Guild Holdings Co (GHLD)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered mixed optics: adjusted profitability improved while GAAP swung to a loss on MSR marks. Adjusted diluted EPS was $0.35 versus S&P Global consensus $0.18—a clear beat—while revenue (S&P reporting basis) was $220.6M versus $240.2M consensus—a miss. Net revenue (company “net revenue”) was $198.5M. Bold takeaways: EPS beat; revenue miss. Values retrieved from S&P Global. Company figures: $198.5M net revenue; $0.35 adjusted EPS; GAAP diluted EPS $(0.39) .*
• Origination momentum remained solid despite seasonality: $5.20B originations (+35% YoY) with gain-on-sale (GOS) margin on originations of 376 bps (+59 bps QoQ), and purchase mix at 88% (vs MBA est. ~71%). Servicing UPB grew to $94.0B. Adjusted EBITDA rose to $36.4M. GAAP net loss was $(23.9)M due primarily to a $(69.9)M MSR valuation adjustment from rate declines .
• Management reiterated margin stability and near-term activity: GOS margin run-rate “around 330–340 bps” was reiterated; April originations were $2.3B with $2.5B pull-through locks, signaling normal seasonal build into Q2 .
• Key catalyst narrative: EPS beat on operating strength (origination scale/productivity) versus top-line softness (S&P revenue basis) and MSR valuation headwinds; stable margin commentary and early Q2 volume datapoints support estimate resilience even as GAAP earnings remain sensitive to rate-driven MSR marks .

What Went Well and What Went Wrong

What Went Well

• Scale-driven origination strength and productivity: Originations rose 35% YoY to $5.2B, supported by acquisitions and organic recruiting; loan officers “30% more productive than the industry average” (MMI). Adjusted EBITDA of $36.4M and adjusted net income of $21.6M reflect operating leverage .
• Margin improvement on funded originations: GOS margin on originations increased to 376 bps (+59 bps QoQ, +12 bps YoY), demonstrating pricing and mix execution in a seasonally favorable quarter .
• Servicing scale and retail purchase mix: Servicing UPB increased to $94.0B with refinance recapture 31% and purchase recapture 26%; 88% purchase origination mix underscores retail-led positioning vs. industry .

What Went Wrong

• GAAP earnings pressure from MSR marks: Q1 GAAP net loss $(23.9)M driven by $(69.9)M MSR valuation loss on rate declines, flipping servicing to a $(4.6)M segment loss (vs $152.4M profit in Q4) .
• Revenue miss on S&P basis: Revenue (S&P reporting basis) of $220.6M lagged the $240.2M consensus (3 estimates), despite company “net revenue” at $198.5M reflecting interest expense netting; highlights estimate framework differences and MSR mark impacts. Values retrieved from S&P Global. Company figure: $198.5M net revenue .*
• Pull-through pricing dynamics softened: GOS on pull-through adjusted locks declined to 316 bps (–44 bps QoQ), partially offsetting funded margin strength; origination segment posted a modest $(2.9)M loss on lower volumes QoQ .

Financial Results

Headline Metrics (Company-reported)

Q1 2025 vs S&P Global Consensus

Note: S&P “Revenue” reflects the sum of reported revenue line items before interest expense; company “Net revenue” is after interest expense, which was $22.1M in Q1 2025 .

Segment Breakdown

KPIs

Non-GAAP adjustments: Adjusted net income excludes MSR fair value changes due to model inputs/assumptions (+$55.0M add-back in Q1), changes in acquisition-related fair value, amortization of intangibles, and stock-based comp; tax-effected at ~25.2% .

Guidance Changes

Note: Company does not provide formal revenue/EPS guidance; management provides qualitative margin and activity commentary .

Earnings Call Themes & Trends

Management Commentary

• “We achieved 35% growth in originations year-over-year to $5.2 billion, while delivering positive adjusted EBITDA of $36.4 million and adjusted net income of $21.6 million… We will prudently manage costs and believe there will be additional opportunities for Guild to gain market share.” – Terry Schmidt, CEO .
• “Loan officers at Guild on average experienced 30% more productivity than the industry average… positioning us for continued success in the current market environment.” – David Neylan, President & COO .
• “We’re still running around that same 330 to 340 [bps gain-on-sale]… overall, on average, we’re still running around that same 330 to 340, and we don’t see any changes that would affect that number.” – Desiree Elwell, CFO (Q&A) .
• “In April, we generated $2.3 billion of loan originations and $2.5 billion of pull-through adjusted lock volume.” – Desiree Elwell, CFO .

Q&A Highlights

• MSR amortization/payoffs: Prepayments down QoQ; service release at ~40%; some Q4 timing effects drove amortization variance; overall runoff moderated .
• Margin outlook: While no formal guidance, management reiterated a 330–340 bps GOS run-rate consistent with history; Q1 uplift versus Q4 reflected seasonality and volatility normalization .
• Competitive dynamics (Rocket-Redfin/Mr. Cooper): GHLD focused on engaging customers earlier but remains anchored to local, purchase-centric model and trust; sees distinct customer segments where GHLD brand excels .
• Regulatory/LO comp rules: No changes planned; will follow regulations; do not expect material impact .
• Tariffs/home prices: Watching input costs; values broadly stable; do not expect material volume impact near term .

Estimates Context

• Q1 2025 EPS: $0.35 vs S&P Global consensus $0.18 (4 est.) → Beat. Values retrieved from S&P Global.*
• Q1 2025 Revenue (S&P basis): $220.6M vs S&P Global consensus $240.2M (3 est.) → Miss. Values retrieved from S&P Global.*
• Implications: Expect models to reflect stable funded GOS margins (330–340 bps) and stronger origination throughput into Q2 (April datapoints), while revenue prints on S&P basis remain sensitive to MSR valuation line timing and rate moves .

Key Takeaways for Investors

• Adjusted profitability outperformed (EPS beat) on origination scale and margin execution; GAAP remains rate-mark sensitive via MSR valuation . Values retrieved from S&P Global.*
• Stable GOS margin framework (330–340 bps) and April volumes ($2.3B originations; $2.5B locks) support a constructive Q2 setup despite macro volatility .
• Purchase-led model (88% mix) and servicer scale ($94.0B UPB) underpin recapture and cross-sell durability through cycles, with natural hedge dynamics offsetting MSR valuation swings over time .
• Watch servicing retention mix (60% retained in Q1 vs 64% in Q4) and MSR marks; both will influence P&L optics relative to operating trends .
• Capital allocation remains supportive (special $0.50 dividend paid; $9.5M buyback capacity through May 2026), with leverage at 1.6x and $111.7M cash providing flexibility for organic hiring and selective M&A .
• Competitive commentary (Rocket/Redfin/Cooper) and regulatory (LO comp) appear non-disruptive to GHLD’s local-first, first-time buyer strategy near term .
• Model considerations: Anchor on adjusted metrics for core performance (adjusted EPS, adjusted EBITDA) and funded GOS; for revenue comps, align to S&P “Revenue” basis (pre-interest netting, includes MSR valuation line) when benchmarking to consensus . Values retrieved from S&P Global.*

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Additional detail and cross-references:

• Company-reported “Net revenue” was $198.5M (after $22.1M interest expense), while S&P “Revenue” (sum of revenue lines before interest expense) was $220.6M; MSR valuation was a $(69.9)M headwind in Q1 .*
• Non-GAAP bridge included a +$55.0M add-back for MSR model-driven changes to reach $21.6M adjusted net income and $0.35 adjusted EPS .

Footnote: *Values retrieved from S&P Global.