Better announces first half 2023 results
Better Home & Finance Holding Company reported its financial results for the six months ended June 30, 2023.
Revenue was $51.1 million in the six months ended June 30, 2023 and $21 million in three months ended March 31, 2023. Net loss was $135.4 million and $89.9 million in the six months ended June 30, 2023 and three months ended March 31, 2023, respectively. Adjusted EBITDA loss was $82.8 million and $57.3 million in the six months ended June 30, 2023 and three months ended March 31, 2023, respectively.
For the six months ended June 30, 2023, funded loan volume was $1.7 billion across 4,768 loans funded. For the three months ended March 31, 2023, funded loan volume was $0.8 billion across 2,347 loans funded.
Key highlights from the first half of 2023 include:
- Through continued focus on originating more profitable business, mortgage platform revenue, net decreased less year-over-year than funded loan volume due to increased revenue per loan.
- Gain on sale margin was 2.34% in the six months ended June 30, 2023.
- In the second quarter of 2023, Better decided to wind down its in-house real estate agent business to instead focus on partnering with third-party real estate agents to provide customers with real estate agent services, a business model that better aligns costs with transaction volumes, particularly in market environments with decreased mortgage volumes.
- Lower funded loan volume as well as reductions in headcount-related costs and other operating expenses resulting from restructuring initiatives drove a year-over-year decline in total operating expenses of 80% to $183.9 million for the six months ended June 30, 2023 from $903.7 million in the six months ended June 30, 2022.
- In April 2023, the Company completed the acquisition of Birmingham Bank, a regulated U.K. bank. The acquisition allows the Company to grow and expand existing operations in the U.K. by enabling it to offer online deposits to consumers and hold U.K. residential mortgages going forward. The Company acquired 100% of the equity of Birmingham Bank for a total consideration of $19.3 million, which consists of $15.9 million in cash and $3.4 million in deferred consideration.
- After June 30, 2023, Better repaid the remaining obligations under its corporate credit facility with proceeds from the sale of loans held for sale.
From 2019-2022, Better completed approximately $98 billion in mortgage volume, more than $4 billion in real estate transaction volume, as well as $39 billion in coverage written through its insurance arm. However, revenue from its insurance agency Better Cover “was immaterial” for the six months ended June 30, 2023 and 2022.
“We are pleased that our continued expense discipline in a challenging mortgage environment has allowed us to dramatically reduce both our GAAP loss and our Adjusted EBITDA loss in the second quarter. We believe the proceeds from closing the business combination alleviate the previously disclosed going concern uncertainty. Pro forma for the business combination, our June 30, 2023 cash and cash equivalents would have been $632.4 million.” – Kevin Ryan, Better’s president and CFO.
