This press release contains certain forward-looking statements within the meaning of federal securities laws. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this communication. Such factors can be found in the Company's annual report on Form 10-K and the Company's quarterly reports on Form 10-Q, which are available, free of charge, at the SEC's website at www.sec.gov . New risks and uncertainties arise from time to time, and it is impossible for Better to predict these events or how they may affect us. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made, and Better undertakes no obligation, except as required by law, to update or revise the forward-looking statements, whether as a result of new information, changes in expectations, future events or otherwise.
Amounts described as of and for the quarter ended September 30, 2024 represent a preliminary estimate as of the date of this earnings release and may be revised upon filing our Quarterly Report on Form 10-Q with the SEC. More information as of and for the quarter ended September 30, 2024 will be provided upon filing our Quarterly Report on Form 10-Q with SEC.
SELECTED FINANCIAL DATA, NON-GAAP MEASURES AND DEFINITIONS
Following are tables that present selected financial data of the Company. Also included are reconciliations of non-GAAP measures to their most comparable GAAP measures and definitions of certain key metrics used herein.
Results of Operations
Three Months
Three Months Ended September Ended June
30, 30,
------------------------------ --------------
(Amounts in thousands,
except per share
amounts) 2024 2023 2024
-------------- -------------- --------------
Revenues:
Gain on loans, net $21,503 $11,553 $24,229
Other revenue 3,070 4,009 2,881
Net interest income
Interest income 9,867 4,043 9,397
Interest expense (5,446) (14,698) (4,245)
-------------- -------------- --------------
Net interest
income/(loss) 4,421 (10,655) 5,152
-------------- -------------- --------------
Total net revenues 28,994 4,907 32,262
-------------- -------------- --------------
Expenses:
Compensation and
benefits 37,752 84,329 35,254
General and
administrative 12,481 14,234 15,155
Technology 7,249 6,349 6,582
Marketing and
advertising 12,101 5,064 8,531
Loan origination
expense 3,774 627 791
Depreciation and
amortization 8,259 10,491 7,990
Other
expenses/(Income) 1,332 237,043 (879)
-------------- -------------- --------------
Total expenses 82,948 358,137 73,424
-------------- -------------- --------------
Loss before income tax
expense (53,954) (353,230) (41,162)
Income tax
expense/(benefit) 126 659 203
-------------- -------------- --------------
Net loss ($54,080) ($353,889) ($41,365)
============== ============== ==============
Use of Non-GAAP Measures and Other Financial Metrics
We include certain financial measures not presented in accordance with generally accepted accounting principles ("GAAP") including Adjusted EBITDA, Adjusted Net Income (Loss) and other key metrics.
We calculate Adjusted Net Income (Loss) as net income (loss) adjusted for the impact of stock-based compensation expense, change in the fair value of warrants, change in the fair value of bifurcated derivative, and other non-core operational expenses. We calculate Adjusted EBITDA as net income (loss) adjusted for the impact of stock-based compensation expense, change in the fair value of warrants, change in the fair value of bifurcated derivative, and other non-recurring or non-core operational expenses, as well as interest and amortization on non-funding debt (which includes interest on the Convertible Note (as defined in our Form 10-Q)), depreciation and amortization expense, and income tax expense. These non-GAAP financial measures should not be considered in isolation and are not intended to be a substitute for any GAAP financial measures. These non-GAAP measures provide supplemental information that we believe helps investors better understand our business, our business model and how we analyze our performance. We also believe these non-GAAP financial measures improve investors' and analysts' ability to compare our results with those of our competitors and other similarly situated companies, which commonly disclose similar performance measures.
However, our calculation of Adjusted EBITDA and Adjusted Net Income (Loss) may not be comparable to similarly titled performance measures presented by other companies. Further, although we use these non-GAAP measures to assess the financial performance of our business, these measures exclude certain substantial costs related to our business, and investors are cautioned not to use such measures as a substitute for financial results prepared according to GAAP. Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. As a result, non- GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, our financial results prepared and presented in accordance with GAAP.
Reconciliation of Non-GAAP Metrics
Three Months
Three Months Ended September Ended June
30, 30,
------------------------------ --------------
(Amounts in thousands) 2024 2023 2024
Adjusted Net Loss
Net income (loss) ($54,080) ($353,889) ($41,365)
Stock-based
compensation
expense 5,487 39,417 7,959
Change in fair value
of warrants and
equity related
liabilities (206) (861) 102
Change in fair value
of bifurcated
derivative -- 237,667 --
Restructuring,
impairment, and
other expenses 43 679 184
-------------- -------------- --------------
Adjusted Net Loss ($48,756) ($76,987) ($33,120)
============== ============== ==============
Adjusted EBITDA
Net income (loss) ($54,080) ($353,889) ($41,365)
Income tax expense /
(benefit) 126 659 203
Depreciation and
amortization
expense 8,259 10,492 7,990
Stock-based
compensation
expense 5,487 39,417 7,959
Interest and
amortization on
non-funding debt 1,631 11,939 1,668
Restructuring,
impairment, and
other expenses 43 679 184
Change in fair value
of warrants and
equity related
liabilities (206) (861) 102
Change in fair value
of bifurcated
derivative -- 237,667 --
-------------- -------------- --------------
Adjusted EBITDA ($38,740) ($53,897) ($23,259)
============== ============== ==============
Consolidated Balance Sheets
September 30,
-------------
(Amounts in thousands, except share and per share amounts) 2024
-------------
Assets
Cash and cash equivalents $207,673
Restricted cash 29,406
Short-term investments 54,414
Mortgage loans held for sale, at fair value 339,485
Loans held for investment 81,401
Other receivables, net 17,337
Property and equipment, net 12,846
Right-of-use assets 3,471
Internal use software and other intangible assets, net 24,684
Goodwill 33,403
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