Executive Summary

Q1 2025 showed sequential improvement with total revenue up to $273.6M (+6% q/q; +23% y/y) as higher pull‑through weighted gain‑on‑sale (GOS) margin and home‑equity mix offset lower servicing revenues after 2024 MSR bulk sales; adjusted EBITDA improved to $18.3M from $(15.1)M in Q4 .
Despite better margins, results missed S&P Global consensus on EPS and EBITDA and were roughly in-line/slightly below on revenue: Diluted EPS $(0.11) vs $(0.061) est.; revenue $273.6M vs $275.0M est.; adj. EBITDA $18.3M vs $21.7M est. (S&P Global)* .
Outlook: Q2 2025 guidance raises volume ranges (origination $5.0–$7.5B; locks $5.5–$8.0B) with GOS margin 300–350 bps and expenses increasing with volume; implies momentum into seasonally stronger Q2 but with rate volatility caveat .
Leadership transition is a key narrative catalyst: Founder Anthony Hsieh returned to day‑to‑day operations, with plan to assume interim CEO in June; management emphasized leveraging multichannel origination, in‑house servicing, and the mello tech stack to regain profitable share .

What Went Well and What Went Wrong

What Went Well

Margin and mix improvement: Pull‑through weighted GOS margin expanded to 3.55% (vs 3.34% in Q4; 2.74% y/y), aided by home‑equity products and higher government mix; beat company’s prior Q1 guidance of 320–340 bps .
Volumes and share: Pull‑through weighted locks rose 15% y/y to $5.4B; originations +14% y/y to $5.2B; unit market share rose to 187 bps (vs 145 bps y/y) and purchase unit share to 126 bps (vs 118 bps) .
Cost discipline outside volume‑related areas: Non‑volume expenses fell 3% y/y; cyber‑related expenses dropped to $0.8M vs $14.7M in Q1’24; liquidity remained strong with $371M cash .

What Went Wrong

Bottom‑line loss persists: Net loss $(40.7)M (vs $(67.5)M in Q4; $(71.5)M y/y) with diluted EPS $(0.11), missing S&P Global EPS consensus (S&P Global)* .
Servicing revenue headwind: Servicing fee income declined to $104.3M (from $124.1M y/y) and fair‑value changes net of hedges were a $(41.1)M drag, reflecting portfolio effects and prior bulk MSR sales .
Expenses up with volume: Total expenses rose 4% y/y to $319.7M on higher commissions/direct origination/marketing; Q2 guide calls for further opex increase with volume .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Total Revenue ($M)	$314.6	$257.5	$273.6
Adjusted Total Revenue ($M)	$329.5	$266.6	$278.4
Net Income (Loss) ($M)	$2.7	$(67.5)	$(40.7)
Diluted EPS ($)	$0.01	$(0.17)	$(0.11)
Adjusted Net Income (Loss) ($M)	$7.1	$(47.0)	$(25.3)
Adjusted EBITDA ($M)	$63.7	$(15.1)	$18.3
PT‑Weighted GOS Margin (%)	3.29%	3.34%	3.55%
PT‑Weighted Locks ($B)	$6.75	$5.59	$5.42
Originations ($B)	$6.66	$7.19	$5.17
Servicing Fee Income ($M)	$124.1	$108.4	$104.3

Actuals vs S&P Global consensus (Q1 2025)

Revenue: $273.6M vs $275.0M est.*
Diluted EPS: $(0.11) vs $(0.061) est.*
Adjusted EBITDA: $18.3M vs $21.7M est.*

KPI and mix

Purchase mix: 59% (vs 58% in Q4; 72% y/y) .
Recapture rate (consumer direct, organic): 65% (vs 59% y/y) .
Servicing UPB: $116.6B; 60+ day delinquency 1.5% (vs 1.6% Q4; 1.0% y/y) .
Liquidity: Cash and cash equivalents $371.5M .

Origination mix by purpose ($B)

Purpose	Q4 2024	Q1 2025
Purchase	$4.14	$3.06
Refi – Cash‑Out	$2.42	$1.85
Refi – Rate/Term	$0.62	$0.26
Total	$7.19	$5.17

Servicing summary

Metric	Q4 2024	Q1 2025
Servicing Fee Income ($M)	$108.4	$104.3
FV Change in MSRs, net of hedges ($M)	$(52.5)	$(41.1)
Servicing UPB ($B)	$116.0	$116.6

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Origination Volume ($B)	Q2 2025	—	5.0 – 7.5	New
PT‑Weighted Rate Lock Volume ($B)	Q2 2025	—	5.5 – 8.0	New
PT‑Weighted GOS Margin (bps)	Q2 2025	—	300 – 350	New
Total Expenses (directional)	Q2 2025	—	Up q/q on volume‑related costs	New
PT‑Weighted GOS Margin (bps)	Q1 2025	320 – 340	Actual 355 (beat guide)	Raised vs guide outcome

Note: Prior quarter (Q1 2025) guidance shown to contextualize delivery vs guide.

Earnings Call Themes & Trends

Topic	Q3 2024 (Prior‑2)	Q4 2024 (Prior‑1)	Q1 2025 (Current)	Trend
Home equity / second mortgage	Emphasized margin support and product contribution to profitability recovery .	Discussed product breadth and wider overall margins; seasonal volume expected down into Q1 .	Home‑equity products boosted GOS; strong demand given high equity/low coupons; expect cash‑out to re‑accelerate if rates fall .	Positive contribution; durable until rate rally shifts mix.
Interest rates & macro	Profitability achieved on modest volume uptick; noted market challenges ahead .	Seasonality/volatility embedded in Q1 guide; share gains expected vs third‑party forecasts .	Q2 outlook includes higher volumes but highlights rate volatility and affordability constraints .	Cautious near‑term; constructive on recovery optionality.
Servicing & MSR hedging	Continued hedging; fair‑value volatility managed; MSR sales impacted portfolio .	Strategy dynamic; MSR viewed as strategic asset; aim to maintain/grow over time .	Servicing fee income lower y/y; FV/hedge drag persists; hedging remains central to liquidity/earnings stability .	Stable approach; portfolio rebuild underway.
Technology/AI (mello)	Reinforced tech‑enabled origination/efficiency focus .	Investments in platforms for North Star; efficiency and cycle time improvements .	Renewed focus under Hsieh; adding “new and emerging technologies”; Investor deck cites AI‑driven CRM .	Re‑acceleration under founder leadership.
Regulatory/legal (Cyber)	Insurance receivable recorded; class‑action accrual; non‑GAAP excludes cyber costs .	Lower cyber expenses expected; liquidity prioritized .	Cyber expense minimal in Q1; non‑GAAP continues to exclude cyber and MSR FV .	Issue largely contained; residual legal tail risk monitored.
Builder JVs / distribution	Announced new JVs (Smith Douglas; Onx Homes) .	Onboarding new JVs in 2025; ramp in 2026 .	JV expansion reiterated as footprint advantage under multichannel model .	Expanding channel; supports purchase share.

Management Commentary

“Q1 was a quarter of positive momentum…higher volume, margins and ongoing cost discipline drive improved Q1 results.” — Frank Martell, CEO .
“Our multichannel sales model, proprietary mello tech stack, wide product array, powerful brand…are foundational places in which loanDepot can win.” — Anthony Hsieh, Founder/Executive Chairman .
“Pull‑through weighted gain on sale margin…355 bps, above our guidance…benefited from home equity‑linked products and higher proportion of government loans.” — David Hayes, CFO .
“We remain focused on…profitability and disciplined approach to growing revenue and market share while maintaining ample cash and a strong balance sheet.” — David Hayes, CFO .

Q&A Highlights

Theme: Home‑equity outlook. Management called second‑lien products a “proper hedge” to elevated rates; demand supported by record home equity and low first‑lien coupons; if rates decline, cash‑out refis should dominate .
Expense trajectory: Total expenses expected to rise in Q2 primarily on volume‑related costs; guidance embeds seasonality and recent rate volatility .
Mix implications: Higher government mix contributed to margin expansion; strategy is dynamic across channels to optimize profitability .

Estimates Context

Versus S&P Global consensus for Q1 2025: revenue $273.6M vs $275.0M est. (slight miss); diluted EPS $(0.11) vs $(0.061) est. (miss); adjusted EBITDA $18.3M vs $21.7M est. (miss). Company beat its own Q1 margin guidance (355 bps vs 320–340 bps) .
Implications: Street models likely need higher GOS margin assumptions but also higher volume‑related expenses; servicing income trajectory and MSR FV/hedge path remain swing factors (limited visibility), which may cap near‑term EBITDA revisions despite better margins .
Values retrieved from S&P Global.*

Key Takeaways for Investors

Mix‑ and product‑driven margin expansion is working (home‑equity, government) and beat guide, but volume‑related costs and servicing headwinds kept the quarter loss‑making; stock narrative hinges on sustaining higher margins while scaling seasonally in Q2 .
Volume set to rise in Q2 per guidance (locks $5.5–$8.0B; originations $5.0–$7.5B); monitor rate volatility and affordability which management cites as key constraints .
Founder leadership is a catalyst: Hsieh’s return signals renewed focus on tech, channel execution, and profitable share capture; watch for product/technology updates and LO productivity gains .
Servicing provides stable fee base but FV/hedge swings remain an earnings noise factor; portfolio UPB is rebuilding with servicing‑retained sales, aiding future recapture .
Liquidity remains solid ($371M cash); management targets ample cash through the cycle while investing in originations; expense step‑up in Q2 likely proportional to volume .
Estimate risk skew: Positive on margin trajectory and volume guidance; negative on expense drift and servicing variability; updated Street models should reflect higher GOS and opex with limited near‑term EPS leverage until rates decline materially .

Supplementary detail (select data and sources)

Financial summary (Q1 2025): Revenue $273.6M; Adjusted revenue $278.4M; Net loss $(40.7)M; Diluted EPS $(0.11); Adjusted net loss $(25.3)M; Adjusted EBITDA $18.3M .
Drivers and mix: PT‑weighted GOS 3.55%; PT‑weighted locks $5.4B; Originations $5.17B; Purchase mix 59%; Recapture 65% .
Servicing: Fee income $104.3M; FV change net of hedges $(41.1)M; UPB $116.6B; 60+ day delinquencies 1.5% .
Q2 outlook: Locks $5.5–$8.0B; Originations $5.0–$7.5B; GOS margin 300–350 bps; expenses up with volume .
Leadership transition: Hsieh to assume interim CEO in June; focus on expanding originations and tech enablement .

Footnote: *Values retrieved from S&P Global.

loanDepot, Inc. (LDI)·Q1 2025 Earnings Summary