Better Home & Finance Holding Company Class A Common Stock 2026 Q2 Earnings Call

Tarek, please go ahead. Welcome to Better Home & Finance Holding Company second quarter 2026 earnings conference call.

My name is Tarek Afifi. I'm Better's Corporate Finance team. Joining me on today's call are Daniel Lewis, Interim Chief Executive Officer of Better, and Lavine 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 30th, 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.

Good afternoon, everyone, and thank you for joining us. This week, the board announced a leadership change and asked me to serve as interim chief executive officer. Better 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've 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-$1.525 billion, total net revenues of $49 million-$52 million, and an adjusted EBITDA loss of $18 million-$15 million. Regarding our previously guided goal of reaching adjusted EBITDA breakeven by September, we now expect to fall short. I remain optimistic about Better's opportunity, but our objective is to establish credibility through execution. I do not want to anchor adjusted EBITDA breakeven 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 to 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 has always been innovative, defined by our founder's spirit and creativity. 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 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. Why are the board and I enthusiastic about Better'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 personal 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. 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's 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's long-term success, I've 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 Mortgage operations are being combined, creating efficiencies while improving execution. A more focused company needs 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's future. 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'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. It comes from my belief that Better 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.