UWM Q1 2025 Earnings Call Transcript

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Operator

Good morning. My name is Abby, and I'll be your conference operator today. At this time, I would like to welcome everyone to the UWM Holdings Corporation First Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Operator

Thank you. And Mr. Blake Kolo, you may begin your conference.

Blake Kolo
Blake Kolo
Chief Business Officer and Head of IR at UWM

Good morning. This is Blake Kolo, Chief Business Officer and Head of Investor Relations. Thank you for joining us, and welcome to the first quarter twenty twenty five UWM Holdings Corporation's earnings call. Before we start, I would like to remind everyone that this conference call includes forward looking statements. For more information about factors that may cause actual results to differ materially from forward looking statements, please refer to the earnings release that we issued this morning.

Blake Kolo
Blake Kolo
Chief Business Officer and Head of IR at UWM

Our commentary today will also include non GAAP financial measures. For information on our non GAAP measures and metrics and the reconciliation between the GAAP and non GAAP metrics for the reported results, please refer to the earnings release issued today as well as our filing with the SEC. I will now turn the call over to Matt Ishbia, Chairman and CEO of UWM Holdings Corporation and United Wholesale Mortgage.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Thanks Blake, and thank you everyone for joining today. I'm very excited for what we accomplished this quarter on many fronts and for what lies ahead here at UWM. We will continue investing in technology to widen the gap between us and our competition. Regardless of how the industry or markets may change due to technology rates, we will continue to lead the way. Since 2022, the mortgage brokerage channel share of the industry is up almost 40% from about 19.7% to almost 28%, the highest level we've seen since 02/2008, I believe.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

This is an incredible growth that we are very excited about. I say this a lot, but I would ask all of you go back and listen to our earnings call from early twenty twenty three or even '22 or 2021. But 2023, when we talked about game on pricing and how we're going to invest in the business and invest in the channel to grow, many people were concerned about lowering the margins like we did. However, I knew and we knew it would be best for the broker channel long term. The current numbers proved that we made the right decision, and we're just getting started with all the success from that decision years ago.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Switching gears, I want to address a topic that many of you recently inquired about. Last week, we announced a strategic decision to bring servicing in house. This is something we've been contemplating for many years. However, we believe now is the time to make this investment. By leveraging the latest technology and AI, our plan is to be the most efficient servicer in America.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

We are excited to control this part of the process and look forward to the cost savings that we will achieve, which some people can estimate between 40,000,000 and $100,000,000 a year. We're very excited about that opportunity once we get this fully done and going. During our past few earnings call, we discussed how UW is uniquely prepared to win in any type of market. And with the significant volatility the PASCO wants, we showcased that preparation several times. When there were brief periods of low rates, our refined operational excellence enabled us to double our daily productions levels without sacrificing speed, quality or service.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

And when the rates were higher, we demonstrated our continued dominance on the purchase market. The numbers tell an even better story, so let's get into them. We closed 32,400,000,000 of production for the quarter, obviously, within guidance, and that's a 17% growth year over year, which outperformed the whole industry. We also delivered about $10,600,000,000 of refi volume, almost double what we delivered in the first quarter of twenty twenty four. A large portion of came in a small window between the February and the March, really illustrating the power of our business.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

The gain margin was 94 basis points. While we posted a $247,000,000 net loss, I want to make sure everyone realize that this is inclusive of $388,000,000 reduction of fair value of our MSR portfolio. As we've discussed several times, we have zero control over this MSR values whether it goes up or down, it's really not that relevant to me. But we did have an amazing quarter and we're profitable on all the measures we look at. I want to highlight two other key operational metrics.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

First, our submission to clear to close for the quarter was twelve point seven days. While some of the best in this year are still running forty to forty five days, 12 point seven is outstanding. Beyond that, we improved this metric by over a day from 13.9 in the first quarter of twenty twenty four despite doing almost 20% more business. So as you see our AI initiatives and things that we've been rolling out, actually impacting the business day to day by seeing that speed and success. Second, our Net Promoter Score for the quarter was 87.3.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

You know companies with NPS in the 60s and 70s are viewed as world class. This is one of the best NPS scores in the last couple of years and reflective of our industry leading service levels, which you know from our experience will continue to drive more volume in the second quarter and beyond. As you can see, this is another really strong quarter for UWM. While the macro environment may remain choppy, we will continue to investing and winning. And I can promise you there's no other mortgage lender that is better equipped and prepared to help brokers, borrowers regardless of what the market does, and we're excited to show it to you as soon as the opportunity shows.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

I'll now turn the call over to our CFO, Rami Hassani. Is a new CFO here at UWM, has been a key member of our finance team since 2020, and he was the obvious choice to become our next CFO. So I'll turn

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

it over to you, Rami.

Rami Hasani
Rami Hasani
CFO at UWM

Thank you, Matt. I appreciate it. Jumping into the numbers, Q1 twenty twenty five revenue of $613,000,000 net loss of $247,000,000 inclusive of $388,000,000 reduction in the fair value of our MSR portfolio and adjusted EBITDA of $58,000,000 As we've discussed before, our focus continues to be on investing in our people, processes and technology as well as our broker partners to prepare UWM and our brokers collectively for continued growth in 2025 and beyond. We continue to invest in growing our operations, underwriting and technology teams to support increased production volume, which we experienced in Q1 of twenty twenty five compared to Q1 of twenty twenty four, a 17% increase.

Rami Hasani
Rami Hasani
CFO at UWM

We continue to originate more than $20,000,000,000 a quarter in purchase volume for eight quarters in a row and we view that as our base, a base that no other lender can approach. We almost doubled our refi volume year over year from 5,500,000,000.0 to $10,600,000,000 despite the rate environment being less than optimal. While our costs have increased compared to Q1 twenty twenty four, our costs are substantially aligned to Q4 of twenty twenty four, which is on strategy for investing for continued growth. More specifically, we believe our business is currently in a position to handle twice our 2024 origination volume with minimal impact to our fixed costs. We also maintained our liquidity and capital and leverage ratios within what we believe to be acceptable ranges in the current environment.

Rami Hasani
Rami Hasani
CFO at UWM

As of the end of Q1 twenty twenty five, we had $485,000,000 of cash, 2,400,000,000.0 of total accessible liquidity and an MSR portfolio with a fair value of $3,300,000,000 overall a strong liquidity position. In summary, Q1 twenty twenty five was a period of continued investment in operational capabilities to remain prepared for what we see as significant market opportunities for UWM and our broker partners. We have also continued to remain prepared for these opportunities from a capital and liquidity perspective and we believe that we remain well positioned operationally and financially for any market cycle. I will now turn things back over to our Chairman, President and CEO, Matt Ishbia, for closing remarks.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Thanks, Rami. So I'll close with a couple of quick points before the Q and A. The way I think about the business is really simple, volume, gain margin and expenses. And we're winning on all of these. The expenses part, we're investing in the business, and we feel great about it even though they're higher than Q1 because those are investments, investments in the growth and success of our business.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

The gain margin was a little lower in Q1, but we're trending higher overall, and our volume was up 70% year over year. That's how we run the business. As long as we manage these three things, we will continue to dominate. We are the leaders, not just in the mortgage business, but also the leaders in tech here at UWM. The things that we're rolling out over the next few weeks and months are game changers.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Just so you guys know, whatever you think you know about our business, how dominant we are, it's about to change in a big way. We're about to roll out some things and the best technology you've ever seen or heard of, and it's coming real soon, like, not 02/1930, like 02/2025 and 02/1926, the cool things we're gonna be doing that will impact the business. Also, as I talked to a lot of our large shareholders and investors, I consistently get the message about getting more float in the market. As you guys know, I own about 87% or control 87% of the shares. Back in March, I put out a 10b5 program that you'll see in the 10 Q that will go in effect June 17 to basically get more float and make it a consistent process rather than some of the one off things we've done to try to increase float, which we've done a good job of now will be consistent across the board where you know exactly what to expect.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

There will be no more uncertainty and no more creative ways to get flow out there. We're going to be consistent with the 10b5. And although I believe even when I did the dockings back in March, it's undervalued, but I believe that if I sell enough float to get out there and get more float in the market that the other 80%, eighty one %, eighty two % of shares I own still after this next year or two that we do this will be worth much, much more. And so we're excited to hopefully serve what the shareholders want. On top of that, on the shareholder side, we're excited to announce our dividend again.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

We're going to consistently pay the dividend we have for four plus years now as you guys know. And even at these share prices is a fantastic deal, but we always reward our shareholders and we have been for years and we're excited about rolling that out again this quarter of zero one zero dollars or $0.40 for the year is what we've been doing. Lastly, I'm very excited that many of you on this call and over 5,000 of our clients from all 50 states are going to be here in Pontiac next week for UWM Live. It's going to be informative and eventful two days that will hopefully change the industry in a huge way. I can't wait to share with what we got going.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Now quickly on guidance. We expect our second quarter production to be between 38,000,000,000 and $45,000,000,000 As a reminder, we did $33,600,000,000 in Q2 twenty twenty four. And I think in the last three years since I don't think we've done over $40,000,000,000 I'm actually hoping we eclipse the $40,000,000,000 range and dominate this quarter as we really see the purchase market being strong and opportunities for us to continue to grow here at UWM. Now with the gain margin, expect it between 90 basis and 115 basis points before. As I said, we control this and we decide what we think is best, and it will be between 90 basis and 115 basis in the second quarter as we continue to help our brokers win and grow their business as we continue to grow as well.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Now I'm going turn it over to Q and A, and look forward to talking to all of you guys.

Operator

Your first question comes from the line of Eric Hagen with BTIG. Your line is open.

Eric Hagen
Managing Director at BTIG

Hey, good morning guys. Hope you're doing well. On moving the servicing in house, I mean, kind of timeline are you looking at? Can you talk about any onetime costs, other resources or investments you need to make that happen? And then are you how does it maybe improve the recapture effort as a result of bringing it all in house?

Eric Hagen
Managing Director at BTIG

Thanks guys.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Yes. Thanks a lot Eric. Appreciate it. Yes, we're like you know everything we do we do fast. So our expectation is that bring servicing in house and start boarding loans at the beginning of twenty six and hopefully have it all in house by the end of next year if you think of it that way.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

So we'll be able to see those significant expense reductions. And at the same time as you pointed out the more important part is one, the recapture rate, but two, the service levels we can provide the consumers. The consumers get such amazing service working with a mortgage broker with UWM and then maybe they don't get that same feel all the way through the process when they're paying their mortgage payment for the next couple of years. They'll have that now because we'll control that process 100%. In addition to that, recapture will be even easier to help communicate with the borrowers on behalf of our brokers and make sure our brokers can stay in front of their clients.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

But recapture has actually not been a huge issue for us. It's actually we do pretty good. Our brokers are doing better and better with that. But the big thing is cost savings, control the process, make it so it's better experience for consumers and then thus they're going want to work with UWM even more. So we're excited about that change and that investment we're making.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

But there are no huge one time expenses or costs that are going to change anything from a that would make it even rate hit the radar on the financial side.

Eric Hagen
Managing Director at BTIG

Yes. Got you. Definitely support that move from you guys. Imagine almost all of the production last quarter was fixed rate loans, but at what point do you think ARMs make a comeback? Like do you see that being a compelling affordability product for borrowers, especially like right now?

Eric Hagen
Managing Director at BTIG

And are you in a position to competitively offer ARMs? And then like how do you think a shift to adjustable rate loans could maybe get valued in the MSR market if the intention is to sell those loans?

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Yes. So obviously as rates go up arms become more exciting, especially with the the yield curve being more normalized. But with that being said, people still think arms is a four letter word and people are scared of arms. And so I don't think many people so, you know, how much ARMs will it be? Could it be 10%?

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

I mean 15%? I don't think it gets close to those numbers. And so I don't think it's relevant. I don't think it's really that important. We do have some ARM programs.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

We do some a little bit here and there. But most consuming them rates will the tenure goes down to 4.1 or 4.5 and no one will touch an arm again, right? And so it just depends on the situation in the market. ARMs are probably more of a refi program. We're doing some temporary buy downs, which is an interesting thing on a purchase, which kind of gives them a little bit lower rate for the first twelve twenty four months and then it sets them up for future refinance down the road if rates go down like everyone expects.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

But, so ARMs are interesting but I don't think they're as viable and as big of an opportunity as maybe they were five, seven, eight years ago from my perspective. But we are prepared and we do a little bit of it and we will probably do a little bit more, but it won't be meaningful enough that it will hit your guys' radar.

Eric Hagen
Managing Director at BTIG

Yes. Got you. Thank you for the color and look forward to seeing you guys next week.

Operator

And your next question comes from the line of Bose George with KBW. Your line is open. And please check your mute button. Your line is open.

Bose George
Managing Director at Keefe, Bruyette & Woods (KBW)

Sorry about that. I was muted. Morning. Actually, just wanted to follow-up on the MSR question. Actually, the change with servicing in house, could that change how you dispose of MSRs?

Bose George
Managing Director at Keefe, Bruyette & Woods (KBW)

Could you hold more MSRs to capture more value that way as well?

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Yes, absolutely. So we look at all those things all the time. We were not selling MSRs because we were subservicing and we're not going to hold them because we're servicing ourselves. We're going to be opportunistic like we always have. Now the fact that we control the process and we can control the experience even more, it makes me lean a little more towards retaining more of it.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

But it's all dependent on the opportunities. Once again, people want to offer me 6.5, seven multiples, 7.5 multiples on MSRs. I have a lot of MSRs, right? And those opportunities are there. But the reality of it is understanding what's best for the business is what we always think about, what's best for our clients as in the brokers, what's best for consumers, what's best for our team members and what's best for our shareholders.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

And so we look at all those things. We think bringing servicing in house is best for us at this point. It's been an inflection point. We've been fifty-fifty for a while on it and we kind of pushed over the edge recently and we're excited about that savings, experienced enhancement. And once again, could it make us hold MSR differently or think of it?

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Absolutely, but we're looking at all things at all times.

Bose George
Managing Director at Keefe, Bruyette & Woods (KBW)

Okay, great. And then in terms of GSE reform, obviously, there's a lot of noise on potential privatization. Can you just talk about what you're hearing and anything you might be doing in terms of preparing for that potentially happening?

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Yes. I mean, think that that stuff's way, way far in the future if it even happens. Here's what I'd say about it. I think you've got great leaders now running the mortgage market from FHFA Director Bill Pulte to HUD Director Scott Turner. You got people on top of the mortgage business.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Obviously, that goes up through the President. Think people that actually care and understand it. So I think they're going make the right decisions for all of us. And so my view on it is whatever happens we will win with it because we are nimble, we react quickly, we make changes and we impact the business and our brokers in a positive way. And if nothing changes we'll continue to win that way.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

And nothing's changing as of now. I think the best part is you have great leaders in the FHFA Director, the Head of HUD and people that actually care and want to do what's best for consumers and the mortgage lending landscape and the housing market in general and they understand it, which is a little bit different than maybe we've had in the past.

Bose George
Managing Director at Keefe, Bruyette & Woods (KBW)

Okay, great. Thanks a lot and looking forward to next week.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Look forward to seeing you there too.

Operator

And your next question comes from the line of Jeff Adelson with Morgan Stanley. Your line is open.

Jeffrey Adelson
Jeffrey Adelson
Executive Director at Morgan Stanley

Hey, good morning guys. Thanks for taking my questions. Matt, I was wondering if you could just maybe help us understand what's sort of embedded in the second quarter outlook. I know you mentioned that you hopefully can get over the $40,000,000,000 mark, but I'm just wondering is that more of a stable environment, great environment for where we're sitting today or just maybe help us understand what else is digging into that?

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Hey, thanks Jeff. Nice to connect with you buddy. So I guess I would say this, nothing it's not like interest rates are real low when I'm saying let's do $40,000,000,000 plus. I'm saying we've been building, we've been investing, all these things are happening. The broker channel is now at its highest it's been since 02/2008.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

So all the things that we've been talking about for years are starting to happen. Now we have rates drop a little bit and we won't talk about 40,000,000,000 we'll talk about $60,000,000,000 right? Like there's opportunities right there and we're ready to do that tomorrow if the ten year dropped, right? So the way I look at it is but I am trying to guide you guys towards that, hey, we haven't hit over $40,000,000,000 since the refi boom times and we are going to do that this quarter. And I know I got it 38 to 45,000,000,000 but I expect us to do over $40,000,000,000 And that's a big statement compared to what we did last year in the second quarter compared to what we did even in this first quarter this year where everyone else is kind of hovering.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Our investments have been working. Our broker channel is winning. And then on top of that, the technology stuff that's going come out in the second quarter. Jeff, I think you're going to be here at UWM Live along with other people on this call. It's going to blow your mind.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

And it's just the beginning, just the beginning of what we're doing. And so you'll understand the strategy even more as you see the things we're doing and brokers are going to grow, UWM is going to grow and we're all going to win together and watch out because if rates drop, got bigger numbers and different things. But if they don't, you got when you see where we're trending and how we're doing things and that's what we're going keep doing.

Jeffrey Adelson
Jeffrey Adelson
Executive Director at Morgan Stanley

Okay. Great. Thanks. And obviously, there's been a big deal in our space. I'm just sort of wondering, do you guys have a view of how that might change competition in the space, if at all?

Jeffrey Adelson
Jeffrey Adelson
Executive Director at Morgan Stanley

And what's United's own view on M and A as well as it looks going forward in addition to all the enhancement you're you're looking at here. Is there anything that you'd be looking to maybe bolster your own tech ambitions in the space?

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Yeah. You broke up a little bit at the beginning. You said because of M and A?

Jeffrey Adelson
Jeffrey Adelson
Executive Director at Morgan Stanley

Oh, yeah. I was just saying there's obviously a big transaction in the space from one of your competitors. So I'm just sort of wondering your your reaction to the impact on

Jeffrey Adelson
Jeffrey Adelson
Executive Director at Morgan Stanley

competition in space.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Yeah. So yeah. I guess my take and I think, you know, in in general, my take is we look at everything and opportunities from an MA perspective, but we're a build versus buy type of company. I can buy something and then make you guys feel really good and you guys can try to pump my stock price for a little bit, but it wouldn't be the right decision for our long term business.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Now there are things that we look at and we could buy. But from a technology stuff, mean, I'm not going go out and buy a bunch of these companies and try to like pump my stock, whatever the words you want to use spend billions and billions of dollars potentially just to get a couple more leads. Our business is organic. It's been dominant and it will continue to be dominant. Now we're opportunistic.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

If an opportunity comes up, we always look at it, but that's really not the strategy right now. The strategy is let's dominate. And same thing on the tech side. The tech side, people only go buy this company that could do this, that could come up with some AI stuff like or I'm just going to sit here with my almost 2,000 technology people and build the best stuff in the world. And so that's kind of how I lean on that stuff.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

But we're open to everything and everyone has their own strategy and we're going to keep doing it our way. But we're always opportunistic if the right thing came up.

Jeffrey Adelson
Jeffrey Adelson
Executive Director at Morgan Stanley

Great. Thanks for taking my questions. See you next

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Thank you.

Operator

And your next question comes from the line of Mikhail Goberman with Citizens. Your line is open.

Mikhail Goberman
VP - Equity Research at Citizen JMP

Hey, good morning, guys. Thanks for taking the question. Excited to hear about these technological changes coming down the coming up. And just wondering, how do you guys expect those changes to affect the expense base going forward? Thanks.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Good question. So yes, the technology enhancements, the AI investments, it's going to how is it going to impact expenses? I mean, we're going to continue to invest. And so will our costs go down? Absolutely.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Will our revenue go up? Absolutely. So if those are the things you care about and focus on then you'll probably be happy with all the things we're doing. With that being said, I'm obviously not going roll out or explain what I'm doing now on this call, but we look at all these things. On the expense side, the fixed costs are kind of at a peak based on where we think of things, but realize that you think they're higher.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

The way I look at it is I'm just investing and other people can't. They can't afford to invest right now. And then we are prepared. And like I just said on, I think, question or two ago, we're going do $75,000,000,000.45000000000 a lot of these quarters and we're going do some great things. But then rates drop a little, we'll do 60,000,000,000 Nobody else can do that.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

And our gain on sale margin will be higher and our volume will be higher and our expenses will basically stay the same from a fixed perspective. And so imagine that and that's how we will build the business where nobody else can prepare for that. So we feel good. I think our expenses as you will say are up 25% from last year's first quarter. Oh my goodness, our volume is up 17%.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

So there's an 8% delta. I think that's pretty good to be honest with you based on the amount of investments and stuff that we've been working on. So I focus on investing in the business in the future. I'm not focused on expenses. If I was focused on expenses as my primary thing, we would not be prepared to dominate as we are right now.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

And so when that domination continue I mean, we've been dominating for three, four years now as you guys have seen, but it's a whole another level what you'll see in the near future.

Mikhail Goberman
VP - Equity Research at Citizen JMP

All right. Thank you, Matt. Appreciate it.

Operator

And your final question comes from the line of Doug Parter with UBS. Your line is open.

Douglas Harter
Douglas Harter
Equity Research Analyst at UBS Group

Thanks. In your prepared remarks, you talked about the being comfortable with the leverage range that you're in right now. Can you just maybe put some numbers around that? What is kind of the target non funding debt to equity range that you're looking at?

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Doug, stuff is not the focus of the business. We're really in a great position on that stuff. I know you like to focus on things that are not relevant, but that's not relevant. What's relevant is the domination of our business, the built we're built to succeed and win. Every single ratio our ratios are in a great position, and I can let Rami speak to that stuff.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

But the truth is, like, that's just like someone that looks at a spreadsheet all day is asking me that question, not someone that actually understands the mortgage business in our industry and what we're trying to do. And so like come out to UWM Live, I think you're going be there so you'll understand the tech investments, what we're doing like our non funding debt ratios, all those things are in great position. We feel really good about our cash position, our net worth, our all of our ratios and we have a lot of room in there to continue to grow. And I think you'll see that stuff after the second quarter and I think you'll be excited to see those numbers go the ways you might like.

Douglas Harter
Douglas Harter
Equity Research Analyst at UBS Group

Great. Thanks.

Operator

And that will wrap up the Q and A portion. I would like to turn the call back over to Matt Ishbia for closing remarks.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Hey, thanks everyone for the questions. We're really happy with the quarter to be honest with you and I'm actually even more excited about the second quarter. So we feel like we're in a great, great position as a company. I like to say never been stronger because I know what we're about to roll out and how we're going do different things over the next three to twelve months. But in general, I appreciate all your support.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

I look forward to seeing a lot you at UW Live. Really means a lot to us. I look forward to spending time with you guys there and talking about the business and when I can open up a little bit more about all the great things we're doing here. It's going be a lot of great things coming out soon and then soon after that as well. So thank you for the time.

Mathew Ishbia
Mathew Ishbia
Chairman, President & CEO at UWM

Have a great day and look forward to seeing you guys soon.

Operator

And ladies and gentlemen, this concludes today's call and we thank you for your participation. You may now disconnect.

Executives
    • Blake Kolo
      Blake Kolo
      Chief Business Officer and Head of IR
    • Mathew Ishbia
      Mathew Ishbia
      Chairman, President & CEO
    • Rami Hasani
      Rami Hasani
      CFO
Analysts

Key Takeaways

  • UWM closed $32.4 billion of production in Q1—a 17% year-over-year increase—and delivered $10.6 billion of refinance volume, while guiding Q2 production of $38–45 billion with expectations to exceed $40 billion.
  • The company reported a $247 million net loss in Q1, driven by a $388 million MSR fair-value reduction, but achieved $58 million of adjusted EBITDA and remains profitable on key operating measures.
  • Operational excellence was highlighted by an average clear-to-close time of 12.7 days (improving over a day year-over-year despite 20% higher volume) and a best-in-class Net Promoter Score of 87.3.
  • UWM announced plans to bring mortgage servicing in-house by early 2026, targeting $40–100 million in annual cost savings, better borrower experience through AI, and improved recapture for brokers.
  • The firm continues to invest heavily in technology and AI to widen its competitive lead, with major product rollouts slated in 2025 that management calls “game changers.”
AI Generated. May Contain Errors.
Earnings Conference Call
UWM Q1 2025
00:00 / 00:00

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