Rocket Companies, Inc. (NYSE: NYSE: RKT ) is trying to become a one-stop shop for buying a home: you find the house on Redfin, get the mortgage from Rocket, and then have Mr. Cooper handle your payments, all stitchedI focus on producing objective, data-driven research, mostly about small- to mid-cap companies, as these tend to be overlooked by many investors. From time to time, though, I also look at large-cap names, just to give a fuller sense of the broader equity markets.Analyst’s Disclosure:I/we have no ...

Core Viewpoint - Rocket Companies Inc. (RKT) has significant upside potential as its price-to-earnings-growth (PEG) ratio indicates that much of its future earnings growth has not yet been priced in by the market [2][9]. Group 1: Current Market Conditions - The current housing market has approximately 50% more listings compared to the same season last year, leading to reduced buying demand due to high mortgage interest rates [3]. - Despite the challenging market conditions, Rocket Companies reported earnings per share (EPS) of 4 cents for the latest quarter, surpassing market expectations of 3 cents [7]. Group 2: Future Growth Potential - Wall Street analysts project Rocket Companies will report 12 cents in EPS for the fourth quarter of 2025, indicating a tripling of current earnings [7]. - The PEG ratio of Rocket Companies is 0.1x, suggesting that 90% of its future EPS growth has not been priced in, presenting a substantial upside opportunity for investors [8][9]. Group 3: Institutional Confidence - There has been $416 million in institutional buying over the recent quarter, signaling confidence from institutional investors in Rocket Companies' future potential [10]. - Boston Partners increased their holdings in Rocket Companies by 6.2%, raising their net position to $206 million, indicating strong institutional support [11].

Core Viewpoint - Rocket Companies, Inc. is conducting tender offers and consent solicitations for the outstanding senior notes of Nationstar Mortgage Holdings Inc. as part of its acquisition of Mr. Cooper Group Inc. [1][10] Tender Offers and Consent Solicitations - The early tender results indicate that as of the Early Tender Deadline, a total of $574.125 million (88.33%) of the 5.125% Senior Notes due 2030 and $534.765 million (89.13%) of the 5.750% Senior Notes due 2031 were validly tendered [2][3]. - The Tender Offers and Consent Solicitations will expire on September 2, 2025, unless extended or terminated earlier [6][8]. Proposed Amendments - The company received the requisite consents to execute supplemental indentures that eliminate the requirement for a "Change of Control" offer, substantially reduce restrictive covenants, and remove certain conditions related to legal defeasance [4][5]. Financial Considerations - Holders of the Early Tender Notes will receive a total tender offer consideration of $1,012.50 per $1,000 principal amount, which includes an early tender payment of $50.00 [3][9]. - Notes tendered after the Early Tender Deadline will receive a lower consideration, excluding the early tender payment [9]. Acquisition Context - The consummation of the Tender Offers and Consent Solicitations is contingent upon the successful completion of the acquisition of Mr. Cooper, as outlined in the Merger Agreement dated March 31, 2025 [10].

Core Viewpoint - Rocket Companies, Inc. is conducting exchange offers and consent solicitations for existing senior notes as part of its acquisition of Mr. Cooper Group Inc. [1] Summary by Sections Exchange Offers and Consent Solicitations - The company announced early results for the exchange offers for $750 million of 6.500% Senior Notes due 2029 and $1 billion of 7.125% Senior Notes due 2032, totaling $1.75 billion in new senior notes [1] - The exchange offers and consent solicitations are linked to the pending acquisition of Mr. Cooper [1] Tender Results - As of the Early Tender Date, $738.34 million (98.45%) of the 2029 Notes and $954.21 million (95.42%) of the 2032 Notes were validly tendered [3][2] Consent and Amendments - Majority Noteholder Consents were received, allowing Nationstar to execute supplemental indentures that eliminate certain covenants and events of default [5][7] - Proposed amendments will not take effect until the company accepts the validly tendered existing notes [8] Timeline and Conditions - The exchange offers will expire on September 2, 2025, unless extended [9] - The settlement date is expected to occur shortly after the expiration date, coinciding with the acquisition's consummation [9] New Rocket Notes - New Rocket Notes will have the same interest rate and maturity date as the existing notes, with interest accruing from the last paid date on the existing notes [12][11] - Eligible holders who tender their existing notes will receive $1,000 principal amount of New Rocket Notes plus cash for any fractional amounts [10] Offering Memorandum - The terms and conditions of the exchange offers are detailed in an Offering Memorandum and Consent Solicitation Statement dated August 4, 2025 [13]

Group 1 - Market participants are anticipating interest rate cuts, with expectations rising from zero cuts to 2-3 cuts for 2025, including a potential 50 basis-point cut [1] - Mortgage lenders like Rocket Companies (RKT) have seen a +7.4% increase, while homebuilders Pulte Home (PHM) and Lennar (LEN) are up +5%, indicating strong interest in the new interest rate environment [2] - The Russell 2000 index has increased by +4.3% over the past two sessions, benefiting small banks and insurance companies from lower interest rates [2] Group 2 - Cisco Systems (CSCO) reported fiscal Q4 earnings of 99 cents per share, exceeding the Zacks consensus by 2 cents and showing a +7.6% year-over-year revenue increase to $14.67 billion [3][4] - Cisco's guidance for the current quarter is slightly raised, with the high-end of the Q1 earnings range remaining flat at 99 cents per share, and shares are up +18.7% year to date [4] Group 3 - Upcoming economic indicators include Weekly Jobless Claims expected to remain below 230K and Continuing Claims anticipated to stay under 2 million [5] - The Producer Price Index (PPI) is projected to rise to +0.2% on the headline and +0.3% on the core, which are manageable increases for the market [6]

Core Insights - Viral Nation has been appointed as the Social Media Agency of Record for Rocket, a Detroit-based fintech platform that encompasses mortgage, real estate, title, and personal finance businesses [1] - The partnership aims to provide authentic homeownership stories that resonate with social media users, moving beyond curated content to offer real support and guidance [2][4] Company Overview - Rocket Companies, founded in 1985, operates various financial services including Rocket Mortgage, Redfin, Rocket Homes, Rocket Close, Rocket Money, and Rocket Loans [6] - The company is recognized for its exceptional client experiences, having been ranked 1 in client satisfaction for primary mortgage origination and servicing by J.D. Power a total of 22 times [7] Strategic Initiatives - The "Own the Dream" campaign launched by Rocket was amplified by Viral Nation's strategic social campaigns, achieving 247 million views nationwide and fostering genuine conversations across platforms [3] - Viral Nation will assist Rocket in showcasing real client stories and managing dynamic community engagement to guide potential homeowners through the homebuying journey [4][5] Industry Context - Nearly 80% of social media users seek inspiration for homeownership through their feeds, indicating a significant opportunity for brands to connect with audiences on a deeper level [2] - The collaboration between Rocket and Viral Nation aims to build a social movement that empowers Americans to envision themselves in the homeownership journey [5]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) H1 2025 saw a net loss of $178.4 million, driven by MSR fair value changes, while total assets grew to $30.4 billion following a $4.0 billion senior note issuance and the Up-C Collapse [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$30.4 billion** by June 30, 2025, driven by higher cash and senior notes, while total equity decreased to **$7.4 billion** due to the Up-C Collapse Condensed Consolidated Balance Sheet Highlights (as of June 30, 2025 vs. Dec 31, 2024) | Metric | June 30, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $5,090,631 | $1,272,853 | +$3,817,778 | | Mortgage loans held for sale | $11,168,691 | $9,020,176 | +$2,148,515 | | Mortgage servicing rights (MSRs) | $7,566,632 | $7,633,371 | -$66,739 | | **Total Assets** | **$30,360,222** | **$24,510,063** | **+$5,850,159** | | **Liabilities** | | | | | Funding facilities | $9,481,780 | $6,708,186 | +$2,773,594 | | Senior Notes, net | $8,000,225 | $4,038,926 | +$3,961,299 | | **Total Liabilities** | **$22,911,294** | **$15,466,683** | **+$7,444,611** | | **Equity** | | | | | Non-controlling interest | $— | $8,340,879 | -$8,340,879 | | **Total Equity** | **$7,448,928** | **$9,043,380** | **-$1,594,452** | [Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)%20and%20Comprehensive%20Income%20(Loss)) Q2 2025 net income decreased to **$34.1 million**, and H1 2025 resulted in a **$178.4 million** net loss, primarily due to MSR fair value changes and increased expenses Income Statement Summary (Q2 & H1 2025 vs. 2024) | Metric ($ in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue, net | $1,360,251 | $1,300,722 | $2,397,515 | $2,684,438 | | Total expenses | $1,335,989 | $1,108,680 | $2,596,356 | $2,194,026 | | **Net income (loss)** | **$34,089** | **$177,925** | **($178,357)** | **$468,639** | | Net (loss) income attributable to Rocket | ($1,785) | $1,295 | ($12,168) | $17,510 | | **Diluted EPS** | **($0.01)** | **$0.01** | **($0.08)** | **$0.13** | [Condensed Consolidated Statements of Changes in Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity decreased to **$7.4 billion** by June 30, 2025, primarily due to the Up-C Collapse eliminating non-controlling interest, alongside a net loss and special dividend payments - The Up-C Collapse on June 30, 2025, resulted in the elimination of the non-controlling interest and the exchange of Class D common stock for newly created Class L common stock[17](index=17&type=chunk)[25](index=25&type=chunk) - A special dividend of **$122.2 million** was paid to Class A shareholders in the first half of 2025[17](index=17&type=chunk)[38](index=38&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents increased by **$3.8 billion** in H1 2025, driven by **$6.5 billion** from financing activities, partially offset by **$2.6 billion** used in operations Cash Flow Summary (Six Months Ended June 30) | Metric ($ in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($2,647,130) | ($3,135,051) | | Net cash used in investing activities | ($54,575) | ($226,025) | | Net cash provided by financing activities | $6,524,908 | $3,560,983 | | **Net increase in cash** | **$3,824,001** | **$200,426** | - Financing activities were significantly boosted by **$4.0 billion** in borrowings from new Senior Notes during the first half of 2025[19](index=19&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the Up-C Collapse, recent acquisitions of Redfin and pending Mr. Cooper deal, **$4.0 billion** senior note issuance, and the company's two reportable segments - On June 30, 2025, the company completed a series of transactions to collapse its Up-C structure, simplifying its organization by eliminating non-controlling interests and creating a new Class L common stock[25](index=25&type=chunk) - The company completed the acquisition of Redfin Corporation on July 1, 2025, and has a pending agreement to purchase Mr. Cooper Group Inc., expected to close in Q4 2025[57](index=57&type=chunk)[58](index=58&type=chunk) - In June 2025, the company issued **$2.0 billion** of 6.125% senior notes due 2030 and **$2.0 billion** of 6.375% senior notes due 2033[106](index=106&type=chunk)[112](index=112&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=54&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses challenging market conditions, an 18% increase in Q2 2025 mortgage origination volume to **$29.1 billion**, but a decline in net income to **$34.1 million** due to lower margins and higher expenses, while maintaining **$9.1 billion** in liquidity [Executive Summary and Recent Developments](index=54&type=section&id=Executive%20Summary%20and%20Recent%20Developments) Q2 2025 faced high inflation and mortgage rates, with strategic moves including the Up-C Collapse and acquisitions, resulting in an 18% increase in origination volume but a drop in net income to **$34.1 million** - Market conditions in Q2 2025 were characterized by inflation remaining above the Federal Reserve's target and elevated 30-year fixed mortgage rates, which continued to challenge housing affordability and mortgage activity[208](index=208&type=chunk) Q2 2025 Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Mortgage Origination Volume | $29.1 billion | $24.7 billion | +18% | | Net Income | $34.1 million | $177.9 million | -81% | | Adjusted EBITDA | $171.8 million | $224.8 million | -24% | [Key Performance Indicators](index=60&type=section&id=Key%20Performance%20Indicators) Q2 2025 saw an 18% increase in closed loan origination volume to **$29.1 billion**, but gain on sale margin compressed to **2.80%**, while total serviced UPB grew to **$609.2 billion** and Rocket Money subscribers reached **4.46 million** Key Performance Indicators (Q2 2025 vs. Q2 2024) | Indicator | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Closed loan origination volume | $29.1B | $24.7B | | Gain on sale margin | 2.80% | 2.99% | | Total serviced UPB (at period end) | $609.2B | $534.6B | | Rocket Money paying subscribers | 4.46M | 3.67M | [Results of Operations](index=66&type=section&id=Results%20of%20Operations) Q2 2025 net revenue slightly increased to **$1.36 billion**, but total expenses rose 21% to **$1.34 billion** due to higher compensation, marketing, and acquisition costs, impacting pre-tax income - Gain on sale of loans, net increased by 8% in Q2 2025 to **$815.9 million**, driven by a 13% increase in net rate lock volume[249](index=249&type=chunk) - Loan servicing income, net decreased by 16% in Q2 2025 to **$202.4 million**, primarily due to a negative change in MSR valuation model inputs caused by a decrease in interest rates during the quarter[257](index=257&type=chunk) - Total expenses for Q2 2025 increased by 21% to **$1.3 billion**, driven by higher variable compensation, a 31% increase in marketing expenses, and acquisition-related costs[268](index=268&type=chunk) [Summary results by segment](index=75&type=section&id=Summary%20results%20by%20segment) Q2 2025 Direct to Consumer contribution margin decreased 2% to **$367.5 million**, while Partner Network saw a 34% decline to **$83.4 million** due to compressed gain on sale margins Segment Contribution Margin (Q2 2025 vs. Q2 2024) | Segment | Q2 2025 Contribution Margin | Q2 2024 Contribution Margin | YoY Change | | :--- | :--- | :--- | :--- | | Direct to Consumer | $367.5 million | $374.7 million | -2% | | Partner Network | $83.4 million | $126.3 million | -34% | - The Direct to Consumer segment's expenses grew 20% YoY, driven by brand marketing and higher variable costs, which offset an 11% increase in adjusted revenue[275](index=275&type=chunk)[276](index=276&type=chunk) - The Partner Network's adjusted revenue fell 21% YoY, driven by a 25% decrease in gain on sale of loans, net, due to compressed margins[283](index=283&type=chunk) [Liquidity and Capital Resources](index=79&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained a strong liquidity position of **$9.1 billion** as of June 30, 2025, bolstered by a **$4.0 billion** senior note offering to support strategic acquisitions - Total liquidity stood at **$9.1 billion** as of June 30, 2025, including **$5.1 billion** of cash and cash equivalents[297](index=297&type=chunk) - In June 2025, the company issued **$4.0 billion** in aggregate principal of new senior notes, with proceeds intended to fund the redemption of Mr. Cooper's senior notes upon acquisition completion and for general corporate purposes[299](index=299&type=chunk) - A special cash dividend of **$0.80** per share was paid to Class A common stockholders on April 3, 2025[303](index=303&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=83&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes to the company's market risk exposure have occurred since the disclosures in its 2024 Annual Report on Form 10-K - There have been no material changes to the Company's market risk exposure since the end of fiscal year 2024[306](index=306&type=chunk) [Item 4. Controls and Procedures](index=83&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures are effective at a reasonable assurance level[307](index=307&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[308](index=308&type=chunk) [PART II. OTHER INFORMATION](index=84&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=84&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions but does not anticipate a material adverse effect on its financial condition or operations - Management does not expect pending or threatened legal matters to have a material adverse effect on the company's business, financial condition, or results of operations[310](index=310&type=chunk) [Item 1A. Risk Factors](index=84&type=section&id=Item%201A.%20Risk%20Factors) The company's risk factors have not significantly changed from those disclosed in its 2024 Form 10-K and Q1 2025 Form 10-Q - There have been no significant changes to the company's risk factors from those previously disclosed in the 2024 Form 10-K and Q1 2025 Form 10-Q[311](index=311&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=84&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On June 30, 2025, the company issued approximately **1.85 billion** shares of Class L common stock as part of the Up-C Collapse, exempt from public registration - The company issued approximately **1.85 billion** shares of Class L common stock on June 30, 2025, as part of the Up-C Collapse transaction[312](index=312&type=chunk) - The issuance was exempt from registration under Section 4(a)(2) of the Securities Act of 1933 as a private offering[313](index=313&type=chunk) [Item 5. Other Information](index=84&type=section&id=Item%205.%20Other%20Information) No additional information was reported under this item - None[314](index=314&type=chunk) [Item 6. Exhibits](index=85&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate charters, debt indentures, and executive certifications - The report includes numerous exhibits, such as the Second Amended and Restated Certificate of Incorporation, the Indenture for the new senior notes, and amendments related to the Up-C Collapse and Tax Receivable Agreement[315](index=315&type=chunk)

Core Viewpoint - Rocket Companies, Inc. is initiating an exchange offer for existing senior notes in connection with its acquisition of Mr. Cooper Group Inc., aiming to exchange up to $1.75 billion in new senior notes for existing notes totaling $1.75 billion [1][5][13] Exchange Offer Details - The company is offering to exchange $750 million of 6.500% Senior Notes due 2029 and $1 billion of 7.125% Senior Notes due 2032 for new senior notes [1][5] - Eligible holders can receive a cash payment of $2.50 per $1,000 principal amount of existing notes for valid consents delivered by the Early Tender Date [8][9] - The total exchange consideration includes $950 or $1,000 principal amount of new Rocket Notes depending on the timing of consent receipt [9][12] Consent Solicitation - Rocket Companies is soliciting consents for proposed amendments to the indentures governing the existing notes, which include eliminating certain covenants and events of default [5][6] - A majority of the aggregate principal amount of existing notes must consent for the proposed amendments to be adopted [6][13] Timeline and Conditions - The exchange offers and consent solicitations will expire on September 2, 2025, with an early tender date of August 15, 2025 [7][10] - The consummation of the exchange offers is contingent upon receiving the necessary consents and the completion of the acquisition of Mr. Cooper [13][10] New Rocket Notes - The new Rocket Notes will have the same interest rate and maturity date as the existing notes, and will be guaranteed by Rocket Mortgage and its subsidiaries [11][12]

Core Viewpoint - Rocket Companies, Inc. is initiating tender offers to acquire outstanding senior notes from Nationstar Mortgage Holdings Inc. as part of its acquisition of Mr. Cooper Group Inc. [1][2] Tender Offers - The company is offering to purchase 5.125% Senior Notes due 2030 and 5.750% Senior Notes due 2031, with aggregate principal amounts of US$650 million and US$600 million respectively [3][4] - The tender offer consideration for both notes is set at $962.50 per $1,000 principal amount, with an early tender payment of $50, bringing the total tender offer consideration to $1,012.50 for early tenders [3][4] Consent Solicitations - The company is soliciting consents to amend the indentures governing the notes, which includes eliminating the "Change of Control" offer requirement and most restrictive covenants [2][9] - A majority of the aggregate principal amount of the notes must provide consent for the proposed amendments to be adopted [9] Timeline and Conditions - The tender offers and consent solicitations will expire on September 2, 2025, with an early tender deadline of August 15, 2025 [7][11] - The consummation of the tender offers is contingent upon receiving the requisite consents and the successful completion of the acquisition of Mr. Cooper [10]

Group 1: Market Performance - Dongyue Group (00189) saw a rise of over 1%, with expectations for increased refrigerant demand as the new cooling season begins, despite a seasonal decline in August [1] - Hong Kong's banking stocks experienced a rally, with Agricultural Bank (01288) up over 2%, and other banks like ICBC (01398) and China Merchants Bank (03968) also gaining over 1%. The overall asset quality of listed banks remains stable, and profit growth is expected to continue [1] - In the gold sector, Lingbao Gold (03330) rose over 3%, with other companies like Chifeng Jilong Gold (06693) and Shandong Gold (01787) also seeing significant gains, driven by lower-than-expected U.S. job growth data which increased interest in gold [3] Group 2: Company Announcements - InnoCare (02577) surged over 8% after being named the only Chinese chip company in NVIDIA's 800VDC power architecture collaboration, indicating a significant partnership in AI data centers [2] - Derun Shipping (02510) announced a profit forecast of approximately $180 million to $200 million for the six months ending June 30, 2025, representing a 220% to 255% increase compared to the previous year [2] - China Eastern Education (00667) reported an expected profit increase of no less than 45% for the first half of the year, driven by a 7% increase in new student registrations and effective cost control [3] Group 3: Financial Results - Amazon (AMZN.US) reported second-quarter earnings that exceeded expectations, with AWS revenue growing 17% year-over-year, but the third-quarter profit guidance fell short of market expectations [5] - Coinbase (COIN.US) saw a 16.7% drop after reporting second-quarter revenue of $1.5 billion, which was below analyst expectations, despite a significant profit increase due to investments [5] - Moderna (MRNA.US) experienced a decline of over 10% due to delays in vaccine shipments, leading to a downward revision of its revenue forecast for 2025 [7]