loanDepot, Inc. Earnings Call: Mixed Sentiments and Growth

loanDepot, Inc. ((LDI)) has held its Q1 earnings call. Read on for the main highlights of the call.

loanDepot, Inc. Earnings Call Reveals Mixed Outlook

The recent earnings call from loanDepot, Inc. presented a mixed sentiment. While the company celebrated significant achievements in increased rate lock volume, gain on sale margin, and loan origination volume, it also faced challenges such as a net loss, decreased servicing revenue, and higher expenses.

Increased Pull-through Weighted Rate Lock Volume

The first quarter of the year saw loanDepot achieve a pull-through weighted rate lock volume of $5.4 billion, marking a 15% increase from the previous year’s volume of $4.7 billion. This growth is a positive indicator of the company’s ability to capture more business in a competitive market.

Higher Gain on Sale Margin

loanDepot reported a pull-through weighted gain on sale margin of 355 basis points for the first quarter, a significant improvement from the prior year’s 274 basis points. This increase highlights the company’s enhanced profitability from its loan sales.

Loan Origination Volume Growth

The company’s loan origination volume reached $5.2 billion for the quarter, representing a 14% increase from the previous year’s $4.6 billion. This growth underscores loanDepot’s successful efforts in expanding its lending operations.

Strong Multi-channel Strategy

loanDepot’s multi-channel strategy, which includes end market retail, joint venture channels, and consumer direct channels, has been instrumental in driving increased origination volume and positioning the company for future growth.

Adjusted Net Loss

Despite the positive growth metrics, loanDepot reported an adjusted net loss of $25 million in the first quarter, which, while an improvement from the $38 million loss in the first quarter of 2024, still indicates ongoing financial challenges.

Decrease in Servicing Revenue

The company experienced a decrease in servicing fee income, dropping from $124 million in the first quarter of 2024 to $104 million in the first quarter of 2025. This decline was primarily due to the impact of 2024 MSR bulk sales.

Higher Total Expenses

Total expenses for the first quarter of 2025 rose by $12 million, or 4%, from the prior year quarter. This increase was mainly attributed to higher volume-related commission, direct origination, and marketing expenses.

Forward-looking Guidance

Looking ahead, loanDepot provided guidance indicating a continued focus on growth. For the second quarter, the company anticipates a pull-through weighted lock volume between $5.5 billion and $8 billion, origination volume ranging from $5 billion to $7.5 billion, and a pull-through weighted gain on sale margin between 300 and 350 basis points. Total expenses are expected to rise due to increased volume-related costs, reflecting the company’s strategy to leverage growth-generating initiatives amidst market volatility.

In summary, loanDepot’s earnings call reflected a mixed outlook, with notable achievements in growth metrics counterbalanced by financial challenges such as net losses and decreased revenue streams. The company’s strategic initiatives and forward-looking guidance suggest a focus on leveraging growth opportunities while navigating market uncertainties.