10-K: Better Home & Finance Boosts Revenue, Narrows Losses in 2025

Better Home & Finance Holding Company reported a 52% revenue increase and a 20% reduction in net loss for 2025, driven by higher loan volumes and improved margins, alongside significant growth in its UK banking operations.

Summary

• Total net revenues increased by 52% to $164.9 million for the year ended December 31, 2025, up from $108.5 million in 2024.
• Net loss decreased by 20% to $165.9 million in 2025, compared to a net loss of $206.3 million in 2024.
• Funded Loan Volume grew by 32% to $4.7 billion in 2025, from $3.6 billion in 2024.
• Gain on Sale Margin improved by 32% to 2.87% in 2025, up from 2.17% in 2024, due to better loan pricing and a shift towards higher-margin products and channels.
• Refinance Loan Volume surged by 119% to $1,015 million in 2025, while Purchase Loan Volume increased by 8% to $2,875 million.
• HELOC Loan Volume saw a 78% increase, reaching $854 million in 2025.
• The B2B Loan Volume, primarily from the Ally Partnership, decreased by 91% to $95 million in 2025 as the partnership concluded.
• Platform Loan Volume was $1,721 million in 2025, reflecting the consolidation of the previous Retail channel.
• Total Stockholders' Equity improved from a deficit of $(58.2) million in 2024 to a positive $37.2 million in 2025.
• Material weaknesses in internal controls over financial reporting, previously identified, were remediated as of December 31, 2025.
• The company completed an exchange of $532.5 million in Convertible Notes for $155.0 million in Senior Notes and a $110.0 million cash payment in April 2025.
• An At-The-Market (ATM) equity offering program was implemented in September 2025, selling 547,260 shares for $29.8 million gross proceeds, with $45.2 million remaining available.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive filing, reflecting significant improvements in revenue and net loss, strong growth in key loan segments, and successful remediation of internal control issues. However, ongoing net losses, CEO litigation, and market volatility temper the overall sentiment.

Positives

• Revenue increased significantly by 52% year-over-year, demonstrating strong top-line growth.
• Net loss decreased by 20% year-over-year, indicating progress towards profitability.
• Funded Loan Volume grew by 32%, driven by substantial increases in refinance (119%) and HELOC (78%) volumes.
• Gain on Sale Margin improved by 32%, reflecting better loan pricing and a favorable product/channel mix.
• The company successfully remediated previously reported material weaknesses in its internal controls over financial reporting.
• The UK banking operations showed significant growth, with Loans Held for Investment increasing by 549% to $723.3 million and customer deposits rising by 469% to $763.0 million.
• Total Stockholders' Equity turned positive, moving from a deficit of $(58.2) million in 2024 to $37.2 million in 2025.
• Operating lease costs decreased by 50% due to real estate footprint reduction initiatives.

Negatives

• The company continues to operate at a net loss of $165.9 million in 2025, despite improvements.
• Cash and cash equivalents decreased by $111.3 million, or 53%, in 2025.
• The B2B Loan Volume, primarily from the Ally Partnership, significantly decreased by 91% due to the conclusion of the partnership.
• Goodwill impairment charges increased to $14.0 million in 2025 from $7.3 million in 2024, primarily related to UK entities.
• Compensation and benefits expenses increased by 23% to $174.2 million, driven by increased headcount and incentive compensation.
• Marketing and advertising expenses increased by 13% to $38.4 million.
• Net cash used in investing activities increased substantially by 360% to $661.5 million, primarily due to funding loans held for investment in the UK.

Risks

• Business and results of operations are highly sensitive to interest rate levels and volatility, which can reduce origination demand and affect asset values.
• Loss of key leadership could have a material adverse effect on the business, with CEO Vishal Garg being critical to operations and vision.
• The company has a history of operating losses and may not achieve or maintain profitability in the future, with prior growth rates not representative of future expectations.
• Inability to effectively maintain and develop relationships with third-party vendors and key commercial partners could adversely affect customer attraction and business growth.
• Dependence on selling loans and mortgage servicing rights (MSRs) in the secondary market to a limited number of purchasers, including government-sponsored enterprises (GSEs), poses a risk if this ability is impaired.
• Compliance and risk management policies may not be sufficient to identify all financial, legal, regulatory, and other risks, potentially leading to substantial losses.
• CEO Vishal Garg is involved in ongoing litigation related to prior business activities, which could impose significant costs, divert resources, damage reputation, and adversely affect licenses.
• Business and mortgage loan origination revenues are highly dependent on macroeconomic and U.S. residential real estate market conditions, which can negatively impact loan volume and profitability.
• Disruption in the secondary home loan market would impact the ability to sell originated loans.
• Hedging strategies may not be successful in mitigating interest rate risks, potentially increasing losses or resulting in margin calls.
• High dependence on Fannie Mae and Freddie Mac and other U.S. government agencies, with changes in their roles or requirements posing a material adverse effect.
• Failure to comply with underwriting guidelines of GSEs or non-GSE loan purchasers/insurers could lead to repurchases, indemnification, penalties, and reputational damage.
• Proprietary models and market data used for risk management may have limitations or failures, leading to pricing errors or reduced hedge effectiveness.
• Reliance on advertising on financial services websites, search engines, and social media for traffic, with potential declines if prominence or cost-effectiveness is lost.
• Liability in connection with loans delivered to third parties, including for insufficient application information, non-compliant disclosures, or mortgage fraud.
• Expansion into platform-based services for third-party originators may not be successful or generate sufficient revenues to offset costs.
• Better Cover (property and casualty insurance agency) exposes the company to additional risks and regulatory oversight, including licensing and compliance challenges.
• Better Settlement Services' reliance on third-party vendors for title insurance policies could result in title claims directed at the company.
• Significant legal and reputational risks and expenses related to the privacy, use, and security of customer information, including potential cybersecurity incidents.
• Inability to adapt to and implement technological changes, or failures in technology infrastructure, could disrupt business and harm reputation.
• Issues related to the development, proliferation, and use of artificial intelligence (AI) could give rise to legal/regulatory action or reputational damage.
• Reliance on third-party software, hardware, and services that may be difficult to replace or cause errors/failures.
• Inadequate protection and enforcement of intellectual property rights, and potential allegations of infringement from third parties.
• Debt obligations could materially and adversely affect financial condition, requiring a large portion of cash flow for principal and interest payments.
• Reliance on warehouse lines of credit for funding loans, with risks of termination or unavailability of replacement financing.
• Exposure to interest rate risk from variable rates on finance and warehouse lines, which could increase debt service obligations.
• Operating in a heavily regulated industry with complex and increasing laws and regulations at federal, state, and local levels, leading to noncompliance risks.
• Subject to litigation and regulatory enforcement matters, with adverse outcomes potentially affecting business and financial results.
• Failure to comply with telemarketing, data protection, AI, and consumer protection laws (e.g., TCPA, GLBA, CCPA) could lead to increased costs, fines, and penalties.
• Did not receive approval from New York state regulators prior to the Business Combination closing, risking license suspension or revocation in New York.
• Better Real Estate and Better Settlement Services businesses are subject to significant additional regulation, including RESPA and state-specific licensing laws.
• Failure to obtain and maintain appropriate state licenses could restrict the ability to produce or service loans in some states.
• CFPB monitoring, rule issuance, and enforcement actions increase compliance costs and risks.
• State regulatory agencies, federal agencies, and loan purchasers actively supervise the loan production and servicing sectors, with examination results potentially impacting the business.
• Inability to comply with TRID rules could lead to inability to sell loans, discounts, repurchase demands, and regulatory action.
• Geographic concentration of loan production (California, Texas, Florida) exposes the company to adverse conditions in those states.
• The Better or Better Home & Finance brand may not become as widely known as competitors' brands, and negative public opinion could tarnish its reputation.
• Fraud could result in significant financial losses and harm to reputation.
• The existence of multiple classes of common stock may materially and adversely impact the value and liquidity of Class A common stock.
• Future sales, or the perception of future sales, of Class A common stock in the public market or other financings could cause the stock price to decline.
• The market price of Class A common stock has been extremely volatile and may continue to be volatile due to numerous circumstances beyond control.
• No expectation of cash dividends for the foreseeable future.
• Directors and management team have limited experience in overseeing a public company, potentially diverting time from strategy and operations.
• Provisions in the Amended and Restated Certificate of Incorporation and Bylaws and Delaware law might discourage, delay, or prevent a change in control.
• Qualifying as an emerging growth company and smaller reporting company means reduced public company reporting requirements, which may make common stock less attractive to investors.
• If analysts do not publish research or publish inaccurate/unfavorable research, the price and trading volume of securities could decline.
• The Amended and Restated Charter's exclusive forum provision for certain lawsuits may discourage actions against directors and officers.

Future Outlook

The company intends to scale its India-based team to leverage the mortgage talent pool and favorable labor cost arbitrage, while also exploring additional third-party business process outsourcing for capacity and disaster recovery. Continued investment in automation and AI-enabled capabilities is planned to streamline the loan manufacturing process, reduce costs, and enhance customer experience. The company expects to expand its Home Finance mortgage loan offerings and broaden U.S. geographic and product coverage, including government-insured, non-agency, and non-mortgage homeownership services. Exposure to foreign currency exchange risk is expected to increase with a focus on UK growth. The company anticipates ceasing to be an Emerging Growth Company on the last day of its fiscal year following March 8, 2026, and plans to use ATM program proceeds for general corporate purposes, including increasing warehouse line capacity for loan production growth.

Management Comments

• "Our goal is to do our part in lowering the hurdles to homeownership by offering the lowest prices and the best experience to our customers."
• "We are seeking to disrupt a business model by leveraging our proprietary platform, Tinman, to enable us to deliver on what we believe is most important for our customers: a seamless experience, time saved, and higher certainty on the single biggest financial decision of their lives."
• "Through this process, we aim to reduce the cost to produce a loan and in the future to create a platform with all homeownership products embedded into a highly automated, single flow, allowing us to pass along savings to our customers."
• "We are focused on improving our platform and plan to continue making investments to build our business and prepare for future growth."
• "We believe that our success will depend on many factors, including our ability to drive customers to our platform, and convert them once they come to us, achieve leverage on our operational expenses, execute on our strategy to fund more purchase loans and diversify our revenue by expanding and enhancing our offerings."
• "We plan to continue to invest in technology to improve customer experience and further drive down labor costs through automation, making our platform more efficient and scalable."
• "Our intention remains to scale our India based team to avail ourselves of the large mortgage talent pool and favorable labor cost arbitrage."
• "Further, we are exploring additional third-party business process outsourcing relationships to provide additional capacity, some variable, as well as enhanced disaster recovery capability."
• "We believe our integrated platform contributes to our ability to mitigate exposure to risk."
• "Since Tinman tracks thousands of data points across each loan file, we are able to maintain a robust audit trail and support compliance with applicable state-specific and federal regulations across customer contact, pricing, underwriting and quality control."
• "We believe this data-focused approach results in lower delinquency and forbearance compared to the overall industry."
• "Our capital markets team helps mitigate interest rate risk in our loan production business by executing appropriate hedging trades between the time of interest rate lock and loan commitment to an investor."
• "We institute different strategies depending on market conditions to provide our customers with attractive rates and promote the stability of our loan production pipeline and our liquidity."
• "We continue to focus on originating the most profitable business available to us."

Industry Context

StockSavvy.ai notes that Better Home & Finance's significant revenue growth and reduced net loss in 2025, despite a challenging macroeconomic environment characterized by elevated interest rates, suggest a degree of resilience and effective strategic adjustments. The substantial increase in refinance and HELOC volumes, coupled with improved gain on sale margins, indicates successful adaptation to market conditions where traditional purchase volumes might be constrained. The strategic shift towards a platform distribution channel and the winding down of the B2B Ally partnership reflect an evolving business model. The growth in UK banking operations aligns with a broader trend of fintech companies diversifying revenue streams and expanding internationally, though this also introduces new regulatory and operational complexities.

Comparison to Industry Standards

• The 32% increase in Funded Loan Volume to $4.7 billion in 2025, while positive, is in the context of a highly competitive and fragmented mortgage market. Without specific industry-wide growth rates for 2025, it's difficult to benchmark this precisely, but the company's market share remained flat at 0.2%, suggesting growth was in line with or slightly above the overall market, rather than significantly outperforming it.
• The improvement in Gain on Sale Margin to 2.87% in 2025 from 2.17% in 2024 is a positive indicator of pricing power and efficiency, especially compared to the industry-wide gain on sale margin compression often seen in rising interest rate environments.
• The average loan amount of $308,321 and average FICO score of 747 for customers in 2025 suggest a focus on a relatively creditworthy borrower segment, which is generally in line with prudent lending standards, particularly for companies selling into the secondary market.
• The average days loans held for sale of approximately 30 days in 2025 (up from 21 days in 2024) is a key metric for liquidity and interest rate risk management. While still relatively short, the increase suggests some potential for higher exposure to market fluctuations compared to the prior year, though it remains competitive with industry averages for digital lenders aiming for quick sales.
• The remediation of material weaknesses in internal controls over financial reporting is a critical step towards meeting public company standards, addressing a common challenge for newly public or rapidly growing fintech firms. This brings the company closer to the robust control environments expected of established financial institutions like JPMorgan Chase or Wells Fargo.

Management Changes

Corporate Governance

Legal Proceedings

• Ongoing employee labor disputes initiated in Q3 2020, alleging failure to pay certain employees for overtime in violation of the Fair Labor Standards Act and California labor laws. Estimated liability of $6.7 million as of December 31, 2025 (down from $8.3 million in 2024), with $1.4 million in settlements during 2025.
• TILA-RESPA Integrated Disclosure (TRID) defects identified in loan production processes from 2018, 2019, and 2021, resulting in potential overcharges to consumers. Estimated liability of $5.1 million as of December 31, 2025 (down from $6.6 million in 2024), with a $0.7 million reduction in accruals during 2025.
• CEO Vishal Garg is involved in litigation related to prior business activities, including allegations of breach of fiduciary duties, misappropriation of intellectual property and trade secrets, conversion of corporate funds, and failure to file corporate tax returns. A jury rendered a verdict against Mr. Garg in one action (no judgment entered yet), and another action for corporate waste proceeded to trial in July 2025 (no decision as of March 13, 2026).
• The company did not receive approval from New York state regulators prior to the closing of the Business Combination, which could lead to suspension or revocation of its license or other restrictions on its ability to originate or service loans in New York, and potential administrative fines or enforcement actions.

Related Party Transactions

• The company has a data analytics services agreement with TheNumber, LLC, an entity affiliated with CEO Vishal Garg. Payments to TheNumber were $0.9 million in 2025 and $1.0 million in 2024.
• The company previously had agreements with Notable Finance LLC, an entity controlled by CEO Vishal Garg and other senior leadership, for consumer lending programs and the purchase of unsecured home improvement loans. The company purchased $2.5 million of such loans in 2025 (down from $4.2 million in 2024) and ceased offering these products in 2024.
• The company has relationships with 1/0 Capital LLC and Zethos Inc. (doing business as True Work), companies affiliated with CEO Vishal Garg, for data analytics and IT support services. Immaterial payments were made in 2025, and $0.1 million in 2024.
• In April 2025, the company entered into a Note Exchange Agreement with SB Northstar LP, a related party, to exchange $532.5 million in Convertible Notes for $155.0 million in Senior Notes and a $110.0 million cash payment.
• Sponsor Locked-Up Shares are held by Novator Capital Sponsor Ltd., a related party, and are accounted for as a derivative liability.

Stakeholder Impact

• **Shareholders:** Improved financial performance (reduced net loss, positive equity) and remediation of internal control weaknesses are positive. However, ongoing litigation involving the CEO and potential regulatory actions in New York could introduce uncertainty and volatility. The ATM program could lead to dilution.
• **Employees:** Increased compensation and benefits expenses reflect higher headcount and incentive compensation. The company's focus on scaling its India-based team and exploring BPO relationships indicates potential shifts in workforce distribution. Employee labor disputes remain an ongoing concern.
• **Customers:** Continued investment in technology (Tinman AI Platform) aims to provide a superior, faster, and cheaper homeownership experience. Expansion of product offerings and geographic coverage seeks to serve more customers. However, TRID defects and potential overcharges highlight past issues in consumer protection.
• **Suppliers/Vendors:** Reliance on third-party software, hardware, and services, as well as lead aggregators, means these relationships are critical. The conclusion of the Ally partnership indicates a dynamic vendor landscape.
• **Creditors:** The exchange of Convertible Notes for Senior Notes and a cash payment, along with the ATM program, impacts the company's capital structure and liquidity. Compliance with warehouse line covenants is crucial for continued funding.

Next Steps

• Scale India-based team to leverage mortgage talent pool and favorable labor cost arbitrage.
• Explore additional third-party business process outsourcing relationships for capacity and enhanced disaster recovery capability.
• Continue to invest in automation and AI-enabled capabilities to further automate the loan manufacturing process, reduce labor costs, and improve customer experience.
• Add new types of Home Finance mortgage loans to expand product offerings.
• Invest in infrastructure and compliance capabilities to broaden U.S. geographic coverage and expand loan product offerings (government-insured, non-agency, non-mortgage homeownership services).
• Use net proceeds from the ATM Program for general corporate purposes, including working capital and increasing warehouse line capacity to finance anticipated growth.

Key Dates

Recommendation

The company demonstrated significant improvements in revenue growth and a reduction in net losses for 2025, alongside positive developments in internal controls and strategic expansion in the UK. These factors suggest a strengthening operational foundation. However, the company remains unprofitable, faces ongoing litigation involving its CEO, and operates in a highly competitive and interest-rate sensitive market. The reliance on related-party transactions and the potential for regulatory challenges in New York introduce notable uncertainties. Given the mixed signals of improving performance against persistent risks and market volatility, a 'hold' recommendation is appropriate for seasoned investors, allowing for observation of sustained profitability and resolution of legal/regulatory issues before a more aggressive stance.

Keywords

Mortgage Origination, Home Equity Loans, Digital Lending, Fintech, Real Estate Services, Title Insurance, Homeowners Insurance, SEC Filing, 10-K, Financial Results, Net Loss, Revenue Growth, Loan Volume, Interest Rates, Risk Management, Corporate Governance, AI Platform, Tinman, UK Banking, Capital Raise, Stock Volatility, Regulatory Compliance