Better Home & Finance Holding Co. (BETR) reported a net loss of $206.3 million for the year ended December 31, 2024, a significant improvement compared to the $536.4 million net loss recorded in 2023. Revenue increased by approximately 50% year-over-year, reaching $108.5 million in 2024 from $72.3 million in 2023. This increase was driven by a 19% rise in Funded Loan Volume to $3.6 billion, primarily due to a 128% increase in refinance loan volume and a substantial increase in HELOC loan volume. However, purchase loan volume decreased slightly by 3%. The company's Gain on Sale Margin improved to 2.17% in 2024 from 1.95% in 2023.
Significant changes in the company's operating environment, including persistent elevated interest rates and a decline in overall mortgage origination volume, led to a substantial workforce reduction. The company's headcount decreased from approximately 10,400 in the fourth quarter of 2021 to approximately 1,250 as of December 31, 2024, representing an 88% reduction. This reduction, along with other factors, contributed to higher labor costs per loan, particularly in the purchase loan segment. The company also noted the winding down of its integrated relationship with Ally Bank and the termination of its advertising relationship with American Express. Conversely, a new advertising relationship with Beyond.com was launched in February 2024, and the company onboarded approximately 110 loan officers from NEO Home Loans to expand its distributed retail channel.
Better Home & Finance highlighted strategic developments aimed at diversifying its revenue streams and expanding its product offerings. The company launched its "One Day Mortgage" program in January 2023 and introduced Betsy™, a voice-based AI loan assistant, in the third quarter of 2024. Better Plus products, including real estate services (Better Real Estate), title insurance (Better Settlement Services), and homeowners insurance (Better Cover), are intended to build long-term customer relationships and diversify revenue streams beyond mortgage lending. The company also mentioned its ongoing international expansion efforts in the U.K., including the acquisition of Birmingham Bank.
The company's financial performance was significantly impacted by interest rate fluctuations. Higher interest rates negatively affected refinance and purchase loan volumes, while the company's hedging strategies aimed to mitigate the impact of interest rate changes on its assets and liabilities. The company also identified three material weaknesses in its internal control over financial reporting, related to the CEO's actions, limited accounting personnel, and oversight of complex financial instruments. Remediation efforts are underway to address these weaknesses.
Looking ahead, Better Home & Finance expects to continue incurring net losses in the near term due to the current interest rate environment and planned investments in business expansion and technology. The company plans to focus on improving conversion rates, enhancing technological innovation, expanding Better Plus products, acquiring additional B2B partners, broadening geographic and product coverage, and pursuing international expansion. The company also acknowledged numerous risks and uncertainties, including intense competition, regulatory risks, and the impact of its CEO's involvement in litigation.
About Better Home & Finance Holding Co
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