Better Home & Finance is proposing a lending operation in which AI handles more of the work, and people step in as needed, following preliminary third-quarter results that showed a revenue miss and deeper losses than management had forecast.
Founder Vishal Garg said the company wants to move toward an “AI first, human engagement solely as fallback” model, targeting production costs below $1,000 per mortgage and $500 per home equity line of credit.
The proposal puts a sharper question in front of originators and potential lender partners: how much of Better’s process would remain in human hands, and whether the promised savings can translate into reliable execution and competitive pricing.
Better’s Oct. 14 release did not spell out the staffing implications or provide a detailed methodology for those cost targets.
Growth From Last Year, A Step Back From Q2
Better reported $1.395 billion in preliminary loan volume, within its $1.375 billion–$1.525 billion guidance range. Volume increased 15.3% from a year earlier but declined 16.3% from the second quarter.
Revenue reached $45.1 million, up 8.6% annually and down 17.5% sequentially. It fell below management’s forecast of $49 million–$52 million.
The company estimated a net loss of $33.1 million–$34.1 million, compared with $30.6 million in Q2 and $39.1 million a year earlier. Its preliminary adjusted EBITDA loss of $24.8 million–$25.8 million exceeded guidance for a $15 million–$18 million loss.
Better attributed approximately $8 million to proxy-related legal, public relations, and other expenses. Excluding those costs, the company said its adjusted EBITDA loss would have been approximately $17.8 million, within guidance. That additional adjustment still leaves a substantial operating shortfall.
Better also expects a noncash reversal of approximately $7 million to $8 million in stock-based compensation expense, primarily from unvested equity awards forfeited following former directors’ departures.
Garg’s Explanation Meets A New Execution Test
The results arrive after Garg prevailed in his campaign to reshape Better’s board, following his removal as CEO in August.
Garg blamed the former board and interim CEO for diverting resources into the control fight. He pointed to July’s performance and internal projections before his dismissal to argue that Better had been positioned for stronger results.
CFO Loveen Advani said both rates and the proxy contest weighed on conversion and partner launches. He expects effects from the contest to continue into October, with expense reductions and improved conversion anticipated in November and December.
For brokers and lender partners, those launch delays are a more immediate consequence than the boardroom accusations. Better is asking outside companies to rely on its platform while working to restore momentum in its own business.
The automation push also predates Garg’s victory. NMP reported in September that he advocated having AI perform more repetitive processing and underwriting work, while arguing that employees who solve borrower problems would become more valuable.
Savings And Liquidity Have To Support The Plan
Better outlined approximately $13.2 million in implemented annualized expense reductions and another $51 million in targeted cuts. The latter includes changes to AI-enabled sales workflows, corporate functions, and professional services.
Its liquidity plans extend beyond cutting expenses. Better reported $81 million in cash and equivalents and $9 million in restricted cash. It expects the sale of Birmingham Bank, its U.K. subsidiary, to generate approximately $65 million, with closing anticipated in the first quarter of 2027.
Garg also wants to borrow against Better’s unencumbered position in the bank before the sale, targeting a cash and securities position above $140 million.
Separately, Better has authorized a $30 million share repurchase program, beginning with an initial $10 million phase. The authorization creates another potential use of capital alongside operating needs, and partner expansion.
More Platform Activity, Profitability Still Ahead
Better reported $790 million in Tinman AI platform volume, up 64% annually and representing approximately 57% of total reported loan volume.
The company also said four of five potential HELOC partner opportunities remained viable, with revised launch milestones still to be finalized.
Garg is now targeting adjusted EBITDA breakeven on a go-forward basis by year-end, assuming the current rate environment and planned savings. That does not promise a profitable fourth quarter or GAAP net income. NMP reported in August that Better would miss its previous September break-even target.
Better’s next steps matter directly to originators considering its technology: when partner launches resume, what support the company provides, and how much lenders can save on production. With Garg back in a position to shape strategy, Better is promising faster implementation and deeper cost cuts even as it works through the disruption reflected in its third-quarter results.
