Executive Summary

Q2 2025 delivered fifth straight quarter of volume growth with $602M funded volume, above the high end of guidance, and GAAP net income of $80M ($3.16 basic EPS) driven by positive fair value marks and operating leverage .
Adjusted results improved: Adjusted EPS $0.55 and Adjusted EBITDA $30M; YTD adjusted EPS reached $1.07, reflecting sustained profitability post-transformation .
Against S&P Global consensus, FOA posted a large revenue beat ($177.4M vs $97.0M*) but a small EPS miss ($0.55 vs $0.61*), noting coverage depth of one estimate per metric (limited Street participation)*.
Capital structure actions are catalysts: in early August FOA repaid a 15% working capital facility, issued 0% exchangeable notes, and agreed to repurchase Blackstone’s entire equity stake; management expects ~+$10M annualized interest expense savings and potential share count reduction beginning in Q4 2025 .
Full-year 2025 guidance reaffirmed (originations $2.4–$2.7B; adjusted EPS $2.60–$3.00) and Q3 funded volume introduced at $600–$630M, underscoring confidence in momentum and capital markets execution .

What Went Well and What Went Wrong

What Went Well

Strong top-line and profitability: Total revenues $177.4M (up 7% q/q; 124% y/y) and GAAP net income $80M, supported by positive fair value adjustments and operational leverage .
Origination momentum: Funded volume $602M, +7% q/q and +35% y/y, exceeding guidance; Retirement Solutions adjusted net income grew to $15M (+67% q/q; +114% y/y) on higher volumes and margins .
Strategic and branding execution: CEO emphasized “another strong quarter”; President highlighted digital prequalification launch and AI initiatives, with Q2 HMBS share averaging 28% and June >29%—highest since Jan 2024 .

What Went Wrong

Adjusted EPS missed S&P Global consensus by ~$0.06* despite solid operational progress (Street coverage thin with one estimate)*.
Sequential diluted EPS from continuing ops declined (2.13 vs 2.56) on higher diluted share base and mix of fair value/other items; total expenses also ticked up with higher variable and marketing spend aligned to volume and brand investment .
Portfolio Management adjusted net income eased to $16M (from $20M in Q1) despite higher pre-tax income, reflecting mix and fair value normalization; net portfolio interest income declined q/q (59.5 vs 70.4) .

Financial Results

Results vs prior periods (GAAP and non-GAAP)

Metric	Q2 2024	Q4 2024	Q1 2025	Q2 2025
Total Revenues ($M)	79.0	(105.6)	165.7	177.4
Net Income from Continuing Ops ($M)	(4.9)	(142.6)	79.8	79.8
Basic EPS from Continuing Ops ($)	(0.20)	(5.95)	3.17	3.16
Diluted EPS from Continuing Ops ($)	(0.29)	(5.95)	2.56	2.13
Adjusted EPS ($)	—	0.21	0.52	0.55
Adjusted EBITDA ($M)	10	18	29	30

Notes: Q2 2024 adjusted EPS not disclosed (“—”) in reconciliations .

Q2 2025 actuals vs S&P Global consensus

Metric	Company Reported	S&P Global Consensus	Delta
Revenue ($M)	177.4	97.0*	+80.4
Primary/Adjusted EPS ($)	0.55	0.61*	-0.06

Values marked with * retrieved from S&P Global.

Key margins (computed from GAAP)

Margin	Q2 2024	Q4 2024	Q1 2025	Q2 2025
Net Income Margin (% of Total Revenues)	(6.2)%	— (neg. revenue)	48.1%	45.0%
Adjusted EBITDA Margin (% of Total Revenues)	12.7%	— (neg. revenue)	17.5%	16.9%

Notes: “—” margin not shown when revenues are negative.

Segment breakdown (continuing ops)

Segment	Metric	Q2 2024	Q1 2025	Q2 2025
Retirement Solutions	Funded Volume ($M)	447	561	602
	Total Revenue ($M)	47	52	62
	Pre-tax Income ($M)	(2)	3	10
	Adjusted Net Income ($M)	7	9	15
Portfolio Management	Assets Under Management ($M)	27,655	29,418	29,907
	Total Revenue ($M)	41	129	130
	Pre-tax Income ($M)	22	105	108
	Adjusted Net Income ($M)	12	20	16

KPIs and Balance Sheet

KPI	Q4 2024	Q1 2025	Q2 2025
Funded Volume ($M)	534	561	602
Total Equity ($M)	316	395	473
Tangible Equity ($M)	99	187	275
Portfolio AUM ($M)	28,877	29,418	29,907
HMBS Issuance Market Share	—	—	28% Q2 avg; >29% in June

Guidance Changes

Metric/Item	Period	Previous Guidance	Current Guidance	Change
Originations (Funded Volume)	FY 2025	$2.4–$2.7B (reaffirmed in Q1)	$2.4–$2.7B	Maintained
Adjusted EPS	FY 2025	$2.60–$3.00 (reaffirmed in Q1)	$2.60–$3.00	Maintained
Funded Volume	Q3 2025	—	$600–$630M	New
Interest Expense Run-Rate	Forward	—	~($10M) annualized reduction from retiring $85M at 15% and replacing with $40M at 0% and $20M at 10%	Lowered
Share Count	Q4 2025 timing	—	Partial reduction expected post-Blackstone repurchase window (~105–120 days; Q4 effect)	New/Timing

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 and Q1’25)	Current Period (Q2’25)	Trend
Volume & Market Share	Q1: 4th straight quarter growth; Q2 funded volume guided $575–$600M; improving ops metrics	5th straight quarter growth; $602M volume; HMBS share avg ~28%, June >29%	Positive momentum
Fair Value & Capital Markets	Q4: volatile marks; Q1: positive marks from tighter spreads/lower rates	Positive marks sustained; tailwind from tighter deal spreads, declining index rates, stable HPA assumptions	Supportive
Branding & Demand Gen	Q1: Launch “A Better Way with FOA”	Full transition completed; 10% increase in digital leads; early TV lead signals skew younger/higher-value markets	Execution progressing
Technology & AI	Q1: cost discipline and productivity initiatives	First digital prequalification live; AI for virtual call agent, analytics, doc management; broader rollout in H2	Expanding
Expense Discipline	Q1: fixed cost base stable, G&A -25% y/y	Variable costs up with volume/marketing; continued fixed-cost vigilance and vendor renegotiation	Mixed: leverage with growth
Capital Structure	Q1: reaffirmed guidance; no specific restructuring	Repayment of high-cost facility; 0% exchangeable notes; Blackstone equity repurchase agreement	De-risking/Accretive

Management Commentary

CEO: “Finance of America delivered another strong quarter, funding $602 million in loans and achieving our fifth consecutive quarter of growth… We continue to see encouraging signals from our new brand campaign and digital initiatives” .
President: “In June, we launched the industry's first digital prequalification experience… AI is playing a pivotal role… We will… introduce our new AI powered virtual call agent… by the end of the year” .
CFO: “Fair value marks also remained positive, supported by tighter deal spreads, declining index rates and stable home price assumptions… We reaffirm our full year guidance of $2.4–$2.7B originations and $2.6–$3 in adjusted EPS” .
CEO on capital moves: “We… paid off our higher cost working capital facility and entered into an agreement… to acquire the remaining equity stake in Finance of America [from Blackstone]” .

Q&A Highlights

Guidance mechanics: CFO said paying off high-cost WC line and the buyback timing were not specifically in guidance but should help meet targets; share count reduction expected to begin impacting Q4 numbers .
Interest expense: Retired $85M line at 15% replaced with $40M 0% exchangeable notes and $20M line at 10%—about $10M annualized interest expense reduction .
Capital structure roadmap: Debt maturities mapped with $50M due Nov 2025 (already addressed), $60M by Nov 2026, $90M by Nov 2027; remaining $150M convertible expected to convert over time .

Estimates Context

Q2 2025: Revenue beat consensus by ~$80M ($177.4M vs $97.0M*), while EPS modestly missed ($0.55 vs $0.61*). Only one estimate was recorded for each metric, underscoring limited Street coverage.*
Implications: Expect Street models to lift revenue run-rate assumptions (given fair value tailwind and securitization execution) but modestly trim EPS pipeline if they were using higher adj. EPS, particularly given mix and diluted share impacts.
Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

Momentum intact: Five straight quarters of volume growth, continued profitability, and rising tangible equity ($275M) indicate durable operating traction .
Capital structure de-risking: Eliminating the 15% WC facility and introducing 0% exchangeable notes lowers interest expense (~$10M annualized) and should support EPS conversion as volumes scale .
Securitization capacity scaling: First-ever $1B+ HomeSafe securitization in July indicates solid investor demand and supports ongoing fair value stability .
Brand and digital investments: Early positive lead indicators and the industry’s first digital prequal plus AI initiatives may widen the top of the funnel and support origination efficiency .
Watch mix and margins: Wholesale-led growth can flatten revenue margin even as product-level margins improve; monitor channel mix and net portfolio interest income trends .
Guidance steady with near-term visibility: Reaffirmed FY25 targets and Q3 volume guide ($600–$630M) provide near-term catalysts; partial share count reduction likely starts impacting Q4 .
Trading lens: Near-term stock catalysts include progress on Blackstone repurchase closing, interest expense savings realization, and continued positive fair value marks; EPS variability tied to market inputs remains a swing factor .

Non-GAAP Adjustments (for context)

Adjusted net income/EPS and Adjusted EBITDA exclude: fair value changes due to market inputs or model assumptions; amortization/impairment of intangibles; equity-based compensation; certain non-recurring costs; and apply a normalized tax rate; Adjusted EPS also adds interest on exchangeable senior secured notes if dilutive .

Finance of America Companies Inc. (FOA)·Q2 2025 Earnings Summary