Beeline (BLNE) Q1 2026 Earnings Transcript

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DATE

Monday, March 30, 2026 at 5 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Nicholas Liuzza
• Chief Operating Officer — Jessica Kennedy
• Chief Financial Officer — Christopher Moe
• Chief Accounting Officer — Tiffany Milton

TAKEAWAYS

• Total Revenue -- $2.7 million, a year-over-year increase of more than 100% from $1.4 million, driven by gains across all core revenue categories.
• BeelineEquity Revenue -- Initiated revenue contribution of approximately $50,000, with management indicating completed initial transactions and workflow validation.
• DSCR Margins -- Approximately 4% and reported as stable, with management emphasizing these as among the highest margin loan types in the product mix.
• Operating Expenses -- $7.9 million, including roughly $1 million in noncash stock-based compensation; excluding this, operating expenses grew about 15% against revenue growth above 100%.
• Net Loss -- $5.3 million, narrowed from prior year due to revenue growth and absence of certain nonrecurring items.
• Adjusted EBITDA -- Negative $3 million, a 21% narrowing compared to a $3.8 million loss in the prior year period.
• Cash Balance -- $1.9 million at period end, supplemented by liquidity from a HELOC facility and ATM equity program.
• Operating Cash Used -- $3.6 million consumed during the quarter, with leadership indicating use of capital levers like HELOC drawdowns ($945,000) and ATM activity ($447,000).
• Cost Reduction Initiatives -- Annualized run rate reductions of approximately $2.5 million, already executed across staff, consultants, and discretionary spending.
• Revenue per Loan -- Expanded over the past year, supporting operating leverage and allowing growth without proportional cost increases.
• Technology and Automation Impact -- Bob, the AI chatbot, increased lead-to-lock conversions by 8%, and the self-service application journey improved application-to-lock pull-through by 131% in early results.
• Product Mix Shifts -- Intentional focus on DSCR and bank statement loans, deprioritizing conventional loan originations due to lower margins.
• Balance Sheet Leverage -- Loans held for sale were $17.3 million at quarter end, with no corporate debt reported.
• MagicBlocks Relationship -- Minority ownership in an AI sales platform that onboarded 4 major lenders and 1 top-10 lender, with technology used to support Beeline’s AI sales agent Bob.
• $100 Million Run Rate Target -- Management reiterated the goal to reach a $100 million revenue run rate by the end of 2027, emphasizing it as a target rather than a guarantee.

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RISKS

• Chief Accounting Officer Tiffany Milton cited the duration of the war with Iran and its effect on the economy as a material risk factor referenced in the call’s forward-looking statements.
• Management highlighted that achieving the $100 million run rate target is a goal and not a guarantee, referencing macroeconomic uncertainties and market dependencies.
• Reliance on BeelineEquity’s partner funding capability was cautioned as a potential risk to scaling that product line.

SUMMARY

Management reported broad-based revenue growth with over 100% year-over-year increase, underpinned by early scaling of fee-based and capital-light initiatives such as BeelineEquity. Operating cost reductions were executed, resulting in early operating leverage and a narrowing of both net loss and adjusted EBITDA loss. There was a strategic emphasis on focusing product mix toward higher-margin DSCR and bank statement loan originations, deprioritizing conventional loans for improved profitability. Liquidity was actively managed using both a HELOC and ATM equity program, allowing ongoing financial flexibility despite sustained negative cash flow. Advancements in automation and AI contributed to substantial improvements in customer conversion rates and operational efficiency, which are being extended to higher-margin products in pursuit of long-term margin expansion.

• Management confirmed that BeelineEquity generates fee revenue per transaction with 0 balance sheet risk. Structurally, it's the highest quality revenue line
• The deployment of the self-service journey resulted in a 131% increase in application-to-lock pull-through in targeted products.
• Capital allocation remains flexible, with numerous other forms of equity financing available and no corporate debt, per CFO Christopher Moe.
• CEO Nicholas Liuzza stated that scaling of BeelineEquity is expected to really see the numbers scale more meaningfully in the third quarter, with the market opportunity concentrated among homeowners who are equity rich but they're cash poor.
• Technology investments in MagicBlocks are viewed as a source for future SaaS revenue streams and operational leverage beyond the company’s core mortgage business.

INDUSTRY GLOSSARY

• DSCR Loan: Debt Service Coverage Ratio loan—mortgage products qualified primarily on a property’s cash flow rather than borrower income, often used by real estate investors.
• ATM: At-the-market equity offering—a mechanism for raising capital via open market sales of newly issued stock.
• HELOC: Home Equity Line of Credit—revolving credit secured by a borrower’s home equity.
• Non-QM: Non-Qualified Mortgage—loans that do not conform to standard agency underwriting criteria, often for borrowers with atypical income documentation.
• BeelineEquity: Proprietary Beeline Holdings initiative enabling homeowners to access home equity through non-debt transactions, with fee-based revenue and no direct lending exposure.
• MagicBlocks: AI-driven sales and workflow automation platform in which Beeline Holdings holds a minority interest; technology is leveraged in mortgage sales processes.
• Bob: Beeline’s proprietary AI-based sales agent, deployed throughout the customer acquisition and qualification process.

Full Conference Call Transcript

Tiffany Milton: Thank you. Good evening, everyone, and thank you for joining us today to discuss Beeline's 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 Liuzza, 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 statements.

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, BeelineEquity performance, growth of its core business, the impact of recent cuts in 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, forecast, target, potential, project, undertake 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 BeelineEquity partner to fund its equity transactions and the risk factors we provided in our 2025 Form 10-K 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 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 Liuzza. Nick, please proceed.

Nicholas Liuzza: 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. BeelineEquity 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 transactions 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 BeelineEquity, 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. BeelineEquity is a key part of that strategy. BeelineEquity 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. BeelineEquity 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 0 balance sheet exposure, we monetize a transaction, not the 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 BeelineEquity is not tied to interest rates, so our revenue grows regardless of market conditions. BeelineEquity generates fee revenue per transaction with 0 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 4 major lenders and 1 top 10 lender. MagicBlocks's AI is proven to make meaningful industry improvements and its platform supports Bob, Beeline'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 a 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 4 revenue pillars: Mortgage, Title, BeelineEquity, 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 towards 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.

Jessica Kennedy: 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 and 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 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. DSCR margins of approximately 4% are stable. Conventional margins are tighter as expected, and bank statement loans are a strong opportunity and 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-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 times and cost while improving conversion.

As we look at technology, technology has been facilitating improved economics in the following ways: Bob, 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 1 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 a 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 BeelineEquity. In a single quarter, we moved BeelineEquity from a concept into a working production system with completed transactions, a validated workflow and the integration 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 BeelineEquity, 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.

Christopher Moe: 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 and initial BeelineEquity 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 of $3 million, G&A of $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 nonrecurring items that impacted the prior year. And 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 noncash expenses such as stock-based compensation, depreciation and amortization as well as certain nonrecurring or nonoperating 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-light revenue streams like BeelineEquity 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, HELOC drawdowns of approximately $945,000 and 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 are implementing this month, driven also in part by improving unit economics in the 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.

Nicholas Liuzza: Thank you. Let me close with 3 points. Our platform is unique. We built a platform combining Mortgage, Title, BeelineEquity and AI, all under one roof. Each piece reinforces the others. Our technology platform contributes efficiency to all 4 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 in partnership with MagicBlocks, 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: [Operator Instructions] And our first question for today will come from [ Kelvin Sito with Prader Lake.]

Unknown Analyst: So I guess when we look at the balance sheet, right, we ended quarter 1 with $1.9 million, and we see that the adjusted EBITDA loss is about $3 million per quarter. So you -- earlier on, you mentioned about some capital levers that you could pull. So I just wonder, could you elaborate on that?

Christopher Moe: Sure, Kelvin. Thanks for checking in. I know you're probably headed to the airport on an airplane or getting on an airplane. So I appreciate your dial in. Yes, as I said before, we have an ATM facility. We also have an HELOC 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're able to fund ourselves through the ATM and HELOC and potentially other things as needed.

Unknown Analyst: Great. And I also would like to ask -- yes. I do have a follow-up. So I'd like to know like -- so we talk about a lot of cost structure initiatives -- cost reduction initiatives, which are excellent. But in terms of hitting breakeven or cash flow positive, do we still see ourselves being on track this year or things have changed quite a bit?

Nicholas Liuzza: Yes, I'll take that. So look, we're not just cutting costs, although that is a big piece of getting towards cash flow positive. We also are steering our business toward our most profitable loans. Our non-QM loans, our bank statement loan and our 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 the shift at the end of the day, and that's where we are.

Operator: Our next question will come from [ Greg McKinley with Retail.]

Unknown Analyst: I'd like to ask you to talk a little bit about just the sort of the competitive backdrop because as I think about the market, we've got a couple of really big digital mortgage companies out there who've spent very heavily building their platform. So in that environment, how does Beeline position itself to get a meaningful share, a durable share of that market over time? And I guess, why is it durable?

Nicholas Liuzza: Yes. So look, I mean, in a favorable rate environment, we're not having this question, right? We are able to grow our revenue very quickly as a result of demand outweighing supply. Right now, it is a bigger issue and something we have to be concerned with. So our 2 most popular loans, the 2 loans that we're the best at, the 2 that are the most profitable, the ones -- the 2 that I just mentioned, the DSCR loan and the bank statement loan, those are loans that you don't get at the top lenders for the most part. Better 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 2 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 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.

Unknown Analyst: Got it. Got it. Okay. That's helpful. And then I wanted to understand BeelineEquity better and maybe on a couple of fronts. So number one, can you give us your thoughts on when this emerges as something that 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?

Nicholas Liuzza: Yes. 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 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 the product, 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.

Unknown Analyst: 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?

Nicholas Liuzza: Yes. 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 advisers. We're going to drive it through very smart digital campaigns. We're going to leverage AI marketing. We're going to partner with organizations where baby boomers are prevalent like AARP. We've got a really good marketing strategy. Look, there's what, $33 trillion of equity. And you have to remember, the failure rate or the denial rate for a cash out refi or a 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.

Christopher Moe: Sell the house.

Nicholas Liuzza: They can sell their house. They can try to get a cash out refi or a HELOC, but they probably won't be successful if they're out living their retirement. And so BeelineEquity becomes front and center for them.

Operator: And that will conclude our question-and-answer session. I would like to turn the conference back over to Mr. Nick Liuzza for any closing remarks. Please go ahead.

Nicholas Liuzza: 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.

Operator: This will conclude our conference call for today. Thank you for your participation. You may now disconnect.

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