loanDepot (LDI) Q2 2024 earnings summary

Executive summary

• Vision 2025 strategic program drove operational and financial improvements, including cost reduction, origination transformation, and organizational simplification.

• Q2 2024 marked the strongest operational results since the market downturn, with expanded market share, higher gain on sale margins, and positive adjusted EBITDA.

• Investments in products, technology, and people position the company for market share gains and profitability as market conditions improve.

• Net loss of $65.9 million to $66 million included $27 million in cybersecurity-related charges and $6 million loss on debt extinguishment.

• Reached tentative settlement for class action litigation related to the January 2024 cyber incident.

Financial highlights

• Adjusted revenue reached $278 million, the highest since the market downturn, while total revenue was $265 million, down 2% year-over-year.

• Adjusted EBITDA was $35 million, and adjusted net loss improved to $15.9 million from $36.1 million year-over-year.

• Pull-through weighted gain on sale margin increased to 3.22% from 2.85% year-over-year.

• Loan origination volume was $6.1 billion, down 3% year-over-year but within guidance.

• Servicing fee income increased to $125.1 million from $119.5 million year-over-year.

Outlook and guidance

• Q3 2024 origination and rate lock volumes expected between $5 billion and $7 billion.

• Q3 gain on sale margin expected between 280 and 300 basis points.

• Expenses projected to decrease in Q3 as one-time Q2 charges subside.

• Market outlook is optimistic, with potential for increased housing transactions and mortgage activity in 2025 as rates moderate.

• Management does not expect the cybersecurity incident to have a material impact on full-year 2024 results beyond amounts already accrued.