Better Home and Finance (BETR) Q1 2025: Tin Man AI Drives 46% Revenue Growth, Unlocks Platform Scale
Better’s Q1 marked a pivotal platform inflection, with Tin Man AI fueling both top-line growth and operational leverage, while the company simultaneously retired $530 million in convertible debt to reset its capital structure. Rapid expansion of B2B and SaaS channels, alongside accelerating AI-driven cost reductions, signal a shift from DTC-centricity to platform enablement across the mortgage ecosystem. Execution on software partnerships and productivity gains will be decisive as BETR seeks to capture share and approach profitability in a volatile housing market.
Summary
- AI Platform Scale-Up: Tin Man AI is powering both internal and partner loan origination, broadening BETR’s addressable market.
- Cost Structure Reset: Debt retirement and AI-driven expense reductions are improving unit economics and strategic flexibility.
- Channel Diversification Momentum: SaaS and platform distribution channels are gaining traction, setting up multi-pronged growth beyond DTC.
Performance Analysis
BETR delivered a 46% YoY revenue increase as funded loan volume rose 31% to $860 million, with growth driven by both direct-to-consumer (DTC) and the Tin Man AI platform. The business mix remains heavily weighted toward DTC (71% of volume), but early results from the NEO channel and B2B partnerships indicate a meaningful shift toward platform-based origination. Notably, home equity products and refinance loans were standout growth drivers, with HELOC and home equity up 207% and refinance up 64%.
Operating leverage improved as AI automation drove down origination costs and enhanced per-loan profitability, particularly in the DTC channel. The company’s mortgage segment was breakeven in March, a material improvement after sustained losses, reflecting tangible benefits from AI deployment. Despite a 7% sequential decline in funded volume due to seasonality, revenue grew 30% quarter-over-quarter, aided by higher gain-on-sale margins and new channel contributions from NEO. Adjusted EBITDA loss narrowed on a monthly basis, and total expenses (excluding one-offs) declined 11% sequentially.
- AI-Driven Margin Expansion: AI underwriting and automation have reduced origination costs to less than $1,000 per loan, with a goal to reach $1,500 all-in—six times lower than industry averages.
- Channel Mix Shift: Tin Man AI platform and B2B channels now represent nearly 30% of funded volume, up from negligible levels last year.
- Debt Overhang Removed: The retirement of $530 million in convertible notes created $200 million in equity value, unlocking strategic optionality and improving counterparty perception.
BETR’s platform shift is translating into both revenue growth and improving unit economics, but scale and sustained execution will be needed to reach profitability amid a still-challenging mortgage market.
Executive Commentary
"We are truly the first scaled-up AI platform built to empower consumers and now also empowering local mortgage brokers and banks with the technology to serve their customers."
Vishal Garg, Founder and Chief Executive Officer
"Despite the sequential quarter-over-quarter decline in volume, revenue is up approximately 30%. Revenue grew in the quarter despite the expected decline in volume due to volume from NEO coming on board with higher gain on sale margins, our continued push towards increased pricing, and a tailwind from the loan loss reserve."
Kevin Ryan, Chief Financial Officer
Strategic Positioning
1. Tin Man AI Platform as Core Growth Engine
BETR’s Tin Man AI platform, an end-to-end mortgage origination and underwriting system, is now central to the company’s growth thesis. The platform underpins not only BETR’s own DTC business but is being rapidly adopted by partner loan officers (NEO) and now banks via SaaS licensing. This enables BETR to address a much larger portion of the $2.1 trillion mortgage TAM, while leveraging AI to compress costs and drive productivity for both internal and partner users.
2. Channel Diversification and SaaS Model Expansion
Distribution is diversifying beyond DTC, as Tin Man AI is now offered as both a platform for mortgage brokers and as a SaaS product for banks. The NEO rollout provides a proof point, with 115 loan officers onboarded and monthly funded volumes scaling from $2 million in January to $119 million in March. The bank SaaS deal, with $4 million+ in annualized revenue potential from a single small bank, validates the per-funded-loan monetization model and opens a path to recurring, higher-margin software revenue.
3. AI-Driven Cost Advantage and Operating Leverage
AI automation is enabling a structural cost advantage. BETR’s goal is to reduce total loan production cost to $1,500—dramatically below the $7,500 industry average. Betsy, the AI loan assistant, and Tin Man’s AI underwriter have materially improved loan officer productivity and reduced manual labor, with the company targeting 10 loans per loan officer per month. This cost structure is key to both DTC profitability and the attractiveness of Tin Man as a platform for partners.
4. Capital Structure Reset and Strategic Flexibility
The retirement of $530 million in convertible debt and creation of $200 million in equity value has removed a major overhang, improving BETR’s standing with potential partners and lenders. The company now operates with $155 million in new debt, maturing in 2028 and non-cash pay until profitability, providing runway to scale the platform and pursue B2B opportunities without near-term refinancing risk.
5. Product Breadth and Ecosystem Penetration
Tin Man AI’s product breadth has expanded, now supporting complex loan types (multi-borrower, construction, non-QM) previously out of reach for BETR’s DTC channel. This not only improves conversion rates but also makes the platform relevant for a wider array of mortgage originators and banks, increasing the total addressable market for both platform and software offerings.
Key Considerations
Q1 2025 reflects a decisive pivot from single-channel origination to platform-centric growth, but execution risk remains as BETR seeks to scale new channels and deliver on the promise of AI-driven efficiency.
Key Considerations:
- B2B Pipeline Scale: Bank and fintech interest in Tin Man AI is high, but sustained onboarding and realized volume will be critical to validating the SaaS model’s scalability.
- Unit Economics Trajectory: Rapid cost reductions are visible, but continued margin improvement depends on maintaining pricing discipline and further automating manual workflows.
- NEO Channel Ramp: NEO’s initial success is promising, yet tripling or quadrupling the channel will test BETR’s onboarding, training, and platform support capabilities.
- Platform Differentiation: Tin Man’s ability to handle complex loan types and outperform legacy systems (e.g., Encompass) is a unique selling point, but incumbents may respond with their own AI investments.
Risks
Execution risk is elevated as BETR juggles rapid channel expansion, AI-driven transformation, and the integration of new B2B partners. Macro headwinds in housing and mortgage demand persist, and the loss of the Ally business represents a $1 billion volume headwind. Competitive response from legacy software vendors and mortgage originators could intensify as BETR’s platform gains visibility. Regulatory and compliance complexity may also increase as the platform scales to more partners and loan types.
Forward Outlook
For Q2 2025, BETR guided to:
- Higher funded loan volume versus Q1, with Tin Man AI platform (NEO) pacing ahead of plan and expected to exceed $450 million in originations, up over 250% sequentially.
- Core expenses (including compensation and benefits) to decline relative to Q1, supporting further adjusted EBITDA improvement.
For full-year 2025, management expects:
- Year-over-year funded loan volume growth, with NEO and SaaS channels offsetting macro and Ally headwinds.
- Adjusted EBITDA losses to improve versus 2024, driven by efficiency gains and corporate cost reductions.
Management emphasized the midterm path to profitability, the ramp of Tin Man AI partnerships, and the exit of non-core UK assets to focus on scalable, AI-driven mortgage origination.
- Q2 and Q3 expected to benefit from seasonality and NEO channel ramp.
- Further bank and fintech SaaS deals targeted for the coming quarters.
Takeaways
BETR’s Q1 signals a business model evolution from digital mortgage originator to AI-powered mortgage platform provider, with early proof points in both channel expansion and unit economics improvement.
- AI Platform Leverage: Tin Man AI is driving cost reduction, productivity, and new revenue streams, but full realization of platform economics hinges on successful partner onboarding and sustained volume growth.
- Capital Structure Reset: Debt retirement removes a major overhang, increasing strategic flexibility and partner confidence as BETR pursues B2B scale.
- Execution Watchpoint: Investors should monitor the pace of SaaS and platform adoption, NEO channel productivity, and continued cost discipline as key markers of future profitability.
Conclusion
BETR is at an inflection point, leveraging Tin Man AI to transition from DTC mortgage origination to a platform and SaaS model that targets a much larger share of the mortgage ecosystem. Sustained execution on partner onboarding, cost efficiency, and product breadth will be critical as the company seeks to scale, differentiate, and approach profitability in a volatile market.
Industry Read-Through
BETR’s rapid Tin Man AI rollout and bank SaaS deal highlight a new wave of technology-driven disruption in mortgage origination. The move from fragmented legacy stacks to unified, AI-powered platforms has the potential to compress costs, expand product coverage, and threaten incumbent software vendors (e.g., Encompass). Banks and mortgage originators facing margin pressure and operational complexity may increasingly look to external AI platforms, accelerating industry consolidation around a handful of scalable tech providers. The per-funded-loan SaaS pricing model could reshape software monetization across financial services, while the speed of AI adoption will be a key competitive differentiator in the quarters ahead.