Better Home & Finance Holding Co: Form 10-Q for the period ended Mar 31, 2026

The following discussion and analysis of Better Home & Finance Holding Company’s (together with its consolidated subsidiaries, the “Company,” “we” “our” or “us”) financial condition and results of operations should be read together with our audited consolidated financial statements as of December 31, 2025 and for the years ended December 31, 2025 and 2024, in each case, together with related notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”), and our condensed consolidated financial statements and related notes as of and for the quarterly period ended March 31, 2026, included elsewhere in this Quarterly Report on Form 10-Q (the “Quarterly Report”).

Company Overview

We are an AI-native home finance company on a mission to make homeownership cheaper, faster, and more accessible for all Americans. Our services offer consumers a seamless experience that eliminates friction and complexity across every stage of homeownership including purchase, refinance, home equity, and sale.

Founded in 2015, we built our business with an AI-first mindset that remains at the core of everything we do. Our proprietary platform, Tinman®, is trained on $110B in origination volume and grew its share of volume by 38% from 2024 to 2025. The platform automates the most time-consuming parts of the mortgage process and enables faster decisions to create a better experience for consumers navigating the biggest financial decision of their life.

The home is among the world’s largest and most tangible asset classes. While other industries have undergone end-to-end digital transformations, the homeownership journey remains mired in legacy inefficiencies. High transaction costs, regulatory complexity, and a sprawling intermediary stack come at the expense of consumers and limit digital adoption across the industry. We believe the homeownership experience is broken, and we're fixing it.

Designed to scale across products, channels, and market conditions, Tinman is not just the engine behind Better; it is how we are modernizing the broader mortgage industry. Through Tinman, we partner with lenders, banks, and financial institutions to bring AI-driven efficiency and savings to their own customers, helping transform an industry long overdue for change.

Business Environment

The mortgage industry continues to be influenced by a dynamic macroeconomic and geopolitical environment. In the first quarter of 2026, the U.S. Federal Reserve maintained the federal funds rate within a target range of approximately 3.50% to 3.75%. This sustained restrictive monetary policy stance, implemented to address inflation above the Federal Reserve’s long-term 2% target, has contributed to mortgage rates remaining elevated relative to recent historical levels, limiting refinance activity and moderating overall borrower demand, particularly in rate-sensitive segments.

In addition, geopolitical uncertainty, including the ongoing conflict in the Middle East, has contributed to volatility in financial markets, impacting U.S. Treasury yields, inflation expectations, and mortgage rate movements. These factors, combined with affordability constraints driven by rising home prices and borrowing costs, have created a more challenging operating environment for mortgage originators. At the same time, lenders with diversified product offerings across purchase and non-mortgage products, such as home equity, are better positioned to capture baseline purchase activity and benefit from the counter-cyclical demand for home equity products that typically increases in higher-rate environments.

Recent Developments

As previously announced, the Company determined to dispose of Birmingham Bank, which represents the Company’s reportable banking segment. The sale process is underway and is expected to conclude during 2026; and, therefore, the assets related to this business have been classified as held for sale. The timing and ultimate outcome of the sale of Birmingham Bank remains subject to market conditions and required regulatory approvals. The results of operations, financial condition, and cash flows for Birmingham Bank are presented herein as discontinued operations. Except where noted, any tables, percentages or metrics included within this filing exclude the results of Birmingham Bank.

Our Business Model

We generate revenue through the production and sale of loans and other product offerings through our platform. The revenue and mix of revenue as a percentage of total revenue attributable to our sale of loan production (Gain on loans, net) and Better Plus (Other revenue) and net interest income for the three months ended March 31, 2026 and 2025 is as follows:

(Amounts in thousands, except percentage amounts)

Home Finance—Gain on loans, net

We produce a wide selection of mortgage loans and leverage our platform to quickly sell these loans and related mortgage servicing rights (“MSRs”) to our loan purchaser network. Historically, the Company utilized three primary channels for customer acquisition; however, our current operations have been streamlined to focus on two key sourcing channels: our D2C channel and our Platform channel. Through these channels, we generate gain on loans, net by selling loans and MSRs to our loan purchaser network, recognizing revenue per loan. Through our Platform channel, we generate revenue from various partnerships with mortgage originators and technology companies, as well as our in-market loan officer teams, which ramped over the course of 2025. These partnerships come in different structures. For some, we access our partners’ customer base and originate loans on our platform and in other arrangements, the partner originates the loan and we provide the technology, underwriting, and fulfillment.

Better Plus—Other revenue

We complement our residential mortgage loan products through Better Plus, which includes a set of non-mortgage homeownership products and services offered primarily through third-party strategic partners. These offerings include referrals to real estate agents, title insurance and settlement services provided through third-party providers, and access to homeowners insurance policies through a digital marketplace of insurance partners. In these arrangements, we generally act as an agent or referral source and receive fees from third-party providers. Better Plus products are integrated into our platform to support customers throughout the homeownership process.

Mortgage Interest Income —Net interest income

As we originate mortgages, there is a short period between the funding of a loan and its sale into our investor network. During this time, we borrow against our warehouse lines of credit as a source of capital and pay interest on those borrowings. It is not uncommon for a mortgage to be awaiting sale while the borrower's first interest payment is collected. In these instances, Better collects and recognizes that interest as revenue. Once the mortgage is sold to our investor network, the warehouse line of credit is repaid and we do not collect any future interest payments on that loan.

International Lending Revenue—Other revenue

International lending revenue consists of revenue from our international lending activities, primarily in the U.K., which has expanded via acquisitions in prior years. International lending activities primarily include broker fees earned via our digital mortgage broker in the U.K. During 2024, management enacted a plan to sell several entities in the U.K. One of those sales was completed in Q3 2025, with the remaining expected to be completed in 2026. As such, the revenue from our non-core international operations is winding down.

Key Business Metrics

In addition to the measures presented in our condensed consolidated financial statements, we use the following key business metrics to help us evaluate our business, identify trends affecting our business, formulate plans and make strategic decisions. Our key business metrics enable us to monitor our ability to manage our business compared to the broader mortgage origination market, as well as monitor relative performance across key purchase and refinance verticals.

Key measures that we use in assessing our business include the following ($ in millions, except percentage data or as otherwise noted):

Home Finance

Refinance Loan Volume represents the aggregate dollar amount of refinance loans funded in a given period based on the principal amount of the loan at refinancing date.

Purchase Loan Volume represents the aggregate dollar amount of purchase loans funded in a given period based on the principal amount of the loan at purchase date.

HELOC Loan Volume represents the aggregate dollar amount of HELOC and closed-end lien loans funded in a given period based on the principal amount of the loan at funding.

Funded Loan Volume represents the aggregate dollar amount of all loans funded in a given period based on the principal amount of the loan at funding.

D2C Loan Volume represents the aggregate dollar amount of loans funded in a given period based on the principal amount of the loan at funding that have been generated from direct interactions with customers using all marketing channels other than our partner relationships and our Tinman® AI Platform channel.

B2B Loan Volume represents the aggregate dollar amount of loans funded in a given period based on the principal amount of the loan at funding that have been generated through our B2B partner relationship with Ally. This channel was discontinued upon the wind-down of the relationship with Ally Financial Inc. (“Ally”); the Company has not reported B2B Loan Volume since Q4 2025.

Platform Loan Volume represents the aggregate dollar amount of loans funded in a given period based on the principal amount of the loan at funding that have been generated through one of our distributed retail channels.

Total Loans represents the total number of loans funded in a given period, including purchase loans, refinance loans and HELOC loans and closed-end second lien loans.

Average Loan Amount represents Funded Loan Volume divided by Total Loans in a period.

Gain on Sale Margin represents gain on loans, net, as presented on our condensed consolidated statements of operations and comprehensive loss, divided by Funded Loan Volume.

Total Market Share represents Funded Loan Volume in a period divided by total value of loans funded in the industry for the same period, as presented by FNMA.

Better Plus

Better Real Estate Transaction Volume represents the aggregate dollar amount of real estate volume transacted in a given period across both in-house agents and third-party network agents.

Insurance Coverage Written represents the aggregate dollar amount of insurance liability coverage provided to customers on behalf of insurance carrier partners across all insurance products on the Company’s marketplace, specifically title and homeowners insurance offered through Better Settlement Services and Better Cover. This includes the value of the loan for lender’s title insurance and dwelling coverage for homeowners insurance. Insurance Coverage Written amounts for Better Cover have been updated for all periods presented to include both new policies and policy renewals, which in prior periods included only new policies.

Description of Certain Components of Our Financial Data

Components of Revenue

Our sources of revenue include gain on loans, net, other revenue, and net interest income.

Home Finance (Gain on Loans, Net)

Gain on loans, net, includes revenue generated from our mortgage production process. The components of Gain on loans, net, are as follows:

i. Gain on sale of loans, net–This represents the premium we receive in excess of the loan principal amount and certain fees charged by loan purchasers upon sale of loans into the secondary market. Gain on sale of loans, net includes unrealized changes in the fair value of LHFS, which are recognized on a loan-by-loan basis as part of current period earnings until the loan is sold on the secondary market. The fair value of LHFS is measured based on observable market data. This also includes activity for loans originated on behalf of the integrated partnership that are subsequently purchased by us as well the portion of the sale proceeds to be received by the integrated partner. The portion of the sale proceeds that is to be allocated to the integrated partner is accrued as a reduction of gain on sale of loans, net when the loan is initially purchased by us from the integrated relationship partner.

Gain on sale of loans, net also includes the changes in fair value of IRLCs and forward sale commitments. IRLCs include the fair value upon purchase/issuance with subsequent changes in the fair value recorded in each reporting period until the loan is sold on the secondary market. Fair value of forward commitments hedging IRLCs and LHFS are measured based on quoted prices for similar assets.

ii. Broker revenue–Includes fees that the Company receives for originating loans on behalf of third-parties.

iii.Provision for Loan Repurchase Reserve–In connection with our sale of loans on the secondary market, we make customary representations and warranties to the relevant loan purchasers about various characteristics of each loan, such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local laws. In the event of a breach of its representations and warranties, we may be required to repurchase the loan with the identified defects. The provision for loan repurchase reserve, represents the charge for these potential losses.

Better Plus, International Lending Revenue, and Other (Other Revenue)

We generate other revenue through our Better Plus offerings, which includes real estate services, insurance, settlement services, and international lending revenue.

For real estate services, we generate revenues from fees related to real estate agent services, mainly cooperative brokerage fees from our network of third-party real estate agents, to assist our customers in the purchase or sale of a home. For settlement services, we generate revenues from fees on services, such as policy preparation, title search, wire, and other services, required to close a loan, which were provided by third parties through our platform. We recognize revenues from fees on settlement services upon the completion of the performance obligation, which was when the loan transaction closes.

For insurance services, we generate revenues from agent fees on homeowners insurance policies obtained by our customers through our marketplace of third-party insurance carriers. For title insurance, we generate revenues from agent fees on title policies written by third parties and sold to our customers in loan transactions. We recognize revenues from agent fees on title policies upon the completion of the performance obligation, which is when the loan transaction closes. As an agent, we do not control the ability to direct the fulfillment of the service, are not primarily responsible for fulfilling the performance of the service, and do not assume the risk in a claim against the policy.

Our performance obligations for settlement services and title insurance are typically completed 40 to 60 days after the commencement of the loan origination process and are recognized in revenue upon the closing of the loan transaction.

For international lending revenue, we generate revenue primarily from broker fees earned via our digital mortgage broker in the U.K. During 2024, management enacted a plan to sell several entities in the U.K. One of those sales was completed in Q3 2025, with an additional sale completed in Q1 2026, and any remaining dispositions are expected to be completed during 2026. As such, the revenue from our non-core international operations is winding down. We do not expect to generate material revenue from these non-core international operations in future periods.

Net Interest Income

Net interest income from continuing operations includes interest income from LHFS, including HELOCs, calculated based on the note rate of the respective loan. Interest expense from continuing operations primarily includes interest expense on warehouse lines of credit and corporate debt.

Components of Our Expenses

Our expenses consist of compensation and benefits, general and administrative, technology expenses, marketing and advertising expenses, loan origination expenses, depreciation and amortization, and other expenses.

Compensation and Benefits Expenses

Compensation and benefits expenses includes salaries, wages, and incentive pay as well as stock-based compensation, employee health benefits, 401(k) plan benefits, and social security and unemployment taxes. Stock-based compensation includes expenses associated with restricted stock unit grants, performance stock unit grants, and stock option grants under our stock plans. We recognize compensation expense for the stock-based payments based on the fair value of the awards on the grant date. The expense is recorded on a straight-line basis over the requisite service period. Compensation and benefits excludes amounts capitalized for internally-developed software.

General and Administrative Expenses

General and administrative expenses include rent and occupancy expenses, travel and entertainment expenses, insurance expenses, and external legal, tax and accounting services. General and administrative expenses are expensed as incurred.

Technology Expenses

Technology expenses consist of expenses related to vendors engaged in product management, design, development and testing of our websites and products. Technology and product development expenses are generally expensed as incurred.

Marketing and Advertising Expenses

Marketing and advertising expenses consist of customer acquisition expenses, brand costs, and paid marketing. For customer acquisition expenses, we primarily generate loan origination leads through third-party financial service websites for which we incur “pay-per-click” expenses. A majority of our marketing expenses are incurred from leads that we purchase from these third-party financial service websites. Marketing expenses are generally expensed as incurred.

Loan Origination Expenses

Loan origination expenses consist primarily of origination expenses, appraisal fees, processing expenses, underwriting, closing fees, and servicing costs. These expenses are expensed as incurred.

Other Expenses

Other expenses relate to other non-mortgage homeownership activities, including settlement service expenses, lead generation expenses, expenses incurred in relation to our international lending activities, restructuring and impairment expenses, gains and losses from equity related liabilities, and gains and losses related to disposals of held-for-sale assets. Settlement service expenses consist of fees for transactional services performed by third-party providers for borrowers while lead generation expenses consist of fees for services related to real estate agents. Other expenses are expensed as incurred.

Results of Operations-Continuing Operations

The following table sets forth selected financial data of the Company’s continuing operations for each of the periods indicated:

(Amounts in thousands, except per share amounts)

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Three Months Ended March 31, 2026 as Compared to Three Months Ended March 31, 2025

Revenues

The components of our revenues for the period were:

(Amounts in thousands)

Gain on loans, net

The components of our gain on loans, net for the period were:

(Amounts in thousands)

Gain on sale of loans, net increased $22.8 million or 107% to $44.1 million for the three months ended March 31, 2026 compared to $21.3 million for the three months ended March 31, 2025. The increase in gain on sale of loans, net was largely driven by the increase of Funded Loan Volume, which was driven by increases in refinance and home equity products.

Broker revenue increased $0.2 million, or 17% to $1.4 million for the three months ended March 31, 2026, compared to $1.2 million for the three months ended March 31, 2025. The increase in broker revenue was primarily driven by broker revenue earned for originating loans for third-parties through in-market originations operations.

Loan repurchase reserve recovery decreased $2.8 million or 130%, to a provision of $0.6 million for the three months ended March 31, 2026, compared to a recovery of $2.1 million for the three months ended March 31, 2025. The prior-year recovery was driven by declining estimated loss exposure associated with historical origination vintages, while the current-year provision reflects updated estimates of expected losses and loan-specific activity during the period.

Other Revenue

The components of other revenue for the period were:

(Amounts in thousands)

International lending revenue decreased $1.5 million, or 96.9% to an immaterial amount for the three months ended March 31, 2026 compared to $1.5 million for the three months ended March 31, 2025. The decrease in international lending revenue was primarily driven by the sale of the Trussle disposal group in the third quarter of 2025.

Insurance services decreased $0.1 million, or 14.1% to $0.6 million for the three months ended March 31, 2026 compared to $0.7 million for the three months ended March 31, 2025. The decrease in insurance services revenue was primarily driven by the sale of the Trussle disposal group in the third quarter of 2025 offset slightly by an increase in insurance related revenue from our Better Cover business.

Real estate services decreased $0.7 million, or 77% to $0.2 million for the three months ended March 31, 2026 compared to $0.9 million the three months ended March 31, 2025 due to a decrease in real estate transaction volume driven by the conclusion of the integrated relationship partnership with Ally and its use as a source of referrals for real estate services.

Other revenue decreased by $0.2 million, or 31.5% to $0.3 million for the three months ended March 31, 2026 compared to $0.5 million for the three months ended March 31, 2025. The decrease in other revenue was primarily driven by lower ancillary revenue activities.

Net Interest Income

The components of our net interest income for the period were:

(Amounts in thousands)

Mortgage interest income increased $0.5 million, or 8% to $6.9 million for the three months ended March 31, 2026 compared from $6.4 million of the three months ended March 31, 2025. The increase in mortgage interest income was primarily driven by the increase in origination volume and the mortgage interest income earned on the unpaid principal balance for loans held and serviced during the interim between the origination of the loan and its sale on the secondary market.

Interest income from investments decreased $0.8 million, or 70% to $0.3 million for the three months ended March 31, 2026 compared to $1.2 million for the three months ended March 31, 2025. The decrease in interest income from investments was primarily driven by decreased holdings of investments with maturities less than 90 days.

Warehouse interest expense increased $2.9 million, or 106% to $5.7 million for the three months ended March 31, 2026 compared to $2.8 million for the three months ended March 31, 2025. The increase in warehouse interest expense was primarily driven by increased borrowings on funding facilities used in the mortgage production process to meet the increased origination volume.

Other interest expense decreased $1.7 million, or 100% to none for the three months ended March 31, 2026 compared to $1.7 million for the three months ended March 31, 2025. Other interest expense is related to interest expense on our Convertible Notes which were extinguished as part of the Exchange per Note 10 in April 2025. As part of the TDR accounting, the interest on the Senior Notes has been recognized up front as part of the new carrying value.

Expenses

The components of our expenses for the period were:

(Amounts in thousands)

Compensation and benefits expenses were $55.7 million for the three months ended March 31, 2026, an increase of $11.8 million or 27% compared with $43.9 million for the three months ended March 31, 2025. The increase in compensation and benefits was primarily driven by higher expense recognized for performance-based equity awards, reflecting changes in the probability of achieving specified performance metrics.

General and administrative expenses were $8.9 million for the three months ended March 31, 2026, a decrease of $1.8 million or 17% as compared with $10.8 million in the three months ended March 31, 2025. The decrease in general and administrative expenses was driven primarily by reductions in insurance premiums and professional services.

Technology expenses were $8.4 million for the three months ended March 31, 2026, an increase of $1.7 million or 26% as compared with $6.6 million in the three months ended March 31, 2025. The increase in technology expenses was driven primarily by the increase in costs related to software vendors.

Marketing and advertising expenses were $9.2 million for the three months ended March 31, 2026, an increase of $0.5 million or 6% as compared with $8.7 million in the three months ended March 31, 2025. The increase was primarily driven by higher advertising spend to generate home equity line of credit and refinancing leads.

Loan origination expenses were $7.7 million for the three months ended March 31, 2026, an increase of $5.2 million or 209%, as compared with $2.5 million in the three months ended March 31, 2025. The increase in loan origination expenses was driven by an increase in origination volume.

Other expenses were $5.4 million for the three months ended March 31, 2026, an increase of $4.5 million or 515%, as compared with $0.9 million in the three months ended March 31, 2025. The increase in other expenses was primarily driven the changes in the fair value of the warrant issued by the Company in connection with a private placement transaction, which provided the holder the right to purchase up to 211,312 shares of the Company’s Class A common stock prior to its exercise, as well as increases in liability-classified warrants and other equity related liabilities due to the higher trading price of the Company’s common stock, partially offset by a gain on the disposal of the BHO disposal group.

Results of Operations-Discontinued Operations

During the first quarter of 2026, the Birmingham Bank business, which represents the Company’s reportable banking segment was classified as held-for-sale. In addition, the Company determined that the planned disposal represents a strategic shift that is expected to have a significant effect on the Company’s operations and financial results. Accordingly, the results of the Birmingham Bank business are presented as discontinued operations in the Company’s condensed consolidated financial statements for all periods presented. The Company continues to actively market the Birmingham Bank business and is pursuing a sale transaction. The timing and ultimate outcome of the disposal remain subject to market conditions and regulatory approvals. The Company expects that the results of discontinued operations will continue to be impacted by operating performance, changes in interest rates, and any additional adjustments to the carrying value of the disposal group prior to sale.

The following table presents the results of discontinued operations for the periods indicated.

(Amounts in thousands, except per share amounts)

Three Months Ended March 31, 2026 as Compared to Three Months Ended March 31, 2025

Revenues

The components of revenues from discontinued operations for the period were:

(Amounts in thousands)

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Net Interest Income

The components of net interest income for discontinued operations for the period were:

(Amounts in thousands)

Interest income on loans held for investment increased $7.3 million, or 389% to $9.2 million for the three months ended March 31, 2026 compared to $1.9 million for the three months ended March 31, 2025. The increase in interest income on loans held for investment was driven by increased originations of loans held for investment in our U.K. banking operations. Loans held for investment was $728.3 million and $207.2 million as of March 31, 2026 and 2025.

Interest income from investments increased $1.1 million, or 116% to $2.1 million for the three months ended March 31, 2026 compared to $1.0 million for the three months ended March 31, 2025. The increase in interest income from investments was driven by increased customer deposits which in turn fund our loans held for investment in our U.K. banking operations. The balance of customer deposits was $755.1 million and $261.1 million as of March 31, 2026 and 2025.

Interest expense on customer deposits increased $6.6 million, or 329% to $8.6 million for the three months ended March 31, 2026 compared to $2.0 million for the three months ended March 31, 2025. The increase in interest expense on customer deposits was driven by increased customer deposits which in turn fund our loans held for investment in our U.K. banking operations. The balance of customer deposits was $755.1 million and $261.1 million as of March 31, 2026 and 2025.

Expenses

The components of expenses for discontinued operations for the period were:

(Amounts in thousands)

Compensation and benefits, general and administrative, and technology expenses were $4.4 million for the three months ended March 31, 2026, an increase of $0.2 million or 6% compared to $4.2 million for the three months ended March 31, 2025. Compensation and benefits expenses were $2.8 million, unchanged period over period, while general and administrative and technology expenses increased modestly, primarily reflecting the impact of foreign currency fluctuations.

Other expenses were $18.9 million for the three months ended March 31, 2026, an increase of $17.5 million or 1215%, as compared with $1.4 million in the three months ended March 31, 2025. The increase was primarily driven by a $15.5 million impairment charge recorded to write down the Birmingham Bank disposal group to its estimated fair value less costs to sell in connection with its classification as held-for-sale.

Non-GAAP Financial Measures

We report Adjusted EBITDA, which is a financial measure not prepared in accordance with generally accepted accounting principles (“non-GAAP”) that we use to supplement our financial results presented in accordance with GAAP in the evaluation of our performance. This non-GAAP financial measure should not be considered in isolation and is not intended to be a substitute for any GAAP financial measures. The non-GAAP measure provides supplemental information that we believe helps investors better understand our business, our business model, and how we analyze our performance.

Non-GAAP financial measure has limitations in their usefulness to investors because it has no standardized meaning and are not prepared under any comprehensive set of accounting rules or principles. Accordingly, other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measure as a tool for comparison.

We include the reconciliation of Adjusted EBITDA to GAAP Net Income (Loss), its most closely comparable GAAP measure. We encourage investors and others to review our condensed consolidated financial statements and notes thereto in their entirety included elsewhere in this Quarterly Report, not to rely on any single financial measure, and to consider Adjusted EBITDA only in conjunction with their respective most closely comparable GAAP financial measure.

We believe the non-GAAP financial measure is useful to investors for supplemental period-to-period comparisons of our business and understanding and evaluating our operating results for the following reasons:

• Adjusted EBITDA is widely used by investors and securities analysts to measure a company's operating performance without regard to items such as stock-based compensation expense, depreciation and amortization expense, interest and amortization on non-funding debt, income tax expense, and costs that are unique or non-recurring in nature or otherwise unrelated to our ongoing revenue-generating operations, all of which can vary substantially from company to company depending upon their financing and capital structures;
• We use Adjusted EBITDA in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including the preparation of our annual operating budget, as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance; and
• Adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our core operating results, and also facilitates comparisons with other peer companies, many of which use a similar non-GAAP financial measure to supplement their GAAP results.

Further, although we use the non-GAAP measure to assess the financial performance of our business, the measure has limitations as analytical tools, and should not be considered in isolation or as substitutes for analysis of our financial results as reported under GAAP. Some of these limitations are, or may in the future be, as follows:

• Although depreciation and amortization expense is a non-cash charge, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
• Adjusted EBITDA excludes stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy;
• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
• Adjusted EBITDA does not reflect (i) interest expense, or the cash requirements necessary to service interest or principal payments on our non-funding debt, which reduces cash available to us; or (ii) tax accruals or tax payments that represent a reduction in cash available to us; and
• The expenses and other items that we exclude in our calculation of Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from similarly titled non-GAAP measures when they report their operating results, and we may, in the future, exclude other significant, unusual or non-recurring expenses or other items from this financial measure.

Because of these limitations, Adjusted EBITDA should be considered along with other financial performance measures presented in accordance with GAAP, and not as an alternative or substitute for our financial results prepared and presented in accordance with GAAP.

Adjusted EBITDA

We calculate Adjusted EBITDA as net income (loss) adjusted for the impact of stock-based compensation expense, change in the fair value of warrants and equity related liabilities, 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), depreciation and amortization expense, and income tax (benefit)/expense.

The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for the periods indicated:

(Amounts in thousands)

(1) Depreciation and amortization represents the loss in value of fixed and intangible assets through depreciation and amortization, respectively. These expenses are non-cash expenses, and we believe that they do not correlate to the performance of our business during the periods presented.

(2) Stock-based compensation represents the non-cash grant date fair value of stock-based instruments utilized to incentivize employees and consultants recognized over the applicable vesting period. This expense is a non-cash expense. We exclude this expense from our internal operating plans and measurement of financial performance (although we consider the dilutive impact to our stockholders when awarding stock-based compensation and value such awards accordingly).

(3) Interest and amortization on non-funding debt represents interest and amortization on the Convertible Note, which is included within net interest income in our Consolidated Statements of Operations and Comprehensive Loss.

(4) Impairment, and other expenses are primarily comprised of employee one-time termination benefits, real estate restructuring losses, impairment of disposal groups classified as held for sale, and impairment of property and equipment.

(5) Change in fair value of warrants and equity related liabilities which comprise the Public Warrants and Private Warrants as well as the Sponsor Locked-Up Shares, represents the change in fair value of liability-classified warrants as presented in our Consolidated Statements of Operations and Comprehensive Loss.

Liquidity and Capital Resources

Overview

Historically, our primary sources for liquidity and capital have been (1) cash on hand, (2) cash flows from operations, (3) customer deposits from our U.K. banking segment, (4) borrowings, including through our warehouse lines of credit and senior notes, and (5) proceeds from equity issuances. Historically, our primary uses of funds have included (1) origination of loans, (2) interest expense, (3) repayment of warehouse lines of credit and other debt, (4) operating expenses, and (5) repurchases of loans under standard representations and warranties. We are also subject to contingencies which may have an impact on the use of our cash.

As of March 31, 2026 and December 31, 2025, loans held for investment and customer deposits associated with the Birmingham Bank disposal group were classified as held for sale and are included within discontinued operations.

Financing Activities

Equity Issuances

The Company has raised capital through an at-the-market equity offering program (“ATM Program”) for sales of up to $75.0 million of our Class A common stock pursuant to our effective shelf registration statement on Form S-3 and the related prospectus supplement dated September 26, 2025. The Company entered into separate sales agreements with Cantor Fitzgerald & Co. and BTIG, LLC (each an “Agent” and collectively, the “Agents”), under which it may offer and sell shares of its Class A common stock from time to time through the Agents, either as sales agents or as principals. Each Agent is entitled to a commission of 2.0% of the gross sales price of all shares sold through it as Agent.

During the three months ended March 31, 2026, the Company sold 328,030 shares of Class A common stock under the ATM Program for total gross proceeds of $11.9 million. The Company incurred commissions and other offering expenses of an immaterial and two tenths amount. As of March 31, 2026, approximately $33.3 million remained available for issuance under the ATM Program. Subsequent to March 31, 2026 and through May 11, 2026, the Company did not sell any shares of Class A common stock under the ATM Program. As of May 11, 2026, approximately $33.3 million remained available for issuance under the ATM Program. Notwithstanding remaining availability, following the Company’s April 2026 underwritten public offering, as described below, the Company decided to discontinue sales under its ATM Program. The Company used net proceeds from the ATM Program for general corporate purposes, including working capital and to increase its warehouse line capacity to finance anticipated growth in loan production and funded loan volume.

On February 17, 2026, the Company entered into a Securities Purchase Agreement with Framework Ventures IV L.P., pursuant to which the Company issued a warrant to purchase up to 211,312 shares of Class A common stock. The warrant was fully exercised during the three months ended March 31, 2026, resulting in the issuance of 211,312 shares of Class A common stock to the holder and receipt by the Company of aggregate cash proceeds of approximately $5.7 million. The Company used net proceeds for general corporate purposes.

On April 9, 2026, the Company also completed an underwritten public offering of 2,156,250 shares of its Class A common stock for total gross proceeds of approximately $69.0 million and net proceeds of $66.1 million. The offering was made pursuant to the Company’s effective shelf registration statement on Form S-3 and the related prospectus supplement dated April 8, 2026. The Company intends to use the net proceeds for general corporate purposes, including working capital and to support growth in loan production and funded loan volume.

Note Exchange Agreement

We have also raised capital via the closing of the Business Combination in August 2023, which resulted in gross proceeds of approximately $568.0 million. Of the total gross proceeds, $528.6 million was in the form of Convertible Notes (the “Convertible Notes”) issued by Better to SB Northstar LP (the “Investor”).

On April 12, 2025, we entered into a privately negotiated Note Exchange Agreement with the Investor, pursuant to which management and the Investor agreed to exchange all of the $532.5 million total aggregate principal amount outstanding of our existing 1.00% Convertible Notes due 2028 held by the Investor for (i) $155.0 million in aggregate principal amount of the Senior Notes (the “Senior Notes”), and (ii) a cash payment of $110.0 million. We did not receive any cash proceeds in connection with the Exchange. The Exchange was subsequently consummated on April 28, 2025 (the “Closing Date”), upon which we received and cancelled all Convertible Notes and the Investor forfeited any accrued and unpaid interest in respect of the Convertible Notes to but not including the Closing Date.

Pursuant to the Note Exchange Agreement, we granted the Investor, conditioned on closing of the Exchange, a non-transferrable right to designate one non-voting board observer from June 1, 2025, for so long as the Investor and affiliates of the Investor continue to hold, in the aggregate, either (i) at least 25% of the initial aggregate principal amount of the New Notes or (ii) at least 12% of the sum of the outstanding shares of the Company’s Class A common stock, Class B common stock and Class C common stock, calculated on a fully diluted basis.

Senior Notes Indenture

On the Closing Date, we entered into the Senior Notes Indenture with GLAS Trust Company LLC, as trustee and notes collateral agent. The Senior Notes represent our senior secured obligations and are secured by substantially all of the Company’s and its material domestic subsidiaries’ assets. The Senior Notes are (i) senior in right of payment to our existing and future senior, unsecured indebtedness to the extent of the value of the collateral; and (ii) senior in right of payment to our existing and future indebtedness that is expressly subordinated to the Senior Notes.

Interest on the Senior Notes is payable, at our election, in cash or by payment-in-kind by issuing additional notes in an aggregate principal amount equal to the relevant amount of interest paid in kind. The Senior Notes will accrue interest at a rate of 6.00% per annum, payable semi-annually in arrears on June 30 and December 31 of each year, starting on June 30, 2025. The Senior Notes will mature on December 31, 2028.

The Senior Notes will be redeemable, in whole and not in part, at our option at any time prior to December 31, 2028, at a cash redemption price equal to 106.00% of the principal amount of the Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, with an amount not exceeding the net cash proceeds of one or more Equity Offerings (as defined in the New Notes Indenture); provided that at least 60% of the aggregate principal amount of the Senior Notes remains outstanding immediately after the redemption and the redemption occurs within 150 days of the date of the closing of each such Equity Offering. Additionally, prior to December 31, 2028, we may redeem all or part of the Senior Notes at a redemption price equal to the sum of 108% of the principal amount of the Senior Notes to be redeemed, plus the Make Whole Premium (as defined in the New Notes Indenture) at the redemption date, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. If certain corporate events that constitute a Change of Control Triggering Event (as defined in the New Notes Indenture) occur, then noteholders may require us to repurchase all or any part of their Senior Notes at a cash repurchase price equal to 101% of the aggregate principal amount of the Senior Notes to be repurchased, plus accrued and unpaid interest, if any, to the date of settlement. The definition of Change of Control Triggering Event includes certain business combination transactions involving the Company.

The carrying value of the Senior Notes of $200.4 million as of March 31, 2026 and is made up of the total future undiscounted cash flows which includes principal of $155.0 million and interest make-whole as well as a redemption premium of $45.4 million. In July 2025, the Company made a cash payment of $1.6 million which was applied to reduce the principal on the Senior Notes. In December 2025, the Company made a payment-in-kind by issuing additional notes in an aggregate principal amount equal to $4.65 million. See Note 10 to our Consolidated Financial Statements for further information.

Warehouse Lines of Credit

In our normal course of business, we fund substantially all of our Funded Loan Volume on a short-term basis primarily through our warehouse lines of credit. Our borrowings are repaid with the proceeds we receive from the sale of our loans to our loan purchaser network, which includes government-sponsored enterprises (“GSEs”). As of March 31, 2026, we had three warehouse lines of credit in different amounts and with various maturities, with an aggregate available amount of $750.0 million. Subsequent to March 31, 2026, the aggregate amount available increased to $850 million.

As of March 31, 2026 and December 31, 2025, we had the following outstanding warehouse lines of credit:

(Amounts in thousands)

(1) Interest charged under the facility is at the 30-day term SOFR plus 1.75% - 2.25%. Cash collateral deposit of $3.8 million is maintained and included in restricted cash.

(2) Interest charged under the facility is at the 30-day term SOFR plus 1.75% - 2.75%. A compensating balance of $7.0 million is maintained and included in cash and cash equivalents. This amount represents a compensating balance arrangement and is not legally restricted. Failure to maintain the required balance may limit the Company’s ability to obtain future advances under the facility. As of March 31, 2026, the Company was in compliance with this requirement.

(3) Interest charged under the facility is at the 30-day term SOFR plus 1.75% - 2.50%. There is no cash collateral deposit maintained as of March 31, 2026. Subsequent to March 31, 2026 , the Company extended the maturity to April 6, 2027 and increased the total capacity to $350 million of which is $100 million committed.

We believe that funds provided by these sources will be adequate to meet our liquidity and capital resource needs for at least the next 12 months under current operating conditions.

Cash Flows

The following table summarizes our cash flows for the periods presented:

(in thousands)

Three Months Ended March 31, 2026 as Compared to Three Months Ended March 31, 2025

Operating Activities

Net cash used in operating activities was $125 million for the three months ended March 31, 2026, an increase of $79 million, or 170%, compared to net cash used by operating activities of $46 million for the three months ended March 31, 2025. The increase in net cash used by operating activities was primarily driven by loan originations in excess of proceeds from sales of loans during the three months ended March 31, 2026, whereas loan originations were more closely aligned with proceeds from loan sales in the prior-year period.

Investing Activities

Net cash used in investing activities was $0.4 million for the three months ended March 31, 2026, a decrease of $2.2 million, or 86%, compared to net cash used in investing activities of $2.5 million for the three months ended March 31, 2025. The decrease was primarily driven by proceeds received from the sale of the BHO disposal group, which had previously been classified as held for sale.

Financing Activities

Net cash provided by financing activities was $113 million for the three months ended March 31, 2026, an increase of $121 million, or 227%, compared to net cash used in financing activities of $53 million for the three months ended March 31, 2025. The increase in cash provided by financing activities was primarily driven by higher net borrowings on our warehouse lines of credit used to fund loan originations and the impact of intercompany funding provided to discontinued operations during the prior-year period.

Material Cash Requirements

Information regarding our material cash requirements is provided in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report.

Other than as described above under “Liquidity and Capital Resources,” there have been no material changes in our material cash requirements and other obligations since December 31, 2025.

Critical Accounting Policies and Estimates

There have been no significant changes in our critical accounting policies and estimates during the period ended March 31, 2026, as compared to the critical accounting policies and estimates disclosed in the audited consolidated financial statements and related notes thereto as of and for the year ended December 31, 2025, which are included in our 2025 Annual Report.

There have been no material changes to our disclosures regarding our exposure to market risk as described in Part II, Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” of our 2025 Annual Report.

Evaluation of Disclosure Controls and Procedures

The Company's management, with the participation of our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of March 31, 2026, which is the end of the period covered by this Quarterly Report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2026.

Changes in Internal Control over Financial Reporting

There were no changes during the quarter ended March 31, 2026 in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We are subject to various risks and uncertainties in the course of our business. For a discussion of these risks, please see the section entitled “Risk Factors” in Part I, Item 1A. in the 2025 Annual Report. Other than as described below, there have been no material changes to the risk factors disclosed therein.

Risks Related to Our Market, Industry, and General Economic Conditions

Our business is subject to the risks of catastrophic events such as earthquakes, fires, floods and other natural catastrophic events, interruption by man-made issues such as strikes, terrorist attacks and geopolitical unrest.

Our systems and operations are vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, strikes, health pandemics, terrorist attacks, and similar events. Disease outbreaks have occurred in the past (including severe acute respiratory syndrome, avian flu, H1N1/09 flu, and COVID-19) and any prolonged occurrence of infectious disease or other adverse public health developments could have a material adverse effect on the macro economy and/or our business operations. In addition, strikes, terrorist attacks, and other geopolitical unrest, including the ongoing conflict in the Middle East, could cause disruptions in our business and lead to interruptions, delays, or loss of critical data. These types of catastrophic events could also affect our loan servicing costs, increase our recoverable and our non-recoverable servicing advances, increase servicing defaults, and negatively affect the value of our MSRs. We may not have sufficient protection or recovery plans in certain circumstances, such as natural disasters or terrorist attacks affecting areas where our operations are located, and our business interruption insurance may be insufficient to compensate us for losses that may occur.

Additionally, if such events lead to a prolonged economic slowdown, recession or declining real estate values, they could impair the performance of our investments and materially and adversely affect our business, financial condition, results of operations, and prospects, increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. For example, recent geopolitical conflicts, including the ongoing conflict in the Middle East, have contributed to volatility in global energy markets and broader financial markets, which have impacted U.S. interest rates and housing market activity. As a result, such conditions have materially affected, and may continue to materially affect, our results of operations and financial condition.

Finally, geopolitical conflicts as well as natural disasters and other catastrophic events, and their impacts, have had, and may continue to have, the effect of heightening other risks described in “Risk Factors” in Part I, Item 1A in the 2025 Annual Report, such as contributing to elevated inflation, elevated or volatile interest rates, macroeconomic uncertainty and the possibility of a decline in economic conditions.

Risks Related to the Planned Divestiture of Birmingham Bank

We cannot be sure that we will be able to sell Birmingham Bank on terms and conditions that are satisfactory to us or at all.

We previously announced our intention to sell Birmingham Bank, which represents the Company’s reportable banking segment and has been classified in our financial statements as an asset held for sale. Any potential sale would be subject to risks and uncertainties, including our ability to identify and negotiate with a buyer, agree on acceptable pricing and other terms, obtain any required regulatory, contractual, third-party or other approvals, and satisfy any conditions that may be included in definitive transaction documents, if executed.

The sale process may also create uncertainty and disrupt our business and operations. For example, the announcement may divert management and employee attention, increase costs, create uncertainty among employees, customers, vendors, business partners and other counterparties, or adversely affect relationships related to the asset or business proposed to be sold. We may also incur expenses in connection with evaluating, negotiating or pursuing a potential transaction, regardless of whether any definitive agreement is executed or any sale is completed.

Even if we enter into a definitive agreement and complete a sale, we may not realize the anticipated benefits of such transaction. Any failure to enter into or complete a transaction on favorable terms, any disruption resulting from the announcement or pursuit of a potential sale, or failure to realize the anticipated benefits of such transaction, could have a material adverse effect on our business, financial condition and results of operations.