UWM Holdings Corporation Class A

Chief Business Officer and Head of Investor Relations. Thank you for joining us and welcome to the first quarter 2025 UWM Holdings Corporation's earnings call. Before we start, I would like to remind everyone that this conference call includes forward-looking statements. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the earnings release that we issued this morning. Our commentary today will also include non-GAAP financial measures. For information on our non-GAAP measures and metrics and the reconciliation between the GAAP and non-GAAP metrics for the reported results, please refer to the earnings release issued today, as well as our filing with the SEC. I will now turn the call over to Matt Ishbia, Chairman and CEO of UWM Holdings Corporation and United Wholesale Mortgage. Thanks, Blake, and thank you, everyone, for joining today.

I'm very excited for what we accomplished this quarter on many fronts and for what lies ahead here at UWM. We will continue investing in technology to widen the gap between us and our competition, regardless of how the industry or markets may change due to technology rates, we will continue to lead the way. Since 2022, the Mortgage Brokers Channel share of the industry is up almost 40% from about 19.7 to almost 28%, the highest level we've seen since 2008, I believe. This is an incredible growth that we are very excited about. I say this a lot, but I would ask all of you to go back and listen to our earnings call from early 2023 or even 22 or 21, but 23 when we talked about game on pricing and how we were going to invest in the business, invest in the channel to grow. Many people were concerned about lowering the margins like we did. However, I knew and we knew it would be best for the broker channel long term. The current numbers proved that we made the right decision, and we're just getting started with all the success from that decision years ago. Switching gears, I want to address a topic. that many of you recently inquired about. Last week, we announced our strategic decision to bring servicing in-house. This is something we've been contemplating for many years. However, we believe now is the time to make this investment. By leveraging the latest technology and AI, our plan is to be the most efficient servicer in America. We are excited to control this part of the process and look forward to the cost savings that we will achieve, which some people can estimate between $40 and $100 million a year. We're very excited about that opportunity once we get this fully done and going. During our past few earnings calls, we discussed how UWM is uniquely prepared to win in any type of market. And with the significant volatility the past call wants, we've showcased that preparation several times. When there are brief periods of low rates, our refi and operational excellence enables us to double our daily production levels without sacrificing speed, quality, or service. And when the rates move higher, we demonstrate our continued dominance on the purchase market. The numbers tell an even better story, so let's get into them. We closed $32.4 billion in production for the quarter, obviously within guidance, and that's a 17% growth year over year, which will outperform the whole industry. We also delivered about $10.6 billion in refined volume, almost double what we delivered in the first quarter of 2024. A large portion of that came in a small window between the end of February and the beginning of March, really illustrating the power of our business. The gain margin was 94 basis points. While we posted a $247 million net loss, I want to make sure everyone realize that this is inclusive of $388 million reduction of fair value of our MSR portfolio. As we've discussed several times, we have zero control over this and MSR values, whether it goes up or down. So it's really not that relevant to me, but we did have an amazing quarter and we're profitable on all the measures we look at. I want to highlight two other key operational metrics. First, our submission to clear to close for the quarter was 12.7 days. While some of the best in the industry are still running 40 to 45 days, 12.7 is outstanding. Beyond that, we improved this metric by over a day from 13.9 in the first quarter of 2024, despite doing almost 20% more business. So as you see our AI initiatives and things that we've been rolling out, actually impacting the business day to day by seeing that speed and success. Second, our net promoter score for the quarter was 87.3. You know, companies with MPS in the 60s and 70s are viewed as world-class. This is one of the best MPS scores in the last couple of years and reflective of our industry-leading service levels. which you know from our experience will continue to drive more volume in the second quarter and beyond. As you can see, this is another really strong quarter for UWM. While the macro environment may remain choppy, we will continue to investing and winning. And I can promise you there's no other mortgage lender that is better equipped and prepared to help brokers, borrowers, regardless of what the market does. And we're excited to show it to you as soon as the opportunity shows. I'll now turn the call over to our CFO, Rami Hassani. He's a new CFO here at UWM, has been a key member of our finance team since 2020, and he was the obvious choice to become our next CFO. So I'll turn it over to you, Rami.

Thank you, Matt. I appreciate it. Jumping into the numbers, Q1 2025 revenue of $613 million, net loss of $247 million, inclusive of a $388 million reduction in the fair value or MSR portfolio, and adjusted EBITDA of $58 million. As we've discussed before, our focus continues to be on investing in our people, processes, and technology, as well as our broker partners to prepare UWM and our brokers collectively for continued growth in 2025 and beyond. We continue to invest in growing our operations, underwriting, and technology teams to support increased production volume, which we experienced in Q1 of 25 compared to Q1 of 24, a 17% increase. We continue to originate more than $20 billion a quarter in purchase volume for eight quarters in a row and we view that as our base, a base that no other lender can approach. We almost doubled our refi volume year over year, from $5.5 to $10.6 billion, despite the rate environment being less than optimal. While our costs have increased compared to Q124, our costs are substantially aligned to Q4 of 24, which is on strategy for investing for continued growth. More specifically, we believe our business is currently in a position to handle twice our 2024 origination volume with minimal impact to our fixed costs. We also maintain our liquidity and capital and leverage ratios within what we believe to be acceptable ranges in the current environment. As of the end of Q125, we had $485 million of cash, $2.4 billion of total accessible liquidity, and an MSR portfolio with a fair value of $3.3 billion. Overall, a strong liquidity position. In summary, Q125 was a period of continued investment in operational capabilities to remain prepared for what we see as significant market opportunities for UWM, and our broker partners. We have also continued to remain prepared for these opportunities from a capital and liquidity perspective, and we believe that we remain well positioned operationally and financially for any market cycle. I will now turn things back over to our chairman, president, CEO, Matt Eshbia, for closing remarks. Thanks, Rami.