Better Home & Finance Q1 Earnings Call Highlights

Key Points

• $1.64 billion in funded loan volume (about 89% YoY growth) drove Q1 revenue up ~52% to $47.5M and an improved adjusted EBITDA loss of roughly $19M, while the Tinman AI platform generated about $821M (≈50%) of volume and is rapidly scaling.
• Management warned that late-quarter geopolitical-driven rate increases (consumer rates moving from ~5.75% to well over 6.5%) have hurt funnel conversion; Q2 guidance assumes no resolution and calls for funded volume of $1.575–1.725B, revenues of $53–56M, and an adjusted EBITDA loss of $12.5–14M.
• Better is shifting mix toward higher-margin HELOCs (HELOC gain-on-sale ~6–7 points vs. mortgages ~2.5–3.5), cutting at least $25M of annualized costs, raised $69M in equity, expanded warehouse capacity to $850M, and targets adjusted EBITDA breakeven by the end of Q3 2026.

Better Home & Finance NASDAQ: BETR reported first-quarter 2026 results that management said exceeded guidance, driven by sharply higher funded loan volume and continued expansion of its Tinman AI platform and partner ecosystem.

First-quarter results: higher volume, improved losses

Chief Executive Officer Vishal Garg said the company generated approximately $1.64 billion in funded loan volume, “exceeding the high end of our prior guidance” and representing about 89% year-over-year growth. Revenue from continuing operations rose about 52% year-over-year to $47.5 million, while adjusted EBITDA loss improved to roughly $19 million, a 48% improvement from a year earlier, according to Garg.

Chief Financial Officer Naveen Advani said total expenses increased about 27% year-over-year, which he characterized as evidence of operating leverage as Tinman AI scales. Advani also said adjusted EBITDA loss improved 16% sequentially from the fourth quarter.

On product performance, Advani said refinance volume grew 542% year-over-year, home equity grew 30%, and purchase grew 2%. By mix, he said 52% of funded loan volume came from refinance, 36% from purchase, and 12% from home equity in the quarter. By channel, roughly half of funded loan volume came from the Tinman AI platform and half from direct-to-consumer originations.

Macro volatility pressures conversion as rates move higher

Management highlighted a late-quarter shift in the interest-rate environment tied to geopolitical events. Garg said the company entered 2026 with momentum, citing funded loan volume of $450 million in January, $521 million in February, and $673 million in March, with month-over-month growth of 16% and 29% in February and March.

However, Garg said “the prolonged conflict in the Middle East has started to show a market impact on interest rates across the mortgage industry,” with consumer rates on Better’s platform moving from 5.75% to “well over 6.5% in the last few weeks.” He said this has caused customers to stall mid-funnel, hesitating to lock at higher rates, and that “conversion rates are down from where they were in Q1 due to macro factors.”

On the call, Garg said the company’s second-quarter guidance assumes “no resolution” to the conflict and no improvement in the macro environment.

HELOC mix shift and unit economics in focus

Executives repeatedly pointed to home equity products as a key offset to refinance slowdowns. Garg said Better has been converting some customers who “need cash now to HELOCs,” while others seeking monthly savings may wait until rates fall.

In response to an analyst question about gain-on-sale economics, Garg said HELOCs are “averaging between 6–7 points” in total gain on sale, combining origination fees and gain-on-sale premium. He contrasted that with traditional mortgage economics, saying direct-to-consumer mortgages have averaged about 2.5 points and the Neo partnership has averaged about 3.5 points.

Discussing Tinman AI versus direct-to-consumer unit economics, Garg said Better prices platform partnerships to generate similar contribution margins to its direct channel, though revenue can vary by partner service requirements. Over time, he said Tinman’s margin profile should improve as the sale becomes “more and more software.” He added that Better targets contribution margin of “around $2,000 per loan” on mortgages and “slightly less than that on HELOCs” within its Tinman AI platform business as it scales.

Second-quarter outlook: flat volume, higher revenue, narrower EBITDA loss

For the second quarter, Garg said the company expects funded loan volume of approximately $1.65 billion, or about 37% year-over-year growth, but slower than originally expected given higher rates. He said funded volumes are expected to be “approximately flat sequentially,” while revenue is expected to rise due to a shift toward higher-margin HELOCs, with management projecting about 15% sequential revenue growth.

Advani provided a more detailed range:

• Funded loan volume: $1.575 billion to $1.725 billion
• Total net revenues: $53 million to $56 million
• Adjusted EBITDA loss: $12.5 million to $14 million

Advani said HELOC mix shift is “one of the most important dynamics in our model today,” allowing revenue growth to outperform funded volume growth.

Cost reductions, liquidity actions, and partnership ramp

Garg said Better is removing at least $25 million of annualized costs beginning in the second quarter, expanded total warehouse capacity by 48% to $850 million since the start of the first quarter, and raised $69 million in equity in early April to strengthen liquidity. Advani said the company ended the first quarter with approximately $136 million of liquidity, excluding the post-quarter equity raise.

Advani said the cost reductions include lower corporate overhead, vendor rationalization, and the planned divestiture of the company’s U.K. bank, which he said is included in discontinued operations. Asked about timing, Advani said the company is in an active sale process and that even after signing, U.K. regulatory approval could take about two to four months, suggesting an impact “in Q4.”

Management reiterated a target of adjusted EBITDA breakeven by the end of the third quarter of 2026. Garg said the timeline to reach the company’s $1 billion monthly funded volume target is now likely deferred due to rates, and he added that if rates move higher or the conflict persists, “we’re gonna have to cut costs deeper.”

On partnerships, Garg said the Credit Karma, Finance of America, and a “top 5 non-bank originator” partnership are live and ramping. He described Credit Karma exposure as expanding within an ecosystem of 140 million members, and said Better’s partnership model provides structurally lower customer acquisition costs by leveraging partner distribution rather than paid acquisition. Garg also said Better’s partnership with Neo grew from a $1.5 billion run rate at onboarding to $2.9 billion in March 2026.

Tinman AI generated approximately $821 million in funded loan volume in the first quarter, about 50% of total volume, up from 44% in the fourth quarter, according to Garg. He said Tinman represented 0% of funded loan volume in 2024, about 36% for full-year 2025, and management expects that share to continue rising. When asked about a target of 60% Tinman by year-end, Garg said the company is “well on our way to achieving that target.”

Garg also highlighted technology initiatives tied to customer service and scalability, including “Betsy” tools enabling 24/7 customer interaction and increased deployment in partner funnels. He said Better is moving Betsy toward “autopilot” in more workflows after extended learning, which he believes can reduce operating costs and help handle demand spikes.

On product launches, Garg said Better introduced the Better Home Equity Card in partnership with Stripe, a Mastercard linked to a Better HELOC that allows customers to spend funds drawn from their line and earn 1% cashback. He also discussed a token-backed mortgage product launched in March in partnership with Coinbase that is described as Fannie Mae-eligible; he said qualified Coinbase customers can pledge Bitcoin or USDC as down payment collateral without liquidating holdings. On the call, Garg said the “publicly stated launch timeline” for the Coinbase product is sometime in late Q2 and suggested the economics should resemble “Neo-like margins.”

About Better Home & Finance NASDAQ: BETR

Better Home & Finance Holding Co engages in the provision of comprehensive homeownership services. It offers mortgage loans, real estate agent services, and title and homeowner's insurance services. The company was founded in 2014 and is headquartered in New York, NY.

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