UWM Holdings Corporation Class A

Hello, everyone, and good morning. My name is Jim, and I will be your conference operator today. At this time, I would like to welcome everyone to the UWM Holdings Corporation second quarter 2025 earnings 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. And if at any time you would like to remove yourself from the queue, please repress star and one. Thank you. Blake Colo, you may begin your conference.

Good morning. This is Blake Colo, Chief Business Officer and Head of Investor Relations. Thank you for joining us and welcome to the second quarter 2025 UWM Holdings Corporation's earnings call. Before we start, I would like to remind everyone that this conference call includes four 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 metrics and the reconciliation between GAAP and non-GAAP metrics for the reported results, please refer to the earnings release issued earlier today, as well as our filings with the SEC. I will now turn the call over to Matt Ishbia. Chairman, President, and CEO of UWM Holdings Corporation in United Wholesale Mortgage. Thanks, Blake, and thank you everyone for joining today.

UWM's strong, consistent, and differentiated values continue to be the foundation for everything we do here. Every day, our team of more than 9,000 people delivers the best products and services to the broker community, which in turn benefits homeowners with significant cost savings and a world-class mortgage experience. Our operating profile and relentless drive to deliver results lend themselves to a consistent message for the investment community. UWM is uniquely positioned to win in any market environment. While others have pulled back, UWM has doubled down, proving that we can and will dominate the purchase market regardless of market cycles. And when the races come down, we'll leverage our world-class operating system and industry-best technology that we've developed for brokers to scale and dominate. Over the last several years, we've built scalability in our business by investing in technology. While you're many other companies using AI as a buzzword, the difference is actually at UWM, we have products and services that are powered by AI that are actually impacting our business today and will impact our business even more when rates drop and just going forward in the future. Years ago, we invested heavily to build our AI-based underwriting system, BOLT. While underwriters and most lenders can do two or three loans per day, maybe even four, we can do two, three X or more per day than anyone else in the country. Our loan quality is better because of this technology and will continue to improve. So here at UWM, we can say AI is making a big impact on our business today. Another example of AI actually working is Chat UWM, which is similar to Chat GPT but for mortgages. Our brokers and team members now use this as a primary resource for accessing job aids, guidelines, and other information that arises that they need on a mortgage transaction. And within this is LEO, Loan Estimate Optizer, which we launched at UWM Live on May 16th. Leo helps brokers compete and win by showing exactly how they can beat a competitor's loan estimate. All they need to do is drag and drop the borrower's loan estimate into Leo, and they get a detailed analysis of tips on how to win this specific loan. And finally, the big noise and big opportunity is around Mia. Mia has been a huge, huge success. It's an AI loan officer assistant. Mia is designed to help loan officers do more loans and get more business. She is the ultimate loan officer assistant. She works 24-7, 365. She doesn't get days off. We rolled this out at UWM. The broker feedback was incredible. We rolled it at UWM Live back in May. We've been using it every single day, and it's having so much success. We're scheduling meetings and helping brokers get more business, and that's really the game. Now, a stat that we're big on here at UWM is about 97% of all consumers that work with a mortgage broker give a five-star review, which is phenomenal, unbelievable information. But only 10% of those people remember who the mortgage broker is when they go to refinance, their mortgage because so much time has gone by and until now brokers haven't had great tools to stand in front of their business and for their past borrowers. So Mia changes all that. She'll stay in front of them. We think that 10% number could go to 30, 40, maybe even 50% of them know who their mortgage broker is, which just guarantees more business for brokers, which helps UWM and the broker channel continue to grow. She makes thousands of outbound calls. Every single day, she takes inbound calls. She sets appointments. All this is happening today is not something that we plan on doing and some cool thing that we're going to tell you that's going to happen in 2028. It's happening today, and it's impacting business today. And if rates tick down a little bit more, it will impact business greatly today and this year. Supplying brokers with the best tools and technology helps them win, and a channel continues to post higher and higher overall market share. Broker share of all direct lending has more than doubled since 2016, reaching about 30%. Our goal is for brokers to be number one. In my mind, that means 50.1%. I don't know if that'll take five years or 15 years, but we're going to grind it out and make sure it happens. It's best for consumers. It's best for real estate agents. It's best for loan officers, which is why the channel continues to grow. I'm super excited about the opportunity as we continue to build this together. And a lot of the AI things I talked about will help brokers scale, help UWM scale, and we're going to all win together. Okay, let's get into the quarter. We closed $39.7 billion of production, our best quarter since 2021, and almost 20% higher than last year's second quarter. We did about $12.4 billion of refi volume, which is double what we did last year's second quarter, and represents about 11% of the volume in the industry, which is really interesting because most people think you need to have the client in your servicing book to refinance them. First, we don't refinance any borrowers. Our brokers do. But second, we only own about 2% of the industry servicing market. So for us to do 11 plus percent really disproves the age-old theory that you must have the service and do the refi. When you deliver world-class experience, you get 97% of borrowers giving a five-star rating. It really doesn't matter how big your servicing book. It gives brokers the ability to excel on refinances, and you're seeing that in real time here with UWM. Additionally, we originally had $27.3 billion of purchases. This is our third-best purchase record of all time, and this is a big number in the market that we're in right now, and it's tracking to do over $100 billion this year. Gain on sale margin was 113 basis point, which is up a lot since the first quarter. We also had a pretty good quarter of earnings, $314.5 million in net income, demonstrating the earning power of our business, and that also included a $111 million decline in fair value of our MSRs. Our playbook won't change. Invest in our business, win, grow the broker channel, and repeat. I'll now turn the call over to our CFO, Rami Hassani, to go over some more numbers.