UWM Hldgs Q2 2026 Earnings Call: Complete Transcript

UWM Hldgs (NYSE: UWMC ) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This content is powered APIs. For comprehensive financial data and transcripts, visit Access the full call at Summary UWM Hldgs reported operating income over $180 million and $40 billion in business for the quarter, demonstrating strong financial performance.

The company discussed a strategic partnership with Oaktree, highlighting its role as a capital and strategic partner aiding long-term growth. UWM Hldgs decided to cut its dividend to boost equity and focus on long-term strategic benefits, with potential for future special dividends. The company experienced a hedge loss due to a failed transaction with Two Harbors but views it as a one-time event, reinforcing future risk management strategies. Management emphasized the strength of their balance sheet, projecting a positive outlook for the next 4-5 years in the mortgage market.

Full Transcript Matt Ishbia, Chairman and CEO All right. Hi there everyone. Welcome for joining and thank you for joining today's call. Appreciate everyone and I know we got a lot of questions today, so I'm going to go through every one of them — at least I'm trying to get through every one of them.

Hopefully make it as effective for everyone as possible. You know, before I get into that, obviously the second quarter perspective, operating income over $180 million, EBITDA, adjusted EBITDA, along with about $40 billion of business. We feel really good about your UWM Hldgs and the strength of the broker channel and the growth of the broker channel. So we feel great about where that's at.

Obviously I got so many questions about Oaktree partnership, the dividend, Two Harbors, the hedging. We're going to get through all that stuff and I'll try to get through it before I get into it. Wanted to start with the overall picture from where we are at UWM Hldgs and the partnership with Oaktree. We feel great about Oaktree and the partnership that we have and are creating.

You know, Oaktree is not just capital. They're strategic partners of ours. They have MSR background, non-agency — like they have a lot of mortgage-related — and they're betting on housing and they're betting on UWM Hldgs. And so we're excited about the partnership and what it's going to do for our business long term.

And that's what we always think about is how do we dominate long term. The mortgage market's been tough the last five years now and UWM Hldgs has consistently made operating income and Two Harbors recognized the strength of our business and says, hey, how can we take this to the next level? And from a strategic perspective we see a lot of the same vision about the brokers, about the operating model and infrastructure that we built to help the independent mortgage channel grow and dominate. And that's really what we're about here at UWM Hldgs.

And housing and mortgages are going to be here and be strong. It's a huge market and it's been a tough four, five years and we expect the next four or five years to be significantly, significantly better. And, and in the tough years we still are successful and profitable at UWM Hldgs. As Oaktree points out many times, we spent time with them and now it's like how do we take it to a whole nother level?

And so the balance sheet is fortified, the debt ratios that people are concerned about are non-question anymore and we're ready to go forward in a really, really strong way. So with that being said, I know there's AI questions, there's dividend questions. So let me just go into all these questions and hopefully answer all of them. I'm going to try to mention a couple people that ask the questions, but to be fair, I think we got the same questions from about 15 different people.

So I won't try, I won't do too many. But you know, let's just start, I guess, with the dividend. I got some questions. Jason, Stewart, Bose, Jeff — I mean, I got a people.

So I'm not going to name everyone's name that asked the question. But the basic question is, hey, Matt, you know, UWM Hldgs, why are we cutting the dividend now? And so the first part, how we got here: a lot of things tied to the dividend. We've always rewarded our shareholders and we feel good about rewarding our shareholders and we're going to always look at ways to do that.

The decision to cut it right now is just capital allocation. Right now after this transaction, after the 2 billion-plus, which is the largest capital raise I think in mortgage history, we're going to have over $3 billion of equity. And so how do we continue to build on that going forward? The dividend obviously takes out from that.

And we made the decision that the right thing for our business for the long term is to continue to build up equity, continue to solve for the debt ratios, which are significant, are well below industry norms now with the capital infusion, and run the business the most effective way. Will there be special dividends down the road? Possibly. Will there be — will we go back to regular dividend?

Possibly. Once again, we look at that stuff every single quarter. But the reality is, you know, liquidity matters, equity matters, and we have the best operating business and infrastructure for brokers to grow and dominate. And so if I can make sure the capital, liquidity are in a great position, then all the rest takes care of itself.

And once again, it's been a tough four or five years in the mortgage industry. The next four or five years are going to be significantly better. Oaktree believes in that. They believe in housing, they believe in UWM Hldgs.

And so do we, and so do I, obviously. And so that's kind of how I think about the dividend. It's just the right time to pause that and suspend that process. And then we'll always evaluate every quarter with our board of directors and see what's best.

But right now I see a going-forward path of let's retain equity, retain earnings, continue to build, continue to grow, and take advantage of the market that we have in front of us. All right, let's see. Two Harbors. I guess we can talk Two Harbors.

A couple questions on, you know, the transaction. So let me just — did that recreate the need for capital? So I don't really look at it that way. And so here's what I'll say.

The way we look at it is, you know, how do we make sure we have a good amount of equity, we have good ratios, and we have a fortified balance sheet. So that's a big part of why we have the capital raise. And it's not just capital, because if it was just capital then I could put money in myself or we could get random people to put capital. This was a strategic partnership with Oaktree because of their MSR background.

They have a whole — and also just their knowledge and their sophistication on capital markets, which will help us in so many ways. And so we're excited about the partnership. Now, the Two Harbors transaction, you know, it definitely was unfortunate how it happened and you'll see some litigation and some things that they did inappropriately and we'll go through that process when that time comes. However, I'm not going to spend my time talking about that.

What I'm going to talk about is that Two Harbors transaction was one of the strategies of helping from a cash, liquidity, and equity perspective. And when that did not go the way we expected, we had another option. And it's great to have options. And once again, Oaktree wrote a massive-size check to be part of this and to be next to me and UWM Hldgs and help us grow together.

And so, you know, if the deal would have closed, maybe, you know, the Oaktree thing would not have happened as quickly. The silver lining is Oaktree is so much better partnership for us than Two Harbors or anything else would have been. And so I think of it as a long-term upside for UWM Hldgs, the way it all played out. And we'll go through the litigation process with Two Harbors and CrossCountry and some of the inappropriate things that happened in that deal at that time.

So I think that covers Two Harbors. I'm trying to think if there's anything else that — look at some of the other Two Harbors questions. Let me go into the hedge loss because I think that's a handful of other questions here. Can you please explain the hedge loss, what caused it, how investors should think about it?

So listen, hedging in general in the mortgage industry is expensive. And it's something I actually don't believe in. In general, we have never hedged MSRs — so I won't say never would. We don't traditionally hedge our MSRs.

Our origination machine is so big and strong that if the rates drop, you'll lose MSR value and equity, but you'll do so much more business that you're good. And if rates go up, your MSR values go up and you do less originations, but your equity goes up. That's kind of how we've always played it. Well, when you're going through and acquiring a company like Two Harbors and a massive MSR book, then our MSR book became double the size of what we've always managed and therefore it created a little more risk.

So we did put a hedge on to protect against that risk and then a lot of things happened. Let's just be real — whether it's a war, a lot of different things that happened that created the 10-year to go up strategy — and then obviously the Two Harbors transaction went away. And so a confluence of events that created a hedge loss. We hit a certain risk threshold that I said we're not going to continue hedging regardless because we didn't want to have more of an equity drain, and we took the hedge off.

And of course that's the strategy that we've always had is let's not hedge, let's run the business effectively. Once again, Oaktree has a strategic perspective on this and I'll go through that with them after this process and whether we hedge going forward or not. But once you have $3 billion equity, you're really not at a risk of the MSR values go down $400 million for this quarter or go up $400 million — it's less relevant. But when you're hovering around one and a half billion or $2 billion, it becomes a little bit more relevant.

And so that became an issue. We hedged and it was a one-time event, to be honest with you. Because of Two Harbors we were over-hedged if you think of it that way, protecting against the Two Harbors transaction. The market moved against us and it's a one-time event that won't happen again.

We feel like our hedging policies are much stronger now. But also we're not acquiring another company that has an MSR book like that — at least that's not the plan now — and we know how to handle it differently going forward. So I think that covers it. It was a transaction-specific event.

It's not a reflection of our operating business, by the way, at all, as you guys know, as I pointed out at the beginning of the call, $160 to $200 million of adjusted EBITDA almost every quarter, consistently a little bit higher than that if you look at the numbers, but we're consistently making that much money. What did management learn from hedge loss? I kind of covered this — one unique circumstance. Traditionally, we don't hedge MSRs at UWM Hldgs.

Definitely with the size book we have right now, we wouldn't be hedging MSRs at that level. And once again, the market moved in a certain way and it was an event that obviously unfortunate and not planned and not expected. But at the same time, we're looking forward now and know what our business is about. And operating business is great.

The balance sheet is fortified and never been stronger. I even looked at the balance sheet from 2020 and '21. I think $3 billion is kind of the high-water mark. And we're going to be at that number when this capital raise is done.

And at the same time, after another quarter or two of earnings, as we're going to have, it will continue to grow and with no dividend, that will make our balance sheet strong, liquidity strong. And then just let's continue to build and dominate helping independent mortgage operate in this housing market with AI. All the things that we've really been building for years and years here at UWM Hldgs can now go to the next level. So I think that covers those.

Let me see if there's any other ones. So let's talk now — there's a bunch of Oaktree questions obviously, so let me talk about that. Talked a lot about it already. But why was Oaktree the right partner for UWM Hldgs at this point of the cycle?

So first, Oaktree has a great background, great reputation, from their leadership to also just their mortgage knowledge and their housing belief. So they believe in housing, they believe in UWM Hldgs. And we partnered together. Once again, my background has always been, hey, I'll just do it myself.

We don't really bring outside parties in. And that was really the path we were going until we started having some in-depth conversations with Oaktree and I realized the strategic benefit of bringing in someone next to me. And so instead of Matt putting in a billion or more, Matt will put in $500, $550 million. These guys put in a billion, billion five.

And that's kind of what would get to $2 billion. And so that was the strategy there. But it's strategic money. It's not just capital.

We can get capital from anyone but strategic partner — we're going to have a member or two on the board as well. They're going to have some different conversations and they have different belief systems on things that maybe can help us. They also believe heavily, heavily in the strategy and the vision of UWM Hldgs — the broker channel, the independent market. And I wouldn't be aligned with someone that didn't believe strategically in the same thing from housing, from the infrastructure we built for brokers, the AI investments that we're making and continue to make.

And so they're aligned with us and how we're doing things. And so I think it's really been a perfect match. They understand the cycles of the industry as well. They understand that in most cycles, you know, most mortgage markets it's every six, seven years is $15-plus trillion of mortgages and, you know, the last five have not been that.

So they know the good years of the 2, 3, 4 trillion dollar years are most likely coming in the next 3, 4, 5 years. So they understand that right now is an amazing time to be partnered with UWM Hldgs. And I understand that as well, which is why I put a lot of money in as well. And you know, obviously I'm the biggest shareholder and also big in on this deal as well.

So we believe in the market, we believe in UWM Hldgs and Oaktree is a great partner in that respect. So let's see, let me see if I can cover more Oaktree. There's a lot of Oaktree questions here. So, you know, some people look at the size and cost of transaction and think, you know, is this — how do we think about this from a strategic benefit — is this, you know, Oaktree is getting a great deal is what people say, which they are, and they should get a great deal and we're happy for them.

When Oaktree makes a lot of money, so does every shareholder, so does UWM Hldgs. Everyone's going to win together. And so I don't begrudge anyone for making a lot of money next to me. I wish them all the best along with everyone.

And when the warrants become very profitable — I guess one of the questions kind of ties to the — when the warrants become very profitable, I think everyone that owns shares today will make a lot of money as well. And so the way we look at that is yeah, there's a lot of different pieces to it. 5 billion check. I'm putting in up to $550 million.

I believe that that's an opportunity for everyone to succeed and it's putting the common shareholders, the debt holders, all in a better long-term position. And that's my job — to run the business the most effective for the long term, not for whatever today is August 6th. You know, it's not about August 6th, it's about '27, '28, 2030, 2032. And anyone that's partnered with us, Oaktree being one of them, me being a big shareholder and a lot of the shareholders on the call and people that pay attention to what we talk about, everyone's going to win together.

And it's about UWM Hldgs and the operating platform, the AI, the technology that we built to dominate for the long term. And now our balance sheet is fortified and integrated. So yes, Oaktree is getting a great deal and I'm happy for them. And when they make a boatload of money and are very successful, so will most of our shareholders.

And a lot of our shareholders will make even more because of — based on where the stock is today. And so we're excited about everyone's winning together and we're going to continue to win going forward. Let's see. You know, so I think there's a question here about debt ratios and equity.

And so, you know, the key thing is the total equity increases from a billion to roughly $3 billion and growing. Right. 2x. 2 is well below the industry norms.

5 to 2. We're well below it and we have plenty of room to grow. And so we feel really good about where we are right now from a debt-to-equity ratios and overall our business and balance sheet. So the key thing for me here on the Oaktree — the question kind of talks about the $2 billion capital raise and how that handles for debt ratios and equity.

And I think in general it's a real big positive. Anyone who wants to take a step back and says is the company stronger today than it was six months or a year ago? Anyone would say yes. Everyone would say yes.

And that's what I think about right now is how are we positioned for the future.