Shares of Rocket Cos. tumbled Wednesday toward their worst day in 14 months after Keefe, Bruyette & Woods analyst Bose George turned bearish, citing valuation and the company’s weakness in the home-purchase market. Rocket Cos. is the parent company of Rocket Mortgage.“We expect mortgage volumes to remain weak in 2024, but to the extent they come in stronger than currently expected, higher volumes are likely to be driven by a stronger purchase market,” George wrote in a note to clients. “We believe that [Roc ...

Key PointsA mix of easing home inventories and more flexible mortgage rates are about to lighten up the kerosine-filled stocks like Rocket Companies.Explosive growth projections may be within the realities of the coming months, as markets are betting on them alongside options traders.Certainty is present in the upside move, and the macro trends back the thesis.5 stocks we like better than Rocket CompaniesMost Wall Streeters can tell you that the time to step away from the desk and 'live a little' is when th ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission file number: 001-39432 Rocket Companies, Inc. (Exact name of registrant as specified in its charter) Delawar ...

Financial Data and Key Metrics Changes - The company reported adjusted revenue exceeding $1 billion in the third quarter, surpassing the high end of its guidance range, reflecting strong execution and expansion in gain on sale margin [2][6][122] - Adjusted EBITDA for the quarter was $73 million, with adjusted net income of $7 million, resulting in positive adjusted diluted EPS and $0.04 of GAAP diluted EPS [23][118] - Total liquidity stood at approximately $8.7 billion as of September 30, including available cash and undrawn lines of credit [24] Business Line Data and Key Metrics Changes - The home equity loan product saw loan units and net rate lock volume double in Q3 compared to earlier in the year [21][84] - The BUY+ program, aimed at enhancing home affordability, has seen significant traction, with closing volume more than tripling from June to September [5][69] - Gain on sale margin for the third quarter was 276 basis points, a 9 basis point increase over the second quarter [22] Market Data and Key Metrics Changes - The company anticipates adjusted revenue for the fourth quarter to be in the range of $650 million to $800 million, considering challenging market conditions [10] - The industry is facing record low affordability and inventory levels, which are expected to impact purchase activity and volume in the fourth quarter [19][126] Company Strategy and Development Direction - The company aims to leverage generative AI to transform the home buying experience and improve operational efficiency [11][113] - There is a focus on maintaining a strong balance sheet and liquidity to capitalize on market opportunities, especially in a fragmented market [43][74] - The company is committed to a cost savings plan of $150 million to $200 million annually, with expectations to achieve the high end of that range [7][123] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging market environment but expressed confidence in the company's ability to gain market share and innovate [40][43] - The company views the current market dynamics as a potential tailwind, allowing it to accelerate growth and take share from smaller competitors [43][44] - Management highlighted the importance of client retention, with a net client retention rate of 97%, significantly higher than the industry average [125] Other Important Information - The company has made significant investments in technology and data analytics to enhance client experiences and operational efficiency [100][115] - The mortgage servicing portfolio included more than 2.4 million loans serviced, with approximately $506 billion in unpaid principal balance [24] Q&A Session Summary Question: Can you provide more detail on the servicing transaction and the gross yield on the MSR portfolio? - Management indicated that the gross yield on the purchased MSR portfolio was north of 6%, which is higher than the existing portfolio, making it opportunistic for refinances [31] Question: Given the high client retention rate, why not be more aggressive in buying higher coupon MSRs? - Management confirmed they are actively pursuing higher coupon MSRs to increase the pool of available refinances, emphasizing the lifetime value of these assets [32] Question: What are the biggest opportunities for the company to use generative AI? - Management highlighted that generative AI can transform every aspect of the home buying process, including lead generation, underwriting, and servicing [36][37] Question: What is the outlook for 2024 originations? - Management noted that while the MBA projects a $2 trillion market for 2024, they are planning conservatively due to current market challenges [44][60] Question: How does the company plan to achieve consistent profitability in a challenging environment? - Management expressed confidence in their strategy and balance sheet, indicating that they are well-capitalized to invest and grow despite market fluctuations [61][81]

PART I. FINANCIAL INFORMATION [Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The unaudited condensed consolidated financial statements for the period ended June 30, 2023, detail the company's financial position, performance, and cash flows, showing a slight increase in total assets to **$20.9 billion**, a shift to a net loss of **$272.3 million** for the first six months of 2023 from a net income of **$1.1 billion** in the prior year period, and a significant decrease in cash from operations [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) - Total assets increased to **$20.86 billion** as of June 30, 2023, from **$20.08 billion** at December 31, 2022, primarily driven by an increase in Mortgage loans held for sale[12](index=12&type=chunk) - Total liabilities also rose to **$12.49 billion** from **$11.61 billion**, mainly due to higher balances on funding facilities[12](index=12&type=chunk) Key Balance Sheet Items (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$20,855,677** | **$20,082,212** | | Cash and cash equivalents | $882,783 | $722,293 | | Mortgage loans held for sale, at fair value | $8,444,443 | $7,343,475 | | Mortgage servicing rights ("MSRs"), at fair value | $6,443,632 | $6,946,940 | | **Total Liabilities** | **$12,490,823** | **$11,606,663** | | Funding facilities | $4,889,236 | $3,548,699 | | Senior Notes, net | $4,030,709 | $4,027,970 | | **Total Equity** | **$8,364,854** | **$8,475,549** | [Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)%20and%20Comprehensive%20Income%20(Loss)) - For Q2 2023, the company reported net income of **$139.2 million**, a 133% increase from **$59.8 million** in Q2 2022, despite a decrease in total revenue[13](index=13&type=chunk) - For the six months ended June 30, 2023, the company recorded a net loss of **$272.3 million**, a significant downturn from a net income of **$1.1 billion** in the same period of 2022, primarily due to lower gain on sale of loans and unfavorable changes in the fair value of MSRs[13](index=13&type=chunk) Key Income Statement Data (in thousands, except per share amounts) | Metric | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | Total revenue, net | $1,236,227 | $1,392,419 | $1,902,295 | $4,063,015 | | Total expenses | $1,097,857 | $1,313,902 | $2,179,912 | $2,922,041 | | Net income (loss) | $139,152 | $59,756 | $(272,331) | $1,096,364 | | Diluted EPS | $0.05 | $0.02 | $(0.11) | $0.43 | [Condensed Consolidated Statements of Changes in Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) - Total equity decreased from **$8.48 billion** at the end of 2022 to **$8.36 billion** as of June 30, 2023, primarily driven by a net loss of **$411.5 million** in the first quarter, partially offset by net income of **$139.2 million** in the second quarter and share-based compensation[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) - For the first six months of 2023, net cash used in operating activities was **$1.61 billion**, a stark contrast to the **$6.59 billion** provided by operating activities in the same period of 2022, mainly due to lower net income and changes in mortgage loans held for sale[22](index=22&type=chunk) - Net cash from financing activities was **$1.1 billion**, a reversal from an **$8.22 billion** use of cash in H1 2022, driven by net borrowings on funding facilities[22](index=22&type=chunk) Net Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(1,611,938) | $6,585,334 | | Net cash provided by investing activities | $641,740 | $408,522 | | Net cash provided by (used in) financing activities | $1,099,037 | $(8,221,278) | | **Net increase (decrease) in cash** | **$128,688** | **$(1,227,513)** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company operates as a fintech holding company with two reportable segments: Direct to Consumer and Partner Network, with a significant portion of its assets, including MSRs and IRLCs, measured at fair value and many classified as Level 3 due to reliance on unobservable inputs[26](index=26&type=chunk)[64](index=64&type=chunk)[163](index=163&type=chunk) - As of June 30, 2023, the fair value of Mortgage Servicing Rights (MSRs) was **$6.44 billion**, covering a portfolio with an unpaid principal balance (UPB) of **$462 billion**, and the company was in compliance with all debt covenants[89](index=89&type=chunk)[90](index=90&type=chunk)[97](index=97&type=chunk) - The company's organizational structure as a C Corporation holding an interest in a partnership (Holdings) significantly impacts its income tax expense, with a Tax Receivable Agreement obligating the company to pay original LLC members 90% of realized cash tax savings from certain tax basis step-ups[126](index=126&type=chunk)[130](index=130&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the significant decline in mortgage origination volume and gain on sale revenue in the first half of 2023 to the rising interest rate environment initiated by the U.S. Federal Reserve, despite which the company improved Q2 2023 net income over Q2 2022 through aggressive cost-saving measures, maintaining a strong liquidity position of **$8.6 billion** and announcing a voluntary career transition program expected to result in a **$50-$60 million** charge in Q3 2023 - The U.S. Federal Reserve's interest rate hikes have driven a significant decline in the mortgage origination market, particularly impacting refinance transactions, which has adversely affected the company's loan volume[198](index=198&type=chunk) - A voluntary career transition program was initiated on July 28, 2023, which is expected to incur a non-recurring charge of **$50 to $60 million** in Q3 2023[199](index=199&type=chunk) Key Performance Indicators | Metric | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | Closed loan origination volume | $22.3B | $34.5B | $39.3B | $88.5B | | Gain on sale margin | 2.67% | 2.92% | 2.54% | 2.98% | | Net income (loss) | $139.2M | $59.8M | $(272.3)M | $1.1B | - Total expenses decreased by **16% in Q2 2023** and **25% in H1 2023** year-over-year, driven by cost-saving measures in salaries, general & administrative, and marketing expenses[263](index=263&type=chunk)[264](index=264&type=chunk) - The company maintained a strong liquidity position with **$8.6 billion** as of June 30, 2023, consisting of cash, self-funding capacity, and undrawn lines of credit[297](index=297&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reports that there have been no material changes to its exposure to market risks from the information previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022 - There have been no material changes to the Company's market risk exposure since the end of 2022[305](index=305&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2023, with no material changes to the company's internal control over financial reporting during the quarter - As of June 30, 2023, the CEO and CFO concluded that the company's disclosure controls and procedures are effective at a reasonable assurance level[306](index=306&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[307](index=307&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions in the ordinary course of business but does not expect any currently pending matters to have a material adverse effect on its financial condition or results of operations - Management believes that currently pending or threatened legal matters are not expected to have a material adverse effect on the company's business or financial condition[310](index=310&type=chunk) [Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) There have been no significant changes to the company's risk factors from those disclosed in its 2022 Form 10-K, and investors are advised to refer to that document for a detailed discussion of risks and uncertainties - The company's risk factors have not changed significantly from those disclosed in the 2022 Form 10-K[311](index=311&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company's **$1.0 billion** share repurchase program, renewed in November 2022, had approximately **$590.7 million** remaining available as of June 30, 2023, with no shares repurchased during the three months ended June 30, 2023 - No share repurchases were made during the three months ended June 30, 2023[312](index=312&type=chunk) - As of June 30, 2023, approximately **$590.7 million** remained available under the company's **$1.0 billion** share repurchase program[312](index=312&type=chunk) [Other Information](index=57&type=section&id=Item%205.%20Other%20Information) On July 7, 2023, the company's subsidiary, Rocket Mortgage, LLC, entered into an agreement that increased the commitments under its Revolving Credit Agreement by **$150 million** with the addition of a new lender - Subsequent to the quarter end, on July 7, 2023, a subsidiary increased its Revolving Credit Agreement commitments by **$150 million** by adding Wells Fargo Bank as a new lender[315](index=315&type=chunk)[316](index=316&type=chunk) [Exhibits](index=58&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO, and various agreements

Rocket Companies, Inc. (NYSE:RKT) Q2 2023 Earnings Conference Call August 3, 2023 4:30 PM ET Company Participants Sharon Ng - Vice President of Investor Relations Bill Emerson - Director & Interim Chief Executive Officer Brian Brown - Chief Financial Officer & Treasurer Conference Call Participants Kevin Barker - Piper Sandler Ryan Nash - Goldman Sachs Kyle Joseph - Jefferies Ryan McKeveny - Zelman & Associates Doug Harter - Credit Suisse James Faucette - Morgan Stanley Mihir Bhatia - Bank of America Donald ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission file number: 001-39432 Rocket Companies, Inc. (Exact name of registrant as specified in its charter) Delaware 84-4946470 (State or ot ...

Financial Data and Key Metrics Changes - Adjusted revenue for Q1 2023 was $882 million, exceeding the high end of guidance, with a significant quarter-over-quarter increase of nearly $200 million [71][66] - Adjusted EBITDA loss improved to $79 million from a loss of $204 million in Q4 2022, indicating better operational efficiency [66][71] - Gain on sale margin for the quarter was 239 basis points, which is 22 basis points higher than the previous quarter [115] Business Line Data and Key Metrics Changes - Rocket Loans achieved its largest month of origination in March, indicating strong growth in personal loans [23] - The mortgage servicing portfolio included over 2.5 million clients with approximately $525 billion in unpaid principal, generating $366 million in cash revenue during Q1 [89][115] - The introduction of the Rocket Signature Card is expected to enhance client acquisition and engagement, particularly among first-time homebuyers [51][87] Market Data and Key Metrics Changes - Existing home sales in March were at a seasonally adjusted annual rate of 4.4 million, significantly below the 20-year average of over 5.3 million [25] - There were only 2.6 months of housing inventory available in March, less than half of the expected levels based on historical averages [25] - Purchase approval letters increased by 11% from March to April, indicating a healthy purchase pipeline [77] Company Strategy and Development Direction - The company is focusing on enhancing its client engagement through programs like Rocket Money, Rocket Rewards, and the Rocket Signature Card, which aim to lower client acquisition costs and improve retention [21][73] - The BUY+ and SELL+ initiatives are designed to provide financial incentives to clients, thereby increasing engagement and conversion rates [108][114] - The company aims to leverage its integrated real estate and mortgage services to capture broader revenue across transactions, differentiating itself from competitors [125] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about consumer demand for homes and a healthy purchase pipeline, despite challenges posed by limited housing inventory [83][120] - The company is closely monitoring the macroeconomic environment and is prepared to adjust marketing investments based on performance [31][120] - Management believes that the investments made in client experience and innovative solutions will lead to sustainable growth in market share and profitability [138][139] Other Important Information - The company ended Q1 with $3.3 billion in available cash and $6.7 billion in mortgage servicing rights, totaling $9.9 billion in assets [30] - The net client retention rate remained over 90%, significantly above the industry average, indicating strong customer loyalty [89] Q&A Session Summary Question: Can you talk about market share and how you're thinking about it going forward? - Management indicated that while they do not specify exact market share figures, they are focused on growing market share in both purchase and refinance segments through targeted strategies [2][3] Question: What impacts have you seen from the recent banking turmoil? - Management reported no direct exposure to failed banks and noted that the banking crisis could present an opportunity for the company to gain market share as banks pull back from the mortgage space [9][10] Question: Can you elaborate on the investments planned for the rest of 2023? - Management highlighted ongoing investments in marketing and technology to enhance client acquisition and engagement, particularly through the Rocket Rewards program and the Signature Card [41][42] Question: How do you view the current capacity in the mortgage industry? - Management acknowledged that capacity is decreasing in the industry, particularly among banks and retail lenders, which could benefit the company as it positions itself as a strong purchase lender [48][49]

Financial Data and Key Metrics Changes - In 2022, the company reported a closed loan volume of $133 billion and adjusted revenue of $4.6 billion, with a GAAP net income of $700 million or $0.28 per share [12] - The adjusted net income showed a loss of $137 million or $0.07 per share, influenced by a $1.2 billion mark-to-market appreciation of mortgage servicing rights [12] - The company reduced total expenses by $3 billion or 40% on an annualized basis from Q4 2021 to Q4 2022, exceeding previous commitments [29] Business Line Data and Key Metrics Changes - Rocket Money experienced significant growth, achieving its largest month of premium member growth in January 2023, and ranked first in daily downloads in the iOS app store finance category [8] - The company generated $371 million in cash revenue from its servicing book during Q4, which annualizes to approximately $1.5 billion [16] - The gain on sale margin was reported at 217 basis points for Q4, impacted by the high demand for the Inflation Buster product [30] Market Data and Key Metrics Changes - The mortgage application index dropped nearly 70% in 2022, marking the largest inter-year decline since 1990, reflecting a challenging market environment [29] - The company noted that the 30-year fixed mortgage rate increased from about 3% in January to over 7% by October 2022, the steepest rise in four decades [6] Company Strategy and Development Direction - The company aims to enhance client engagement through integrated experiences, particularly targeting millennials and first-time homebuyers [15] - The introduction of the Inflation Buster and Rocket Rewards programs is part of the strategy to improve client retention and conversion rates [26][32] - The company is focused on capturing market share in the purchase market while maintaining a robust capital structure and investing in technology [28][127] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging environment in 2022 due to rising interest rates and declining consumer confidence, but expressed confidence in the company's ability to adapt and innovate [29] - The outlook for 2023 includes expectations for improved margins and production, with a focus on maintaining a strong cost structure [34][53] - Management emphasized the importance of being present with clients throughout their home buying journey to enhance engagement and conversion [91] Other Important Information - Total liquidity stood at approximately $8.1 billion as of December 31, 2022, including available cash and undrawn lines of credit [33] - The company has enrolled over 1 million clients in the Rocket Rewards program, with significant engagement and point redemptions [145] Q&A Session Summary Question: What strategies are in place to diversify revenue in the current market? - Management discussed the importance of reducing client acquisition costs and increasing conversion rates to drive revenue diversification [35][46] Question: How does the company plan to return to profitability? - Management highlighted a focus on long-term results and the importance of maintaining a strong cost structure while preparing for the home buying season [43][45] Question: What is the outlook for margins in 2023? - Management indicated that margins are expected to improve due to a shift in product mix and the performance of promotional products like Inflation Buster [52][53] Question: How is the company addressing the competitive landscape in the mortgage industry? - Management noted that many competitors are exiting the market, providing an opportunity for the company to capture market share [58][88]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission file number: 001-39432 Rocket Companies, Inc. (Exact name of registrant as specified in its charter) (State or other ...