loanDepot (NYSE: LDI) shrinks net debt while quarterly loss widens to $29 million

What happened

loanDepot, Inc. (NYSE: LDI) widened its third-quarter net loss to $29 million from $7 million in the second quarter. It reported the results for the quarter ended Sept. 30 on Nov. 9.

Adjusted net loss, which leaves out servicing-rights valuation changes and other items, also widened to $31 million. Origination volume fell 12% to $7.05 billion from the second quarter. Unit volume rose 7% on growth in home equity lending.

Revenue fell 9% to $307 million. Adjusted revenue fell 2% to $302 million. The company blamed lower origination income from reduced mortgage volumes.

It repurchased $87 million of senior notes at an average of 88% of par. It also completed the sale of $10 billion of Agency mortgage servicing rights (MSRs). It agreed to sell $9 billion of Government MSRs, and that deal closed in October.

Chief Financial Officer David Hayes said the Agency sale and the discounted note repurchases cut net debt obligations by approximately $114 million.

Key numbers

Metric	Latest	Change	Source
Loan origination volume	$7.05 billion	from $6.53 billion, +8%	SEC 8-K Exhibit 99.1
Total revenue	$307.1 million	from $323.3 million	SEC 8-K Exhibit 99.1
Adjusted net loss	$30.8 million	from $2.7 million	SEC 8-K Exhibit 99.1
Cash and cash equivalents	$214.4 million	from $459.2 million, -53.3%	SEC 8-K Exhibit 99.1
Total equity	$310.9 million	from $433.3 million, -28.2%	SEC 8-K Exhibit 99.1
Senior notes repurchased	$87 million		SEC 8-K Exhibit 99.1

Read more: loanDepot (LDI) company research

Where the revenue gap comes from

Total revenue and adjusted revenue moved by very different amounts. By OptimistFi's calculation from the filing's tables, total revenue fell $30.18 million from the second quarter. Adjusted revenue fell $5.13 million.

The difference is servicing-rights valuation. The company's reconciliation backs out valuation changes in servicing rights, net of hedging. Those changes added $4.94 million to revenue in the third quarter, against $29.98 million in the second.

That smaller gain explains most of the drop in total revenue.

Adjusted EBITDA slipped to $17 million from $20 million. Adjusted net loss excludes a one-time $4.12 million gain on extinguishment of debt, so the buybacks do not flatter that measure.

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Margins and the home equity shift

Pull-through weighted gain on sale margin rose 54 basis points to 399 basis points. The company said a deliberate shift toward higher-margin home equity loans drove the gain.

The same shift cut pull-through weighted lock volume 15% to $5.6 billion, the company said. HELOC production carries no interest rate lock.

Costs moved the right way. Total expense was $335.74 million, against $343.94 million in the second quarter. The company raised the impact of its productivity initiatives to $25 million of annualized cost savings from $12 million.

Against the third quarter of 2025, the company said origination volume rose 8% and unit volume rose 33%. It said its cost to produce fell 16%, using internal management metrics.

Cash, equity and debt

Liquidity thinned over the past year. Cash and cash equivalents were $214.4 million on Sept. 30, down 53.3% from $459.2 million a year earlier. Total equity was $310.9 million, down 28.2% from $433.3 million.

Credit quality in the servicing book also weakened. Loans 60 or more days delinquent were 2.0% in the servicing portfolio data. That compares with 1.7% at June 30 and 1.5% a year earlier.

Debt obligations, net, were $2.02 billion, down from $2.13 billion at June 30. Hayes said the company is pursuing several financing alternatives to refinance or extend its debt. He said the focus is on extending the maturity profile.

Why it matters

OptimistFi has argued that loanDepot works only if its platform captures a housing and refinancing recovery profitably before cash and book equity erode further. The quarter is mixed on that test. Margins and unit volume improved. Losses widened, and cash and equity fell.

The refinance side showed no recovery. The preliminary organic refinance consumer direct recapture rate fell to 52% from 68% in the second quarter. Founder and Chief Executive Officer Anthony Hsieh said elevated interest rates remain a headwind for mortgage demand.

The debt reduction came from servicing sales and discounted buybacks, which the filing treats as one-time items. The adjusted net loss still widened. Better margins have not yet reached the bottom line.

What's next

Fourth-quarter results will test the company's guidance. It expects origination volume of $4.5 billion to $6.5 billion. Even the top end is below the third quarter's volume.

It also expects a gain on sale margin of 315 to 355 basis points, which brackets the third quarter's 3.18%. It guides to a pull-through weighted gain on sale margin of 425 to 465 basis points, against 399 in the third quarter.

Margins at or above the guided range, plus a completed refinancing or extension of debt, would strengthen the case. Another drop in cash and equity without one would weaken it.

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