UWM Holdings Corporation Q2 FY2025 earnings call

• UWM's team of over 9,000 delivers best products/services to brokers, benefiting homeowners. - Dominates purchase market, leverages AI technology like BOLT (AI-based underwriting system), ChatUWM, LEO (loan estimate optimizer), and Mia (AI loan officer assistant). - 97% of consumers working with mortgage brokers give 5-star reviews. - Broker share of direct lending has doubled since 2016 to ~30%. - Closed $39.7 billion of production, $12.4 billion refi, $27.3 billion purchase; gain on sale margin 113 basis points; net income $314.5 million; MSR portfolio $211.2 billion UPB.

UWM closed $39.7 billion of production in Q2 2025, its best quarter since 2021 and almost 20% higher than last year's second quarter. Refi volume was $12.4 billion, double the previous year's second quarter and representing about 11% of the industry volume. Purchase volume was $27.3 billion, the third best purchase quarter of all time, tracking to over $100 billion for the year. Gain on sale margin was 113 basis points, up from the first quarter. Net income was $314.5 million. The MSR portfolio was $211.2 billion in UPB with a WAC of 5.51%. Revenue contribution: Production volume was the main segment, with refi and purchase volumes contributing to overall performance.

• Expected third quarter production to be around $33 billion to $40 billion. - Margin guidance revised to 100 to 125 basis points, up from previous levels. - Confident in UWM's position to perform well in the third, fourth quarters, and into 2026.

Q: Does the higher gain on sale margins reflect market trends or prioritizing higher margins?

A: Matt Ishbia states they understand the market and feel confident in the guidance as they have a view on the market and what clients need, with margins sometimes differing from others.

Q: Costs related to servicing in-house?

A: Matt Ishbia says some costs will come out in a positive way in 2026, with servicing to be up internally by early 2026 first quarter and costs to be seen throughout the year and beyond.

Q: Speed to close loans and margin?

A: Matt Ishbia says speed to close loans will continue to get faster with AI investments, and it creates a competitive advantage, giving opportunity for more business and margin.

Q: MSR selling and market capacity?

A: Matt Ishbia says the market is robust, with new buyers coming in, and they look at MSR sales opportunistically.

Q: Noninterest expense growth trajectory?

A: Matt Ishbia thinks noninterest expenses will moderate, not going up significantly, with investments in scalability, AI, and servicing being considered.

Q: 10b5 plan?

A: Matt Ishbia says the 10b5 is a long-term play to provide float for investors, selling at a discount for the long term.

Q: Broker and consumer reaction to Mia?

A: Matt Ishbia says broker reaction has been great, with Mia making many calls, setting up appointments, and being a success, though market demand hasn't needed massive call volume yet.

Q: Derivative gain in the quarter?

A: Matt Ishbia says it was opportunistic, taking advantage of market opportunities when the 10-year dropped significantly.

Q: Originations guidance decline?

A: Matt Ishbia says it's based on current market conditions with rates impacting the purchase market, but feels confident in the $33 billion to $40 billion guidance.

Q: Hedge strategy and MSR book?

A: Matt Ishbia says they are opportunistic with everything, including hedging, analyzing market aspects to make decisions.

Q: Biggest driver of margin guidance increase?

A: Matt Ishbia says it's due to understanding various market aspects like volume, interest rates, bond trading, and feeling confident in the new margin range for the wholesale channel