Company Overview

Better Home & Finance is a next-generation platform aiming to revolutionize the home asset class. Their goal is to simplify and make affordable the process of owning a home through their holistic solution and marketplace model enabled by proprietary technology.

They operate a technology-driven business model seeking to enhance automation and reduce costs in home finance. They aim to create a platform embedding all homeownership products into a highly automated, single flow to pass along savings.

Financial Highlights

Revenue

• Total Q1 2024 revenue was $22 million, up 19% from $19 million in Q1 2023
  • Gain on loans (mortgage production) was $16 million, up 23%
  • Other revenue (non-mortgage products) was $3 million, down 43%
  • Net interest income was $4 million, up 311%
    
• Gain on loans accounted for 70% of total revenue
• Other revenue accounted for 13%
• Net interest income accounted for 17%

Expenses and Losses

• Total Q1 2024 expenses were $74 million, down 30% from $105 million in Q1 2023
• Compensation and benefits remained flat at $38 million
• General and administrative expenses fell 16% to $14 million
• Technology expenses fell 62% to $5 million
• Marketing expenses fell 41% to $5 million
• Other expenses fell 102% to $0.2 million
• Q1 2024 net loss was $51 million, an improvement from $88 million loss in Q1 2023

Cash Flows

• Cash used in operating activities fell 74% to $43 million in Q1 2024
• Cash used in investing activities increased 452% to $33 million
• Cash used in financing activities fell 102% to $1 million
  

Liquidity and Capital Resources

• Ended Q1 2024 with $425 million in warehouse lines of credit, of which $126 million was utilized
• Maintains compliance with Nasdaq listing requirements

Strategic Analysis

Strengths

• Strong growth in core gain on loans revenue, up 23%
• Falling expenses from restructuring program
• Improved net losses
• Ample warehouse lines of credit

Weaknesses

• Declines in other revenue streams
  
• Continued heavy net losses
• Cash burn from operating activities

Opportunities

• Launch of new HELOC product gaining traction
• Expansion of Better Plus non-mortgage products
• International expansion through U.K. operations

Threats

• Potential further declines in mortgage origination market
• Ongoing impacts of CEO litigation
  
• Competitive threats from other lenders

Outlook

Better Home & Finance made progress on restructuring its business to focus on core strengths in mortgage gain on loans. It continues working to reach profitability through lowering costs and diversifying revenue streams beyond mortgages.

Key factors in improving performance will be scaling HELOC and Better Plus products, continuing international expansion, and maintaining ample liquidity. However, an uncertain mortgage market and ongoing legal issues present continued challenges.