loanDepot Announces Second Quarter 2023 Financial Results
Company reports second consecutive quarter of sequential double-digit revenue growth and ongoing cost productivity gains resulting in significant narrowing of net loss
-
Revenue up
31% or$63.9 million -
Total expenses increased
5% or$15.7 million -
Quarterly net loss narrowed by
46% to$49.8 million $42.0 million $91.7 million -
Adjusted net loss for the second quarter of 2023 was
$34.3 million $60.2 million -
Company continues to maintain strong liquidity profile, exiting the quarter with cash balance of
$719.1 million
“loanDepot continues to make significant progress against the strategic imperatives laid out in our Vision 2025 plan,” said President and Chief Executive Officer Frank Martell. “We delivered our second successive quarter of strong top line growth and margin expansion on a sequential basis, and at the same time, continued to drive cost productivity and operating leverage. Importantly, we reduced our sequential quarterly net loss by
“While we continue the work of resetting our cost structure to align with generationally low unit volumes, we are also focused on the other pillars of Vision 2025, including capturing opportunities inherent in our strategy to expand purpose-driven lending that supports first-time homebuyers and diverse communities. During 2022, loanDepot ranked as the country’s third largest mortgage lender for all minorities1. Home ownership is a bedrock of the American Dream and plays a vital role in helping to build strong, stable communities, and further deepening our support for diverse and first-time homebuyers is a critical component of our Vision 2025 plan,”
“As we move forward in the second half of 2023, we plan to continue maintaining a strong liquidity position and aggressively reduce our costs,” said Chief Financial Officer, David Hayes. “Importantly, we are also investing in critical operating platforms, which we expect will deliver higher levels of automation and operating leverage and position us for additional growth and margin expansion in 2024.”
_______________
1 Based on 2022 Home Mortgage Disclosure Act (HMDA) data collected by the Consumer Financial Protection Bureau (CFPB).
Second Quarter Highlights: |
|||||||||||||||||||
Financial Summary |
|||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
($ in thousands except per share data) (Unaudited) |
Jun 30,
|
|
Mar 31,
|
|
Jun 30,
|
|
Jun 30,
|
|
Jun 30,
|
||||||||||
Rate lock volume |
$ |
8,973,666 |
|
|
$ |
8,468,435 |
|
|
$ |
19,596,763 |
|
|
$ |
17,442,101 |
|
|
$ |
49,588,215 |
|
Pull through weighted lock volume(1) |
|
6,057,179 |
|
|
|
5,325,488 |
|
|
|
12,412,894 |
|
|
|
11,382,667 |
|
|
|
32,212,939 |
|
Loan origination volume |
|
6,273,543 |
|
|
|
4,944,337 |
|
|
|
15,995,055 |
|
|
|
11,217,880 |
|
|
|
37,545,786 |
|
Gain on sale margin(2) |
|
2.75 |
% |
|
|
2.43 |
% |
|
|
1.16 |
% |
|
|
2.61 |
% |
|
|
1.62 |
% |
Pull through weighted gain on sale margin(3) |
|
2.85 |
% |
|
|
2.26 |
% |
|
|
1.50 |
% |
|
|
2.57 |
% |
|
|
1.89 |
% |
Financial Results |
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue |
$ |
271,833 |
|
|
$ |
207,901 |
|
|
$ |
308,639 |
|
|
$ |
479,734 |
|
|
$ |
811,949 |
|
Total expense |
|
330,148 |
|
|
|
314,484 |
|
|
|
560,657 |
|
|
|
644,632 |
|
|
|
1,166,913 |
|
Net loss |
|
(49,759 |
) |
|
|
(91,721 |
) |
|
|
(223,822 |
) |
|
|
(141,480 |
) |
|
|
(315,141 |
) |
Diluted loss per share |
$ |
(0.13 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.66 |
) |
|
$ |
(0.38 |
) |
|
$ |
(0.93 |
) |
Non-GAAP Financial Measures(4) |
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted total revenue |
$ |
275,709 |
|
|
$ |
226,190 |
|
|
$ |
273,273 |
|
|
$ |
501,899 |
|
|
$ |
777,877 |
|
Adjusted net loss |
|
(34,329 |
) |
|
|
(60,247 |
) |
|
|
(168,863 |
) |
|
|
(94,623 |
) |
|
|
(250,255 |
) |
Adjusted EBITDA (LBITDA) |
|
6,499 |
|
|
|
(29,336 |
) |
|
|
(191,510 |
) |
|
|
(22,838 |
) |
|
|
(265,916 |
) |
| (1) | Pull through weighted rate lock volume is the principal balance of loans subject to interest rate lock commitments, net of a pull-through factor for the loan funding probability. |
|
| (2) | Gain on sale margin represents the total of (i) gain on origination and sale of loans, net, and (ii) origination income, net, divided by loan origination volume during period. |
|
| (3) | Pull through weighted gain on sale margin represents the total of (i) gain on origination and sale of loans, net, and (ii) origination income, net, divided by the pull through weighted rate lock volume. |
|
| (4) | See “Non-GAAP Financial Measures” for a discussion of Non-GAAP Financial Measures and a reconciliation of these metrics to their closest GAAP measure. |
Operational Highlights
-
Quarterly non-volume related expenses increased
$2.2 million -
Incurred expenses related to the Vision 2025 plan of
$6.8 million $4.5 million $2.3 million $2.6 million -
Accrued
$7.5 million -
Pull through weighted lock volume of
$6.1 billion $0.7 billion 14% from the first quarter of 2023, resulting in quarterly total revenue of$271.8 million $63.9 million 31% , over the same period. -
Loan origination volume for the second quarter of 2023 was
$6.3 billion $1.3 billion 27% from the first quarter of 2023. -
Purchase volume increased to
73% of total loans originated during the second quarter, up from71% of total loans originated during the first quarter of 2023 and up from59% of total loans originated during the second quarter of 2022. -
For the three months ended June 30, 2023, our preliminary organic refinance consumer direct recapture rate2 increased to
69% from the first quarter’s refinance rate of67% . This highlights the efficacy of our marketing efforts, the strength of our customer relationships, and the value of our servicing portfolio for adjacent and complementary revenue opportunities. -
Net loss for the second quarter of 2023 of
$49.8 million $91.7 million -
Adjusted EBITDA for the second quarter of 2023 was positive
$6.5 million $29.3 million
______________
2 We define organic refinance consumer direct recapture rate as the total unpaid principal balance (“UPB”) of loans in our servicing portfolio that are paid in full for purposes of refinancing the loan on the same property, with the Company acting as lender on both the existing and new loan, divided by the UPB of all loans in our servicing portfolio that paid in full for the purpose of refinancing the loan on the same property. The recapture rate is finalized following the publication date of this release when external data becomes available.
Outlook for the third quarter of 2023
-
Origination volume of between
$5 billion $7 billion -
Pull-through weighted rate lock volume of between
$5.5 billion $7.5 billion - Pull-through weighted gain on sale margin of between 245 basis points and 285 basis points.
Servicing |
||||||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
Servicing Revenue Data: ($ in thousands) (Unaudited) |
|
Jun 30,
|
|
Mar 31,
|
|
Jun 30,
|
|
Jun 30,
|
|
Jun 30,
|
||||||||||
Due to changes in valuation inputs or assumptions |
|
$ |
26,138 |
|
|
$ |
(21,368 |
) |
|
$ |
98,795 |
|
|
$ |
4,771 |
|
|
$ |
297,792 |
|
Due to collection/realization of cash flows |
|
|
(41,619 |
) |
|
|
(34,657 |
) |
|
|
(66,380 |
) |
|
|
(76,276 |
) |
|
|
(143,502 |
) |
Realized gains (losses) on sales of servicing rights |
|
|
7,021 |
|
|
|
140 |
|
|
|
(2,493 |
) |
|
|
7,161 |
|
|
|
7,540 |
|
Net (loss) gain from derivatives hedging servicing rights |
|
|
(30,014 |
) |
|
|
3,079 |
|
|
|
(63,429 |
) |
|
|
(26,936 |
) |
|
|
(263,720 |
) |
Changes in fair value of servicing rights, net |
|
$ |
(38,474 |
) |
|
$ |
(52,806 |
) |
|
$ |
(33,507 |
) |
|
$ |
(91,280 |
) |
|
$ |
(101,890 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Servicing fee income |
|
$ |
117,737 |
|
|
$ |
118,961 |
|
|
$ |
117,326 |
|
|
$ |
236,699 |
|
|
$ |
228,385 |
|
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
Servicing Rights, at Fair Value: ($ in thousands) (Unaudited) |
|
Jun 30,
|
|
Mar 31,
|
|
Jun 30,
|
|
Jun 30,
|
|
Jun 30,
|
||||||||||
Balance at beginning of period |
|
$ |
2,016,568 |
|
|
$ |
2,025,136 |
|
|
$ |
2,078,187 |
|
|
$ |
2,025,136 |
|
|
$ |
1,999,402 |
|
Additions |
|
|
75,866 |
|
|
|
59,295 |
|
|
|
180,455 |
|
|
|
135,161 |
|
|
|
450,215 |
|
Sales proceeds, net |
|
|
(78,191 |
) |
|
|
(11,838 |
) |
|
|
(86,464 |
) |
|
|
(90,030 |
) |
|
|
(399,314 |
) |
Changes in fair value: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Due to changes in valuation inputs or assumptions |
|
|
26,138 |
|
|
|
(21,368 |
) |
|
|
98,795 |
|
|
|
4,771 |
|
|
|
297,792 |
|
Due to collection/realization of cash flows |
|
|
(41,619 |
) |
|
|
(34,657 |
) |
|
|
(66,380 |
) |
|
|
(76,276 |
) |
|
|
(143,502 |
) |
Balance at end of period (1) |
|
$ |
1,998,762 |
|
|
$ |
2,016,568 |
|
|
$ |
2,204,593 |
|
|
$ |
1,998,762 |
|
|
$ |
2,204,593 |
|
| (1) |
Balances are net of |
|
|
|
% Change |
||||||||||||||
Servicing Portfolio Data: ($ in thousands) (Unaudited) |
Jun 30,
|
|
Mar 31,
|
|
Jun 30,
|
|
Jun-23 vs Mar-23 |
|
Jun-23
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Servicing portfolio (unpaid principal balance) |
$ |
142,479,870 |
|
|
$ |
141,673,464 |
|
|
$ |
155,217,012 |
|
|
0.6 |
% |
|
(8.2 |
)% |
|
|
|
|
|
|
|
|
|
|
||||||||
Total servicing portfolio (units) |
|
482,266 |
|
|
|
475,765 |
|
|
|
507,231 |
|
|
1.4 |
|
|
(4.9 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
60+ days delinquent ($) |
$ |
1,192,377 |
|
|
$ |
1,282,432 |
|
|
$ |
1,511,871 |
|
|
(7.0 |
) |
|
(21.1 |
) |
60+ days delinquent (%) |
|
0.8 |
% |
|
|
0.9 |
% |
|
|
1.0 |
% |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||||
Servicing rights, net to UPB |
|
1.4 |
% |
|
|
1.4 |
% |
|
|
1.4 |
% |
|
|
|
|
||
As of June 30, 2023, approximately |
|||||||||||||||||
Balance Sheet Highlights |
||||||||||||||
|
|
|
|
|
|
|
% Change |
|||||||
($ in thousands) (Unaudited) |
Jun 30,
|
|
Mar 31,
|
|
Jun 30,
|
|
Jun-23
|
|
Jun-23
|
|||||
Cash and cash equivalents |
$ |
719,073 |
|
$ |
798,119 |
|
$ |
954,930 |
|
(9.9 |
)% |
|
(24.7 |
)% |
Loans held for sale, at fair value |
|
2,256,551 |
|
|
2,039,367 |
|
|
4,656,338 |
|
10.6 |
|
|
(51.5 |
) |
Servicing rights, at fair value |
|
2,012,049 |
|
|
2,028,788 |
|
|
2,213,700 |
|
(0.8 |
) |
|
(9.1 |
) |
Total assets |
|
6,203,504 |
|
|
6,190,791 |
|
|
9,195,187 |
|
0.2 |
|
|
(32.5 |
) |
Warehouse and other lines of credit |
|
2,046,208 |
|
|
1,830,319 |
|
|
4,265,343 |
|
11.8 |
|
|
(52.0 |
) |
Total liabilities |
|
5,406,160 |
|
|
5,349,629 |
|
|
7,981,324 |
|
1.1 |
|
|
(32.3 |
) |
Total equity |
|
797,344 |
|
|
841,162 |
|
|
1,213,863 |
|
(5.2 |
) |
|
(34.3 |
) |
An increase in loans held for sale at June 30, 2023, resulted in a corresponding increase in the balance on our warehouse lines of credit. Total funding capacity with our lending partners was |
||||||||||||||
Consolidated Statements of Operations |
|||||||||||||||||||
($ in thousands except per share data) (Unaudited) |
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
Jun 30,
|
|
Mar 31,
|
|
Jun 30,
|
|
Jun 30,
|
|
Jun 30,
|
||||||||||
REVENUES: |
|
|
|
|
|
|
|
|
|
||||||||||
Interest income |
$ |
33,060 |
|
|
$ |
27,958 |
|
|
$ |
62,722 |
|
|
$ |
61,017 |
|
|
$ |
115,687 |
|
Interest expense |
|
(30,209 |
) |
|
|
(26,760 |
) |
|
|
(39,923 |
) |
|
|
(56,969 |
) |
|
|
(79,813 |
) |
Net interest income |
|
2,851 |
|
|
|
1,198 |
|
|
|
22,799 |
|
|
|
4,048 |
|
|
|
35,874 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gain on origination and sale of loans, net |
|
154,335 |
|
|
|
108,152 |
|
|
|
146,562 |
|
|
|
262,487 |
|
|
|
509,692 |
|
Origination income, net |
|
18,332 |
|
|
|
12,016 |
|
|
|
39,108 |
|
|
|
30,349 |
|
|
|
98,181 |
|
Servicing fee income |
|
117,737 |
|
|
|
118,961 |
|
|
|
117,326 |
|
|
|
236,699 |
|
|
|
228,385 |
|
Change in fair value of servicing rights, net |
|
(38,474 |
) |
|
|
(52,806 |
) |
|
|
(33,507 |
) |
|
|
(91,280 |
) |
|
|
(101,890 |
) |
Other income |
|
17,052 |
|
|
|
20,380 |
|
|
|
16,351 |
|
|
|
37,431 |
|
|
|
41,707 |
|
Total net revenues |
|
271,833 |
|
|
|
207,901 |
|
|
|
308,639 |
|
|
|
479,734 |
|
|
|
811,949 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
EXPENSES: |
|
|
|
|
|
|
|
|
|
||||||||||
Personnel expense |
|
157,799 |
|
|
|
141,027 |
|
|
|
296,569 |
|
|
|
298,826 |
|
|
|
642,563 |
|
Marketing and advertising expense |
|
34,712 |
|
|
|
35,914 |
|
|
|
60,837 |
|
|
|
70,626 |
|
|
|
162,350 |
|
Direct origination expense |
|
17,224 |
|
|
|
17,378 |
|
|
|
33,996 |
|
|
|
34,603 |
|
|
|
87,153 |
|
General and administrative expense |
|
54,817 |
|
|
|
56,134 |
|
|
|
63,927 |
|
|
|
110,951 |
|
|
|
113,675 |
|
Occupancy expense |
|
6,099 |
|
|
|
6,081 |
|
|
|
9,388 |
|
|
|
12,180 |
|
|
|
18,784 |
|
Depreciation and amortization |
|
10,721 |
|
|
|
10,026 |
|
|
|
11,323 |
|
|
|
20,747 |
|
|
|
21,867 |
|
Servicing expense |
|
5,750 |
|
|
|
4,834 |
|
|
|
10,741 |
|
|
|
10,583 |
|
|
|
32,252 |
|
Other interest expense |
|
43,026 |
|
|
|
43,090 |
|
|
|
33,140 |
|
|
|
86,116 |
|
|
|
47,533 |
|
Goodwill impairment |
|
— |
|
|
|
— |
|
|
|
40,736 |
|
|
|
— |
|
|
|
40,736 |
|
Total expenses |
|
330,148 |
|
|
|
314,484 |
|
|
|
560,657 |
|
|
|
644,632 |
|
|
|
1,166,913 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss before income taxes |
|
(58,315 |
) |
|
|
(106,583 |
) |
|
|
(252,018 |
) |
|
|
(164,898 |
) |
|
|
(354,964 |
) |
Income tax benefit |
|
(8,556 |
) |
|
|
(14,862 |
) |
|
|
(28,196 |
) |
|
|
(23,418 |
) |
|
|
(39,823 |
) |
Net loss |
|
(49,759 |
) |
|
|
(91,721 |
) |
|
|
(223,822 |
) |
|
|
(141,480 |
) |
|
|
(315,141 |
) |
Net loss attributable to noncontrolling interests |
|
(26,316 |
) |
|
|
(48,813 |
) |
|
|
(122,894 |
) |
|
|
(75,130 |
) |
|
|
(179,472 |
) |
Net loss attributable to loanDepot, Inc. |
$ |
(23,443 |
) |
|
$ |
(42,908 |
) |
|
$ |
(100,928 |
) |
|
$ |
(66,350 |
) |
|
$ |
(135,669 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic loss per share |
$ |
(0.13 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.66 |
) |
|
$ |
(0.38 |
) |
|
$ |
(0.93 |
) |
Diluted loss per share |
$ |
(0.13 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.66 |
) |
|
$ |
(0.38 |
) |
|
$ |
(0.93 |
) |
Consolidated Balance Sheets |
||||||||
($ in thousands) |
Jun 30,
|
|
Mar 31,
|
|
Dec 31,
|
|||
|
(Unaudited) |
|
|
|||||
ASSETS |
|
|
|
|
|
|||
Cash and cash equivalents |
$ |
719,073 |
|
$ |
798,119 |
|
$ |
863,956 |
Restricted cash |
|
61,294 |
|
|
90,084 |
|
|
116,545 |
Accounts receivable, net |
|
68,581 |
|
|
99,381 |
|
|
145,279 |
Loans held for sale, at fair value |
|
2,256,551 |
|
|
2,039,367 |
|
|
2,373,427 |
Derivative assets, at fair value |
|
80,382 |
|
|
84,624 |
|
|
39,411 |
Servicing rights, at fair value |
|
2,012,049 |
|
|
2,028,788 |
|
|
2,037,447 |
Trading securities, at fair value |
|
93,442 |
|
|
95,561 |
|
|
94,243 |
Property and equipment, net |
|
82,677 |
|
|
88,877 |
|
|
92,889 |
Operating lease right-of-use asset |
|
34,040 |
|
|
35,362 |
|
|
35,668 |
Prepaid expenses and other assets |
|
129,675 |
|
|
139,904 |
|
|
155,982 |
Loans eligible for repurchase |
|
647,418 |
|
|
672,458 |
|
|
634,677 |
Investments in joint ventures |
|
18,322 |
|
|
18,266 |
|
|
20,410 |
Total assets |
$ |
6,203,504 |
|
$ |
6,190,791 |
|
$ |
6,609,934 |
|
|
|
|
|
|
|||
LIABILITIES AND EQUITY |
|
|
|
|
|
|||
LIABILITIES: |
|
|
|
|
|
|||
Warehouse and other lines of credit |
$ |
2,046,208 |
|
$ |
1,830,319 |
|
$ |
2,146,602 |
Accounts payable and accrued expenses |
|
407,356 |
|
|
449,641 |
|
|
488,696 |
Derivative liabilities, at fair value |
|
8,790 |
|
|
35,662 |
|
|
67,492 |
Liability for loans eligible for repurchase |
|
647,418 |
|
|
672,458 |
|
|
634,677 |
Operating lease liability |
|
56,552 |
|
|
57,837 |
|
|
61,675 |
Debt obligations, net |
|
2,239,836 |
|
|
2,303,712 |
|
|
2,289,319 |
Total liabilities |
|
5,406,160 |
|
|
5,349,629 |
|
|
5,688,461 |
EQUITY: |
|
|
|
|
|
|||
Total equity |
|
797,344 |
|
|
841,162 |
|
|
921,473 |
Total liabilities and equity |
$ |
6,203,504 |
|
$ |
6,190,791 |
|
$ |
6,609,934 |
Loan Origination and Sales Data |
||||||||||||||||||||
($ in thousands) (Unaudited) |
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
Jun 30,
|
|
Mar 31,
|
|
Jun 30,
|
|
Jun 30,
|
|
Jun 30,
|
|||||||||||
Loan origination volume by type: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Conventional conforming |
|
$ |
3,323,678 |
|
|
$ |
2,893,821 |
|
|
$ |
10,392,730 |
|
|
$ |
6,217,499 |
|
|
$ |
26,105,003 |
|
FHA/VA/USDA |
|
|
2,337,946 |
|
|
|
1,678,591 |
|
|
|
3,658,309 |
|
|
|
4,016,537 |
|
|
|
7,626,820 |
|
Jumbo |
|
|
148,077 |
|
|
|
131,066 |
|
|
|
1,595,843 |
|
|
|
279,143 |
|
|
|
3,383,547 |
|
Other |
|
|
463,842 |
|
|
|
240,859 |
|
|
|
348,173 |
|
|
|
704,701 |
|
|
|
430,416 |
|
Total |
|
$ |
6,273,543 |
|
|
$ |
4,944,337 |
|
|
$ |
15,995,055 |
|
|
$ |
11,217,880 |
|
|
$ |
37,545,786 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loan origination volume by purpose: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase |
|
$ |
4,552,919 |
|
|
$ |
3,512,771 |
|
|
$ |
9,500,164 |
|
|
$ |
8,065,690 |
|
|
$ |
17,530,930 |
|
Refinance - cash out |
|
|
1,614,747 |
|
|
|
1,324,239 |
|
|
|
5,669,205 |
|
|
|
2,938,986 |
|
|
|
15,498,840 |
|
Refinance - rate/term |
|
|
105,877 |
|
|
|
107,327 |
|
|
|
825,686 |
|
|
|
213,204 |
|
|
|
4,516,016 |
|
Total |
|
$ |
6,273,543 |
|
|
$ |
4,944,337 |
|
|
$ |
15,995,055 |
|
|
$ |
11,217,880 |
|
|
$ |
37,545,786 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans sold: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Servicing retained |
|
$ |
3,943,845 |
|
|
$ |
3,277,707 |
|
|
$ |
10,568,649 |
|
|
$ |
7,221,552 |
|
|
$ |
27,691,365 |
|
Servicing released |
|
|
2,134,024 |
|
|
|
2,118,874 |
|
|
|
7,342,889 |
|
|
|
4,252,898 |
|
|
|
13,088,211 |
|
Total |
|
$ |
6,077,869 |
|
|
$ |
5,396,581 |
|
|
$ |
17,911,538 |
|
|
$ |
11,474,450 |
|
|
$ |
40,779,576 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loan origination margins: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Gain on sale margin |
|
|
2.75 |
% |
|
|
2.43 |
% |
|
|
1.16 |
% |
|
|
2.61 |
% |
|
|
1.62 |
% |
Second Quarter Earnings Call
Management will host a conference call and live webcast today at 5:00 p.m. ET on loanDepot’s Investor Relations website, investors.loandepot.com, to discuss its earnings results.
The conference call can also be accessed by dialing (888) 440-6385 using conference ID number 2021948. Please call five minutes in advance to ensure that you are connected prior to the call. A replay of the webcast and transcript will also be made available on the Investor Relations website following the conclusion of the event, or can be accessed by dialing (800) 770-2030 following the conclusion of the event through September 7, 2023.
For more information about loanDepot, please visit the company’s Investor Relations website: investors.loandepot.com.
Non-GAAP Financial Measures
To provide investors with information in addition to our results as determined by GAAP, we disclose certain non-GAAP measures to assist investors in evaluating our financial results. We believe these non-GAAP measures provide useful information to investors regarding our results of operations because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. They facilitate company-to-company operating performance comparisons by backing out potential differences caused by variations in hedging strategies, changes in valuations, capital structures (affecting interest expense on non-funding debt), taxation, the age and book depreciation of facilities (affecting relative depreciation expense), and other cost or benefit items which may vary for different companies for reasons unrelated to operating performance. These non-GAAP measures include our Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share (if dilutive), and Adjusted EBITDA (LBITDA). We exclude from these non-GAAP financial measures the change in fair value of MSRs and related hedging gains and losses as they add volatility and are not indicative of the Company’s operating performance or results of operation. We also exclude stock-based compensation expense, which is a non-cash expense, gains or losses on extinguishment of debt and disposal of fixed assets, non-cash goodwill impairment, and other impairment charges to intangible assets and operating lease right-of-use assets as management does not consider these costs to be indicative of our performance or results of operations. Adjusted EBITDA (LBITDA) includes interest expense on funding facilities, which are recorded as a component of “net interest income (expense)”, as these expenses are a direct operating expense driven by loan origination volume. By contrast, interest expense on our non-funding debt is a function of our capital structure and is therefore excluded from Adjusted EBITDA (LBITDA). Adjustments for income taxes are made to reflect historical results of operations on the basis that it was taxed as a corporation under the Internal Revenue Code, and therefore subject to
- they do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments;
- Adjusted EBITDA (LBITDA) does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt;
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and Adjusted Total Revenue, Adjusted Net Income (Loss), and Adjusted EBITDA (LBITDA) do not reflect any cash requirement for such replacements or improvements; and
- they are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows.
Because of these limitations, Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share, and Adjusted EBITDA (LBITDA) are not intended as alternatives to total revenue, net income (loss), net income (loss) attributable to the Company, or Diluted Earnings (Loss) Per Share or as an indicator of our operating performance and should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations. We compensate for these limitations by using Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share, and Adjusted EBITDA (LBITDA) along with other comparative tools, together with
Reconciliation of Total Revenue to Adjusted Total Revenue ($ in thousands) (Unaudited) |
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
Jun 30,
|
|
Mar 31,
|
|
Jun 30,
|
|
Jun 30,
|
|
Jun 30,
|
||||||||
Total net revenue |
|
$ |
271,833 |
|
$ |
207,901 |
|
$ |
308,639 |
|
|
$ |
479,734 |
|
$ |
811,949 |
|
Change in fair value of servicing rights, net of hedging gains and losses(1) |
|
|
3,876 |
|
|
18,289 |
|
|
(35,366 |
) |
|
|
22,165 |
|
|
(34,072 |
) |
Adjusted total revenue |
|
$ |
275,709 |
|
$ |
226,190 |
|
$ |
273,273 |
|
|
$ |
501,899 |
|
$ |
777,877 |
|
| (1) Represents the change in the fair value of servicing rights attributable to changes in assumptions, net of hedging gains and losses. | |||||||||||||||||
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) ($ in thousands) (Unaudited) |
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
Jun 30,
|
|
Mar 31,
|
|
Jun 30,
|
|
Jun 30,
|
|
Jun 30,
|
|||||||||||
Net loss attributable to loanDepot, Inc. |
|
$ |
(23,443 |
) |
|
$ |
(42,908 |
) |
|
$ |
(100,928 |
) |
|
$ |
(66,350 |
) |
|
$ |
(135,669 |
) |
Net loss from the pro forma conversion of Class C common shares to Class A common shares (1) |
|
|
(26,316 |
) |
|
|
(48,813 |
) |
|
|
(122,894 |
) |
|
|
(75,130 |
) |
|
|
(179,472 |
) |
Net loss |
|
|
(49,759 |
) |
|
|
(91,721 |
) |
|
|
(223,822 |
) |
|
|
(141,480 |
) |
|
|
(315,141 |
) |
Adjustments to the benefit for income taxes(2) |
|
|
6,916 |
|
|
|
13,316 |
|
|
|
31,952 |
|
|
|
20,120 |
|
|
|
46,663 |
|
Tax-effected net loss |
|
|
(42,843 |
) |
|
|
(78,405 |
) |
|
|
(191,870 |
) |
|
|
(121,360 |
) |
|
|
(268,478 |
) |
Change in fair value of servicing rights, net of hedging gains and losses(3) |
|
|
3,876 |
|
|
|
18,289 |
|
|
|
(35,366 |
) |
|
|
22,165 |
|
|
|
(34,072 |
) |
Stock-based compensation expense |
|
|
5,754 |
|
|
|
5,926 |
|
|
|
4,712 |
|
|
|
11,679 |
|
|
|
7,021 |
|
Gain on extinguishment of debt |
|
|
(39 |
) |
|
|
— |
|
|
|
— |
|
|
|
(39 |
) |
|
|
(10,528 |
) |
Loss on disposal of fixed assets |
|
|
751 |
|
|
|
261 |
|
|
|
— |
|
|
|
1,012 |
|
|
|
— |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
40,736 |
|
|
|
— |
|
|
|
40,736 |
|
Other impairment (recovery) |
|
|
686 |
|
|
|
(345 |
) |
|
|
5,963 |
|
|
|
341 |
|
|
|
5,963 |
|
Tax effect of adjustments(4) |
|
|
(2,514 |
) |
|
|
(5,973 |
) |
|
|
6,962 |
|
|
|
(8,421 |
) |
|
|
9,103 |
|
Adjusted net loss |
|
$ |
(34,329 |
) |
|
$ |
(60,247 |
) |
|
$ |
(168,863 |
) |
|
$ |
(94,623 |
) |
|
$ |
(250,255 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
| (1) | Reflects net loss to Class A common stock and Class D common stock from the pro forma exchange of Class C common stock. |
|
| (2) |
loanDepot, Inc. is subject to federal, state and local income taxes. Adjustments to income tax benefit reflect the effective income tax rates below, and the pro forma assumption that loanDepot, Inc. owns |
|
|
Three Months Ended |
|
Six Months Ended |
|||||||||||
|
Jun 30,
|
|
Mar 31,
|
|
Jun 30,
|
|
Jun 30,
|
|
Jun 30,
|
||||||
Statutory |
|
21.00 |
% |
|
21.00 |
% |
|
21.00 |
% |
|
21.00 |
% |
|
21.00 |
% |
State and local income taxes (net of federal benefit) |
|
5.28 |
% |
|
6.28 |
% |
|
5.00 |
% |
|
5.78 |
% |
|
5.00 |
% |
Effective income tax rate |
|
26.28 |
% |
|
27.28 |
% |
|
26.00 |
% |
|
26.78 |
% |
|
26.00 |
% |
| (3) | Represents the change in the fair value of servicing rights attributable to changes in assumptions, net of hedging gains and losses. |
|
| (4) | Amounts represent the income tax effect using the aforementioned effective income tax rates, excluding certain discrete tax items. Reporting periods after June 30, 2022 include the income tax effect of excess tax benefits or deficiencies on vested RSUs. Prior periods were adjusted to conform to current presentation. |
Reconciliation of Adjusted Diluted Weighted Average Shares Outstanding to Diluted Weighted Average Shares Outstanding ($ in thousands except per share data) (Unaudited) |
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
Jun 30,
|
|
Mar 31,
|
|
Jun 30,
|
|
Jun 30,
|
|
Jun 30,
|
|||||||||||
Net loss attributable to loanDepot, Inc. |
|
$ |
(23,443 |
) |
|
$ |
(42,908 |
) |
|
$ |
(100,928 |
) |
|
$ |
(66,350 |
) |
|
$ |
(135,669 |
) |
Adjusted net loss |
|
|
(34,329 |
) |
|
|
(60,247 |
) |
|
|
(168,863 |
) |
|
|
(94,623 |
) |
|
|
(250,255 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Share Data: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted weighted average shares of Class A and Class D common stock outstanding |
|
|
173,908,030 |
|
|
|
170,809,818 |
|
|
|
153,822,380 |
|
|
|
172,358,924 |
|
|
|
146,415,135 |
|
Assumed pro forma conversion of weighted average Class C shares to Class A common stock |
|
|
148,597,745 |
|
|
|
149,210,417 |
|
|
|
165,281,304 |
|
|
|
149,535,576 |
|
|
|
173,245,208 |
|
Adjusted diluted weighted average shares outstanding |
|
|
322,505,775 |
|
|
|
320,020,235 |
|
|
|
319,103,684 |
|
|
|
321,894,500 |
|
|
|
319,660,343 |
|
Reconciliation of Net Income (Loss) to Adjusted EBITDA (LBITDA) ($ in thousands) (Unaudited) |
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
Jun 30,
|
|
Mar 31,
|
|
Jun 30,
|
|
Jun 30,
|
|
Jun 30,
|
|||||||||||
|
|
(Unaudited) |
|
(Unaudited) |
|
|
||||||||||||||
Net loss |
|
$ |
(49,759 |
) |
|
$ |
(91,721 |
) |
|
$ |
(223,822 |
) |
|
$ |
(141,480 |
) |
|
$ |
(315,141 |
) |
Interest expense - non-funding debt (1) |
|
|
43,026 |
|
|
|
43,090 |
|
|
|
33,140 |
|
|
|
86,116 |
|
|
|
47,533 |
|
Income tax benefit |
|
|
(8,556 |
) |
|
|
(14,862 |
) |
|
|
(28,196 |
) |
|
|
(23,418 |
) |
|
|
(39,823 |
) |
Depreciation and amortization |
|
|
10,721 |
|
|
|
10,026 |
|
|
|
11,323 |
|
|
|
20,747 |
|
|
|
21,867 |
|
Change in fair value of servicing rights, net of hedging gains and losses(2) |
|
|
3,876 |
|
|
|
18,289 |
|
|
|
(35,366 |
) |
|
|
22,165 |
|
|
|
(34,072 |
) |
Stock-based compensation expense |
|
|
5,754 |
|
|
|
5,926 |
|
|
|
4,712 |
|
|
|
11,679 |
|
|
|
7,021 |
|
Loss on disposal of fixed assets |
|
|
751 |
|
|
|
261 |
|
|
|
— |
|
|
|
1,012 |
|
|
|
— |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
40,736 |
|
|
|
— |
|
|
|
40,736 |
|
Other impairment (recovery) |
|
|
686 |
|
|
|
(345 |
) |
|
|
5,963 |
|
|
|
341 |
|
|
|
5,963 |
|
Adjusted EBITDA (LBITDA) |
|
$ |
6,499 |
|
|
$ |
(29,336 |
) |
|
$ |
(191,510 |
) |
|
$ |
(22,838 |
) |
|
$ |
(265,916 |
) |
| (1) | Represents other interest expense, which includes gain on extinguishment of debt and amortization of debt issuance costs, in the Company’s consolidated statements of operations. |
|
| (2) | Represents the change in the fair value of servicing rights attributable to changes in assumptions, net of hedging gains and losses. |
Forward-Looking Statements
This press release may contain "forward-looking statements," which reflect loanDepot's current views with respect to, among other things, its business strategies, including the Vision 2025 plan, our HELOC product, financial condition and liquidity, competitive position, industry and regulatory environment, potential growth opportunities, the effects of competition, operations and financial performance. You can identify these statements by the use of words such as "outlook," "potential," "continue," "may," "seek," "approximately," "predict," "believe," "expect," "plan," "intend," "estimate," “project,” or "anticipate" and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as "will," "should," "would" and "could." These forward-looking statements are based on current available operating, financial, economic and other information, and are not guarantees of future performance and are subject to risks, uncertainties and assumptions, including the risks in the "Risk Factors" section of loanDepot, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2022 and Quarterly Reports on Form 10-Q as well as any subsequent filings with the Securities and Exchange Commission, which are difficult to predict. Therefore, current plans, anticipated actions, financial results, as well as the anticipated development of the industry, may differ materially from what is expressed or forecasted in any forward-looking statement. loanDepot does not undertake any obligation to publicly update or revise any forward-looking statement to reflect future events or circumstances, except as required by applicable law.
About loanDepot
loanDepot (NYSE: LDI) is a digital commerce company committed to serving its customers throughout the home ownership journey. Since its launch in 2010, loanDepot has revolutionized the mortgage industry with a digital-first approach that makes it easier, faster and less stressful to purchase or refinance a home. Today, as one of the nation's largest non-bank retail mortgage lenders, loanDepot enables customers to achieve the American dream of homeownership through a broad suite of lending and real estate services that simplify one of life's most complex transactions. With headquarters in
LDI-IR
View source version on businesswire.com: https://www.businesswire.com/news/home/20230808066863/en/
Investor Relations Contact:
Gerhard Erdelji
Senior Vice President, Investor Relations
(949) 822-4074
gerdelji@loandepot.com
Media Contact:
Rebecca Anderson
Senior Vice President, Communications & Public Relations
(949) 822-4024
rebeccaanderson@loandepot.com
Source: loanDepot, Inc.
