Finance Of America Companies (FOA) Q2 2024 earnings summary

Executive summary

• Achieved fourth consecutive quarter of improved adjusted net income, with positive adjusted EBITDA for the first time since 2022 and continued growth in volume and revenue, while reducing expenses.

• Completed integration of acquired AAG/Bloom assets, unified all brands under a single name, and launched new marketing initiatives targeting the 55+ demographic and home equity market.

• Shifted focus to core retirement solutions, exiting traditional mortgage and commercial lending to become a modern retirement solutions platform.

• Positioned as a market leader with a dominant distribution footprint, digital capabilities, and deep industry experience in the reverse mortgage sector.

Financial highlights

• Net loss from continuing operations improved to $4.9M for Q2 2024, a 98% improvement from $220.6M loss in Q2 2023; adjusted net loss was $1M, or $0.05 per share.

• Achieved positive adjusted EBITDA of $9M, up from negative $26M in Q2 2023; total revenues were $79M, up from negative $111.9M in Q2 2023.

• Revenue (excluding fair value changes) grew 33% year-over-year to $68M; expenses declined from $110M (Q2 2023) to $85M (Q2 2024).

• Origination volumes increased 5% sequentially to $447M, with higher margin retail and broker channels up 18% and 12%, respectively.

• Cash and cash equivalents plus restricted cash totaled $246.6M at June 30, 2024.

Outlook and guidance

• Q3 2024 origination volume expected between $475M and $500M, with July production on pace to meet high end of target.

• Anticipates return to ANI profitability in Q3, supported by reduced expenses and higher margins; favorable interest rate movements expected to increase tangible net worth and originations.

• Management expects continued benefit from demographic tailwinds and plans to launch additional non-agency reverse mortgage products.