Better's new CEO pledges enterprise focus after another loss

Better's new boss is promoting the lender's shift toward an enterprise strategy, a plan which could see it also expand into the wholesale space. 

Interim CEO Daniel Lewis led his first earnings call Thursday afternoon, just days after founder and ex-CEO Vishal Garg agreed to transition to the board of directors. He inherits a company that is still deep in the red, and which is projecting to miss a breakeven goal later this year. 

"We are now in a transitional phase between a founder-mode based company, which is creativity and many different projects, versus an enterprise stage of executing against very select ideas that have a demonstrated product market fit," he told investors. 

The lender posted a $30.6 million net loss for the quarter, and hasn't approached a profit since going public in 2023. That loss was trimmer than a steep $70 million loss in the first quarter, and a $36.3 million deficit in the second quarter last year. 

While company leaders this year had a goal of breakeven adjusted EBITDA by the end of the third quarter, Lewis acknowledged the lender is going to fall short, and did not forecast a future date for profitability. Better's latest adjusted EBITDA was negative $14 million, an amount which included a $6.5 million benefit from a reserve release related to pre-June 2022 loans.

Earnings gains

Better reported loan volume of $1.67 billion in the second quarter, up slightly from the prior period but 38% greater than the year ago period. Of that production, $824 million was purchase volume, while home equity lines of credit accounted for $294 million. Platform volume of $912 million surpassed direct-to-consumer production of $755 million. 

The company's net revenue also ticked up to $54.7 million in the second quarter, a 28% annual increase. Better's warehouse lines of credit grew to $850 million, a 48% increase from the end of 2025, and it closed the quarter with cash and cash equivalents of $102.3 million. 

Executives shared slightly lower guidance for the third quarter, based on a muted refi environment and the uncertain timing of several agreed-upon HELOC partnerships, which Lewis anticipates rolling out toward the fourth quarter. 

Company plans

The lender says it's sharpening its focus on being a platform model, with its partners owning the customer relationship and Better providing its technology infrastructure, mainly its artificial intelligence-fueled Tinman platform. That plan includes dipping into the wholesale space by bringing brokers into the Tinman ecosystem, although Lewis didn't discuss a timeline for when Better would roll out to brokers.

"With that said, D2C remains a core part of Better's operations," said Lewis. "If we have the lowest unit economics in the industry, we have a right to win across channels, and Tinman is what gives us that advantage in every channel we serve."

The firm also backed its retail arm, Neo Home Loans, which serves as Better's "innovation platform" and which is still recruiting loan officers, according to executives. 

Big picture

Better is projecting more than $45 million in annualized cost reductions by the end of the year, of which a meaningful impact should show up in the third quarter earnings. 

The board of directors is searching for a full-time CEO, and Lewis emphasized that his role is an interim one. He will receive a minimum salary and he and the board have tied the compensation to equity rather than cash. While Lewis reiterated the lender's shift into an enterprise provider from its fintech roots, he lauded Garg's vision and building of the company. 

The lender's stock fell precipitously this week following Garg's ousting, from $26.62 per share Monday afternoon to a close of $16.64 Thursday afternoon.