Transcript: Better Home & Finance Q2 2026 Earnings Conference Call

Better Home & Finance (NASDAQ:BETR) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call.

Benzinga APIs provide real-time access to earnings call transcripts and financial data. Visit https://www.benzinga.com/apis/ to learn more.

The full earnings call is available at https://events.q4inc.com/attendee/309944226

Summary

Better Home & Finance reported a 38% year-over-year increase in loan volume to $1.67 billion, with total net revenues rising 28% year over year to $54.7 million for Q2 2026.

The company expects Q3 loan volumes between $1.375 billion and $1.525 billion, with total net revenues projected to be between $49 million and $52 million, and anticipates an adjusted EBITDA loss of $18 million to $15 million.

Cost savings initiatives are expected to exceed $45 million annually, surpassing the original target of $25 million, contributing to the improved adjusted EBITDA guidance.

Strategic focus includes increasing distribution through enterprise partnerships and enhancing the HELOC product, which now represents 18% of loan volume, up from 12% in the previous quarter.

The company plans to prioritize fewer projects with a strong focus on execution and operational efficiency, especially through its AI-driven Tinman platform, to achieve long-term sustainable profitability.

Leadership changes were announced, with Daniel Lewis serving as Interim CEO, emphasizing a shift from a founder-led creative phase to an enterprise execution phase.

The company is not dependent on refinancing cycles or interest rate changes, focusing instead on improving customer acquisition costs and strengthening its partnership infrastructure.

Full Transcript

Kelsey, Operator

Ladies and gentlemen, thank you for standing by. My name is Kelsey and I'll be your conference operator today. At this time I would like to welcome you to the Better Home & Finance second quarter 2026 results. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I would now like to turn the conference over to Tarek Afifi, Corporate Finance and Investor Relations Manager.

Tarek, please go ahead.

Tarek Afifi, Corporate Finance and Investor Relations Manager

Welcome to Better Home & Finance's second quarter 2026 earnings conference call. My name is Tarek Afifi on Better's corporate finance team. Joining me on today's call are Daniel Lewis, Interim Chief Executive Officer of Better, and Loveen Advani, Chief Financial Officer of Better. In addition to this conference call, please direct your attention to our second quarter earnings release which is available on our Investor Relations website. Also available on our website is an investor presentation.

Certain statements we make today may constitute forward-looking statements within the meaning of federal securities laws that are based on current expectations and assumptions. These expectations and assumptions are subject to risks, uncertainties, and other factors as discussed further in our SEC filings that could cause our actual results to differ materially from our historical results. We assume no responsibility to update forward-looking statements other than as required by law.

During today's discussion, management will discuss certain non-GAAP financial measures which we believe are relevant in assessing the company's financial performance. These non-GAAP financial measures should not be considered replacements for, and should be read together with, our GAAP results. These non-GAAP financial measures are reconciled to GAAP financial measures in today's earnings release and investor presentation, both of which are available on the Investor Relations section of Better's website and, when filed, in our Quarterly Report on Form 10-Q with the SEC.

More information as of and for the period ended June 30, 2026 will be provided upon filing our Quarterly Report on Form 10-Q with the SEC. I will now turn the call over to Daniel.

UNKNOWN, Interim Chief Executive Officer

Good afternoon everyone and thank you for joining us. This week the Board announced the leadership change and asked me to serve as Interim Chief Executive Officer. Better Home & Finance is not new to me. I've been working alongside management for the past three months after Vishal invited me to work directly with the business. I've attended virtually every management meeting in that time and contributed to many of the strategic initiatives we'll be discussing today.

I've been a significant shareholder for some time, and I have worked closely with our founder, Vishal Garg. Over the past year, my initial mandate was straightforward: help strengthen execution and improve operational efficiency, delivering the company's strategic priorities. That work expanded into enterprise partnerships, development, and the day-to-day operations of the business. Along the way, I developed a deep understanding of the business, its leadership team, and the opportunities and challenges in front of us.

I spent the last 30 years as an investor, board member, founder, and operator at highly regulated financial institutions. I want to address our forward outlook at the beginning of this call. Our third quarter guidance reflects the muted refinancing environment and the uncertain timing of several partnership launches. In Q3 we expect loan volume of 1.375 billion to 1.525 billion, total net revenues of 49 million to 52 million, and an adjusted EBITDA loss of 18 million to 15 million.

Regarding our previously guided goal of reaching adjusted EBITDA break even by September, we now expect to fall short. I remain optimistic about Better Home & Finance's opportunity, but our objective is to establish credibility through execution. I do not want to anchor adjusted EBITDA break even expectations to a specific month because achieving it depends on transaction volumes, revenue mix, and the timing of our cost reductions. Our cost reductions are expected to continue to flow through the P&L over the remainder of the year.

At the same time, the timing of partnership launches and other revenue initiatives will naturally influence quarterly results. Sustainable profitability is a clear priority, and we will strengthen our financial position without sacrificing the opportunity in front of us. We now expect our annual cost savings to exceed 45 million, well above our original target of 25 million. That represents meaningful progress, but is not where we intend to stop.

Better Home & Finance has always been innovative, defined by our founder, spirit, and creativity. But as is often the case, an organization moving into an enterprise strategy needs focus. As complexity slows execution, going forward we will concentrate on fewer priorities and execute them exceptionally well. No group is more excited about that focus than our AI engineering team. I'm pleased to say that July was our most productive month for engineering in some time, largely because of clear prioritization.

Sustainable profitability and long-term growth are not competing priorities. When capital is allocated with discipline and execution is consistent, they reinforce one another. What gives me the greatest confidence is the team. Better Home & Finance has exceptional people who are energized by the opportunity ahead. Across the company, I see leaders who are eager to build, move fast, and execute at a higher standard. Just as importantly, we will not depend on a refinancing cycle or wait for interest rates to fall.

We already have a compelling HELOC product. What we need is thoughtful distribution and continued improvement in customer acquisition costs, not additional demand or a different macro environment. We are building operating leverage in businesses where demand already exists. Our growth will come from better execution, not from waiting for the market to improve. I know our enterprise results can improve significantly. Our partnership support infrastructure still requires work, which reflects our direct-to-consumer heritage.

The expansion from direct-to-consumer to an enterprise model is not a simple evolution. So why are the board and I enthusiastic about Better Home & Finance's future? The demand for Tinman and Betsy is no longer in question. It is coming from enterprise customers, independent mortgage brokers, and our own loan officers. Independent mortgage brokers have expressed interest in our Tinman solution built specifically for the wholesale channel, and we are now preparing for launch.

We have demonstrated product-market fit in one of the largest financial markets in the world spanning first-lien mortgages, home equity lending, and an enterprise mortgage infrastructure. That brings me to our operating priorities. Our first priority is distribution. We will focus on enterprise partners whose businesses naturally align with Tinman and our API-driven operating model. We will win by manufacturing mortgages efficiently, not by outspending competitors on customer acquisition.

That includes consumer platforms like Credit Karma and Coinbase, our NEO operation, as well as wholesale brokers and other enterprise partners whose customers can move seamlessly onto the Tinman platform. We are not simply interested in partnership announcements. Our objective is to build an organization that consistently implements, supports, and grows them. Since my appointment we have spoken with each of our enterprise partners and those that are still in the pipeline.

We talked about the exciting future ahead, and those conversations reinforced my conviction about this opportunity. We are excited about a few select verticals, and today I will highlight the wholesale channel. There's real interest from independent mortgage brokers who are already waiting for Tinman. We intend to serve them, but only when we can deliver a best-in-class loan officer experience: faster funding, lower cost, and better customer outcomes.

We are interested in winning for the long term. Our second priority is product. We will continue investing aggressively in HELOC. Our offering combines sophisticated underwriting with a differentiated experience for both borrowers and loan officers. The wholesale market's interest has exceeded our expectations, and we intend to pursue the opportunity aggressively but thoughtfully. Today, HELOC is still largely a direct-to-consumer product. Over time we expect it to become an important enterprise product as well.

Our third priority is Tinman. Tinman is an AI-native, modular, end-to-end solution supporting the mortgage process from lead to fund. It is not a wrapper on someone else's technology. It is the manufacturing system itself. Further automation reduces expense, but it also enables a faster closing experience for customers. Our near-term objectives are simple: give loan officers the best experience and continue driving automation throughout the platform.

Let me explain why we expect to win here. D2C and NEO are our innovation platform and our feedback loop on the loan officer experience. Every day our loan officers tell us what works, what does not, and what needs to improve. That feedback loop is how Tinman becomes an AI platform built by loan officers rather than just for them—and ultimately a platform that enterprise customers and independent brokers can adopt with confidence. Because our AI strategy is fundamental to Better Home & Finance's long-term success, I have asked our board member Prabhu Narasimhan to continue serving as a strategic advisor on enterprise artificial intelligence.

As the founder and CEO of Brahma AI, Prabhu brings deep experience helping enterprises deploy AI at scale. Finally, we will continue simplifying operations. Our NEO and Better Home & Finance mortgage operations are being combined, creating efficiencies while improving execution. A more focused company means clear priorities, aligning engineering resources, disciplined capital allocation, and an operating model built around execution. Let me turn to how we intend to communicate with you, our shareholders.

Today, I am signaling confidence in Better Home & Finance's future. But our objective is to establish credibility through execution. We will report on our prospects, our progress against stated objectives, and our cost structure, including the impact of stock-based compensation. At my request, I will receive the minimum salary permitted by law and no cash bonus. My compensation will consist of performance-based equity, with the final terms to be determined by the board and disclosed in our public filings.

That is the structure I requested because I believe in Better Home & Finance's future, and I want my incentives aligned with those of our shareholders. The Board's incentives are also aligned with yours. They have elected to receive their compensation in equity rather than cash. The board and I are aligned on my interim designation. The interim designation provides complete flexibility for the board as it considers the company's long-term leadership while allowing us to devote our full attention to executing the plan in front of us.

My confidence is not built on hope, but on the information and experience I have gained over the past several months. It comes from employees rallying around a clear plan and shared sense of purpose. It comes from the opportunities I see to grow this business. And it comes from my belief that Better Home & Finance has the people, technology, and foundation to execute. If we remain disciplined and focused, we will build partnerships we can support properly and put our engineers on the work that matters most.

Better Home & Finance exists to solve deeply human problems: helping someone buy a first home, giving a growing family more space, enabling a retiree to lower monthly payments, or allowing a business owner to invest by unlocking home equity. The strongest impression I formed at Better Home & Finance was not about the technology; it was about the people who do that work. Finally, I want to thank Vishal Garg. Better Home & Finance would not exist without his vision, and the technology we are discussing today is the product of years of investment and innovation under his leadership.

I appreciate his partnership through this transition. With that, I'll turn the call over to Loveen.

Loveen Advani, Chief Financial Officer

Thank you, Daniel, for clearly laying out the priorities ahead. We look forward to supporting you on their execution. On the macro environment, the rate backdrop got more difficult as the quarter progressed, and mortgage application activity has softened industry-wide. We don't expect this to be a short-term blip. We're planning for an elevated rate environment to persist over the medium term, and we're adapting accordingly. Despite the macro environment, in Q2 Better's loan volume grew 38% year over year to $1.67 billion, and total net revenues increased 28% year over year and 15% quarter over quarter to $54.7 million this quarter.

HELOC represented 18% of our loan volume, up from 12% last quarter. That's a direct reflection of how we're responding to this rate backdrop. HELOCs enable homeowners to access liquidity without giving up a lower rate that they have already locked in. Even though HELOCs carry smaller average loan sizes than first liens, they generate higher average revenue per loan, so they have an outsized impact on revenue. Turning to NIO: In Q2, our NIO business grew 60% in loan volume year over year and continues to recruit top loan officer teams across the country.

In Q2, our adjusted EBITDA loss was $14 million. This $14 million loss is a 39% improvement year over year and a 26% improvement quarter over quarter. The adjusted EBITDA benefits from a one-time $6.5 million trade reserve release related to loans originated prior to June 2022. Looking at product trends in Q2, refinance loan volume grew 239% year over year to $549 million. Home equity volume grew 23% year over year to $294 million, and purchase loan volumes grew 3% year over year to $824 million.

By product mix, refinance made up 33% of Q2 loan volume, home equity made up 18% of Q2 loan volume, and purchase made up 49% of Q2 loan volume. By channel, in Q2, 55% of loan volume came from the Tinman AI platform and 45% from direct to consumer. Now, turning to third-quarter guidance, we expect loan volumes of $1.375 billion to $1.525 billion, of which the midpoint represents 20% growth year over year. We expect total net revenues of $49 million to $52 million, of which the midpoint represents 22% growth year over year.

We also expect an adjusted EBITDA loss in the range of $18 million to $15 million, of which the midpoint represents a 28% improvement year over year. The range is wider than in prior quarters for two reasons: refinance volume is more rate-sensitive at current levels, and our revenue mix is actively shifting toward HELOCs. As our HELOC partnerships ramp and season, we expect that product to become a more predictable contributor to give us better visibility into our forecast.

Building on Daniel's earlier statement on the September breakeven target, the cost reductions we have executed will continue to flow through the P&L over the remainder of the year. But the timing of the HELOC partnership ramps and launches, and the pace of the refinance market, will determine when we cross over. Rather than re-anchor to a specific month, we will report our progress each quarter and let the results speak for themselves. On the balance sheet, we ended Q2 2026 with approximately $102 million in cash and cash equivalents and $10 million in restricted cash.

We believe the balance sheet today is appropriately positioned to support our path towards profitability. In addition, our total warehouse capacity stands at approximately $850 million, a 48% increase from year-end 2025. That capacity reflects both the belief in the platform and the infrastructure required to support future partnership growth. Our warehouse lenders have continued to expand their commitments alongside us, which we see as a strong vote of confidence in the direction we're headed.

We continue to pursue the sale of our UK bank subsidiary, Birmingham Bank, through a process led by FT Partners. We will provide an update when there is a material development. We'll continue to give you clear visibility into these numbers each quarter and let the results speak for the progress we are making. I'll turn it back to the operator for Q&A.

Kelsey, Operator

We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Kartik Mehta with Northcoast Research.

Your line is open. Kartik, please go ahead.

Kartik Mehta, Analyst at Northcoast Research

Let's start off just looking at third-quarter guidance. When looking at the third-quarter guidance, it kind of assumes lower loan volume and revenue sequentially, yet the implied EBITDA performance suggests that you're realizing meaningful benefits from the cost initiatives. And so I was wondering if you could discuss how much of that improvement is already visible versus how much you can realize over the next 12 months.

Loveen Advani, Chief Financial Officer

Hey, Kartik. Thanks for the question. Yeah, so in our Q2, if you adjust for the trade, our OPEX was around $75 million, and the midpoint of our Q3 guidance has OPEX at about $67 million, so say about $8 million of savings quarter over quarter. We started cost cuts later in the quarter, so we couldn't get the impact of the majority of them in Q2. But we see a meaningful impact in our cost cuts in Q3, which is why despite lower volumes and lower revenue in Q3, we should get better EBITDA.

Kartik Mehta, Analyst at Northcoast Research

Daniel, you talked about, obviously, partnerships. Some of them are delayed. I'm wondering if you could talk about maybe your pipeline of new partnerships, and is it delayed just because it takes time to implement them, or is it a delay because maybe demand is different today than it was six months ago for those partnerships?

UNKNOWN, Interim Chief Executive Officer

Thanks for the question. The answer is that when you deal with large enterprises, you are subject to their rollout schedule, both in terms of the percentages of leads we would get, the actual launch dates, et cetera. So it's not a lack of demand at all for Tinman. In fact, we made some announcements about our HELOC product coming to market. I think it's our first partnership from the D2C. So the pipeline is very robust. We've spoken to all the partners this week, and we feel that we're in a great position.

But in terms of guiding you for Q3, it becomes difficult. So we decided we weren't going to include the impact of any launches in those numbers. But certainly as we end the second— I guess, Q4 this year, that's when I think you'll really start to see some activity.

Kartik Mehta, Analyst at Northcoast Research

Thanks. I apologize—go ahead.

UNKNOWN, Interim Chief Executive Officer

No, just—I think the other thing is, again, leaning into the HELOC side, because right now our enterprise partnerships are very skewed towards the refinancing, so that obviously has the macro headwinds. So the ones in the second half of the year we think are going to start to be more meaningful because they're the right kind of partner and it's the right kind of product, which is our HELOC.

Kartik Mehta, Analyst at Northcoast Research

Perfect, thank you. Good to hear the pipeline is still pretty strong.

Kelsey, Operator

Your next question comes from the line of Kyle Peterson with Needham. Your line is open, Kyle. Please go ahead.

Kyle Peterson, Analyst at Needham

Great. Good afternoon. Thank you for taking the questions. Wanted to dig into the third-quarter guide a little bit, but more on the top line base. Just wanted to see if you guys could help us maybe bridge in a little more detail in terms of how we get from the 2Q level to 3Q. I assume there's a good amount of mix that'll probably be changing there with less refi, more home equity, but any more color that you guys could give in terms of what to expect on the mix and kind of the puts and takes to get to the third-quarter revenue would be really helpful.

Loveen Advani, Chief Financial Officer

Hey Kyle, thanks. Yeah, that's a great question. You know, as we said on our first-quarter earnings call, we expect the percentage of HELOC in our total volumes to increase, and we saw that in the second quarter. We went from HELOCs being 12% of the volumes in the first quarter to being 18% of the volumes in the second quarter. We expect HELOCs to be meaningfully higher in the third quarter. We don't want to give exact pinpoint guidance for a couple of reasons.

One is we've factored in no HELOC partnerships in our 3Q guide—it's purely D2C. And the second piece is the macro environment affects the refi business, so that mix is uncertain as well.

Kyle Peterson, Analyst at Needham

Okay, that is helpful. And then as a follow-up, I hear you on not including any of the HELOC contribution with partnerships, but did want to ask a little bit about what that could look like in the future, specifically with Credit Karma, I guess. How are you guys thinking about how long it would take a partnership like this to get up and running and when that could start to contribute to volumes? Is that in the fourth quarter of this year or is that more of a next year event?

Just any directional, rough timing on the ramp time there would be great.

UNKNOWN, Interim Chief Executive Officer

So the answer is multiple partnerships should start to kick in in HELOC in the fourth quarter. So far this quarter we have done no partner launches and no HELOC launches specifically. So hopefully that gives you a sense of why the bridge on revenue. We basically still have the refi environment in our largest enterprise segment, and we don't have anything really additional in terms of channel development in the HELOC product.

Kyle Peterson, Analyst at Needham

Got it, thank you.

Kelsey, Operator

Your next question comes from the line of Joseph Vafi with Canaccord Genuity. Your line is open, Joseph. Please go ahead.

Joseph Vafi, Analyst at Canaccord Genuity

Hey guys, good afternoon, welcome on board. Daniel, maybe could we talk a little bit about ramping HELOC volume? You know, it sounds like it's going to continue to ramp here on a mix shift basis into Q3, but it doesn't sound like we're necessarily signing any new partners right now. So if we can just double-click on where HELOC volume growth is coming from in a more detailed way across your existing channels. Is it just direct B2C or is there a channel benefit here?

UNKNOWN, Interim Chief Executive Officer

I think just to correct that point, we have signed HELOC partnerships; they just haven't launched or ramped yet. So that's why I'm pushing you towards the fourth quarter when you start to see some impact. And the HELOC product itself, we have a very competitive offering vis-à-vis our competition. Tinman is a great solution for HELOC, as is our loan operation. So again, I think we're really excited about the HELOC partnership, but we want to be thoughtful about the Q3 guide just because we're not in control of those start dates.

We know that they're coming, but they're not coming in this quarter.

Joseph Vafi, Analyst at Canaccord Genuity

Okay, that's helpful, thank you. And then are there any channels that you think maybe Better is going to de-emphasize moving forward relative to previously? Thanks very much.

UNKNOWN, Interim Chief Executive Officer

I think that echoes my comments on Focus. There's the kind of partnership we want and the one that we really don't think makes a ton of sense for the business right now when you're thinking about ripping out existing systems and training other people's loan officers on the use of Tinman. Those are very long sales cycles; they're very expensive in terms of customer support. It's the partnerships where we are using our API-driven culture to plug in Tinman.

We can provide a white-label solution, and that includes the wholesale channel, which I think is going to be starting towards the end of September, and it includes the enterprise platform, the platforms that we have. So there's a wide market that covers most of the TAM of the industry, particularly in HELOC. But it's the really complicated enterprise integrations that we think so far have not yielded material results, and the costs associated with them have been high.

Loveen Advani, Chief Financial Officer

Yeah, absolutely. We're going to price to kind of keep our price. Our pricing methodology is more on contribution margin, going to keep our pricing methodology around the 20% to 25% incremental contribution margin across all channels and products.

UNKNOWN, Interim Chief Executive Officer

I think the way we want you all to start thinking about the company is less about loan volume because of the change in mix of HELOC versus first lien, and we want you to think less about simply revenue growth. But look at contribution margin, which is less our marketing expense and the loan platform fees we have to pay. That's a proper metric, rather than seeing if we're buying business in the marketing DTC channel.

Kelsey, Operator

As a reminder, if you would like to ask a question, please press star one to raise your hand. The next question comes from the line of Ramsey El Assal with Cantor Fitzgerald. Your line is open. Ramsey, please go ahead.

Ramsey El Assal, Analyst at Cantor Fitzgerald

Hi. Thank you very much for taking my question this evening. Daniel, congratulations on the new role. I guess my first question is, why now on the CEO transition? Why did the board decide to act now? And then maybe as a two-parter here, also you were listed as interim CEO, but your prepared remarks sounded more permanent, and I was just wondering if the board's running a search for a permanent CEO, or whether the interim title is, I don't know, itself interim, if that makes sense.

UNKNOWN, Interim Chief Executive Officer

The board is committed to running a search for a full-time CEO, and part of my service on the board of directors and stepping into this role is giving them the most flexibility that they need. They've also given me the total authority to act against a strategic plan, which is why I probably sound less interim today. So we have a strategic plan, we're acting, and we have a search firm. In terms of the decision of "why now," I think the board concluded that we are really in a transitional phase between a founder-mode company, which is creativity and many different projects, versus an enterprise stage of executing against very select ideas that have a demonstrated product-market fit. That's the transition moment. And obviously, Vishal has been an incredible founder for the company, and we are all very grateful.

Ramsey El Assal, Analyst at Cantor Fitzgerald

Fantastic. Let me squeeze one more quick one in. I mean, given your background, is the board exploring any kind of strategic alternatives for the business? Is that on the table, or is that not something that's being contemplated?

UNKNOWN, Interim Chief Executive Officer

There's no formal strategic alternatives process at this time.

Ramsey El Assal, Analyst at Cantor Fitzgerald

Fantastic. Thank you very much.

Kelsey, Operator

We have reached the end of the Q&A session. I will now turn the call back to Daniel Lewis for closing remarks.

UNKNOWN, Interim Chief Executive Officer

Thank you all for joining us. I'm grateful to our team for all the hard work. We're focused on executing with discipline and delivering on the opportunity ahead. Look forward to speaking to you all again next quarter.

Kelsey, Operator

This concludes today's call. Thank you for attending. You may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.