0001628280-26-017692
SEC filingFinance Of America Companies Inc. reported net income of $103.0M for FY 2025, a significant increase from $35.7M in FY 2024. Total revenues grew to $497.4M from $394.4M, driven by a $46.2M increase in net origination gains from higher reverse mortgage loan volumes and a $91.0M increase in fair value changes from market inputs or model assumptions. Net income from continuing operations attributable to controlling interest was $48.2M, up from $17.5M. The company ended the year with total assets of $30.73B and total equity of $395.6M. Operating cash flow was negative at -$429.7M, but investing activities provided $854.9M in cash, primarily from loan portfolio activities. The company's strategic focus on home equity-based financing solutions for seniors and new partnerships positions it for continued growth in the retirement solutions market.
Finance Of America Companies Inc. reported strong financial results for FY 2025, with net income increasing to $103.0M from $35.7M in FY 2024. Total revenues grew 26% to $497.4M, driven by higher reverse mortgage loan origination volumes and favorable fair value adjustments. Net income from continuing operations before income taxes was $113.1M, up from $42.8M. The company's basic earnings per share from continuing operations was $5.04, compared to $1.78 in the prior year. Total expenses increased to $369.5M from $343.7M, primarily due to higher marketing and advertising expenses and loan portfolio related expenses.
Revenue growth was driven by two main factors: a $46.2M increase in net origination gains to $226.1M, resulting from higher reverse mortgage loan origination volumes of $2.38B (up 24% from $1.92B), and a $91.0M increase in fair value changes from market inputs or model assumptions to $147.0M. Net portfolio interest income decreased slightly to $260.8M from $267.9M due to a higher cost of funds. The company operates through two reportable segments: Retirement Solutions (revenue of $253.0M, up 23%) and Portfolio Management (revenue of $302.5M, up 76%).
The company's operating margin (net income from continuing operations before income taxes divided by total revenues) was 22.7% for FY 2025. Profitability improved significantly due to the revenue growth outpacing expense increases. Total expenses grew 7.5% to $369.5M, with the largest increases in marketing and advertising expenses (up $9.2M to $48.6M) and loan production and portfolio related expenses (up $18.1M to $54.3M). These were partially offset by decreases in general and administrative expenses (down $8.4M to $51.1M) due to cost-cutting measures.
Operating activities used $429.7M in cash, primarily due to changes in fair value of loans and related obligations. Investing activities provided $854.9M in cash, mainly from proceeds/payments on loans held for investment. Financing activities used $402.5M in cash, with significant activity in HMBS related obligations and nonrecourse debt. The company ended the period with $89.5M in cash and cash equivalents and $235.1M in restricted cash. Total assets were $30.73B, with loans held for investment comprising the majority. Total liabilities were $30.34B, primarily HMBS related obligations ($18.91B) and nonrecourse debt ($9.74B). Total equity was $395.6M.
The company's strategy focuses on growing its core retirement solutions business to capitalize on the U.S. home equity-based lending market opportunity. Management believes demographic trends support continued growth, with 11,400 people per day turning 65 in the U.S. from 2024 through 2026. The company is expanding through strategic partnerships, including with Better for traditional home equity loans and Blue Owl for product development. New initiatives include digital capabilities like the 'Joy' AI-powered chatbot and a digital pre-qualification tool. The company faces risks from interest rate fluctuations, housing market trends, and regulatory changes that could impact loan origination volume and fair values.