locked loans; D2C contribution per loan rose ~64% QoQ; Betsy now at feature parity with bottom 80% of loan officers, enabling scale at near-zero marginal cost .

  • What Went Wrong

    • Sequential softness on headline P&L: revenue essentially flat QoQ ($44.1M in Q2 vs $43.9M in Q3) and net loss widened QoQ ($(36.3)M to $(39.1)M) as resources were deployed to launch partnerships (not yet revenue-generative in Q3) .
    • Expense reductions delayed: management acknowledged less intensity in cost-cutting this quarter due to focus on onboarding partners; expects cost savings to materialize in Q1 2026 .
    • Executive transition risk: CFO Kevin Ryan retiring effective Nov 14, 2025; search underway—adds near-term uncertainty to finance leadership continuity .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$32.553 $44.144 $43.867
Net Loss ($USD Millions)$(50.557) $(36.270) $(39.125)
Adjusted EBITDA ($USD Millions)$(40.357) $(26.605) $(24.915)
Adjusted EBITDA Margin (%)(124.0%) (60.3%) (56.8%)
Net Loss Margin (%)(155.3%) (82.2%) (89.2%)
Diluted EPS ($)——$(2.56)

Segment/product mix

Product MixQ1 2025Q2 2025Q3 2025
Purchase Volume ($MM)$578 (67%) $803 (67%) $774 (64%)
HELOC/Second Lien Volume ($MM)$157 (18%) $240 (20%) $253 (21%)
Refinance Volume ($MM)$133 (15%) $162 (13%) $183 (15%)
Total Funded Loan Volume ($MM)$868 $1,200 $1,210

Channel mix

ChannelQ1 2025Q2 2025Q3 2025
D2C Volume ($MM)$614 (71%) $774 (64%) $727 (60%)
Tinman AI Platform/B2B Volume ($MM)~$254 (29%) ~$426 (36%) ~$483 (40%)

KPIs

KPIQ1 2025Q2 2025Q3 2025
Total Loans (#)~3,000 4,032 4,086
D2C Revenue per Loan ($)—$7,886 ~$8,300
D2C Contribution Profit per Loan ($)—~$1,064 ~$1,772
Lead-to-Lock Conversion (%)—~4.4% (from 3.3%) 6.1%
AI Underwriting Approval (% of locked)—~43% >61%
Tinman AI Platform Funded Volume ($MM)~$163 (Neo) ~$428 ~$483

Notes: “—” indicates not disclosed in the cited materials.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA Breakeven TimingCompany-LevelBreakeven by end of Q3 2026 Breakeven by end of Q3 2026 (affirmed) Maintained
Tinman AI Platform OriginationsNext Quarter>$500M in Q3 2025 >$600M in Q4 2025 Raised next-quarter platform outlook
Monthly Total Funded Loan Volume Run-RateNear-Term—~$500M/month in Q4 2025; ~$1B/month within 6 months New
FY 2025 Total Funded Loan VolumeFull YearIncrease YoY vs 2024 Increase YoY vs 2024 (reiterated) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2025)Current Period (Q3 2025)Trend
AI/Technology (Betsy/Tinman)Betsy interactions ~600k; lead-to-lock up to ~4.4%; underwriting approvals ~43% 700k interactions; lead-to-lock 6.1%; AI underwriting >61%; Betsy feature parity with bottom 80% of LOs; no underwriter can decline without checking with Betsy Accelerating capability and adoption
Distribution/PartnershipsTinman AI platform (Neo) scaling; first bank partner live; robust pipeline Three new partnerships live (top-5 personal finance app; top-5 non-bank originator; Finance of America reverse); broad pipeline across lenders/servicers Rapid expansion; validation of platform model
Unit EconomicsD2C revenue/loan $7,886; contribution $1,064; platform margin ~40% D2C revenue/loan ~$8,300; contribution ~$1,772; conversion +84% since launch Improving mix and per-loan profitability
Macro/Rate AssumptionsScaling independent of macro; AI platform growth Guidance assumes rates flat; CEO sees potential recession; upside to D2C if rates fall Neutral base case; positive convexity if rates decline
Capital & LiquidityRetired ~$521M converts; $575M warehouse capacity Cash/restricted/investments/assets held for sale $226M; still $575M capacity; may increase lines for partner demand Stable liquidity; potential line expansion
UK OperationsBirmingham Bank loan book +90% QoQ Loan book +44% QoQ; exiting non-core UK assets Continuing growth and portfolio focus

Management Commentary

  • “This was a pivotal quarter for Better…three new strategic partnerships validate the strength of our platform and technology and are expected to meaningfully expand growth and reinforce our path to profitability, with Adjusted EBITDA breakeven anticipated by the end of Q3 2026.” – Vishal Garg, CEO .
  • “We’re already pacing to fund $500 million in monthly volume…in the next six months, we are comfortable that this will double to at least $1 billion a month.” – Vishal Garg .
  • “Since we’ve launched Bettsy, our lead-to-lock conversion rate has increased by approximately 84% from 3.3% to 6.1%…Bettsy can handle millions of consumer conversations at the same time, enabling infinite scalability without adding additional headcount.” – Vishal Garg .
  • “Unit economics in our direct-to-consumer channel continue to improve…revenue per fund increasing to $8,300…labor cost of fund…$2,500…CAC per fund…$3,200…net contribution margin of $1,772 per fund vs $1,064 last quarter.” – Vishal Garg .
  • “During the third quarter, we had an adjusted EBITDA loss of approximately $25 million…as these partnerships…start to generate revenue…we expect burn to come down more dramatically in the coming quarters ahead in 2026.” – Vishal Garg .

Q&A Highlights

  • Partnership ramps: Top personal finance app integration to scale through in-app offers over next 3–6 months; non-bank originator rolling Tinman to D2C, MSR recapture, then retail LOs; Finance of America launching HELOC/HELOAN and reverse second-lien HELOC, scaling over 3–6 months .
  • Pipeline strength: Frustration with incumbents and Better’s faster implementations expanding partner interest across verticals (fintechs, servicers, banks) .
  • CAC dynamics: Partnerships carry no upfront CAC; D2C CAC remains elevated with long gestation in purchase; potential for CAC to compress if rates fall .
  • Break-even volume: ~$1B+/month run-rate, depending on mix (higher-margin partnerships vs D2C), positions business to drive toward break-even .
  • Home equity economics: Gain-on-sale currently ~103.5; opportunity to improve 1–2 pts over time; home equity marketplace model scales without credit/prepay risk .

Estimates Context

  • Wall Street consensus (S&P Global) for quarterly revenue and EPS was not available for BETR for Q3 and Q4 2025 at the time of this report. As a result, we compare performance versus prior periods and management guidance. Values referenced from S&P Global where available.

Key Takeaways for Investors

  • Partnerships are the primary growth catalyst into 2026: $500M/mo run-rate targeted in Q4 2025, doubling to ~$1B/mo within six months, with a robust pipeline across fintechs, servicers, and banks .
  • AI is driving tangible unit economic gains: higher conversion, lower labor cost per loan, and improved per-loan contribution; further efficiencies likely as Betsy/Tinman permeate workflows .
  • Mix shift toward platform/software channels supports structurally higher margins and lower CAC over time, de-risking macro sensitivity relative to pure D2C .
  • Near-term P&L may remain choppy as partner onboarding precedes revenue contribution; management flagged cost savings re-acceleration in Q1 2026 .
  • Liquidity looks adequate with $226M cash/restricted/investments/assets held for sale and $575M of warehouse capacity; lines may expand to meet partner-driven funding demands .
  • Strategic narrative: platform/SaaS-like evolution in a fragmented, legacy mortgage tech stack; continued execution could warrant multiple expansion if guidance trajectory is achieved .
  • Watch items: CFO transition, realized partner volumes versus ambitious run-rate targets, and home equity execution/gain-on-sale improvement path .

Appendix: Other Relevant Materials and Availability

  • Q3 2025 8-K 2.02 and press release read in full; earnings call transcript read in full; no additional Q3 press releases identified in the period searched – –.
  • Prior quarters for trend: Q2 2025 8-K and call; Q1 2025 8-K – – –.