loanDepot's Q3 2025: Contradictions Emerge on Market Share Growth, Capital Structure, and Loan Officer Investments

Date of Call: November 6, 2025

Financials Results

• Revenue: $325M adjusted total revenue, compared to $292M in Q2 2025

Guidance:

• Q4 pull-through weighted lock volume expected to be $6.0B–$8.0B.
• Q4 origination volume expected to be $6.5B–$8.5B.
• Pull-through weighted gain on sale margin expected ~300–325 bps.
• Total expenses expected to increase in Q4, primarily from higher volume-related expenses as funded volume rises.
• Company remains focused on profitability, cost discipline and maintaining ample cash and a strong balance sheet.

Business Commentary:

* Business Transformation and Leadership Changes: - LoanDepot initiated a business transformation that included naming new leadership across all origination channels and technology functions. - New appointments include Rick Calle as Chief Strategy Officer, Adam Saab to lead the servicing business, and Nikul Patel as Chief Growth Officer, aiming to capitalize on AI disruption and accelerate momentum.

• Market Share Strategy and Execution:
• During the 5 months since Anthony Hsieh returned as CEO, significant changes were made to align with the objective of growing market share profitably.

• The new leadership team is focused on executing plans for profitable market share growth amidst a highly fragmented market, leveraging diversified business models and differentiated assets.

• Financial Performance and Outlook:

• The third quarter reflected higher revenue and contained expense growth from positive operating leverage, with an adjusted net loss of $3 million.
• Pull-through weighted rate lock volume increased by 10% to $7 billion, and a guidance range of $5.25 billion to $7.25 billion for the fourth quarter is expected.

• Servicing Revenue and Portfolio Growth:
• Servicing fee income increased from $108 million in Q2 to $112 million in Q3, primarily due to an increase in unpaid principal balance and seasonal increases in custodial balances.

• The strategy of hedging the servicing portfolio protects against volatility in earnings and liquidity, ensuring stability in financial performance.

• Capital Structure and Funding:

• LoanDepot is focused on reviewing its capital structure in the coming 12-18 months, which is not expected to impact day-to-day operations.
• The company is confident in its ability to fund growth opportunities, given supportive lender groups and opportunities to upsize warehouse lines if needed.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Adjusted net loss narrowed to $3M from $16M prior quarter; adjusted total revenue rose to $325M from $292M. Management repeatedly emphasized execution and profitable market-share growth: "We are positioned to profitably grow volume and market share" and "The pieces are in place...executing a bold strategy."

Q&A:

• Question from Douglas Harter (UBS): I was hoping you could talk about your outlook for the ability to fund the growth with capital given the upcoming debt maturities and kind of the upfront capital that some growth might take and just how you're thinking about that in the current environment?
  Response: Confident in funding growth—warehouse lenders are supportive and upsizeable for daily funding; will reassess capital structure over the next 12–18 months but no near-term impact to operations.

• Question from Douglas Harter (UBS): And I guess how do you think about the size of the MSR servicing book in that context? Is that something that you would look to grow over time -- regrow over time?
  Response: Yes—growing MSRs is strategic due to strong recapture economics, but it pressures cash; plan to reduce production costs while waiting for market volume to return.

• Question from Eric Hagen (BTIG): Maybe following up on that last point because there's all these moving pieces. Have you guys sensitized the portfolio to what the minimum level of originations might be in order to return to profitability?
  Response: Profitability hinges on margins and volumes; modest recoveries in both drive materially improved results and the company believes it's well positioned for that return.

• Question from Eric Hagen (BTIG): Yes. Okay. That's helpful. When the stock got up to $4.50 back in September, did you guys consider any sort of capital raising to help maybe stabilize the capital structure a little bit more? And then if the stock got back up to that level in the future, I mean, are you prepared to put an ATM in place? Or how would you think about potentially raising capital in order to, again, stabilize the capital structure a little bit more?
  Response: They evaluated raising capital when the stock appreciated and are actively considering options—debt refinancings and equity (ATM/follow-on)—but no specific actions to announce now.

Contradiction Point 1

Outlook for Market Share Growth

The responses from 2025Q3 and 2025Q2 differ in their optimism about the company's ability to grow market share profitably, which is crucial for future financial performance and investor expectations.

How do you plan to fund growth with upcoming debt maturities and upfront capital needs in the current environment? - Douglas Harter (UBS Investment Bank, Research Division)

2025Q3: Once we return to standard operations, we'll grow market share profitably. loanDepot started with $70 billion capital and grew 38% annually for 11 years. The current market is highly fragmented, offering plenty of room for growth. - Anthony Hsieh(CEO)

What steps are being taken to drive profitable market share growth? What specific actions are being prioritized such as adding headcount, marketing dollars, or other investments? - Douglas Harter (UBS)

2025Q2: Achieving scale is crucial, as the company's market share has shrunk over the past years, and variable costs need to kick in. - Anthony Hsieh(CEO)

Contradiction Point 2

Capital Structure and Funding Growth

The responses from 2025Q3 and 2025Q2 differ in their assessment of the company's ability to fund growth opportunities through capital, which is critical for the company's financial stability and future expansion.

How do you plan to fund growth amid upcoming debt maturities and upfront capital needs in the current environment? - Douglas Harter (UBS Investment Bank, Research Division)

2025Q3: From a capital structure perspective, we'll need to look at it in the next 12-18 months, but it won't impact day-to-day operations. - David Hayes(CFO)

How is the company balancing scaling and profitable growth with existing debt and the need to maintain equity? - Douglas Harter (UBS)

2025Q2: Because of the trends that we're seeing in the business, we don't believe that we have the luxury of sitting back and just kind of waiting for things to play out and hope that the capital markets come back from us. - Anthony Hsieh(CEO)

Contradiction Point 3

Funding Growth and Capital Structure

It involves the company's approaches to funding growth and addressing capital structure issues, which are critical for financial sustainability and investor confidence.

How do you plan to fund growth with capital given upcoming debt maturities and upfront capital requirements for growth in the current environment? - Douglas Harter (UBS Investment Bank, Research Division)

2025Q3: We feel good about funding growth opportunities. We've largely worked through our renewal season for warehouse lines and have a supportive lender group. Opportunities exist to upsize lines if needed. - David Hayes(CFO)

With maturing warehouse facilities over the next few years and significant Whitney Place notes approaching, how are you addressing liquidity concerns? - Eric Hagen (BTIG, LLC, Research Division)

2025Q1: We have $2.7 billion of cash on the balance sheet and $3.8 billion of availability under our warehouse lines. - David Hayes(CFO)

Contradiction Point 4

Investment in Loan Officers (LOS) and Operating Leverage

It pertains to the company's strategy regarding investments in loan officers and the expected operating leverage, which affects cost efficiency and profitability.

What minimum origination level is needed to return to profitability? - Eric Hagen (BTIG, LLC, Research Division)

2025Q3: We're not expecting our production costs to go up. In fact, we feel we can drive it down, which gives us more opportunity to maybe increase our MSRs, which adds to our overall revenue base. - Anthony Hsieh(CEO)

Are there any updates on initiatives such as geographic expansion, joint ventures, cost savings, or other areas? - Unidentified Analyst (Raymond James)

2024Q4: We have invested strategically in our LO and operations teams, expecting improved LO productivity as refinance markets materialize, leading to better pull-through to revenue and profitability. - Dave Hayes(CFO)