Better Home & Finance Holding Company

Thank you for standing by. My name is Jeannie and I will be your conference operator today. At this time, I would like to welcome everyone to the Better Home and Finance Holding Company's second quarter 2024 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the conference over to Hana Khosla, Vice President, Corporate Finance and Investor Relations. You may begin.

Welcome to Better Home and Finance Holding Company's second quarter 2024 earnings conference call. My name is Hana Khosla and I am the Vice President of Corporate Finance and Investor Relations at Better. Joining me on today's call are Dashal Garg, Founder and Chief Executive Officer at Better, and Kevin Ryan, Chief Financial Officer at Better. In addition to this conference call, please direct your attention to our second quarter earnings release, which is available on our Investor Relations website. Also available on our website is an investor presentation. Certain statements we make today may constitute forward-looking statements within the meaning of federal securities laws that are based on current expectations and assumptions. These expectations and assumptions are subject to risks, uncertainties, and other factors, as discussed further in our SEC filing, that could cause our actual results to differ materially from our historical results. We assume no responsibility to update forward-looking statements other than as required by law. During today's discussion, management will discuss certain non-GAAP financial measures, which we believe are relevant in assessing the company's financial performance. These non-GAAP financial measures should not be considered replacements for and should be read together with our GAAP results. These non-GAAP financial measures are reconciled to GAAP financial measures in today's earnings release and investor presentation. both of which are available on the Investor Relations section of Better's website and when filed in our quarterly report on Form 10-Q filed with the SEC. Amounts described as of and for the quarter ended June 30, 2024 represent a preliminary estimate as of the date of this earnings release and may be revised upon filing our quarterly report on Form 10-Q with the SEC. More information as of and for the quarter ended June 30th, 2024 will be provided upon filing our quarterly report on Form 10-Q with the SEC. I will now turn the call over to Vishal.

Thank you, Hannah, and welcome to our second quarter 2024 earnings call. We appreciate everyone joining us today and for your continued support as we drive towards our mission to make homeownership better, faster, and cheaper for our customers by building a technology platform that revolutionizes the experience of becoming and being a homeowner. We continue to make great progress towards our vision in which every customer can seamlessly buy, sell, refinance, insure, and improve their home digitally online instantly. I'd like to start by highlighting some of our key achievements during the quarter. We continue to lean into growth to drive increased volume, balanced with ongoing efficiency improvements and disciplined cost management to target reaching profitability in the medium term. In short, even in a market that remains challenged with historically low housing affordability and persistently high mortgage rates, we continue to deliver on the roadmap we set out at the start of the year, which included top-line growth and continued expense management. Compared with the first quarter of 2024, funded loan volume increased by 45% and revenue rose by approximately 41% in the second quarter. We continue executing on strategies to increase conversion through additional products and services, as well as improve sales efficiency to drive higher pull-through on the approximately 60,000 monthly customers who begin their mortgage applications with us. We also continue to increase revenue per loan while still being a low-cost provider and continue to optimize the revenue generated on prudently invested cash and investments. Specifically, we have increased the volume of self-funded loans we choose to hold on our balance sheet that generate income between loan funding and sales to secondary investors. Volume growth was primarily driven by growth in purchase loans as well as home equity products, including HELOCs and closed and second lien loans. These products remain attractive to our customers in an environment with persistently higher rates and higher cost of living because they enable borrowers to tap into the equity they have in their homes, which totals over $30 trillion in the United States today. Our second quarter growth was combined with continued expense discipline with a focus on maximizing operating efficiency, resulting in quarterly total expenses remaining approximately flat quarter over quarter, even with the top-line growth we showed. As discussed on our first quarter earnings call, I'd like to remind everyone of our strategic priorities for 2024. Our first priority is thoughtfully leading into growth, against which we showed continued progress this quarter. Since we announced our intention to begin leaning back into growth in the fourth quarter of last year, we have increased our funded loan volume by 83% and revenue by approximately 78%. We continue to embrace the opportunity to grow our loan officer footprint, add additional marketing channels and new products and services to ensure we are well positioned as consumer demand returns to capture increased market share across our three main mortgage products, purchase, refinance, and home equity products. Looking at growth for each product, compared sequentially with the first quarter of 2024, purchase loan volume increased by 50%. HELOC volume, including home equity lines of credit and closed and second lien loans, increased 76%, and refinance loan volume decreased 5%, with high rates continuing to negatively impact rate term refinances and customers with existing low mortgage rates opting for home equity products instead of cash-out refinances. In purchase, we continue to see strong early results from the benefit of having experienced loan officers nurturing homebuyers through their journey. In our home equity products, we see strong momentum given home values continue to appreciate while rates have remained high and customers are looking to manage their monthly cash flow by tapping into the equity sitting in their homes without resetting the rates on their first lien mortgages. With a one-day HELOC, they can go online 24-7 and within a few hours have certainty on how much money they can save each month. In the second quarter, we saw continued improvements to our gain-on-sale margin, which increased to 2.43% in the second quarter of 2024, compared to 2.37% for the first quarter of 2024. Drivers of this margin improvement include increased pricing, while still remaining the low-cost provider, and a focus on driving customer retention through improved service, as well as continued efforts to optimize for the best execution across our network of loan purchasers, including the GSEs. In the second quarter, we also saw certain non-recurring benefits to gain on sale revenue that total approximately $9 million, including a one-time positive mark-to-market impact on our lock pipeline and a recovery from a release of our loan repurchase reserve. Our second priority is improving operational efficiency and further variablizing loan production expenses, which we also demonstrated in the second quarter. Over the past 2 and a half years, we have been intensely focused on significantly reducing expenses and maximizing operating efficiency during the highly challenging macro environment. While we lean into certain growth expenses, such as marketing and compensation for larger loan production teams to produce higher volumes, these were offset by lower vendor and corporate compensation expenses compared with the first quarter of 2024. Our marketing and advertising expenses increased 87% from 4.6 million in Q1 2024 to 8.5 million in Q2 2024, and we expect these to further increase in order to support volume growth. Additionally, our loan officer productivity remained above industry average and continued to benefit from the previously discussed shift to a sales compensation structure with lower salaries and higher commissions. We're also testing a variety of applications of AI within Tin Man, both for internal efficiency and consumer-facing benefits. We are seeing early indications from these AI program investments geared towards sales and underwriting productivity, specifically around customer routing, data capture, and initial underwriting review of loan files. We believe these AI investments and our continued investments in core automation, such as our automated initial review system, or AIR, where for certain loan files, Tin Man is capable of completing the entire initial underwriting fully autonomously, will help us drive customer conversion and operational efficiency at scale. When Tin Man autonomously handles certain tasks and interactions, it frees our team up for more complex or nuanced customer interactions. In the second quarter, we also saw certain one-time non-recurring expense benefits, including reductions in certain reserves and a state tax refund. Aggregate one-time benefits amounted to approximately $1 million of contract expenses in the second quarter. To recap, in the second quarter of 2024, our revenue increased by approximately 41% quarter-over-quarter, while total expenses were approximately flat, demonstrating substantial operating leverage in the business. Finishing with our third priority of growing our B2B mortgage-as-a-service distribution channel, we continue to see demand for our technology and origination capabilities from new partners with strong brands who are looking to offer mortgages to their customers in a cost-efficient way. We also continue to nurture our existing pipeline and are currently working on multiple B2B pilot programs, One example being an early stage partnership with a large national roofing and basement contractor. While early in the pilot, we are excited about programs like this because they can empower homeowners to protect and invest in their homes and finance these projects through their existing home equity with our one day HELOC products. We believe our partnership pipeline demonstrates strong product market fit for our B2B offerings and demand for our technology from firms with existing brands and relationships with customers. We are, however, in a position at the mid-year mark to see that the most material prospective partnerships from a funded loan volume perspective have multi-year enterprise sales and integration cycles. As a result, we expect most of our growth in 2024 year being driven by the DDC channel. Looking beyond 2024, the medium-term opportunity for better remains very exciting. We are focused on, first, enhancing our go-to markets with growth being our North Star, and second, continuing to invest in automation and AI through the cycle. In terms of go-to-market, our experienced commission-based loan officers are working to drive improved customer conversion in a cost-efficient manner, specifically converting website visitors to funded customers, particularly on the purchase side. We are seeing that industry veteran loan officers who come on our platform are able to drive higher fundings per month while maintaining the same level of service and engagement with their customers because of the end-to-end proprietary technology we have built. We expect to manage costs through a highly variable sales compensation model and continued automation that drives down non-customer-facing costs, as well as reductions to corporate overhead costs. Further, we are testing the addition of more traditional brand advertising to our D2C acquisition channels. This quarter, we became an official partner of the Premier Lacrosse League. To expand the breadth of our customers, we are reaching an awareness of the breader brand. We continue to invest in Tin Man, our proprietary technology platform to improve the customer experience and further drive down labor costs, making our platform more efficient and scalable and enabling us to provide our customers with lower rates, higher approvals, and certainty earlier in the mortgage process. Tin Man powers our highly differentiated competitive advantage and drives our better, faster, and cheaper customer experience. In summary, we continue to have a large and attractive market opportunity. We are excited to continue our growth direction in the second half of 2024 and excited about the market dynamics we are seeing thus far in Q3. With that, let me now turn it over to Kevin Ryan, our Chief Financial Officer, who will discuss the quarterly performance and our financial strategy. Kevin?

Thank you, Vishal. As Hannah mentioned at the start of the call, we have not yet completed our second quarter 10-Q, and the numbers discussed in this call represent a preliminary estimate and may be revised upon the filing of the 10-Q with the SEC. As Vishal discussed, we are excited to report that better is growing while continuing to be laser focused on maximizing operating efficiency. While we expect improvement in the mortgage market in the medium to long term, this will likely take time. To that end, we continue to thoughtfully lean into certain growth expenses, including marketing spend and production headcount, to drive increased volume as well as increased origination capacity in advance of expected near-term demand, which will be balanced by continued cost discipline to target reaching profitability in the medium term. I'll turn now to the financial results of the second quarter. During the second quarter of 2024, we generated funded loan volume of approximately $962 million. This compares to our prior guidance of the quarter of above 800 million. Revenue of approximately 31 million and an adjusted EBITDA loss of approximately 25 million, which represents an improvement of approximately 6 million in our adjusted EBITDA loss compared to the first quarter of 2024. Total gap net loss for the second quarter was approximately $42 million and improvement of approximately $9 million compared to the first quarter. Total expenses of $73 million in Q2 2024 was approximately flat compared to $74 million in the first quarter. Our second quarter funded loan volume was 70% generated through our direct-to-consumer channel and 30% generated through our B2B channel. It was 83% purchase, 8% refinance, and the remainder of dollar volume was home equity, including home equity lines of credit and closed-end second lien loans. Now, to touch briefly on our balance sheet and capital positioning. We ended the second quarter of 2024 with approximately $507 million of cash, restricted cash, short-term investments, and self-funded loans. Self-funded loans is defined by our loans held for sale less than warehouse lines of credit. We believe that adding self-funded loans is relevant when looking at our liquidity as we are making a conscious decision to hold these high-quality cash flow generating assets on an interim basis between funding and sale to secondary investors, similar to other short-term investments. We are well capitalized for growth as our cash position provides us with liquidity to continue executing against our vision and corporate objectives. We retain strong relationships with our financing counterparties to manage mortgage working capital, even in this lower volume environment. As of June 30th, 2024, we had three warehouse facilities for total capacity of $425 million. Additionally, we are effectuating a reverse stock split of betters common stock at a ratio of 1 post split share for every 50 pre split shares. Their verse split was approved by better stockholders at our annual meeting on June 4th, 2024. And the 1 for 50 reverse stock split ratio is approved by the company's board of directors on August 1st, 2024. The reverse stock split is intended to increase the per share trading price of the company's Class A common stock to enable the company to regain compliance with the minimum bid price requirement for continued listing on the NASDAQ capital market. We expect the reverse stock split to be completed shortly within the time required to regain NASDAQ compliance. Turning now to our second half of 2024 outlook. We continue to expect funded loan volume to increase in 2024 as compared with 2023, as we prudently increase customer acquisition spend in the highest returning channels and increase origination capacity through hiring and loan production roles. For the third quarter of 2024, we expect to generate a funded loan volume of at least $1 billion. which represents continued quarter over quarter funded loan growth for the third quarter in a row. We continue to have a keen focus on cost management, including the continued reduction of corporate overhead expenses, vendor costs, and other costs due to further automation and critical review of our existing contracts. As a result of increased growth expenses offset by continued expense reductions, We expect total expenses to be approximately flat in 2024 as compared to 2023. Lastly, we expect customer conversion to improve with continued investment in Tin Man, increasingly variable sales compensation plans, improved sales technology, and purchased product offerings.

With that, I'll now turn it back to the operator for Q&A.

Thank you. The floor is now open for questions.

If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, press star 1 to join the queue. Your first question comes from the line of Raina Kumar with Oppenheimer. Please go ahead.

Good morning. Thanks for taking my question. In regards to the AI initiatives, could you give some more specifics around the AI investment that you're making and the types of operational efficiency that they could drive? And maybe talk a little bit about the metrics the AI could impact and how does your strategy compare to that of peers?

Sure, that's a great question. I think there's three main areas in our operations that the AI initiatives are going to impact. The first is in terms of sales and customer support. So there are operating costs for, you know, sales and customer support are amongst the lowest in the industry in terms of sales expense for funds. However, that's still a pretty significant portion of our total cost of making a loan. Approximately 25% of the cost of making it to 30% of making a loan goes to sales and sales support. We've been testing voice agents that are autonomous that are now actively in the field that are gathering customer information, transcribing that customer information, writing it into our database, and automatically generating pre-approvals for our customers based on the missing data that has been collected. That is a task that was previously done by humans and required a significant labor force for us to go and do that. It's also enabled us to touch our customers much faster than we would on a usual basis. So rather than having a response time measured in minutes or hours, we are now able to respond back to customer queries in seconds and milliseconds. And that level of speed is just something that is unmatched with what you can do in a traditional mortgage call center setting. Another area where we are seeing dramatic improvement in processing and processing turn times. We've already always had the one-day mortgage since 2023, but we've gotten even faster with that with using generative AI in document classification and data extraction from document classification. So traditional methods of generating OCR for document data extraction really require the computer to already know and have a template of the document that's being OCRed. With generative AI, we are now able to have the machine automatically determine what document is being OCRed. and use an example of a previous document like that document, let's say if it's a homeowner's association statement or a tax return or a home purchase contract and automatically extract the data that is required so that it dramatically lowers the amount of processor time and we're using that to not only just do the basic documents of the mortgage process but all the hundreds of trailing documents in the mortgage process and take the data extraction process and bring that down dramatically both in terms of speed and in terms of efficiency. The last is on the underwriting side. We have now introduced our automated initial underwriting, where traditionally that is a process that would take weeks and a traditional underwriter to do. And we are seeing dramatic progress in expanding the percentage of our customers who are effectively getting a commitment letter from us almost instantly post-locking a loan. And we expect that metric to continue to go up. Of course, that is going to result in labor cost savings. We think that these investments in total will enable us to lower our total cost of manufacturing alone. by over 50% over the coming years. And we think that we have been leaning into technology and AI since the founding of this company. So in 2014, we set out to build an autonomous rules engine that would match consumer data and property data to investor preferences and criteria. And we use machine learning to do that. With the advances in generative AI, we believe that there's a second chapter in Better's history that is being written today which will enable us to drive the cost of loan production and the speed at which we're able to process in a way that none of our competitors will be able to match.

Got it. Appreciate all that detail. And one more question from me. The B2B platform, pilot program you spoke about sounds like an interesting opportunity for other lenders like personal lenders to expand their product offering into HELOC. What do you see as the addressable opportunity here should this materialize?

So that's another great question. There are over $2 trillion of personal installment loans, solar loans, student loans, and buy now, pay later loans that all are out there because the HELOC went away post the credit crisis. And so we saw growth in all these other categories because the instant availability of credit from your home went away after the credit crisis. And so the last decade has seen about $2 trillion of origination for other loan types that would traditionally have been covered by the HELOC product. And we see great partnership opportunities with lenders who have been in these other markets who now with the advent of a one-day HELOC product and an instant underwrite on the HELOC product for the consumer are going to seek to have their consumers be able to access that product. Now, the likelihood of them building it themselves is pretty remote considering the complexities of mortgages and HELOCs. So we see a really great opportunity to partner with these existing lenders and many of the fintech lenders that have come up over the past decade to actually be able to meet their consumers with a HELOC product and be able to deliver that for them in partnership with these lenders.

Great. Thank you.

Your next question comes from the line of Ryan Tomasello with KBW.

Please go ahead.

Good morning, everyone. Thanks for taking the questions. You know, as the mortgage market maybe starts to see some tailwinds here, I was hoping you could walk us through some back-of-the-envelope math for what level of origination volume you think the company needs to see in order to reach breakeven over the intermediate term.

Thanks. Hey, Ryan. It's Kevin. Good morning. So we look at this all the time. I think there's obviously three components to this. So we put up first just on expenses. We put up 40 points of operating leverage in the second quarter. We're very proud of the fact that we can hold expenses flat while getting revenue of 40%. I think that operating leverage was flattered in part, as I think Fischel mentioned in his prepared remarks, by some one-timers. But I think the business from here has very little fixed expense growth we need to put on to literally 10x the volume of the company. I mean, there's public company costs. We obviously invest heavily in tech, just given the way this company was built. And so those expenses are already embedded. So from a volume perspective, it's also a function of gain on sale. So it's really revenue versus volume that ultimately matters to cover an expense base that's run $150 million through two quarters. That's fully loaded, including stock-based comp and everything else, including some non-cash expenses. And so what we're doing is we're guiding to over a billion of volume in Q3. We took gain on sale up. in Q2 versus Q1. We're working to do that again now in Q3. We're running pricing experiments and things like that. We're still at the very low cost of the customer. To lower the number at which we need to break even, you know, to something just north of $10 billion we'd like to get to, but we're still working that through. So what we're going to try to do in September is do a investor meeting where we actually lay out that math and great specificity, but it will be a combination of volume and gain on sale margin we ultimately land at in our business. Okay, thanks. We don't think expenses grow much from here. We doubled marketing expense. We're hiring LOs, so I don't think we're going to put up 40 points of operating leverage every quarter. We're going to have to add some what I'll call variable expenses. But our fixed expenses are, and we're still knocking them down. We're going to continue. We got compensation down. We're going to take out some chunky corporate costs this quarter around leases and vendors. And so we're working through it every day.

Got it. Thanks, Kevin. And then separate but related topic, was hoping you could provide your updated thoughts on how the upcoming broker commission practice changes in about a week might impact the industry. and how you see that playing out for the mortgage market in particular, just given the unique relationship that the mortgage market does have with residential brokers, particularly on the buy side, that serve as a meaningful source of referral business for loan officers. Thanks.

Sure. So I make two comments. I think we still see the broker having a very important role, and we've worked hard. to improve our relationships with real estate agents, brokers over the last year, right? I think part of the history of the company growing up is a digitally native business that wasn't not out in the field. we didn't really have those relationships. And as the market turned from refi to purchase, it's taken us a little while to catch up and adopt those relationships. That's point one. But point two, and this is counterbalanced, is that industry transforms We're perfectly placed to transform with the industry, meaning anything that takes cost and friction out of the process is ultimately good in our minds for the process. That's the reason Rochelle founded this company. And so if you lower that friction and transaction costs across the board, there will be more transactions, we think, over time. And I think particularly given... what we're doing in AI, the digital experience, the low cost to the customer, that should act on a relative basis a tailwind for Better versus others. And so we're going to continue to partner with real estate agents. We need to do more purchase loans. We've been saying that for a year and a half, two years now. We understand that. But we do actually support anything that makes the market better for the consumer.

Yeah, I think fundamentally, as soon as consumers, and I know there are changes coming through this week and the week after, where from going forward, consumers are going to have to sign these representation agreements where they're going to, in many cases, say they're on the hook for the fee, even if the seller doesn't pay the realtor a fee. I think that's going to force consumers to potentially shop around for realtors. And then if they're going to shop around for realtors, they're going to go online. And when they go online, they come to us. Now, the fact is the bulk of consumers still don't shop around, and they don't go online. The 80% plus of the consumers do not shop around or go online, according to the CFPB. So we're pretty psyched about the potential. for there to be significant disruption in the consumer's willingness to go online to both shop for a realtor as they shop for homes and then as they shop for a realtor to shop for a mortgage.

Appreciate the comments. Thanks, guys. Thanks, Ryan.

Your next question comes from the line of Joseph Zaffi with Canaccord Genuity. Please go ahead.

Hey, everyone. Good morning, and thanks for the opportunity to ask some questions. Just wondering here in the rate environment that we're in and what we're looking at potentially moving forward, how much rate cut do you think we need to see before potentially refi volumes start to kick back up materially and then on the follow-up?

I'll let Kevin handle how much the rate cuts need to be, but I know that with 50 basis points of rate cuts, there's about 6 million purchase mortgages that have been originated since 2022. And on average, a 50 basis points of rate cut is going to save each of these businesses. homeowners at least $100 a month, which is pretty significant. And their propensity to refinance is going to be higher because of the rates they have financed at versus what traditional prepaid speeds were when people were getting 3% or 4% mortgages. So 6 million consumers, let's assume $250,000 average balance is probably more nowadays. You're talking about a trillion and a half dollars of potential refinance volume. And back when we were doing refinances, we had between 1% to 2% market share in 2020 and 2021 of refinances in the market. So we see a pretty significant boost for our ability to capture and grow into that. with our one-day mortgage, one-day refi product offerings that enable a consumer to go online and effectively lock their refinance and lock in their savings within 15 minutes and then be able to have a commitment letter for that within the same day.

And I think I would add to that. the mindset of the consumer for the last couple of years is rates are going up, rates are going up, rates are going up. Now you're finally having this shift where we're almost certainly going to get a cut in September, right? We'll have to see. There's still some data that the federal need to see, but I think people are very convinced that we're going to get the first move in September. And so from that perspective, we're finally, for this industry, going to have a tailwind in going forward. We don't know what's going to happen to the curve. The curve is flat, and it should ultimately steepen over time. And so it's really hard to track direct mortgage rates with the Fed funds rate. But from a sentiment matter, it does start to show to the consumer that rates are coming down. It's OK to kind of dip back into this market. You still have supply challenges. You still have affordability challenges. It's going to take a bit to work through this. But as Vishal said, we've been bumping at 7% or even slightly above 7% really for the first six months of the year at this point. You got down lower in the last week, Monday. Now you're kind of running just below 7% generally. The market pricing is pretty dynamic. That 50% Savings is $200 plus for our average customer, and I think that's meaningful enough to just start a little mini refi move, even really at current rates, and we expect rates to march down into the lower sixes by the end of the year. It's nothing like 2020, 2021, obviously, but people that did deals in 22 and 23 are going to be refi eligible in the near term here.

Sure. That's a great color. And then just to follow up on that same point, is there a kind of revenue margin differential between your refi business and your original purchase business? Thanks a lot.

Yeah. I mean, historically, when, you know, refi correlates with higher volume and historically we've put up slightly higher margins. Because remember, if rates come down, it's also going to open up the purchase market. Affordability has been a big issue. So margins are very driven by just aggregate volume in the industry because it's a supply-demand dynamic across the sector.

That also being said, margins are likely to be healthy because of the number of loan officers that have left the industry. Correct. So you've seen, since the peak in 2021, an attrition rate of about 45%, depending on who you ask, of the number of loan officers that are licensed and are out there and doing transactions.

You know, and the other thing I'll add, so there's, it's funny when you're in the mortgage business, there's the revenue margin, but then there's like, you think about running a company, just your operating margin. When we do refinances and clearly, you know, we did 50 billion of volume back in 2021, 50 billion approximately, which was refi. Our cost to actually execute that loan is much lower, right? A purchase process takes some hand-holding, some time, et cetera. It's more LO time. A refi can be very quick twitch. And so our cost to manufacturers is lower. So our corporate margin or our contribution margin on that refi loan for us is certainly higher than it has been on purchase and will be, even at an equal gain on sale or revenue margin.

Thanks for all that, Colin.

Your next question comes from the line of Jeff Cantwell with Seaport Research Partners.

Please go ahead.

Hey, thank you. I wanted to ask you, with your volume starting to rise and assuming that trend continues, can you talk a little bit about your zone officer capacity for originations and will investments really be the typical operational bottleneck?

Yeah, I mean, our productivity for loan officers has continued to be best in class for industry. And as we're bringing these experienced loan officers on, we're seeing, you know, guys and gals that were doing two to four loans a month come on our platform and do north of 10 loans a month. So the bottlenecks really are in terms of recruiting where we're seeing, you know, continued incumbents shedding workforces and in training in terms of being able to then train these experienced loan officers to work on the system, on the Tin Man system. So there's some gravitational forces that preclude us from growing massively, but those are bottlenecks primarily on training the experienced loan officers to come on board the platform. We've had some amazing luck on recruiting. in terms of being able to hire them. You know, there's some bottlenecks in onboarding. And then once they're on the system, their productivity is world-class. Their productivity is industry-beating. So we see some really great productivity and margin expansion as we get more of these experienced loan officers onto the platform and we scale up.

Okay, great. Thanks, guys. Appreciate it.

Again, if you would like to ask a question, press star followed by the number 1 on your telephone keypad. There are no further questions at this time. I will now turn the conference back over to Vishal Garg for closing remarks.

Thank you everyone for joining. We really value your support and We had a great quarter in terms of growth and expense management, and we look forward to delivering more of the same for our shareholders in the coming quarters ahead. Thank you.

This concludes today's call. You may now disconnect.