Finance Of America Companies (FOA) Q3 2024 earnings summary

Executive summary

• Reported net income of $204 million and basic EPS of $8.48 for Q3 2024, with adjusted net income of $15 million and adjusted EPS of $0.67.

• Funded volume reached $513 million, surpassing guidance and reflecting strong execution of strategic initiatives.

• Operational consolidation and efficiency improvements led to a 38% increase in retail productivity and an 89% increase in HomeSafe Second fundings from the prior quarter.

• Completed a reverse stock split and exchange offer for 2025 unsecured notes, enhancing balance sheet and financial flexibility.

• Focused on digital innovation, marketing, and leveraging $14 trillion in senior-held home equity to expand reach and product suite.

Financial highlights

• Total revenues reached $290 million in Q3 2024, up 267% sequentially and 514% year-over-year, driven by higher origination volumes and fair value gains.

• Net income improved to $204 million in Q3 2024 from a loss of $5 million in Q2 2024 and a loss of $172 million in Q3 2023.

• Adjusted EBITDA was $32 million, up from $10 million in Q2 2024 and a loss of $23 million in Q3 2023.

• Year-to-date, total revenue reached $444 million, net income $183 million, and adjusted EBITDA $42 million.

• Tangible net worth increased to $231 million, or $10 per share.

Outlook and guidance

• Projected adjusted EPS for 2025 is $2.60–$3.00, with expected full-year funded volume around $2.7 billion.

• Q4 2024 volume expected to be similar to Q3, with some seasonality anticipated in Q1 2025.

• Management expects continued focus on growing the core retirement solutions business, leveraging demographic tailwinds and expanded retail platform.

• Ongoing cost discipline and operational efficiency are expected to support profitability.

• Monitoring of macroeconomic factors, including interest rate volatility and housing market trends, remains a priority.