Better Home & Finance Holding Company (Better) today reported financial results for its second quarter ended June 30, 2024. The financial services company reported revenue of approximately $31 million, an increase of 41% from $22 million in Q1 2024.
Better posted a net loss of approximately $42 million as compared with $51 million in Q1 2024. The company ended the second quarter with approximately $507 million of cash, restricted cash, short-term investments, and self-funded loans.
“We are very pleased with the growth and continued progress towards profitability we demonstrated in the second quarter of 2024, through a continued challenging macro environment with persistently high rates," said Vishal Garg, Better's CEO and founder. "Our investments in purchase and home equity products, where we see growth being less rate-sensitive, generated sizable outperformance. We also saw strong early performance in sales and operating efficiency through investments in AI and our new commission model."
Funded loan volume grew 45% from Q1 2024 to $962 million, across 2,995 total loans, which Better says was driven by purchase and HELOC loan volume growth. Purchase loan volume grew 50% quarter-over-quarter and comprised 83% of the funded loan volume. Compared to Q4 2023, funded loan volume increased 150%.
HELOC loan volume (which includes home equity lines of credit and closed-end second-lien loans) grew 76% quarter-over-quarter and comprised 9% of funded loan volume. Refinance loan volume declined 5% quarter-over-quarter and comprised the remainder of the funded loan volume.
“In Q2 2024 we continued leaning into a challenging market and demonstrated operating leverage with our revenue growth outpacing expense growth. We believe the efficiencies gained from continued technology investments and corporate cost reductions will allow us to further narrow our losses as we continue to grow,” said Kevin Ryan, CFO of Better.
Looking ahead to Q3 2024, Garg projected in the earnings call that Better would see $1 billion in funded volume. “I think we’re getting our momentum started again, and people forget that this is a company that went from doing $500 million in volume during 2017 to doing over $50 billion in volume in 2021," he said.
Better's Q2 2024 highlights included total expenses being approximately flat quarter-over-quarter, with increases in marketing spend and loan production team compensation being offset by lower vendor and corporate compensation expenses compared to the first quarter. The company also highlighted a shift from fixed compensation plans to commission-based compensation plans for loan officers, as well as plans to continue investing in AI applications within its Tinman platform.
Garg also commented that the market "seems to be turning around again" which has led the company to prepare for a potential refinance boom. "There are 6 million consumers who purchased a home at rates above 7% in the last two years, and for those consumers, even a 50 bps rate cut is going to be meaningful to them.," Garg said in a call with NMP. "We think that there are going to be 6 million consumers refinancing because those people will be acutely aware of the benefits of refinancing. We’re going to see approximately a trillion and a half dollars of refinance volume, and only those companies that have leaned into technology will be able to serve that customer base."
Better also announced its plans for a 1-for-50 reverse stock split, effective at 6 p.m. EST on August 16, 2024. This decision follows approval from stockholders at its June 4 annual meeting, where they authorized the Board of Directors to implement a reverse split with a ratio ranging from 1-for-2 to 1-for-100.
