[Management View]
loanDepot reported a 15% increase in pull-through weighted rate lock volume to $5.4 billion and a 20% increase in adjusted revenue to $278 million, driven by growth initiatives and a higher gain on sale margin. The company is undergoing a CEO transition, with Frank Martell stepping down and Anthony Shea returning as interim CEO in June. The focus remains on leveraging a multichannel origination strategy and technology platform to capture profitable market share.

[Outlook]
Guidance for Q2 2025 projects pull-through weighted lock volume between $5.5 billion and $8 billion, and a gain on sale margin between 300 and 350 basis points. The company aims to expand originations and drive growth through its multichannel sales model and proprietary technology.

[Financial Performance]
The adjusted net loss improved to $25 million from $38 million in Q1 2024, primarily due to higher lock volume and gain on sale margin. Pull-through weighted rate lock volume increased by 15% YoY, and the gain on sale margin exceeded expectations at 355 basis points. Loan origination volume rose by 14% YoY to $5.2 billion.

[Q&A Highlights]
Question 1: You had a wider gain on sale margin this quarter, and you mentioned how home equity linked products helped you to increase that gain on sale. Can you maybe just talk a little bit about what the outlook is for the home equity business? Like, what is that market looking like now? Is it more attractive than it was perhaps a few months ago?

Answer: The second mortgage product serves as a hedge to the interest rate environment. As rates remain elevated, we are scaling this business by increasing marketing and exploring cross-sell opportunities with our first mortgage leads and servicing portfolio. If rates decrease, first mortgage cash-out will dominate over the home equity market. Currently, there is strong demand due to record home equity levels and low loan-to-value ratios, making it an optimal time for consumers to leverage their cash flow.

[Sentiment Analysis]
The tone of the management was optimistic, focusing on strategic growth and leveraging unique assets. Analysts showed interest in the home equity market's potential, reflecting a positive outlook on the company's strategic direction.

[Quarterly Comparison]
| Metric | Q1 2025 | Q1 2024 |
|--------------------------------|---------|---------|
| Pull-Through Weighted Rate Lock Volume | $5.4B | $4.7B |
| Adjusted Revenue | $278M | $231M |
| Gain on Sale Margin | 355 bps | 274 bps |
| Loan Origination Volume | $5.2B | $4.6B |
| Servicing Fee Income | $104M | $124M |

[Risks and Concerns]
The primary risk involves potential market volatility and interest rate changes, which could impact the gain on sale margin and origination volumes. The leadership transition may also pose challenges in maintaining strategic continuity.

[Final Takeaway]
loanDepot's Q1 2025 results reflect strong growth in key metrics, driven by strategic initiatives and a focus on leveraging its multichannel origination strategy. The leadership transition, with Anthony Shea returning as interim CEO, is expected to maintain strategic continuity and drive future growth. The company is well-positioned to capitalize on market opportunities, particularly in the home equity sector, as it navigates potential interest rate fluctuations and market volatility.