Full Transcript: Beeline Holdings Q1 2026 Earnings Call

On Thursday, Beeline Holdings (NASDAQ:BLNE) discussed first-quarter financial results during its earnings call. The full transcript is provided below. Benzinga APIs provide real-time access to earnings call transcripts and financial data. Visit https://www.benzinga.com/apis/ to learn more. Access the full call at https://event.choruscall.com/mediaframe/webcast.html?webcastid=lhQu88bn Summary Beeline Holdings reported that Q1 revenue more than doubled year-over-year, reaching $2.7 million, with significant contributions from mortgage, title, and equity segments. The company emphasized its strategic focus on profitable transactions, reducing costs, and scaling its Beeline Equity platform, which offers a debt-free solution for accessing home equity. Management expressed confidence in achieving a $100 million run rate by the end of 2027, highlighting improved unit economics, higher margin loan products, and cost-reduction initiatives. Operational highlights included improved conversion rates, increased revenue per loan, and advancements in AI and automation, particularly with their MagicBlocks AI sales platform. Management noted a narrowing of the adjusted EBITDA loss to $3 million and outlined a structured cost-reduction program, aiming for a meaningful reduction in cash burn during 2026. Full Transcript OPERATOR Good day and welcome to the Beeline Holdings first quarter 2026 analyst call. All participants will be in a listen only mode. Should you need assistance, please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone and to withdraw your question, please press Star then two. Please note this event is being recorded. I would now like to turn the call over to Ms. Tiffany Milton, Chief Accounting Officer. Please go ahead. Tiffany Milton (Chief Accounting Officer) Thank you. Good evening everyone and thank you for joining us today to discuss Beeline Holdings' results for the first quarter of 2026. I'm Tiffany Milton, Beeline's Chief Accounting Officer and joining us on today's call to discuss these results is Nick Laiuza, our Chief Executive Officer, Jess Kennedy, Chief Operating Officer, and Chris Moe, our Chief Financial Officer. Following our remarks, we will open the call to your questions. Now. Before we begin with prepared remarks, we submit for the record the following statement. This conference call contains forward looking statements within the meaning of the Private Securities Litigation Reform act of 1995, including but not limited to statements regarding Beeline holdings, expected future business trends, revenue growth and future revenue changes in revenue components, Beeline Holdings, performance growth of its core business, the impact of recent cuts and expenses, technology changes and net loss and adjusted EBITDA trends. Forward looking statements are typically identified by words such as believe, expect, anticipate, plan, intend, seek, estimate, will, would, could, may, continue forecasting, target, potential, project undertaken, and similar expressions. These statements are based on management's current assumptions, beliefs and expectations and are not guarantees of future performance. Actual results may differ materially from those described in forward looking statements due to various risks and uncertainties. These include, without limitation the duration of the war with Iran and its effect on the economy, the ability of our Beeline equity partner to fund its equity transactions and and the risk factors we provided in our 2025 Form 10K and Prospectus Supplement dated March 10, 2026. We caution investors not to place undue reliance on any forward looking statements made during this call. All forward looking statements speak only as of the date of this presentation and are based on information available to Beeline Holdings. As of today, we undertake no obligation to publicly update or revise these statements to reflect events or circumstances occurring after today's date except as required by law. Now with that said, I'd like to turn the call over to Nick Laiuza. Nick Laiuza Nick, please proceed. Good afternoon everyone and thank you for joining us. Q1 marked encouraging progress on the things we said we would do. Revenue more than doubled year over year. Unit Economics moved in the right direction. Beeline Holdings closed and funded its first transactions. We executed on the plan we set coming into 2026. Now let me tell you how we're managing the business right now. The macro environment is what it is. Rates, capital markets, inflation and geopolitical uncertainty, including the war in Iran, all factor in. Our board, our management team and I are aligned on a measured approach. We are prioritizing profitable transaction over total volume. We are bringing down our cost base to extend our Runway. We are leaning into the parts of the business that already work. Our second 2026 initiative was to validate Beeline Holdings, a capital light and strategically backed opportunity. Simultaneously, we are delivering revenue and growing parts of our business that represent a less risky, more stable platform for profitable growth. Beeline Equity is a key part of that strategy. Beeline Equity was launched in partnership with TYTL holdings, which is a related party. The partnership brings institutional discipline and capital markets expertise to a product category we believe is structurally novel. Beeline Equity closed its first transactions in the fourth quarter of 2026. Validation of the workflow is in hand. We are now moving from build to scale on transactions completed to date. Unit Economics are slightly higher than our lending business. Approximately 3.5% of transaction value plus title revenue averaging approximately $1,500 per close with zero balance sheet exposure. We monetize a transaction that's a loan. According to the Federal Reserve, U.S. homeowners hold approximately 35 trillion in home equity, the vast majority of which is effectively inaccessible without taking on new debt. For homeowners who do not want to take on new debt to access the equity, this is a path that did not previously exist. With workflow validation in hand and a budding pipeline, we are heading to scaling mode. The best piece is Beeline Equity is not tied to interest rates, so our revenue grows regardless of market conditions. Beeline Equity generates fee revenue per transaction with zero balance sheet risk. Structurally, it's the highest quality revenue line we have. As many of you know, we hold a minority interest in MagicBlocks, an AI driven sales platform. We've been working hard to advance this technology as a minority owner. The team there is doing strong work and the enterprise pipeline is building. Magicblocks has recently onboarded four major lenders and one top 10 lender. Magicblocks AI is proven to make meaningful industry improvements and its platform supports Beeline Holdings's proprietary AI sales agent. We're very happy with the technology built inside of MagicBlocks and we're currently evaluating the optimal structure for the relationship going forward. More to come on this we recently announced a partnership with a builder in Dallas, Texas called Structured Real Estate Group. We expect that revenue to start in Q3 and are currently embedding our platform into their web tools and online showrooms. This is not just an immediate opportunity to generate revenue in Q3 and Q4. It's also part of a longer term strategy to partner with the group that can drive new property transactions in Texas, Florida and other parts of the Southeast. I'm excited to visit this site next week in Dallas. Our platform rests on four revenue pillars, Mortgage Title, Equity Technology and AI. Over time, a greater share of revenue will come from Capital Light fee based streams. That mix is the long term margin story and distances beeline from other mortgage lenders leveraging the blockchain to fund pure equity transactions. The mix shift toward fee based revenue is the key driver of long term margin expansion. Our target of achieving $100 million run rate by the end of 2027 remains a key focal point. That's a target, it's not a guarantee. But the building blocks are in place. Q1 was a big step in the right direction. I'll now turn it over to Jess. Jess Kennedy (Chief Operating Officer) Thank you Nick. Q1 was a quarter of meaningful progress across our core operating metrics. Revenue per loan expanded, conversion rates improved and the technology investments we have been making are beginning to show measurable results in the business. Let me walk you through each of these in turn, starting with the core mortgage business in origination, trends in volume. We drove steady momentum through the quarter with a strong finish in March. While there was some normal variability, the underlying trend is positive and we exited the quarter with stronger momentum than we entered it. As it relates to product mix and credit profile, our product mix is shifting in a deliberate direction. We are intentionally leaning into Debt Service Coverage Ratio (DSCR) and bank statement loans where margins are strong and unit profitability is real. Non QM volumes remain stable. Conventional loans remain part of the platform, but we are intentionally deprioritizing them where the economics do not work. Borrower credit metrics also remain strong across the book. Additionally, we saw a modest boost in rate term refinance activity late in the quarter driven by a brief dip in interest rates in late February and early March. As it relates to margin performance, we remain disciplined on pricing. Debt Service Coverage Ratio (DSCR) margins of approximately 4% are stable, conventional margins are tighter as expected, and bank statement loans are a strong opportunity in growing share of our pipeline. Basically we're not chasing volume at the expense of margin. Some key drivers here include good secondary execution on non-Qualified Mortgage (non-QM) loans, increase in higher revenue origination channels, and a change in loan product mix optimization as it relates to revenue per loan and unit economics. One of the most important trends is growth in revenue per loan. This has increased meaningfully over the last year. Revenue per loan expansion is driving operating leverage. This allows us to grow without linear cost increases and with improving efficiency. Automation is reducing cycle time and cost while improving conversions as we look at technology. Technology has been facilitating improved economics in the following ways. Beeline Holdings our Chatbot drives an 8% increase in lead to lock conversions when he is engaged with customers on the website, through SMS or in the point of sale journey. Our version one launch of our self service journey where a customer can move through application qualification, locking and disclosure signing without human intervention has generated promising early results including 131% increase in application to lock pull through. That foundational capability is now being extended beyond its initial product into our higher margin loan types where the operating leverage is greatest. We are encouraged about the trajectory of this platform and plan to enhance the flow further this quarter. This also includes implementing back office AI facilitated workflows with the goal of continuing to improve our speed to close and our cost to serve. I'll turn now to Beeline equity. In a single quarter we moved Beeline Equity from a concept into a working production system with completed transactions, a validated workflow and the integrations needed to scale the infrastructure is built. The focus is now on throughput. We currently have a full system launch, initial transactions completed, the workflow is validated. We've built the production software and completed those integrations to facilitate that scale for 2026 priorities. They remain improving revenue per loan, continuing to sharpen our product mix towards our highest margin loan types, scaling beeline equity, expanding the use of AI and automation in our sales and operations processes, driving efficiency and moving towards positive cash flow. With that I'll turn it over to Chris. Chris Moe (Chief Financial Officer) Thanks Jess. Let's turn to Q1 financial performance. As Nick mentioned, we more than doubled quarterly revenue year over year. Total revenue was 2.7 million up from 1.4 million in the prior year period. Let's break that down. We saw a gain on sale of 1.8 million, origination fees of 395,000, 380,000 from title, an initial beeline equity contribution of about 50,000 and other revenue of 51,000. So our revenue growth was broad based across all core categories. Let's look at expenses now and operating performance. Operating expenses were 7.9 million, including approximately 1 million of noncash stock based compensation. Excluding stock based compensation, operating expenses grew approximately 15% year over year against revenue growth of more than 100%. Reflecting early operating leverage. Key components of OPEX were compensation at 3 million, GNA at 1.9 million, marketing at 1 million. So the loss from operations was 5.2 million. We are investing in growth while beginning to see operating leverage. Let's talk about cost discipline. We have recently executed on a structured program of cost reductions. Run rate reductions of approximately 210,000 per month or about 2.5 million per year. These savings will become increasingly visible in our results over the coming quarters. These reductions span staff and consultant rationalization, marketing optimization with select reductions where return did not meet our internal thresholds and other discretionary spending. So we're not just growing the top line, we are tightening the cost base while we do it. Our net loss was 5.3 million. Narrowing year over year. This reflects revenue more than doubling, improving unit economics in each loan, continued operating discipline and the absence of certain non recurring items that impacted the prior year. Now I want to talk to you about adjusted ebitda. Adjusted ebitda, which we view as an important supplemental metric for understanding the underlying trajectory of the business. Adjusted EBITDA was a loss of 3 million, narrowing from a loss of 3.8 million in the prior year period. This is a narrowing of $800,000 or 21% year over year. Specifically, adjusted EBITDA excludes non cash expenses such as stock based compensation, depreciation and amortization as well as certain non recurring or non operating items. So the direction of travel is consistent across both our GAAP and non-GAAP results. What both demonstrate is that revenue is growing at a faster rate than core operating costs. We're generating early evidence of operating leverage. The underlying earnings profile of the business is improving as we continue to grow revenue per loan, expand higher margin capital revenue streams like Beeline Holdings and leverage our fixed cost base and execute the cost reductions I just walked you through. As a result, we expect both net loss and adjusted EBITDA to continue the positive trajectory. Let's turn to the balance sheet. At quarter end we had cash of 1.9 million, loans held for sale of 17.3 million. And our equity is approximately 51 million and no corporate debt. And the warehouse usage increased with production. Now we turn to cash flow and capital strategy. Operating cash used during Q1 was 3.6 million. We funded the business through a combination of capital levers during the quarter, Home Equity Line of Credit (HEquity Line of Credit (ELOC)) drawdowns of approximately 945,000 and Automated Teller Machine (ATM) activity of approximately 447,000. Subsequent to quarter end, we've continued to access both facilities, providing ongoing flexibility on the timing and pacing of capital draws. So we are actively managing liquidity with multiple capital levers. Our Cash Burn Target Looking forward, we are targeting a meaningful reduction in our monthly cash burn during 2026, driven in part by operating cost reductions we've already implemented or implementing this month, driven also in part by improving unit economics and underlying business. And this is a target we're working towards, not a milestone we've already achieved. Our outlook Looking ahead, we see continued revenue growth, higher margin mix, improving operating leverage and a tighter cost base. And now I'll turn it back to Nick. Thank you. Nick Laiuza Let me close with three points. Our platform is unique. We've built the platform combining mortgage, title, equity and AI all under one roof. Each piece reinforces the others. Our technology platform contributes efficiency to all four pillars. The combination is what creates the long term opportunity. We're building a fully integrated housing finance platform, not just a product lending platform. Our business model is evolving. We're incorporating more capital, light revenue, taking less balance sheet risk. Our higher margin products are getting more of our focus. We're building AI solutions for Beeline Holdings in partnership with Magic blocks which creates SaaS revenue opportunities we're executing with discipline. Operating expenses are coming down. Product mix is sharpening toward profitable transactions. Our team is focused on the work in front of us. Our target remains $100 million run rate as we exit 2027. That's a goal. It's not a guarantee, but it's a goal we're working toward. And Q1 was a step in the right direction. Thank you for your time and your continued support. We will now open it up to questions. OPERATOR We would now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. And our first question for today will come from Calvin Sito with Crater Lake. Please go ahead. Calvin Sito (Equity Analyst) Hi. Hi Nick and Chris, thanks for the update. So I guess when we look at the balance sheet right, we ended quarter one with 1.9 million and we see that the adjusted EBITDA loss is about 3 million per quarter. So you earlier you mentioned about some capital levers that you could pull. So I Just wonder, could you elaborate on that? Chris Moe (Chief Financial Officer) Sure. Calvin, thanks for checking in. I know you're probably headed to the airport and on an airplane or getting on an airplane. So I appreciate your dialing in. Yeah. As I said before, we have an Automated Teller Machine (ATM) facility. We also have an Equity Line of Credit (ELOC) arrangement and numerous other forms of equity financing are available. We are debt avoidant, so we're not looking to do a debt deal, but we were able to fund ourselves, you know, through the Automated Teller Machine (ATM) and Equity Line of Credit (ELOC) and potentially other things as needed. Calvin Sito (Equity Analyst) Oh, great, great. Also would like to ask. Yeah, I do have a follow up, so I'd like to know, like. So we talk about a lot of cost structure initiative, cost reduction initiatives, which are excellent, but in terms of, in terms of hitting break even or cash flow positive, do we still see ourselves being on track this year or. Things have changed quite a bit. Yeah, I'll take that. So, look, we're not just cutting cost, although that is a big piece of getting toward cash flow positive. We also are steering our business toward our most profitable loans, our non-Qualified Mortgage (non-QM) loans, our bank statement loan and our Debt Service Coverage Ratio (DSCR) loans. They're our most profitable by far. And the margins are significantly higher than our conventional business. It takes a lot fewer loans to close in order to achieve the same revenue. And so when you think about the combination of higher margins per loan and cutting costs at the same time, we get to the end result much faster. So we're quite excited about making this shift at the end of the day, and that's where we are. All right, thank you. Thanks OPERATOR again. If you have a question, please press star. Then one. Our next question will come from Greg McKinley with retail. Please go ahead. Greg McKinley Yeah, good afternoon. Thank you. I'd like to ask you to talk a little bit about just the sort of the competitive backdrop because, and as I think about the market, we got a couple really big digital mortgage companies out there who've spent very heavily building their platform. So in that environment, how does Beeline Holdings position itself to get a meaningful share, a durable share of that market over time? And I guess, why is that durable? Yeah, so look, I mean, in a favorable rate environment, you know, we're not having this question, right. We are able to grow our revenue very quickly as a result of, you know, demand outweighing supply. Right now it is a bigger issue and something we have to be concerned with. So our two most popular loans, the two loans that we're the best at, the two that are the most profitable, the ones, the two that I just mentioned, the DSCR loan, And the bank statement loan, those are loans that you don't get at the top. The top lenders, for the most part, Better.com doesn't offer them. I don't think Rocket Mortgage offers them, although they said they would start offering one of them, but they're not right now. And so we've built a really good niche in those two areas, and we've built a really good niche in investment property investors as well. So when you think about our marketing spend, we're not competing against Rocket and the other top lenders for that audience because they're not offering those products. And so we have a bit of an advantage there because we've taken these products, we've nationalized them, we built them to scale, and we're making, you know, 40 to 50% more per transaction than what we were making on the conventional side. We're not getting out of the conventional business. We still are going to process and close conventional mortgages. We're just not going to spend as much money driving them in this market. And we're not going to try to outspend the very large lenders. We're going to play in a space that we know we can make money in. Got it, Got it. Okay, that's helpful. Thank you. And then I wanted to understand Beeline Holdings Equity better and maybe on a couple fronts. So, number one, can you give us your thoughts on when this emerges as something that, you know, call it moves the needle for you financially. And then secondly, I just want to understand the product better. What's the value proposition and sort of economics to your customer with this offering? Yeah, listen, I think it's going to be more of a Q3 thing before we start to really see the numbers scale the way we want to see them. We, you know, we kind of went through why it's taken, why we are where we are with that particular product. But the demand for the product is pretty significant. It's a pure equity product and it's geared toward people that need cash. And they're cash rich, but they're. I'm sorry, they're equity rich, but they're cash poor. And so they have the ability to leverage their biggest asset and create cash for themselves very quickly without having to incur debt. And at a real high level, that's. That's the product. Chris Moe (Chief Financial Officer) Right. We're not recording a lien, we're recording a deed of trust. I'm sorry, we're recording a deed, and as a result of that, they're not swapping debt for debt. They're basically Bringing in new cash that has no time clock on ever having to pay it back. So the demand for the product in today's world where people's retirement is growing or their inflation is outgrowing their retirement, this is a perfect product for them. And just in terms of accessing that borrower or not borrower, it's not debt, but accessing that customer. Can you just talk a little bit about how you develop that relationship? Yeah, listen, you're right. It's a bit of an education process. We're going to drive that audience digitally. We're going to drive it through wealth advisors, we're going to drive it through very smart digital campaigns. We're going to leverage artificial intelligence marketing, We're going to partner with organizations where baby boomers are prevalent, like the AARP. We've got a really good marketing strategy. Look, there's what, $33 trillion of, of equity. And you have to remember the failure rate or the deny rate for a cash out refi or heloc is between 50 and 60%. And we're targeting retirees where it's much greater. So these, a lot of these people don't have a lot of options. It's unfortunate, but they just don't have a lot of options. Their options would be to get a reverse mortgage, which is punitive and expensive and time consuming. Sell their house. They can sell their house, they can try to get a cash out refi or heloc, but they probably won't be successful if they're, you know, if they're outliving their retirement. And so Beeline Equity becomes front and center for them. Interesting. Okay, very good. Thank you guys. Thank you. Welcome. OPERATOR And that will conclude our question and answer session. I would like to turn the conference back over to Mr. Nick Laiusa for any closing remarks. Please go ahead. Nick Laiuza Look, I just want to thank everyone for their support of Beeline. We're in it to win it and we are motivated to continue to grow our business. And we look forward to the next earnings call. Thank you. Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.