EX-99.1 2 a2023q3formearningsreleasea.htm EX-99.1
loanDepot announces third quarter 2023 financial results
Continues focused execution of Vision 2025
Narrows net loss for third consecutive quarter and maintains strong liquidity position
Expands productivity program, expected to yield additional $120 million in run-rate benefits
•Revenue decreased $6 million or 2% to $266 million from second quarter 2023, primarily driven by lower pull through weighted lock volume partially offset by higher pull through weighted gain on sale margin.
•Total expenses decreased $25 million or 8% to $305 million from second quarter 2023, driven by cost reductions across almost all expense categories.
•Expands Vision 2025 productivity program targeting $120 million of annualized cost reductions, including $100 million of non-volume related expenses.
•Quarterly net loss narrowed by $15 million or 31% to $34 million from the second quarter of 2023.
•Adjusted net loss declined by $7 million or 22% to $27 million from the second quarter of 2023.
•Company continues to maintain strong liquidity profile; cash balance of $717 million compared to $719 million at end of second quarter 2023.
IRVINE, Calif., November 7, 2023 - loanDepot, Inc. (NYSE: LDI), (together with its subsidiaries, “loanDepot” or the “Company”), a leading provider of home lending solutions that enable customers to achieve the dream of home ownership, today announced results for the third quarter ended September 30, 2023.
“loanDepot continues to make significant progress against the strategic imperatives laid out in our Vision 2025 plan,” said President and Chief Executive Officer Frank Martell. “We delivered our third successive quarter of significantly lower operating losses driven by margin expansion and the continued benefits of cost reduction, productivity, and operating leverage. Importantly, we also benefited from contributions from our servicing platform, builder partnerships, and home equity lending.
“We continue to aggressively reset our cost structure to address the impact of generationally low unit volumes as we maintain our focused execution of Vision 2025, including capturing opportunities to expand purpose-driven lending in support of the increasingly diverse communities of first-time homebuyers. We believe our proven diversified channel strategy, highly talented team, operating scale, and ongoing cost productivity program will position us well to capitalize on the eventual recovery of the housing market,” Martell added.
“Our focus on cost reduction, margin expansion and effective capital management have been the key drivers underpinning our ability to maintain a strong liquidity position in the face of the ongoing market contraction. Importantly, we ended the third quarter with cash balances essentially unchanged from the prior quarter end,” said Chief Financial Officer David Hayes. “We remain laser focused on maintaining significant levels of liquidity as we work toward run-rate profitability.”
1

Third Quarter Highlights:
Financial Summary

| Three Months Ended |  | Nine Months Ended
($ in thousands except per share data) (Unaudited) | Sep 30, 2023 |  | Jun 30, 2023 |  | Sep 30, 2022 |  | Sep 30, 2023 |  | Sep 30, 2022
Rate lock volume | $ | 8,295,935 |  |  | $ | 8,973,666 |  |  | $ | 12,032,026 |  |  | $ | 25,738,036 |  |  | $ | 61,620,241 |
Pull through weighted lock volume(1) | 5,685,209 |  |  | 6,057,179 |  |  | 8,755,082 |  |  | 17,067,876 |  |  | 40,968,021 |
Loan origination volume | 6,083,143 |  |  | 6,273,543 |  |  | 9,849,927 |  |  | 17,301,023 |  |  | 47,395,713 |
Gain on sale margin(2) | 2.74 | % |  | 2.75 | % |  | 1.80 | % |  | 2.66 | % |  | 1.66 | %
Pull through weighted gain on sale margin(3) | 2.93 | % |  | 2.85 | % |  | 2.03 | % |  | 2.69 | % |  | 1.92 | %
Financial Results |  |  |  |  |  |  |  |  |
Total revenue | $ | 265,661 |  |  | $ | 271,833 |  |  | $ | 274,192 |  |  | $ | 745,395 |  |  | $ | 1,086,141 |
Total expense | 305,128 |  |  | 330,148 |  |  | 435,125 |  |  | 949,760 |  |  | 1,602,038 |
Net loss | (34,262) |  |  | (49,759) |  |  | (137,482) |  |  | (175,743) |  |  | (452,623) |
Diluted loss per share | $ | (0.09) |  |  | $ | (0.13) |  |  | $ | (0.37) |  |  | $ | (0.48) |  |  | $(1.29)
Non-GAAP Financial Measures(4) |  |  |  |  |  |  |  |  |
Adjusted total revenue | $ | 266,363 |  |  | $ | 275,709 |  |  | $ | 249,663 |  |  | $ | 768,263 |  |  | $ | 1,027,540 |
Adjusted net loss | (26,859) |  |  | (34,329) |  |  | (116,846) |  |  | (121,457) |  |  | (367,101) |
Adjusted EBITDA (LBITDA) | 18,493 |  |  | 6,499 |  |  | (114,133) |  |  | (4,345) |  |  | (380,049) |

(1)Pull through weighted rate lock volume is the principal balance of loans subject to interest rate lock commitments, net of a pull-through factor for the loan funding probability.
(2)Gain on sale margin represents the total of (i) gain on origination and sale of loans, net, and (ii) origination income, net, divided by loan origination volume during period.
(3)Pull through weighted gain on sale margin represents the total of (i) gain on origination and sale of loans, net, and (ii) origination income, net, divided by the pull through weighted rate lock volume.
(4)See “Non-GAAP Financial Measures” for a discussion of Non-GAAP Financial Measures and a reconciliation of these metrics to their closest GAAP measure.
Operational Highlights
•Quarterly non-volume related expenses decreased $18.7 million since the second quarter of 2023, primarily due to lower salaries and benefits resulting from lower headcount and lower legal expenses.
•Incurred expenses related to Vision 2025 plan of $2.5 million during the quarter, including $1.2 million of Vision 2025-related professional services fees, $0.8 million of personnel related expenses and $0.5 million of lease and other asset impairment charges. Vision 2025-related expenses totaled $6.8 million in the second quarter of 2023.
•Accrued $2.0 million of legal expenses related to the expected settlement of outstanding litigation.
•Pull through weighted lock volume of $5.7 billion for the third quarter 2023, a decrease of $0.4 billion or 6% from the second quarter of 2023, resulting in quarterly total revenue of $265.7 million, a decrease of $6.2 million, or 2%, over the same period.
•Loan origination volume for the third quarter of 2023 was $6.1 billion, a decrease of $0.2 billion or 3% from the second quarter of 2023.
2

•Purchase volume decreased to 71% of total loans originated during the third quarter, down from 73% of total loans originated during the second quarter of 2023 and up from 70% of total loans originated during the third quarter of 2022.
•For the three months ended September 30, 2023, our preliminary organic refinance consumer direct recapture rate 1 increased to 71% from the second quarter’s refinance rate of 68%. This highlights the effectiveness of our marketing efforts, the strength of our customer relationships, and the value of our servicing portfolio for adjacent and complementary revenue opportunities.
•Net loss for the third quarter of 2023 of $34.3 million as compared to net loss of $49.8 million in the second quarter of 2023. Net loss decreased quarter over quarter primarily due to a decrease in expenses exceeding the decrease in revenue.
•Adjusted EBITDA for the third quarter of 2023 was $18.5 million as compared to adjusted EBITDA of $6.5 million for the second quarter of 2023.
Outlook for the fourth quarter of 2023
•Origination volume of between $4 billion and $6 billion.
•Pull-through weighted rate lock volume of between $3.8 billion and $5.8 billion.
•Pull-through weighted gain on sale margin of between 240 basis points and 280 basis points.
Servicing

|  | Three Months Ended |  | Nine Months Ended
Servicing Revenue Data: ($ in thousands) (Unaudited) |  | Sep 30, 2023 |  | Jun 30, 2023 |  | Sep 30, 2022 |  | Sep 30, 2023 |  | Sep 30, 2022
Due to changes in valuation inputs or assumptions |  | $ | 68,651 |  |  | $ | 26,138 |  |  | $ | 75,366 |  |  | $ | 73,422 |  |  | $ | 373,158 |
Due to collection/realization of cash flows |  | (38,502) |  |  | (41,619) |  |  | (49,519) |  |  | (114,777) |  |  | (193,022) |
Realized gains (losses) on sales of servicing rights, net (1) |  | 3,516 |  |  | 7,021 |  |  | (13,489) |  |  | 10,677 |  |  | (5,949) |
Net loss from derivatives hedging servicing rights |  | (69,353) |  |  | (30,014) |  |  | (50,837) |  |  | (96,290) |  |  | (314,557) |
Changes in fair value of servicing rights, net |  | $ | (35,688) |  |  | $ | (38,474) |  |  | $ | (38,479) |  |  | $ | (126,968) |  |  | $ | (140,370) |
Servicing fee income |  | $ | 118,783 |  |  | $ | 117,737 |  |  | $ | 113,544 |  |  | $ | 355,482 |  |  | $ | 341,929 |

(1)Includes the provision for sold MSRs.
1 We define organic refinance consumer direct recapture rate as the total unpaid principal balance (“UPB”) of loans in our servicing portfolio that are paid in full for purposes of refinancing the loan on the same property, with the Company acting as lender on both the existing and new loan, divided by the UPB of all loans in our servicing portfolio that paid in full for the purpose of refinancing the loan on the same property. The recapture rate is finalized following the publication date of this release when external data becomes available.
3

|  | Three Months Ended |  | Nine Months Ended
Servicing Rights, at Fair Value: ($ in thousands) (Unaudited) |  | Sep 30, 2023 |  | Jun 30, 2023 |  | Sep 30, 2022 |  | Sep 30, 2023 |  | Sep 30, 2022
Balance at beginning of period |  | $ | 1,998,762 |  |  | $ | 2,016,568 |  |  | $ | 2,204,593 |  |  | $ | 2,025,136 |  |  | $ | 1,999,402 |
Additions |  | 80,068 |  |  | 75,866 |  |  | 124,244 |  |  | 215,229 |  |  | 574,459 |
Sales proceeds |  | (73,972) |  |  | (85,164) |  |  | (331,922) |  |  | (171,167) |  |  | (751,276) |
Changes in fair value: |  |  |  |  |  |  |  |  |  |
Due to changes in valuation inputs or assumptions |  | 68,651 |  |  | 26,138 |  |  | 75,366 |  |  | 73,422 |  |  | 373,158 |
Due to collection/realization of cash flows |  | (38,502) |  |  | (41,619) |  |  | (49,519) |  |  | (114,777) |  |  | (193,022) |
Realized gains (losses) on sales of servicing rights |  | 3,647 |  |  | 6,973 |  |  | (9,493) |  |  | 10,811 |  |  | 10,548 |
Balance at end of period (1) |  | $ | 2,038,654 |  |  | $ | 1,998,762 |  |  | $ | 2,013,269 |  |  | $ | 2,038,654 |  |  | $ | 2,013,269 |

(1)Balances are net of $14.7 million, $13.3 million, and $16.8 million of servicing rights liability as of September 30, 2023, June 30, 2023, and September 30, 2022, respectively.

|  |  | % Change
Servicing Portfolio Data: ($ in thousands) (Unaudited) | Sep 30, 2023 |  | Jun 30, 2023 |  | Sep 30, 2022 |  | Sep-23 vs Jun-23 |  | Sep-23 vs Sep-22
Servicing portfolio (unpaid principal balance) | $ | 143,959,705 |  |  | $ | 142,479,870 |  |  | $ | 139,709,633 |  |  | 1.0 | % |  | 3.0 | %
Total servicing portfolio (units) | 490,191 |  |  | 482,266 |  |  | 463,471 |  |  | 1.6 |  |  | 5.8 |
60+ days delinquent ($) | $ | 1,235,443 |  |  | $ | 1,192,377 |  |  | $ | 1,365,774 |  |  | 3.6 |  |  | (9.5) |
60+ days delinquent (%) | 0.9 | % |  | 0.8 | % |  | 1.0 | % |  |  |  |
Servicing rights, net to UPB | 1.42 | % |  | 1.40 | % |  | 1.44 | % |  |  |  |

4

Balance Sheet Highlights

|  |  |  |  |  |  | % Change
($ in thousands) (Unaudited) | Sep 30, 2023 |  | Jun 30, 2023 |  | Sep 30, 2022 |  | Sep-23 vs Jun-23 |  | Sep-23 vs Sep-22
Cash and cash equivalents | $ | 717,196 |  |  | $ | 719,073 |  |  | $ | 1,143,948 |  |  | (0.3) | % |  | (37.3) | %
Loans held for sale, at fair value | 2,070,748 |  |  | 2,256,551 |  |  | 2,692,820 |  |  | (8.2) |  |  | (23.1) |
Servicing rights, at fair value | 2,053,359 |  |  | 2,012,049 |  |  | 2,030,026 |  |  | 2.1 |  |  | 1.1 |
Total assets | 6,078,529 |  |  | 6,203,505 |  |  | 7,378,536 |  |  | (2.0) |  |  | (17.6) |
Warehouse and other lines of credit | 1,897,859 |  |  | 2,046,208 |  |  | 2,529,436 |  |  | (7.2) |  |  | (25.0) |
Total liabilities | 5,309,594 |  |  | 5,406,160 |  |  | 6,300,039 |  |  | (1.8) |  |  | (15.7) |
Total equity | 768,935 |  |  | 797,344 |  |  | 1,078,497 |  |  | (3.6) |  |  | (28.7) |

A decrease in loans held for sale at September 30, 2023, resulted in a corresponding decrease in the balance on our warehouse lines of credit. Total funding capacity with our lending partners was $3.9 billion at September 30, 2023 and $3.9 billion at June 30, 2023. Available borrowing capacity was $1.8 billion at September 30, 2023.
5

Consolidated Statements of Operations

($ in thousands except per share data) (Unaudited) | Three Months Ended |  | Nine Months Ended
| Sep 30, 2023 |  | Jun 30, 2023 |  | Sep 30, 2022 |  | Sep 30, 2023 |  | Sep 30, 2022
REVENUES: |  |  |  |  |  |  |  |  |
Interest income | $ | 37,253 |  |  | $ | 33,060 |  |  | $ | 51,202 |  |  | $ | 98,271 |  |  | $ | 166,888 |
Interest expense | (34,642) |  |  | (30,209) |  |  | (41,408) |  |  | (91,612) |  |  | (121,220) |
Net interest income | 2,611 |  |  | 2,851 |  |  | 9,794 |  |  | 6,659 |  |  | 45,668 |
Gain on origination and sale of loans, net | 148,849 |  |  | 154,335 |  |  | 156,300 |  |  | 411,336 |  |  | 665,993 |
Origination income, net | 17,740 |  |  | 18,332 |  |  | 21,268 |  |  | 48,088 |  |  | 119,449 |
Servicing fee income | 118,783 |  |  | 117,737 |  |  | 113,544 |  |  | 355,482 |  |  | 341,929 |
Change in fair value of servicing rights, net | (35,688) |  |  | (38,474) |  |  | (38,479) |  |  | (126,968) |  |  | (140,370) |
Other income | 13,366 |  |  | 17,052 |  |  | 11,765 |  |  | 50,798 |  |  | 53,472 |
Total net revenues | 265,661 |  |  | 271,833 |  |  | 274,192 |  |  | 745,395 |  |  | 1,086,141 |
EXPENSES: |  |  |  |  |  |  |  |  |
Personnel expense | 141,432 |  |  | 157,799 |  |  | 218,819 |  |  | 440,258 |  |  | 861,382 |
Marketing and advertising expense | 33,894 |  |  | 34,712 |  |  | 42,940 |  |  | 104,520 |  |  | 205,289 |
Direct origination expense | 15,749 |  |  | 17,224 |  |  | 19,463 |  |  | 50,352 |  |  | 106,616 |
General and administrative expense | 46,522 |  |  | 54,817 |  |  | 83,412 |  |  | 157,473 |  |  | 197,089 |
Occupancy expense | 5,903 |  |  | 6,099 |  |  | 9,889 |  |  | 18,083 |  |  | 28,673 |
Depreciation and amortization | 10,592 |  |  | 10,721 |  |  | 10,243 |  |  | 31,339 |  |  | 32,110 |
Servicing expense | 8,532 |  |  | 5,750 |  |  | 14,221 |  |  | 19,116 |  |  | 46,472 |
Other interest expense | 42,504 |  |  | 43,026 |  |  | 36,138 |  |  | 128,619 |  |  | 83,671 |
Goodwill impairment | — |  |  | — |  |  | — |  |  | — |  |  | 40,736 |
Total expenses | 305,128 |  |  | 330,148 |  |  | 435,125 |  |  | 949,760 |  |  | 1,602,038 |
Loss before income taxes | (39,467) |  |  | (58,315) |  |  | (160,933) |  |  | (204,365) |  |  | (515,897) |
Income tax benefit | (5,205) |  |  | (8,556) |  |  | (23,451) |  |  | (28,622) |  |  | (63,274) |
Net loss | (34,262) |  |  | (49,759) |  |  | (137,482) |  |  | (175,743) |  |  | (452,623) |
Net loss attributable to noncontrolling interests | (17,663) |  |  | (26,316) |  |  | (77,401) |  |  | (92,793) |  |  | (256,873) |
Net loss attributable to loanDepot, Inc. | $ | (16,599) |  |  | $ | (23,443) |  |  | $ | (60,081) |  |  | $ | (82,950) |  |  | $ | (195,750) |
Basic loss per share | $ | (0.09) |  |  | $ | (0.13) |  |  | $ | (0.37) |  |  | $ | (0.48) |  |  | $ | (1.29) |
Diluted loss per share | $ | (0.09) |  |  | $ | (0.13) |  |  | $ | (0.37) |  |  | $ | (0.48) |  |  | $ | (1.29) |

6

Consolidated Balance Sheets

($ in thousands) | Sep 30, 2023 |  | Jun 30, 2023 |  | Dec 31, 2022
| (Unaudited) |  |
ASSETS |  |  |  |  |
Cash and cash equivalents | $ | 717,196 |  |  | $ | 719,073 |  |  | $ | 863,956 |
Restricted cash | 114,765 |  |  | 61,295 |  |  | 116,545 |
Accounts receivable, net | 53,845 |  |  | 68,581 |  |  | 145,279 |
Loans held for sale, at fair value | 2,070,748 |  |  | 2,256,551 |  |  | 2,373,427 |
Derivative assets, at fair value | 86,622 |  |  | 80,382 |  |  | 39,411 |
Servicing rights, at fair value | 2,053,359 |  |  | 2,012,049 |  |  | 2,037,447 |
Trading securities, at fair value | 89,334 |  |  | 93,442 |  |  | 94,243 |
Property and equipment, net | 76,762 |  |  | 82,677 |  |  | 92,889 |
Operating lease right-of-use asset | 32,558 |  |  | 34,040 |  |  | 35,668 |
Prepaid expenses and other assets | 124,756 |  |  | 129,675 |  |  | 155,982 |
Loans eligible for repurchase | 639,806 |  |  | 647,418 |  |  | 634,677 |
Investments in joint ventures | 18,778 |  |  | 18,322 |  |  | 20,410 |
Total assets | $ | 6,078,529 |  |  | $ | 6,203,505 |  |  | $ | 6,609,934 |
LIABILITIES AND EQUITY |  |  |  |  |
LIABILITIES: |  |  |  |  |
Warehouse and other lines of credit | $ | 1,897,859 |  |  | $ | 2,046,208 |  |  | $ | 2,146,602 |
Accounts payable and accrued expenses | 462,521 |  |  | 407,356 |  |  | 488,696 |
Derivative liabilities, at fair value | 49,742 |  |  | 8,790 |  |  | 67,492 |
Liability for loans eligible for repurchase | 639,806 |  |  | 647,418 |  |  | 634,677 |
Operating lease liability | 53,579 |  |  | 56,552 |  |  | 61,675 |
Debt obligations, net | 2,206,087 |  |  | 2,239,836 |  |  | 2,289,319 |
Total liabilities | 5,309,594 |  |  | 5,406,160 |  |  | 5,688,461 |
EQUITY: |  |  |  |  |
Total equity | 768,935 |  |  | 797,344 |  |  | 921,473 |
Total liabilities and equity | $ | 6,078,529 |  |  | $ | 6,203,504 |  |  | $ | 6,609,934 |

7

Loan Origination and Sales Data

($ in thousands) (Unaudited) |  | Three Months Ended |  | Nine Months Ended
| Sep 30, 2023 |  | Jun 30, 2023 |  | Sep 30, 2022 |  | Sep 30, 2023 |  | Sep 30, 2022
Loan origination volume by type: |  |  |  |  |  |  |  |  |  |
Conventional conforming |  | $3,158,107 |  | $3,323,678 |  | $6,002,765 |  | $9,375,605 |  | $32,107,768
FHA/VA/USDA |  | 2,354,630 |  | 2,337,946 |  | 3,038,467 |  | 6,371,168 |  | 10,665,287
Jumbo |  | 126,408 |  | 148,077 |  | 571,509 |  | 405,551 |  | 3,955,056
Other |  | 443,998 |  | 463,842 |  | 237,186 |  | 1,148,699 |  | 667,602
Total |  | $6,083,143 |  | $6,273,543 |  | $9,849,927 |  | $17,301,023 |  | $47,395,713
Loan origination volume by purpose: |  |  |  |  |  |  |  |  |  |
Purchase |  | $4,337,476 |  | $4,552,919 |  | $6,938,408 |  | $12,403,166 |  | $24,469,338
Refinance - cash out |  | 1,660,578 |  | 1,614,747 |  | 2,682,330 |  | 4,599,564 |  | 18,181,170
Refinance - rate/term |  | 85,089 |  | 105,877 |  | 229,189 |  | 298,293 |  | 4,745,205
Total |  | $6,083,143 |  | $6,273,543 |  | $9,849,927 |  | $17,301,023 |  | $47,395,713
Loans sold: |  |  |  |  |  |  |  |  |  |
Servicing retained |  | $4,175,126 |  | $3,943,845 |  | $6,604,979 |  | $11,396,678 |  | $34,296,344
Servicing released |  | 2,092,762 |  | 2,134,024 |  | 5,132,350 |  | 6,345,660 |  | 18,220,561
Total |  | $6,267,888 |  | $6,077,869 |  | $11,737,329 |  | $17,742,338 |  | $52,516,905

Third Quarter Earnings Call
Management will host a conference call and live webcast today at 5:00 p.m. ET on loanDepot’s Investor Relations website, investors.loandepot.com, to discuss its earnings results.
The conference call can also be accessed by dialing (888) 440-6385. Please call five minutes in advance to ensure that you are connected prior to the call. A webcast can also be accessed at https://events.q4inc.com/attendee/845777270
A replay of the webcast and transcript will also be made available on the Investor Relations website following the conclusion of the event, or can be accessed by dialing (800) 770-2030, conference ID: 2021948, following the conclusion of the event through December 7, 2023.
For more information about loanDepot, please visit the company’s Investor Relations website: investors.loandepot.com.
8

Non-GAAP Financial Measures
To provide investors with information in addition to our results as determined by GAAP, we disclose certain non-GAAP measures to assist investors in evaluating our financial results. We believe these non-GAAP measures provide useful information to investors regarding our results of operations because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. They facilitate company-to-company operating performance comparisons by backing out potential differences caused by variations in hedging strategies, changes in valuations, capital structures (affecting interest expense on non-funding debt), taxation, the age and book depreciation of facilities (affecting relative depreciation expense), and other cost or benefit items which may vary for different companies for reasons unrelated to operating performance. These non-GAAP measures include our Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share (if dilutive), and Adjusted EBITDA (LBITDA). We exclude from these non-GAAP financial measures the change in fair value of MSRs and related hedging gains and losses as they add volatility and are not indicative of the Company’s operating performance or results of operation. We also exclude stock-based compensation expense, which is a non-cash expense, gains or losses on extinguishment of debt and disposal of fixed assets, non-cash goodwill impairment, and other impairment charges to intangible assets and operating lease right-of-use assets as management does not consider these costs to be indicative of our performance or results of operations. Adjusted EBITDA (LBITDA) includes interest expense on funding facilities, which are recorded as a component of “net interest income (expense)”, as these expenses are a direct operating expense driven by loan origination volume. By contrast, interest expense on our non-funding debt is a function of our capital structure and is therefore excluded from Adjusted EBITDA (LBITDA). Adjustments for income taxes are made to reflect historical results of operations on the basis that it was taxed as a corporation under the Internal Revenue Code, and therefore subject to U.S. federal, state and local income taxes. Adjustments to Diluted Weighted Average Shares Outstanding assumes the pro forma conversion of weighted average Class C shares to Class A common stock. These non-GAAP measures have limitations as analytical tools, and should not be considered in isolation or as a substitute for revenue, net income, or any other operating performance measure calculated in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Some of these limitations are:
•they do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments;
•Adjusted EBITDA (LBITDA) does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt;
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and Adjusted Total Revenue, Adjusted Net Income (Loss), and Adjusted EBITDA (LBITDA) do not reflect any cash requirement for such replacements or improvements; and
•they are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows.
Because of these limitations, Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share, and Adjusted EBITDA (LBITDA) are not intended as alternatives to total revenue, net income (loss), net income (loss) attributable to the Company, or Diluted Earnings (Loss) Per Share or as an indicator of our operating performance and should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations. We compensate for these limitations by using Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share, and Adjusted EBITDA (LBITDA) along with other comparative tools, together with U.S. GAAP measurements, to assist in the evaluation of operating performance. See below for a reconciliation of these non-GAAP measures to their most comparable U.S. GAAP measures.
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Reconciliation of Total Revenue to Adjusted Total Revenue ($ in thousands) (Unaudited) |  | Three Months Ended |  | Nine Months Ended
| Sep 30, 2023 |  | Jun 30, 2023 |  | Sep 30, 2022 |  | Sep 30, 2023 |  | Sep 30, 2022
Total net revenue |  | $ | 265,661 |  |  | $ | 271,833 |  |  | $ | 274,192 |  |  | $ | 745,395 |  |  | $ | 1,086,141 |
Change in fair value of servicing rights, net of hedging gains and losses(1) |  | 702 |  |  | 3,876 |  |  | (24,529) |  |  | 22,868 |  |  | (58,601) |
Adjusted total revenue |  | $ | 266,363 |  |  | $ | 275,709 |  |  | $ | 249,663 |  |  | $ | 768,263 |  |  | $ | 1,027,540 |

(1)Represents the change in the fair value of servicing rights due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging servicing rights.

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) ($ in thousands) (Unaudited) |  | Three Months Ended |  | Nine Months Ended
| Sep 30, 2023 |  | Jun 30, 2023 |  | Sep 30, 2022 |  | Sep 30, 2023 |  | Sep 30, 2022
Net loss attributable to loanDepot, Inc. |  | $ | (16,599) |  |  | $ | (23,443) |  |  | $ | (60,081) |  |  | $ | (82,950) |  |  | $ | (195,750) |
Net loss from the pro forma conversion of Class C common shares to Class A common shares (1) |  | (17,663) |  |  | (26,316) |  |  | (77,401) |  |  | (92,793) |  |  | (256,873) |
Net loss |  | (34,262) |  |  | (49,759) |  |  | (137,482) |  |  | (175,743) |  |  | (452,623) |
Adjustments to the benefit for income taxes(2) |  | 4,845 |  |  | 6,916 |  |  | 20,124 |  |  | 25,054 |  |  | 66,787 |
Tax-effected net loss |  | (29,417) |  |  | (42,843) |  |  | (117,358) |  |  | (150,689) |  |  | (385,836) |
Change in fair value of servicing rights, net of hedging gains and losses(3) |  | 702 |  |  | 3,876 |  |  | (24,529) |  |  | 22,868 |  |  | (58,601) |
Stock-based compensation expense |  | 3,940 |  |  | 5,754 |  |  | 4,773 |  |  | 15,619 |  |  | 11,794 |
Gain on extinguishment of debt |  | (1,651) |  |  | (39) |  |  | — |  |  | (1,690) |  |  | (10,528) |
Loss on disposal of fixed assets |  | 93 |  |  | 751 |  |  | 11,026 |  |  | 1,105 |  |  | 11,026 |
Goodwill impairment |  | — |  |  | — |  |  | — |  |  | — |  |  | 40,736 |
Other impairment |  | 129 |  |  | 686 |  |  | 9,149 |  |  | 470 |  |  | 15,112 |
Tax effect of adjustments(4) |  | (655) |  |  | (2,514) |  |  | 93 |  |  | (9,140) |  |  | 9,196 |
Adjusted net loss |  | $ | (26,859) |  |  | $ | (34,329) |  |  | $ | (116,846) |  |  | $ | (121,457) |  |  | $ | (367,101) |

(1)Reflects net loss to Class A common stock and Class D common stock from the pro forma exchange of Class C common stock.
(2)loanDepot, Inc. is subject to federal, state and local income taxes. Adjustments to income tax benefit reflect the effective income tax rates below, and the pro forma assumption that loanDepot, Inc. owns 100% of LD Holdings.

|  | Three Months Ended |  | Nine Months Ended
| Sep 30, 2023 |  | Jun 30, 2023 |  | Sep 30, 2022 |  | Sep 30, 2023 |  | Sep 30, 2022
Statutory U.S. federal income tax rate |  | 21.00 | % |  | 21.00 | % |  | 21.00 | % |  | 21.00 | % |  | 21.00 | %
State and local income taxes (net of federal benefit) |  | 6.43 | % |  | 5.28 | % |  | 5.00 | % |  | 6.00 | % |  | 5.00 | %
Effective income tax rate |  | 27.43 | % |  | 26.28 | % |  | 26.00 | % |  | 27.00 | % |  | 26.00 | %

(3)Represents the change in the fair value of servicing rights due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging servicing rights.
(4)Amounts represent the income tax effect using the aforementioned effective income tax rates, excluding certain discrete tax items.
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Reconciliation of Adjusted Diluted Weighted Average Shares Outstanding to Diluted Weighted Average Shares Outstanding ($ in thousands except per share data) (Unaudited) |  | Three Months Ended |  | Nine Months Ended
| Sep 30, 2023 |  | Jun 30, 2023 |  | Sep 30, 2022 |  | Sep 30, 2023 |  | Sep 30, 2022
Net loss attributable to loanDepot, Inc. |  | $ | (16,599) |  |  | $ | (23,443) |  |  | $ | (60,081) |  |  | $ | (82,950) |  |  | $ | (195,750) |
Adjusted net loss |  | (26,859) |  |  | (34,329) |  |  | (116,846) |  |  | (121,457) |  |  | (367,101) |
Share Data: |  |  |  |  |  |  |  |  |  |
Diluted weighted average shares of Class A and Class D common stock outstanding |  | 175,962,804 |  |  | 173,908,030 |  |  | 162,464,369 |  |  | 173,568,986 |  |  | 151,803,928 |
Assumed pro forma conversion of weighted average Class C shares to Class A common stock |  | 147,171,089 |  |  | 148,597,745 |  |  | 156,677,534 |  |  | 148,741,661 |  |  | 167,796,888 |
Adjusted diluted weighted average shares outstanding |  | 323,133,893 |  | 322,505,775 |  | 319,141,903 |  | 322,310,647 |  | 319,600,816 |

Reconciliation of Net Income (Loss) to Adjusted EBITDA (LBITDA) ($ in thousands) (Unaudited) |  | Three Months Ended |  | Nine Months Ended
| Sep 30, 2023 |  | Jun 30, 2023 |  | Sep 30, 2022 |  | Sep 30, 2023 |  | Sep 30, 2022
Net loss |  | $ | (34,262) |  |  | $ | (49,759) |  |  | $ | (137,482) |  |  | $ | (175,743) |  |  | $ | (452,623) |
Interest expense - non-funding debt (1) |  | 42,504 |  |  | 43,026 |  |  | 36,138 |  |  | 128,619 |  |  | 83,671 |
Income tax benefit |  | (5,205) |  |  | (8,556) |  |  | (23,451) |  |  | (28,622) |  |  | (63,274) |
Depreciation and amortization |  | 10,592 |  |  | 10,721 |  |  | 10,243 |  |  | 31,339 |  |  | 32,110 |
Change in fair value of servicing rights, net of hedging gains and losses(2) |  | 702 |  |  | 3,876 |  |  | (24,529) |  |  | 22,868 |  |  | (58,601) |
Stock-based compensation expense |  | 3,940 |  |  | 5,754 |  |  | 4,773 |  |  | 15,619 |  |  | 11,794 |
Loss on disposal of fixed assets |  | 93 |  |  | 751 |  |  | 11,026 |  |  | 1,105 |  |  | 11,026 |
Goodwill impairment |  | — |  |  | — |  |  | — |  |  | — |  |  | 40,736 |
Other impairment (recovery) |  | 129 |  |  | 686 |  |  | 9,149 |  |  | 470 |  |  | 15,112 |
Adjusted EBITDA (LBITDA) |  | $ | 18,493 |  |  | $ | 6,499 |  |  | $ | (114,133) |  |  | $ | (4,345) |  |  | $ | (380,049) |

(1)Represents other interest expense, which includes gain on extinguishment of debt and amortization of debt issuance costs, in the Company’s consolidated statements of operations.
(2)Represents the change in the fair value of servicing rights due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging servicing rights.
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Forward-Looking Statements
This press release may contain "forward-looking statements," which reflect loanDepot's current views with respect to, among other things, our business strategies, including the Vision 2025 plan, including our expanded productivity program, our progress toward run-rate profitability, our HELOC product, financial condition and liquidity, competitive position, industry and regulatory environment, potential growth opportunities, the effects of competition, operations and financial performance. You can identify these statements by the use of words such as "outlook," "potential," "continue," "may," "seek," "approximately," "predict," "believe," "expect," "plan," "intend," "estimate," “project,” or "anticipate" and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as "will," "should," "would" and "could." These forward-looking statements are based on current available operating, financial, economic and other information, and are not guarantees of future performance and are subject to risks, uncertainties and assumptions, including but not limited to, the following: our ability to achieve the expected benefits of our Vision 2025 plan and the success of our cost-reduction initiatives, such as the expanded productivity program; our ability to achieve run-rate profitability; our loan production volume; our ability to maintain an operating platform and management system sufficient to conduct our business; our ability to maintain warehouse lines of credit and other sources of capital and liquidity; cyberattacks, information or security breaches and technology disruptions or failures, of ours or of our third party vendors; the outcome of legal proceedings to which we are a party; adverse changes in macroeconomic and U.S residential real estate and mortgage market conditions, including increases in interest rate levels; changing federal, state and local laws, as well as changing regulatory enforcement policies and priorities; and other risks detailed in the "Risk Factors" section of loanDepot, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2022 and Quarterly Reports on Form 10-Q as well as any subsequent filings with the Securities and Exchange Commission, which are difficult to predict. Therefore, current plans, anticipated actions, financial results, as well as the anticipated development of the industry, may differ materially from what is expressed or forecasted in any forward-looking statement. loanDepot does not undertake any obligation to publicly update or revise any forward-looking statement to reflect future events or circumstances, except as required by applicable law.
About loanDepot
loanDepot (NYSE: LDI) is a digital commerce company committed to serving its customers throughout the home ownership journey. Since its launch in 2010, loanDepot the pioneering leader of the mortgage industry with a digital-first approach that makes it easier, faster and less stressful to purchase or refinance a home. Today, as one of the nation's largest non-bank mortgage lenders, loanDepot enables customers to achieve the American dream of homeownership through a broad suite of lending and real estate services that simplify one of life's most complex transactions. With headquarters in Southern California and offices nationwide, loanDepot is committed to serving the communities in which its team lives and works through a variety of local, regional and national philanthropic efforts.
Investor Relations Contact:
Gerhard Erdelji
Senior Vice President, Investor Relations
(949) 822-4074
gerdelji@loandepot.com
Media Contact:
Rebecca Anderson
Senior Vice President, Communications & Public Relations
(949) 822-4024
rebeccaanderson@loandepot.com
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LDI-IR
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