Finance of America Companies Q3 2025 Earnings Results & Report

Finance of America Companies EPS Results

• Actual EPS: $1.33
• Consensus EPS: $0.6710
• Beat/Miss: Beat by +$0.6590
• One Year Ago EPS: N/A
• EPS Beat Rate: 5 of last 8 quarters

Finance of America Companies Revenue Results

• Actual Revenue: $80.85 million
• Expected Revenue: $101.91 million
• Beat/Miss: Missed by -$21.07 million
• YoY Revenue Growth: N/A

Finance of America Companies (NYSE:FOA), Inc. (NYSE: FOA) is a financial services company focused on helping older homeowners use their home equity as part of a broader retirement strategy. Through its subsidiaries, the company provides reverse mortgage products and related solutions designed to help homeowners access cash, supplement retirement income, manage expenses or remain in their homes.

The company’s reverse mortgage business, Finance of America Reverse, offers federally insured Home Equity Conversion Mortgages as well as proprietary reverse mortgage products, including HomeSafe. These products are generally marketed to homeowners age 62 and older, subject to applicable program requirements. Finance of America also provides educational resources and support for consumers, lending professionals and other advisers involved in retirement and home-equity planning.

Finance of America serves customers throughout the United States through a network of direct-to-consumer and professional channels. The company has evolved from a broader mortgage platform into a more specialized provider of home-equity-based retirement solutions and is led by Chief Executive Officer Graham Fleming.

Finance of America Companies Q3 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Adjusted results and guidance improved — Q3 adjusted net income was $33M ($1.33/sh), YTD adjusted net income is $60M ($2.33/sh), management reaffirmed 2025 adjusted EPS of $2.60–$3.00 and gave 2026 adjusted EPS guidance of $4.25–$4.75 supported by 20%–25% volume growth.
• Positive Sentiment: Liquidity and capital markets execution strengthened — cash rose to $110M from $46M after repaying higher‑cost facilities, issuing $40M 0% convertible notes, and completing over $3B of securitizations (including a nearly $2B deal), positioning the company to meet upcoming debt obligations and the planned Blackstone buyback.
• Negative Sentiment: GAAP volatility from fair‑value marks — the company reported a Q3 GAAP net loss of $29M, driven by lower rates and softer home‑price appreciation assumptions that reduced the non‑cash fair value of residuals, highlighting mark‑to‑market sensitivity.
• Positive Sentiment: Operational momentum and digital transformation — funded volumes rose (Q3 funded $603M; YTD volumes up ~28%), digital prequalification completed end‑to‑end >20% of the time, web leads and email‑nurture leads surged, and a partnership with Better.com expands product diversification into traditional home equity.

Presentation

[Operator]

Good day, everyone, and welcome to the Finance of America third quarter 2025 earnings call. At this time, I would like to hand the call over to Mr. Michael Fant. Please go ahead, sir.

[Michael Fant, SVP of Finance at Finance of America]

Thank you, and good afternoon, everyone, and welcome to Finance of America's third quarter 2025 earnings call. With me today are Graham Fleming, Chief Executive Officer, Kristen Sieffert, President, and Matt Engel, Chief Financial Officer. As a reminder, this call is being recorded, and you can find the earnings release on our Investor Relations website at ir.financeofamericacompanies.com. Also, I would like to remind everyone that comments on this conference call may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the company's expected operating and financial performance for future periods. These statements are based on the company's current expectations and are subject to the Safe Harbor Statement for forward-looking statements that you will find in today's earnings release.

[Michael Fant, SVP of Finance at Finance of America]

Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of risk or other factors, including those that are described in the risk factors section of Finance of America's amended annual report on Form 10-K for the year ended December 31st, 2024, filed with the SEC on May 20, 2025. Such risk factors may be amended and updated in our subsequent filings with the SEC. We are not undertaking any commitment to update these statements if conditions change. Please note, today we will be discussing interim period financials for our continuing operations, which are unaudited. In addition, we will refer to certain non-GAAP financial measures on this call. You can find reconciliations of non-GAAP to GAAP financial measures to the extent available without unreasonable efforts in our earnings press release on the Investor Relations page of our website.

[Michael Fant, SVP of Finance at Finance of America]

Now, I'll turn the call over to our Chief Executive Officer, Graham Fleming. Graham?

[Graham Fleming, CEO at Finance of America]

Thank you, Michael, and good afternoon, everyone. The third quarter of 2025 marked a period of strategic execution and strong performance for Finance of America. In a dynamic market environment, we remain focused on operational excellence, proactive balance sheet management, and long-term growth. Year-to-date, we have reported GAAP net income of $131 million, or $5.78 per basic share, reflecting the benefit of lower interest rates and tighter spreads, partially offset by softer home price appreciation projections in the third quarter. On an adjusted basis, we generated adjusted net income of $33 million for the quarter for $1.33 per share, representing a significant sequential improvement and more than double the level from a year ago.

[Graham Fleming, CEO at Finance of America]

The increase was driven by improving revenues across our business with increased margins on HomeSafe and HECM products, stronger origination fee income, and higher capital markets revenue as a result of the over $3 billion of notes issued in our securitizations backed by our proprietary loans during the quarter. Compared to the first 9 months of 2024, we have seen funded volumes increase by over 28% and adjusted net income grow by more than five times from $9 million in 2024 to $60 million in the first 9 months of 2025. This translates to $2.33 of adjusted earnings per share, a major step toward our full-year guidance. Turning to adjusted EBITDA, the company generated $114 million for the first 9 months of 2025, a 171% improvement compared to the same period a year ago. During the quarter, we completed a series of transactions to enhance liquidity and balance sheet flexibility.

[Graham Fleming, CEO at Finance of America]

We repaid $85 million of higher-cost working capital facilities and entered into an agreement to repurchase the entirety of Blackstone's equity stake in FOA. We also closed our largest proprietary securitization in company history in September, a nearly $2 billion issuance. As of September 30th, these actions left the company with $110 million in cash and cash equivalents compared to $46 million as of June 30th. This increase in cash provides FOA with enough liquidity to satisfy the $53 million corporate bond payments due later this month. In addition to our strong results, in October, we announced a strategic partnership with Better.com, expanding our product offerings and enhancing our technology backbone to better serve our demographic, which Kristen will touch on in more detail. Over the last several years, we've continued to invest in digital innovation, AI, and data analytics, strengthening the foundation of our business.

[Graham Fleming, CEO at Finance of America]

While still very early in the adoption of AI technology, we fully expect these investments to improve the customer experience, enhance the ROI in our marketing spend, and increase the productivity of the organization, driving improved operating leverage. Kristen will share more on the progress we've made in these areas and the impact across our platform. Kristen?

[Kristen Sieffert, President at Finance of America]

Thanks, Graham, and good afternoon, everyone. The third quarter represented a disciplined period of execution across Finance of America. We delivered solid origination performance, advanced our technology transformation, and continued to strengthen the core fundamentals that position FOA for sustainable, profitable growth into 2026 and beyond. Origination performance remained robust, with funded volume reaching $603 million. And submission volume reaching $887 million for the quarter, compared to $764 million in the same period last year. By the end of October for the year 2025, we funded $1.97 billion in reverse mortgages, surpassing our entire 2024 production of $1.92 billion, and October submissions totaled $336 million, the highest month in 3 years. Beyond headline volume, the team continues to make substantial progress in transforming the business model. We're embedding AI, digital automation, and advanced data analytics across our wholesale and retail channels, driving measurable gains in efficiency and conversion.

[Kristen Sieffert, President at Finance of America]

We're already seeing tangible results from our digital-first strategy. Over 20% of customers who engaged with our new digital prequalification completed the process without loan officer intervention. The tool, which includes a soft credit pull, delivers a 3-minute prequalification experience, setting a new benchmark for speed and customer engagement in the reverse mortgage industry. This will translate into greater efficiency per loan officer, and we saw this in October's numbers as our loan officers were able to service 25% more opportunities and generated a 32% increase in monthly submission volume over the year-to-date averages. Our continued investment in and attention to the top of the funnel is driving stronger digital engagement and setting the foundation for efficient volume growth in 2026.

[Kristen Sieffert, President at Finance of America]

Unique web leads increased 16% quarter-over-quarter, customer email retention increased 36% from the time of the AAG platform acquisition, and leads generated through email nurture from our database increased 206% quarter-over-quarter. In the coming months, we're enhancing this digital ecosystem further with SMS engagement tools for sales teams, AI-powered call agents to provide 24/7 borrower support, and AI-powered wholesale tools to improve our partner experience. These initiatives are expected to increase conversion at critical funnel points, expanding our operating leverage and the scalability of our model. We are also continuing to advance our diversification strategy through a strategic partnership with Better.com that broadens our impact into the total addressable market. These traditional home equity products enable us to serve approximately 30% more of the potential borrowers already engaging with our brand who need higher loan-to-value solutions than our current reverse suite provides.

[Kristen Sieffert, President at Finance of America]

At FOA, we're not just adapting to the future of home equity. We're defining it. Our investments in digital automation, data infrastructure, and AI are structurally enhancing unit economics, driving margin expansion, and strengthening our long-term earnings power. As home equity continues to move from the most underused retirement asset to a mainstream solution for the modern retiree, FOA is positioned at the center of this transformation, committed to unlocking opportunities for millions of Americans to realize the full potential of their retirement. With that, I'll turn it over to Matt to review the financials. Matt?

[Matt Engel, CFO at Finance of America]

Thank you, Kristen, and good afternoon, everyone. The third quarter reflected strategic execution and strong performance for Finance of America, highlighting both the consistent progress of our operating performance and our ability to take advantage of opportunities as they arise. On a GAAP basis, the company reported a net loss of $29 million for the quarter, as lower interest rates and tighter spreads were more than offset by softer home price appreciation projections impacting the non-cash fair value of our residuals. Year-to-date, the company is still significantly positive, reporting $131 million of pre-tax income for the first 9 months of 2025. Adjusted net income for the quarter totaled $33 million, or $1.33 per share, a 125% increase from the prior quarter and more than double the level from the same period last year. This improvement was driven by higher origination margins and increased capital markets activity.

[Matt Engel, CFO at Finance of America]

For the first 9 months of 2025, we have funded approximately $1.8 billion in originations compared with $1.4 billion during the same period last year, an increase of 28% year-over-year. Adjusted net income totaled $60 million, or $2.33 per share, up meaningfully from $9 million, or $0.38 per share, in the same period of 2024. This improvement reflects stronger margins, increased capital markets activity, and continued expense discipline across our platform. Excluding fair value changes from market and model assumptions, Q3 revenues totaled $103 million, bringing year-to-date total revenue to $263 million, an increase of 22% year-over-year from $215 million in the first 9 months of 2024.

[Matt Engel, CFO at Finance of America]

During the quarter, we strengthened our liquidity through the issuance of $40 million of 0% convertible notes, as well as the monetization of residual assets, completing over $3 billion in securitizations, including a nearly $2 billion securitization in September, the largest in the company's history. Additionally, we paid down $125 million of working capital and other financing facilities, with $60 million remaining to be redrawn for future use. Despite these paydowns, cash levels increased from $46 million as of June 30 to $110 million as of September 30, allowing us to set aside funds for the scheduled $53 million corporate debt paydown later this month. As announced in August, we entered into an agreement to repurchase all existing shares owned by Blackstone.

[Matt Engel, CFO at Finance of America]

In accordance with GAAP accounting rules, this agreement is seen as an obligation and therefore accounted for as a liability and a reduction to equity as of the date of the announcement. Our September 30 balance sheet reflects this liability and reduction to equity. Turning to guidance, we are reaffirming our full-year 2025 adjusted EPS target of $2.60-$3.00 and anticipate tracking toward the low end of our previously stated volume range of $2.4-$2.7 billion. Looking ahead to 2026, we expect volume growth of 20%-25% year-over-year, supporting a 2026 adjusted earnings per share guidance of $4.25-$4.75 per share, which is up from $2.60-$3.00 in 2025. With that, I'll turn it back to Graham for closing remarks.

[Graham Fleming, CEO at Finance of America]

Thank you, Matt. As we close the third quarter, I want to take a moment to reflect on the progress we've made. In just over a year since our transformation, we have achieved consistent profitability and expanded our leadership in reverse lending while delivering and strengthening our balance sheet. As Kristen mentioned, we're seeing strong momentum at the top of the funnel with record lead generation, higher digital engagement, and continued efficiency gains, all of which give us confidence to achieve a 60% year-over-year increase in 2026 adjusted EPS guidance. These accomplishments demonstrate our progress in building a stronger, more efficient, and more diversified Finance of America. Our continued investment in modernization, digital innovation, and AI is enhancing productivity, expanding operating leverage, and positioning us to scale efficiently as demand for home equity solutions grows.

[Graham Fleming, CEO at Finance of America]

We believe we are well-positioned to deliver sustained volume growth of roughly 20% annually over the coming years as we build the most trusted and technologically advanced platform for retirement-focused home equity solutions in America. We are confident in our direction, encouraged by our results, and excited about the opportunities ahead. As we look to 2026, we remain committed to driving sustainable growth, enhancing shareholder value, and helping more Americans discover there is a better way with FOA. And with that, we'll open the call for questions.

[Operator]

Thank you, sir. If you do have a question, please press star one on your telephone keypad. We'll take the first question today from Doug Harter, UBS.

[Doug Harter, Equity Research Analyst at UBS]

Thanks. Just on the buyback. I guess. Has that been completed yet, or what is the updated timeframe on that completion?

[Matt Engel, CFO at Finance of America]

It has not been completed yet, Doug. It's really, we're on track to complete it. Most likely that'll begin later this month and into December, perhaps.

[Doug Harter, Equity Research Analyst at UBS]

And can you remind me the cash total of that? Just as we think about kind of the uses of your current cash position?

[Matt Engel, CFO at Finance of America]

It's about $80 million.

[Doug Harter, Equity Research Analyst at UBS]

Okay, and then how do you think about what is the right level of cash to hold? How much of that capacity do you have to redraw? Do you think you need to do in the coming months?

[Matt Engel, CFO at Finance of America]

So if you kind of piece it together, Doug, I think we ended the quarter with the $110 million. We indicated we had paid down during the quarter $125 million of working capital facilities, right, which was $85 million of the kind of corporate general facilities and then other kind of warehouse debt. So of that $125 million, $60 million of it is available really to be redrawn as necessary. So you can really kind of add that to the $110 million we had on hand at the end of September to give you the kind of the adjusted cash capacity we have heading into the fourth quarter.

[Doug Harter, Equity Research Analyst at UBS]

Got it. And then I guess how should we obviously a strong securitization quarter, which I imagine was a big part of the cash generation. How should we think about your cadence in the coming months, quarters of securitization? And just any update on how that market is functioning right now?

[Matt Engel, CFO at Finance of America]

Yeah, I think generally our cadence has been to do kind of one large securitization every quarter. We probably accelerated and pulled one that we'd planned for Q4 into Q3. But that said, we do have a smaller securitization we expect to complete this month. Remains to be seen exactly what that timing looks like. But I do think the Q3 activity was larger than what you'd normally expect to see on a go-forward basis. The market's been performing very well. Spreads have been tight. Demand has been good. One thing we've seen, especially as we started doing some larger deals, I mean, we did a $1 billion deal in July, which at the time was our largest deal ever. Followed that up with a $2 billion deal in September, doubled that. Both were very well-received.

[Matt Engel, CFO at Finance of America]

And when you start talking bigger numbers, you just get a different class of investor. Multiple new investors coming in, so we saw very good reception for our bonds and those deals.

[Doug Harter, Equity Research Analyst at UBS]

Great. Appreciate it. Thank you, guys, for the time.

[Operator]

The next question is from Leon Cooperman from Omega Advisors.

[Leon Cooperman, Chairman and CEO at Omega Advisors]

Thank you. There are lots of different measures of earnings. How much cash do you generate a typical year? In other words, how much cash would you generate in a 12-month period? On average?

[Graham Fleming, CEO at Finance of America]

So Leon, I'll answer that one. So in a given year, when you look at our PTI, it may, because we create residuals and MSR, I would say within 24-36 months after our P&L, that number all turns green. So if we post $100 million or $120 million of PTI for this year, you would expect over the course of 3 years that that would all become cash.

[Leon Cooperman, Chairman and CEO at Omega Advisors]

Okay. I want to take the $100 million divided by 3. That's a typical year.

[Graham Fleming, CEO at Finance of America]

Well, we do have currently on our balance sheet, we still have roughly $300 million of residuals and retained securities, right, that over the coming years, we'll continue to monetize those residuals. And they'll continue to turn to cash. And then our new residuals will create new residuals and new MSR on a go-forward basis.

[Leon Cooperman, Chairman and CEO at Omega Advisors]

So basically, how many shares is the new capitalization going to be?

[Matt Engel, CFO at Finance of America]

So total. Today, well, we have today about 24 million shares outstanding, right? 8 million of that will be repurchased in the Blackstone transaction, which leaves you with about 16. And then the convertible notes, both the $150 million we have from the prior convertible notes and the $40 million notes we just added would add about 7 million. Plus our stock options get you back about 24. So you see our total fully diluted share count go from what today is about 31 million down to about 24 million on an adjusted basis going forward.

[Leon Cooperman, Chairman and CEO at Omega Advisors]

So are you suggesting that you generate about $4 a share in cash earnings?

[Matt Engel, CFO at Finance of America]

Yeah, at $100 million in PTI, that'd be correct.

[Leon Cooperman, Chairman and CEO at Omega Advisors]

Okay. Thank you. Good luck.

[Operator]

Everyone, at this time, there are no further questions. I'll hand the conference back to Graham Fleming for any additional or closing remarks.

[Graham Fleming, CEO at Finance of America]

Yeah, thank you, everybody, for joining. We appreciate your participation, and we look forward to updating the full-year numbers in March of next year. So thank you very much, everybody.

[Operator]

Once again, everyone, that does conclude today's conference. We would like to thank you all for your participation today. You may now disconnect.

Participants

Executives

• Kristen Sieffert, President
• Graham Fleming, CEO

Analysts

• Michael Fant, SVP of Finance at Finance of America
• Matt Engel, CFO at Finance of America
• Leon Cooperman, Chairman and CEO at Omega Advisors
• Doug Harter, Equity Research Analyst at UBS