Better Home & Finance Q3 Earnings Call Highlights

Key Points

• Q3 revenue missed guidance: Revenue rose 9% year over year to $45.1 million and loan volume increased 15% to $1.4 billion, but the adjusted EBITDA loss widened to $29.7 million. Management said $12.8 million in proxy-contest expenses drove much of the shortfall; excluding them, the loss was about $16.9 million, within guidance.
• Better is targeting adjusted EBITDA break-even through cost cuts and AI: completed actions are expected to save $30.4 million annually toward a roughly $64.2 million target, with additional quarterly savings expected in Q4. The company plans to use AI tools for tasks including application support and follow-up.
• Loan volume declined month by month from $496 million in July to $345 million in October, while Better expands its partner channel and home-equity lending. Its AI-powered HELOC recently launched with a partner, and it has signed 39 brokerages representing an estimated $400 million in annual home-equity volume.

Better Home & Finance NASDAQ: BETR reported third-quarter revenue below its guidance and outlined plans to cut costs, expand home-equity lending and use artificial intelligence to improve productivity as it pursues adjusted EBITDA break-even.

The mortgage lender reported $45.1 million in total net revenue, up 9% from a year earlier, while loan volume rose 15% to $1.4 billion. Its net loss narrowed to $36.5 million from $39.1 million in the third quarter of 2025, but its adjusted EBITDA loss widened to $29.7 million from $22.9 million.

Founder and Head of Product, Platform, and Innovation Vishal Garg attributed part of the shortfall to disruption from a proxy contest following his removal as CEO on Aug. 3. He said the contest delayed partnership launches and hurt employee productivity and customer conversion. Garg also cited interest rates and broader uncertainty as headwinds.

Chief Financial Officer Loveen Advani said $12.8 million in proxy-related expenses was the largest driver of the variance from the company’s adjusted EBITDA guidance. Excluding those expenses, the loss would have been approximately $16.9 million, within the company’s $15 million to $18 million guidance range.

Cost cuts and AI are central to turnaround

Garg, who said shareholders backed his return in the proxy contest, described the company’s strategy as “Better 2.0.” Its top financial priority is to reach adjusted EBITDA break-even as soon as possible, he said, without giving a specific date.

The company has completed actions expected to generate $30.4 million in annualized savings toward a target of approximately $64.2 million, Garg said. Those completed actions represent $7.6 million in quarterly savings. Better expects another $7.4 million to $9.4 million in quarterly savings in the fourth quarter and adjusted EBITDA-basis operating expenses of $45 million to $47 million.

Garg said the company has removed management roles representing more than $3.5 million in annualized savings, with some responsibilities shifted to AI agents and dashboards. During the question-and-answer session, he also said Better had eliminated its home lending associate role and was using its AI assistant, Betsy, for application support, follow-up and other tasks.

Better plans to publish weekly scorecards tracking its initiatives until it reaches adjusted EBITDA break-even, management said.

Loan volumes decline as partner channel grows

Monthly loan volume fell from $496 million in July to $464 million in August, $435 million in September and $345 million in October. Garg said he expected October and November to be the bottom of the decline, followed by a rebuilding toward July and August volume levels, though he cautioned that operational changes would take time to show results.

Advani said lower refinancing activity, softer conversion and delayed partnership launches weighed on volume and revenue compared with the previous quarter. He also said operational disruption and market volatility limited near-term visibility.

The company’s Tinman AI platform accounted for $792 million, or 57%, of third-quarter loan volume, up 64% from a year earlier. Direct-to-consumer lending represented $603 million, or 43%. By product, purchase loans made up 55.6% of volume, refinancing accounted for 25.5% and home equity represented 18.9%.

Better recently launched an AI-powered home equity line of credit, or HELOC, with an existing partner. Garg said the product is being introduced to a small portion of that partner’s customers before expanding to larger groups. The company has also signed 39 mortgage brokerages representing an estimated $400 million in annual addressable home-equity volume, he said.

Garg told analysts that four potential partnerships that stalled during the proxy contest remain under discussion. Legal documents are being exchanged with two, while technology integrations are underway with the other two, he said.

On HELOC economics, Garg said gain on sale can range from 6 to 8 points, depending on the investor, compared with 2 to 3 points for traditional mortgages. Although HELOC balances are smaller, he said Better generally earns about the same revenue per loan.

Bank sale and balance sheet

Better ended the quarter with $77.5 million in cash and cash equivalents and $12.9 million in restricted cash, Advani said. He expects the sale of Birmingham Bank to close in the first quarter of 2027, subject to regulatory approval, and generate approximately $65 million in additional cash.

In the meantime, the company is evaluating borrowing against its unencumbered position in the bank and has received five term sheets, Advani said.

About Better Home & Finance (NASDAQ:BETR)

Better Home & Finance Holding Company is a financial technology company that provides digital services for homeownership. Through its Better brand, the company offers an online platform designed to simplify the process of buying, financing and protecting a home.

Its principal businesses include Better Mortgage, a digital mortgage lender and broker; Better Real Estate, which provides residential real estate brokerage services; Better Cover, an insurance platform; and Better Settlement Services, which supports title and closing activities.

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