How did FOA's Q3 earnings shock the market?

Finance of America Companies (NYSE: FOA) surprised the market with robust Q3 2024 earnings, significantly exceeding expectations in both net income and revenue, driven by strong loan funding and financial performance.

1. **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. This substantial growth in loan funding contributed significantly to the company's financial performance.
2. **Revenue Margin Expansion**: The company experienced a 16% increase in revenue margins, rising from 9.2% in 2023 to 10.7% in 2024. This improvement was driven by a higher margin product mix and improved execution of proprietary products. Revenue exceeded analyst estimates significantly, adding to the surprise.
3. **Cost Efficiency Improvements**: Finance of America achieved $48 million in cost reductions through technology-driven process automation and lower corporate overhead. These cost efficiency improvements enhanced profitability and contributed to the positive earnings shock.
4. **Record Securitization**: In February 2025, Finance of America completed its largest securitization from non-agency proprietary products, enhancing liquidity and supporting continued growth. This strategic move further bolstered the company's financial position and surprised the market with its proactive approach to capital markets.

Overall, Finance of America's Q3 2024 earnings showcased strong growth in loan funding, revenue margin expansion, cost efficiency improvements, and record securitization, which collectively contributed to the earnings shock and exceeded market expectations.