Better Home & Finance (BETR -5.91%), a digital mortgage and homeownership platform, released its second quarter earnings on August 7, 2025. The release revealed a substantial miss on both GAAP earnings and revenue relative to analyst expectations. The company posted a GAAP earnings per share (EPS) loss of $36, and GAAP revenue of $44 million, about $4.8 million below the $48.84 million Street forecast (GAAP). Despite these shortfalls, total funded loan volume increased 24.7% compared to Q2 2024, with GAAP revenue up 37.5% compared to Q2 2024. However, persistent losses and higher than expected operating expenses weighed on overall results.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | (–36.27) | ($1.89) | N/A | N/A |
| Revenue (GAAP) | $44 million | $48.84 million | $32 million | 37.5% |
| Adjusted EBITDA | ($26.6 million) | ($23.3 million) | (14.2%) | |
| Funded Loan Volume | $1.2 billion | $962 million | 24.7% | |
| Total Loans Funded | 4,032 | 2,995 | 34.6% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
About Better Home & Finance
Better Home & Finance is a technology-based home mortgage and digital real estate platform. It serves customers across all fifty states, providing online mortgage lending and a suite of related services, such as title, settlement, and homeowner’s insurance. The company’s core offerings center around making the home-buying and refinancing process simpler and less expensive through its AI-driven approach.
In the past year, Better Home & Finance has focused on diversifying its loan products and expanding its AI technology. It seeks to improve efficiency and lower costs both for consumers and for institutional partners. The company’s ability to innovate with platform tools, such as its Tinman AI Platform and Betsy Voice AI, is a central part of its strategy for growing loan volume, entering new markets, and enhancing profitability.
Quarterly Highlights: Financials, Product Growth, and Efficiency
GAAP revenue grew significantly compared to Q2 2024, reflecting increased loan origination and product mix. Funded loan volume rose 24.7% to $1.2 billion compared to Q2 2024, supported by a jump in home equity and refinance activity. Specifically, home equity loans, including home equity lines of credit (HELOCs) and closed-end second lien products, increased 166% year over year, while refinance volume climbed 109% year-over-year. The purchase segment grew just 1% year-over-year, making up 67% of total volume.
The number of total loans funded expanded by 34.6%, reaching 4,032 compared to 2,995 in Q2 2024. Direct-to-consumer (D2C) volume made up 64% of business, with the remainder attributed to platform and business-to-business channels. Revenue per loan in D2C stood at $7,886, with a D2C contribution profit margin of approximately 13%, but platform loans saw higher profit margins—at 40%—reflecting efficiencies from the Tinman AI Platform.
Despite loan growth, Better Home & Finance continued to post considerable operating losses, reporting a GAAP net loss of approximately $36 million. The net loss (GAAP) stood at $36.3 million. Adjusted EBITDA, a non-GAAP measure of earnings before interest, taxes, depreciation, and amortization, but adjusted for specific items, showed a loss of $26.6 million—14.0% larger than the year-earlier loss for Q2 2024 (non-GAAP). while general and administrative costs (GAAP) declined.
Total expenses (GAAP) reached $80.3 million, compared to $73.4 million in Q2 2024. Compensation and benefits rose to $41.4 million, while marketing and advertising (GAAP) grew to $11.1 million, but general and administrative costs (GAAP) dropped from $15.2 million in Q2 2024 to $11.5 million. Loan origination costs, linked to growing volumes, also increased year-over-year. Depreciation and amortization expenses declined compared to Q2 2024.
Strategic Progress: AI Expansion, Partnerships, and Capital Structure
Expansion of the Tinman AI Platform and Betsy Voice AI remained central to product development. These technologies automate parts of the mortgage origination process, increase loan officer productivity, and support broader service offerings such as pre-approvals and rate locks handled by automated systems. The NEO Powered by Better channel—a traditional retail operation now merged with the digital platform—delivered $428 million in loan volume and is expected to surpass $500 million of funded loan volume in Q3 2025.
New business-to-business partnerships emerged during the period, with the Tinman AI Platform now powering third-party banks and fintechs. For example, one partnered bank is expected to generate $4 million in revenue, based on management commentary, with potential to surpass $10 million as product coverage and volumes expand. This illustrates Better Home & Finance’s focus on creating recurring software and service revenue in addition to direct loan origination.
The company took significant steps to improve its balance sheet, retiring approximately $521 million in convertible debt, which resulted in a pre-tax equity gain of over $210 million and reduced its debt profile. Following this refinancing, $155 million in new debt matures in late 2028, with payments deferred until profitability is achieved—aligning capital structure with the company’s medium-term outlook.
The company continued with ongoing provision of government-sponsored enterprise (GSE), Federal Housing Administration (FHA), and Veterans Affairs (VA) loans. The firm continued to exit non-core U.K. businesses, consolidating its focus on U.S. operations and streamlining international activities—moves intended to reduce operating losses and sharpen its business strategy.
Looking Ahead: Outlook and Watch Points
Management projects continued funded loan volume growth for fiscal 2025. It has set a path to reach Adjusted EBITDA breakeven by the end of Q3 2026. Executives emphasized expense controls as volume scales and highlighted growing contributions from Tinman-related business-to-business software revenues and partnerships. However, no explicit or detailed quantitative revenue or net income guidance was provided for future quarters.
Investors should monitor trends in operating expense control, particularly in compensation and technology spending, as well as ramp-up speed for Tinman-related partnerships. The company also aims to continue expanding its AI platform’s reach into mortgage banking, continuing its exit from legacy U.K. assets. Material risks include ongoing operating losses, elevated costs, and timelines for achieving positive margins on newer SaaS and B2B offerings.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
