loanDepot (LDI -7.45%), a major U.S. non-bank mortgage lender, reported earnings for the second quarter of fiscal 2025 on August 7, 2025. The company's results showed a rise in loan originations, but both non-GAAP revenue and GAAP earnings per share came in below Wall Street estimates. Non-GAAP revenue was $291.9 million, missing analyst estimates of $315.8 million. Despite higher origination volume and improvements in cost efficiency, the quarter was marked by margin compression and a continued lack of profitability on a GAAP basis.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | N/A | $(0.03) | N/A | N/A |
| Revenue (Non-GAAP) | $291.9 million | $315.8 million | $278.0 million | 5.0 % |
| Adjusted EBITDA | $25.6 million | $34.6 million | (26.0 %) | |
| Net Loss (GAAP) | $(25.3 million) | $(65.9 million) | (61.6%) | |
| Loan Origination Volume | $6.73 billion | $6.09 billion | 10.5 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
What Does loanDepot Do, and What Drives Its Business?
loanDepot is an independent, technology-focused mortgage company that provides residential mortgage loans directly to consumers. It operates through multiple channels, offering products such as home purchase loans, refinancing, and government-backed mortgages. Its business is built on its mello® technology platform, facilitating digital lending experiences across all its customer-facing platforms, and an in-house loan servicing operation.
Recently, the company has concentrated on driving efficiency through automation, expanding its loan origination network, and maintaining robust risk management. Strategic initiatives—Vision 2025 and Project North Star—define the current phase: investing in digital capabilities, reducing costs, and adapting quickly to changes in consumer demand and the interest rate environment. Key metrics for success include loan origination growth, gain-on-sale margins (the profit made when selling loans into the secondary market), expense discipline, and the ability to recapture customers for repeat business.
Key Developments During the Quarter
More of this volume came from purchase loans, which accounted for 63% of the total, up from 59% in Q1 2025. This shift toward home purchase lending is important since purchase loans tend to offer greater consistency and stability than refinancings, especially as consumer refinancing activity drops when interest rates rise.
Direct origination expenses increased 12%, but at a slower rate than loan origination volume growth of 30%, implying better operating efficiency.
Technology investments also featured prominently, including the hiring of two technology-focused executives to advance automation and digital engagement.
While these investments helped reduce some variable costs, the pull-through weighted gain-on-sale margin—a key profitability metric—fell to 3.30%, down by 0.25 percentage points from the last quarter.
Servicing fee income (GAAP), earned from managing customer loans, reached $108.2 million—up sequentially, but down 13% from the $125.1 million achieved in the prior year quarter.
The servicing portfolio (unpaid principal balance) increased modestly to $117.54 billion. The company also noted a recovery from prior cybersecurity-related costs, which impacted results in the year-earlier period, with only a small related expense recorded in Q1 2025.
One-time items this quarter included minor residual expenses from earlier cyber incidents. Other non-volume-related costs dropped $17.3 million sequentially compared to Q1 2025, although some of this benefit is not expected to repeat. No dividend was declared or altered.
Looking Ahead: Guidance and Investor Focus
Management forecasted origination volume between $5.0 billion and $7.0 billion for Q3 2025, which could represent a decrease compared to Q2 2025's loan origination volume of $6.73 billion. Pull-through weighted lock volume is expected to land in the $5.25 billion to $7.25 billion range. Guidance for pull-through weighted gain-on-sale margin is 3.25% to 3.50%.
No explicit forward guidance on full-year earnings or revenue was given. Looking ahead, investors should keep an eye on trends in origination volumes, gain-on-sale margin performance, cost discipline, and adoption of new technology platforms as outlined by the company’s leadership. Monitoring shifts in purchase vs. refinance mix and the continued ability to lower expenses without harming service or growth will also be key.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
