8-K: Better Home & Finance Reports Preliminary Q3 2026 Results

Better Home & Finance Holding Company announced preliminary Q3 2026 results, with loan volume within guidance but net revenues missing expectations, impacted by interest rates and a proxy contest.

Summary

• Better Home & Finance Holding Company announced preliminary unaudited financial and operating results for the quarter ended September 30, 2026.
• Preliminary third quarter Loan Volume was $1.395 billion, within the previously issued guidance range of $1.375 billion to $1.525 billion.
• Total Net Revenues were $45.1 million, below the previously issued guidance of $49.0 million to $52.0 million.
• Preliminary Net Loss was between $33.1 million and $34.1 million.
• Preliminary Adjusted EBITDA loss was between $24.8 million and $25.8 million.
• The preliminary results include approximately $8.0 million of proxy-related legal and PR expenses.
• Excluding these proxy expenses, the Adjusted EBITDA loss would have been approximately $17.8 million, within the previously issued guidance range.
• The company expects to recognize a non-cash reversal of approximately $7 million to $8 million of stock-based compensation expense in Q3 2026.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative sentiment due to the company missing revenue guidance and reporting a significant net loss, despite some metrics being within guidance and the exclusion of proxy costs. The ongoing proxy battle and its impact on morale and operations are concerning.

Positives

• Loan Volume of $1.395 billion was within the previously issued guidance range.
• Total Net Revenues increased 8.6% year over year to $45.1 million.
• Loan Volume increased 15.3% year over year.
• Liquidity position remains strong with $81 million in cash and cash equivalents and $9 million in restricted cash.
• An unencumbered tangible equity position of $75 million in the UK Bank is expected to generate an additional $65 million of cash upon sale in Q1 2027.
• Excluding approximately $8.0 million of proxy-related expenses, the Adjusted EBITDA loss would have been within guidance.

Negatives

• Total Net Revenues of $45.1 million were below the previously issued guidance of $49.0 million to $52.0 million.
• Preliminary Net Loss was between $33.1 million and $34.1 million.
• Preliminary Adjusted EBITDA loss was between $24.8 million and $25.8 million, wider than Q2 2026 and Q3 2025.
• Net Loss widened from $30.6 million in the second quarter of 2026.
• Adjusted EBITDA loss widened from $14.0 million in the second quarter of 2026.
• The proxy solicitation distraction is cited as a reason for lowered morale, impacted conversion, and lengthened partner launch timelines.

Risks

• Interest rate headwinds are impacting revenue.
• The ongoing proxy contest is weighing on conversion and partner launches, and has lowered morale.
• Future results may differ materially from preliminary estimates due to quarter-end accounting procedures, adjustments, and the occurrence or identification of subsequent events.
• The company faces risks and uncertainties as discussed in its Form 10-K for the year ended December 31, 2025, and Form 10-Q for the quarters ended March 31, 2026, and June 30, 2026.

Future Outlook

In the fourth quarter, the company expects to continue facing headwinds from the proxy contest in October numbers but believes it can cut expenses and improve conversion efficiency for November and December. Key goals include driving to Adjusted EBITDA breakeven by year-end, selling the Birmingham Bank and potentially borrowing against its unencumbered position to increase cash to over $140 million, and reducing the cost to make a mortgage below $1000 and a HELOC below $500 by becoming an AI-first company.

Management Comments

• "We did $496 million of volume, $17 million of revenue, and $(4.8) million of Adjusted EBITDA in July 2026. Historically, August and September have been better than July as those months are peak seasonality for purchase mortgage and HELOCs used for home improvement and school tuition expenses. As late as the August 3rd board meeting, the day I was fired, the Companys own projections were estimating that we were on track to over $1.5 billion of volume, over $53 million of revenue, and $12 million of Adjusted EBITDA loss, which, if achieved, would have handily came in at the top end of the guidance range on all three metrics. Instead, our Board and Interim CEO diverted the Companys resources and attention to an unnecessary and self-serving proxy fight and in doing so, tanked volume and revenue by 13% and spent over $8 million of the Companys precious cash on matters non-accretive to shareholder value. It is a testament to our people, our product and our partners belief in the superiority of our platform that the business didnt fall off more appreciably during the $8 million proxy solicitation distraction. We are optimistic that we can get our numbers back to July levels and continue on the path to both growth and Adjusted EBITDA breakeven in the months ahead," said Vishal Garg, Founder & Head of Product, Platform and Innovation at Better.
• "Our third quarter Loan Volume was within guidance, but revenue came in below our guidance range as interest rate headwinds and the proxy contest weighed on conversion and partner launches. Excluding approximately $8 million of proxy-related expenses, our Adjusted EBITDA loss would have been within guidance, which shows the underlying cost base held. In the fourth quarter, we expect to still face headwinds from the proxy contest actions in our October numbers but believe we will be able to cut expenses and improve conversion efficiency for November and December," said Loveen Advani, Chief Financial Officer of Better.
• "We have a few big goals that our Board has set out for us that we are executing against: 1. Drive to Adjusted EBITDA breakeven on a go-forward basis, assuming the current rate environment, and with the expense savings we outlined earlier this week, by the end of the year. 2. Move quickly to get the Birmingham Bank sold, and in the interim borrow against our unencumbered position in the Birmingham Bank from one of the parties that has approached us to take our total cash and securities position to over $140 million prior to the consummation of the sale. 3. Move from being a Human powered by AI company, to an AI first, human engagement solely as fallback company and in doing so, reduce our total cost to make a mortgage below $1000 per loan, and the cost to produce a HELOC below $500 per HELOC, which would be 10x cheaper than the rest of the mortgage industry. The combined impact of these three all together should substantially demonstrate to investors and our business partners that the Company has not only a technological edge but also can achieve commercial excellence," said Vishal Garg, Founder of Better.

Industry Context

StockSavvy.ai notes that the mortgage and home equity finance industry is highly sensitive to interest rate fluctuations and competitive pressures. Better's reliance on AI and its stated goal of significantly reducing per-loan costs align with broader fintech trends aiming for efficiency gains, but the impact of internal governance issues like the proxy fight can significantly disrupt operational performance and investor confidence, a challenge many growth-oriented companies face.

Comparison to Industry Standards

• The company aims to reduce the cost to make a mortgage below $1000 per loan and the cost to produce a HELOC below $500 per HELOC, which would be 10x cheaper than the rest of the mortgage industry.
• The preliminary Q3 2026 Net Loss of $33.1 million to $34.1 million and Adjusted EBITDA loss of $24.8 million to $25.8 million are significant, and the company is aiming for Adjusted EBITDA breakeven by the end of the year, a common but challenging target in the fintech lending space.
• The company's stated goal of becoming 'AI first, human engagement solely as fallback' is a significant strategic shift, aiming to leverage technology more aggressively than many traditional lenders who are also investing in digital transformation but often maintain a more balanced human-AI approach.

Legal Proceedings

• The filing mentions a proxy-related distraction and proxy solicitation, indicating potential ongoing governance or shareholder disputes.

Stakeholder Impact

• Shareholders: The missed revenue guidance, significant net loss, and ongoing proxy battle could negatively impact shareholder value and confidence.
• Employees: The proxy contest is cited as having lowered morale, potentially affecting productivity and retention.
• Business Partners: Lengthened partner launch timelines due to the proxy contest could affect strategic initiatives and revenue generation.

Next Steps

• Drive to Adjusted EBITDA breakeven by the end of the year.
• Sell the Birmingham Bank.
• Borrow against unencumbered position in the Birmingham Bank to increase total cash and securities position to over $140 million prior to sale.
• Transition to an AI-first company with human engagement as fallback.
• Reduce total cost to make a mortgage below $1000 per loan.
• Reduce cost to produce a HELOC below $500 per HELOC.
• Improve conversion efficiency for November and December.

Key Dates

Recommendation

The company missed revenue guidance and reported a significant net loss, exacerbated by internal proxy conflicts. While loan volume was within guidance and liquidity remains strong, the ongoing governance issues and the need to achieve aggressive cost-saving and breakeven targets by year-end present considerable uncertainty. The potential for a turnaround exists if management can execute its AI-driven cost reduction strategy and resolve internal disputes, but the current performance and outlook warrant a cautious 'hold' stance.

Keywords

mortgage finance, home equity, AI-native, financial results, loan volume, net revenue, Adjusted EBITDA, preliminary results