• Overall Production: $139.4 billion, a 29% increase year over year.
• Net Income: $329.4 million for the full year 2024.
• Gain on Sale Margin: 110 basis points, up from 92 basis points last year.
• Fourth Quarter Production: $38.7 billion.
• Fourth Quarter Net Income: $40.6 million.
• Adjusted EBITDA: $460 million for the full year 2024; $118.2 million for Q4.
• Total Equity: Approximately $2.1 billion at year-end.
• Cash: Just over $500 million at year-end.
• Total Accessible Liquidity: Approximately $2.5 billion at year-end.
• MSR Portfolio Fair Value: Approximately $4 billion.
• 2025 Q1 Guidance: Expected production of $28 billion to $35 billion; gain on margin between 90 basis points and 115 basis points.

• Warning! GuruFocus has detected 4 Warning Signs with UWMC.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• UWM Holdings Corp (NYSE:UWMC) achieved a 29% year-over-year growth in production, reaching $139 billion.
• The company retained its position as the largest mortgage company in the US for the third consecutive year.
• UWM Holdings Corp (NYSE:UWMC) tripled its refinance business in 2024 compared to 2023, despite a challenging interest rate environment.
• The broker channel's share of the market increased significantly, with over 16,000 loan officers joining, indicating strong momentum.
• The company maintained strong liquidity and capital positions, with $2.5 billion of total accessible liquidity and a $4 billion MSR portfolio.

Negative Points

• Operating expenses were higher than expected, attributed to ongoing investments in business growth.
• The mortgage market faced one of its toughest years, with 2024 being the lowest home sales year since 1995.
• There is uncertainty regarding the impact of interest rate changes on the company's future performance.
• The company faces increased competition in the broker channel, although it maintains a strong position.
• The interplay between origination and servicing earnings could be affected by potential interest rate fluctuations.

Q & A Highlights

Q: Operating expenses were higher than expected this quarter. Were there any one-time factors, and what should we expect going forward? A: Mat Ishbia, CEO: The higher expenses are due to ongoing investments in our business to dominate the market. These are not one-time expenses but strategic investments to prepare for potential growth. We are ready to double our business without significantly increasing fixed expenses, focusing on long-term gains rather than short-term cost-cutting.

Q: You mentioned tripling your refinance business in 2024. What initiatives are driving this growth, and what is the outlook for 2025? A: Mat Ishbia, CEO: We are prepared to double our business, having tripled our refinance share while increasing purchase business. The refinance market has significant potential, with trillions in loans that could benefit from a rate drop. We expect 2025 to be a strong year for both purchase and refinance markets.

Q: How do you measure the success of incentives offered to brokers, especially in varying interest rate environments? A: Mat Ishbia, CEO: Success is measured by broker retention, the percentage of business they conduct with UWM, and their engagement with our products and services. We focus on training and supporting brokers to grow their business, which in turn drives more business to UWM.

Q: Can you discuss the expected purchase mix for 2025 and how interest rates might affect this? A: Mat Ishbia, CEO: The purchase mix will depend on interest rates. We aim for $100 billion in purchase volume, but if rates rise, refinance volume could decrease. We are prepared for a wide range of scenarios, with the ability to handle significant increases in both purchase and refinance volumes.

Q: How do you manage servicing UPB levels relative to origination trends? A: Mat Ishbia, CEO: We closely monitor the servicing asset and decide whether to sell or retain based on market conditions. We continuously originate at high levels, allowing us to replenish our servicing portfolio regularly. This flexibility helps us balance cash flow and asset management.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.