Finance Of America Companies (FOA 7.73%), a leading originator and servicer of reverse mortgage loans in the United States, announced its second quarter 2025 results on August 5, 2025. The most notable news was a surge in revenue (GAAP) to $177 million, well ahead of analyst expectations of $97.05 million (GAAP) revenue. Adjusted earnings per share came in at $0.55, underperforming consensus non-GAAP estimates of $0.61. Compared to Q2 2024, the business posted major gains in funded volume, revenue, and net income. While overall the quarter demonstrated top-line strength and continued growth in key strategic areas, Non-GAAP profitability metrics fell below market forecasts.—suggesting rising expenses or margin pressure offset some gains.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Adjusted, Non-GAAP) | $0.55 | $0.61 | N/A | N/A |
| Revenue | $177 million | $97.05 million | $79 million | 124 % |
| Net Income from Continuing Operations | $80 million | N/A | ($5 million) | N/A |
| Adjusted EBITDA | $30 million | $10 million | 200 % |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Key Areas of Focus
Finance Of America Companies specializes in providing financial solutions for retirees, with a core offering in reverse mortgages. These products allow older homeowners to access accumulated equity in their homes for income or expenses, while continuing to live in their residences. Its two primary businesses are the origination of reverse mortgage loans (Retirement Solutions) and managing a portfolio of assets and related fee income (Portfolio Management).
The company’s strategy centers on capturing value from the aging U.S. population, which represents a growing opportunity as baby boomers retire. A major focus is expanding market share in a sector with low overall adoption—just 2% of eligible seniors currently use reverse mortgage products, according to a June 2022 report by Reverse Mortgage Insight. Product innovation, compliance with regulations, and maintaining brand leadership through digital investment are key drivers for the business.
Quarterly Performance and Operational Highlights
The quarter marked another period of strong growth in loan origination volumes, with $602 million in funded loans—up 35% compared to Q2 2024, and above management’s top guidance. This marks the fifth consecutive quarter of volume growth. Revenue (GAAP) more than doubled compared to Q2 2024. The main drivers were higher loan volumes and positive fair value adjustments on the value of certain loan assets.
Within the Retirement Solutions segment, which accounts for the reverse mortgage loan origination, revenue climbed to $62 million, up 13% year over year. Pre-tax income for this segment swung from a loss to $10 million (GAAP), Adjusted net income swung from a loss to a positive result. The Portfolio Management segment, which involves asset and fair value management, reported GAAP revenue growth of 217% compared to Q2 2024. This segment’s performance was boosted by favorable adjustments to the valuation of retained interests in securitized loans and higher accreted yield from investment assets. Assets under management in this area reached $29.9 billion, representing an 8% increase year over year.
Expenses increased to $95 million (GAAP), up 14% year over year. These costs outpaced revenue growth over the past two quarters. This expense trend, while in line with scaling a growing business, put pressure on overall profits and contributed to the shortfall in adjusted EPS (non-GAAP) compared to analyst expectations.
The company also completed several significant financial maneuvers after the quarter closed. Management repaid a higher-cost working capital facility and signed an agreement to repurchase Blackstone’s entire equity stake in the business. These steps are expected to reduce interest expenses and improve future financial flexibility. Tangible equity, which excludes goodwill and other intangible assets, increased by 47% from the previous quarter, strengthening the company’s capital base.
Key Factors and Industry Context
Reverse mortgages, the company’s flagship product, are designed for homeowners aged 55 and over, allowing them to convert part of their home equity into cash. The potential market is significant and growing, as the population over age 65 rises rapidly. Despite ongoing investment in marketing and product education, penetration remains low, indicating ongoing opportunity.
A focus on innovation is evident in the rollout of new reverse mortgage offerings beyond traditional federal-backed loans, including non-agency and second lien products. Digital marketing campaigns and brand unification efforts have improved lead conversion rates and customer reach, helping drive the recent surge in originated volumes over the past two quarters. Management has cited progress on these fronts as key achievements this year.
The company’s regulatory environment is highly complex, with strict state and federal requirements governing its products and sales practices. There were no new legal or regulatory setbacks disclosed in this quarter’s release. Management continues to highlight ongoing compliance and adaptation to changing rules as core priorities for sustainable growth.
Competitive positioning remains an advantage for Finance Of America Companies, supported by previous asset acquisitions from competitors such as AAG/Bloom. Ongoing investments in technology and new product launches aim to maintain its leadership, with management noting that the continued integration and brand strategy are paying dividends in loan origination performance.
Outlook and Investor Considerations
Management did not provide any new financial guidance for the rest of the year in this release. Previous guidance included expectations of $2.4 billion to $2.7 billion in funded loan volume, and adjusted diluted EPS in the range of $2.60 to $3 (non-GAAP). but investors should note that no explicit confirmation or update was given post-quarter.
Looking ahead, key areas to monitor include ongoing expense discipline, sustainability of margin improvements, and the impact of fair value adjustments on reported profits. The strategic buyback of Blackstone’s stake and the repayment of high-cost debt are noteworthy for future capital planning.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
