Despite reporting a sequential net loss in the first quarter, digital lender
The mortgage lender reported a net loss of $51 million, unchanged
However, its revenue increased by 26%, growing to $22 million, up from $18 million, thanks to the company's strategy of "prudently invest[ing]cash and investments," said Vishal Garg, Better's CEO, during the company's earnings call Tuesday.
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During the first quarter, the mortgage shop originated 1,991 loans totaling $661 million, a $134 million increase from the prior quarter. Said volume was made up of 80% purchase loans, 12% refinance loans, with the
"In purchase we are seeing strong early results [due to] the benefit of having experienced loan officers nurturing homebuyers through their journey and in refi we are leaning into cash-out refi's to improve sales and operation excellence," Garg said.
The company's gain-on-sale margin grew to 2.37% in the first quarter of 2024, up from 2.03% for the full year of 2023. This increase was buoyed by Better's push to limit the use of sales concessions, while driving customer retention, they said.
Better ended the first quarter of 2024 with $509 million in cash, restricted cash, and short-term investments, which will be leveraged for the company's growth plans.
"We believe that our cash position is well in excess of other originators of our size, therefore we are well capitalized for growth as our cash position provides us with the liquidity to continue executing against our vision and corporate objectives," said Kevin Ryan, chief financial officer at Better.
The company is "thoughtfully" leaning into certain growth expenses in order to capture market share and increase revenue. As such, the company has increased its marketing expenses by 27% to $4.6 million in the first quarter.
"We're still early in our expansion into a handful of new marketing channels, but are seeing positive early results that we expect to scale as the year progresses," said Garg.
The ultimate goal is to "Uber-ize the loan officer giving them leads generated by our proprietary tech platform and customer interface and having them be more productive," the company's CEO said.
