Finance Of America Companies Inc ((FOA)) has held its Q4 earnings call. Read on for the main highlights of the call.
Finance of America Companies Inc. recently held its earnings call, revealing a generally positive sentiment despite some challenges. The company showcased substantial growth in loan funding and financial performance for 2024, alongside successful cost efficiency improvements and a record securitization. However, it also faced a Q4 net loss and underperformance in market penetration for certain products. Overall, the positive aspects such as revenue growth and cost efficiency improvements outweighed the challenges faced.
Significant Loan Funding Growth
Finance of America reported a remarkable increase in loan funding, with over $1.9 billion funded in 2024, marking a 19% year-over-year increase. Looking ahead, the company projects full-year origination volumes for 2025 to range between $2.4 billion and $2.7 billion, representing a 26% to 42% increase from 2024.
Strong Financial Performance
The company achieved a positive GAAP net income of $40 million, an adjusted net income of $14 million, and an adjusted EBITDA of $60 million in 2024. This performance marks a $200 million increase in GAAP net income and nearly $100 million increase in adjusted net income from the previous year.
Revenue Margin Expansion
Finance of America experienced a 16% increase in revenue margins, rising from 9.2% in 2023 to 10.7% in 2024, driven by a higher margin product mix and improved execution of proprietary products.
Cost Efficiency Improvements
The company achieved $48 million in cost reductions through technology-driven process automation and lower corporate overhead, including workforce optimization and real estate consolidations.
Record Securitization
In February 2025, Finance of America completed its largest securitization from non-agency proprietary products, enhancing liquidity and supporting continued growth.
Q4 Net Loss
Despite a strong overall performance in 2024, the company reported a net loss of $143 million, or $5.95 per share, in the fourth quarter.
Volatility in Interest Rates
The company faced pressure on revenue margins in Q4 2024 due to volatile interest rates, which affected the net gain on originations line.
Underperformance in Market Penetration
While the HomeSafe Second product saw 77% growth between the first and second half of 2024, market penetration remains low, accounting for only one-tenth of 1% of the total lending to the senior demographic.
Forward-Looking Guidance
Looking forward to 2025, Finance of America anticipates origination volumes between $2.4 billion and $2.7 billion, a projected 26% to 42% increase from 2024. The company expects Q1 origination volume to be between $525 million and $550 million, with full-year adjusted net income projected between $2.60 to $3 per share.
In summary, Finance of America Companies Inc.’s earnings call highlighted a strong performance in 2024, with significant growth in loan funding and financial metrics. Despite facing challenges such as a Q4 net loss and low market penetration in certain areas, the company’s positive trajectory and strategic improvements suggest a promising outlook for 2025.