UWM Holdings Corp Q1 FY2025 earnings call

• Invested in technology to widen the gap with competition. - Decided to bring servicing in-house leveraging technology and AI to be the most efficient servicer, expecting cost savings of $40-$100 million annually. - Operational metrics: Submission to close was 12.7 days, improved from 13.9 days in Q1 2024 despite 20% more business; net promoter score was 87.3, reflecting industry-leading service levels. - Continued investment in people, processes, and technology to prepare for growth, with costs aligned to Q4 2024 for continued growth.

In the first quarter of 2025, UWM closed $32.4 billion of production, a 17% year-over-year growth. Revenue was $613 million, with a net loss of $247 million inclusive of a $388 million reduction in the fair value of the MSR portfolio. Adjusted EBIT was $58 million. Purchase volume exceeded $20 billion for eight consecutive quarters. Refi volume doubled year over year from $5.5 billion to $10.6 billion. The broker channel share of the industry increased from about 19.7% in 2022 to almost 28% in 2025, the highest since 2008.

• Expect Q2 2025 production to be between $38 billion and $45 billion, aiming to exceed $40 billion. - Gain margin expected to be between 90 basis points and 115 basis points in the second quarter.

Q: On moving servicing in-house, what's the timeline and one-time costs?

A: Expect to start boarding loans in early 2026 and have it all in-house by end of next year. No huge one-time expenses.

Q: When might ARMS make a comeback?

A: ARMS may become more exciting as rates rise, but not expected to be a major part of business currently.

Q: Impact of GST reform privatization?

A: Leaders in mortgage market are making right decisions, UWM will win regardless.

Q: What's embedded in Q2 outlook?

A: Brokers channel growth, investments working, technology to be rolled out in Q2.

Q: View on M&A and competition?

A: Prefer build over buy, focused on long-term business.

Q: Impact of tech on expenses?

A: Technology investments will lead to cost savings and revenue growth, expenses up but due to investments.

Q: Leverage range?

A: Ratios in great position, focus on domination rather than specific leverage numbers