Rocket Companies(US:RKT)2025-07-31 21:17markdown [Executive Summary](index=1&type=section&id=Executive%20Summary) [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) Rocket Companies exceeded its Q2 2025 guidance, reporting $1.34 billion in adjusted revenue and an adjusted diluted EPS of $0.04. The quarter also marked the successful closing of the Redfin acquisition, which is already showing positive early signs in expanding the purchase funnel and increasing conversion rates - Rocket Companies exceeded the high end of its guidance with **$1.34 billion in adjusted revenue** and delivered adjusted diluted EPS of **$0.04**[2](index=2&type=chunk) - The successful closing of the Redfin transaction is a significant milestone, with early signs indicating an expanding purchase funnel and rising conversion rates[2](index=2&type=chunk) | Metric | Q2-25 | Q2-24 | | :--------------------------------- | :------ | :------ | | Adjusted Revenue (in millions) | $1,340 | $1,228 | | Adjusted Diluted EPS | $0.04 | $0.06 | | GAAP Net Income (loss) (in millions) | $34 | $178 | | GAAP Diluted (Loss) Earnings Per Share | $(0.01) | $0.01 | [Q2 2025 Financial Results](index=1&type=section&id=Q2%202025%20Financial%20Results) [Key Financial Metrics](index=1&type=section&id=Key%20Financial%20Metrics) Rocket Companies reported a net total revenue of $1.36 billion and adjusted revenue of $1.34 billion for Q2 2025. Mortgage closed loan origination volume increased by 18% year-over-year to $29.06 billion, while gain on sale margin decreased to 2.80% | Metric | Q2-25 | Q2-24 | YTD 25 | YTD 24 | | :--------------------------------- | :------ | :------ | :------- | :------- | | Mortgage closed loan origination volume | $29,056 | $24,662 | $50,640 | $44,867 | | Gain on sale margin | 2.80 % | 2.99 % | 2.84 % | 3.05 % | | Net rate lock volume | $28,429 | $25,050 | $54,545 | $47,412 | | Total revenue, net | $1,360 | $1,301 | $2,398 | $2,684 | | Adjusted revenue | $1,340 | $1,228 | $2,637 | $2,391 | | GAAP net income (loss) | $34 | $178 | $(178) | $469 | | Adjusted net income | $75 | $121 | $155 | $205 | | Adjusted EBITDA | $172 | $225 | $341 | $399 | | GAAP diluted (loss) earnings per share | $(0.01) | $0.01 | $(0.08) | $0.13 | | Adjusted diluted earnings per share | $0.04 | $0.06 | $0.08 | $0.10 | [Detailed Financial Highlights](index=3&type=section&id=Detailed%20Financial%20Highlights) In Q2 2025, Rocket Mortgage saw a 13% increase in net rate lock volume and an 18% increase in closed loan origination volume year-over-year. The gain on sale margin slightly decreased by 19 basis points. The company maintained strong liquidity of $9.1 billion and managed a servicing portfolio of $609 billion, generating significant recurring fee income - Rocket Mortgage generated **$28.4 billion in net rate lock volume**, a **13% increase** compared to Q2 2024[7](index=7&type=chunk) - Rocket Mortgage generated **$29.1 billion in closed loan origination volume**, an **18% increase** compared to Q2 2024[7](index=7&type=chunk) - Gain on sale margin was **2.80%**, a decrease of **19 bps** compared to Q2 2024[7](index=7&type=chunk) - Total liquidity stood at **$9.1 billion** as of June 30, 2025, including **$5.1 billion of cash** on the balance sheet[7](index=7&type=chunk) - The servicing portfolio unpaid principal balance was **$609 billion** (2.8 million loans) as of June 30, 2025, generating approximately **$1.6 billion of recurring servicing fee income** on an annualized basis[7](index=7&type=chunk) [Operational and Strategic Highlights](index=4&type=section&id=Operational%20and%20Strategic%20Highlights) [Product and Technology Innovations](index=4&type=section&id=Product%20and%20Technology%20Innovations) Rocket Mortgage introduced several innovations, including a fully digital refinance journey, AI-powered banker communication platform enhancements, and an agentic AI tool for reviewing earnest money deposits, saving nearly 20,000 hours annually. They also upgraded their self-serve portal for mortgage broker partners and launched a bridge loan product - Rocket Mortgage clients can now complete their refinance journey fully digitally, from application to rate lock in under **30 minutes**[8](index=8&type=chunk) - A new AI-powered banker communication platform feature boosted daily refinance client follow-ups by **20%**[8](index=8&type=chunk) - An agentic AI tool within the Rocket Logic loan origination system processes **80% of earnest money deposits**, saving nearly **20,000 hours annually**[8](index=8&type=chunk) - Upgrades to the self-serve portal for mortgage broker partners resulted in significant time savings and a nearly **20% reduction in outbound outreach**[8](index=8&type=chunk) - Rocket Mortgage launched a bridge loan product to provide homebuyers with financial flexibility to purchase a new home before selling their current one[8](index=8&type=chunk) [Partnerships and Community Initiatives](index=4&type=section&id=Partnerships%20and%20Community%20Initiatives) Rocket Companies completed an all-stock acquisition of Redfin Corporation, increasing Rocket's Class A float to 12%. They also launched Rocket Preferred Pricing, offering interest rate reductions or lender credits for clients working with Redfin agents. Community efforts included the seventh annual Rocket Classic, raising over $10 million for local charities, and a new program providing free high-speed internet to 450 Detroit families - On July 1, Rocket Companies completed an all-stock acquisition of Redfin Corporation, exchanging each Redfin share for **0.7926 shares of Rocket Companies Class A common stock**, increasing Rocket's Class A float to **12%**[8](index=8&type=chunk) - Rocket Mortgage introduced Rocket Preferred Pricing, offering clients a **one percentage point interest rate reduction** for the first year or a lender credit up to **$6,000** when financing with Rocket Mortgage and working with a Redfin agent[8](index=8&type=chunk) - The seventh annual Rocket Classic event raised over **$10 million** for local charitable organizations since 2019[11](index=11&type=chunk) - The Rocket Community Fund and Detroit Housing Commission launched a new program to provide free high-speed home internet to **450 families in Detroit** for three years, supported by an **$850,000 investment**[11](index=11&type=chunk) [Corporate Structure and Debt Management](index=5&type=section&id=Corporate%20Structure%20and%20Debt%20Management) Rocket Companies streamlined operations by shutting down Rocket Mortgage Canada and initiating the wind-down of the Rocket Visa Signature card program. The company issued $4.0 billion in senior notes to fund the pending Mr. Cooper acquisition and completed the simplification of its capital and organizational structure through the 'Up-C Collapse' - The Company shut down Rocket Mortgage Canada operations and initiated the wind-down of the Rocket Visa Signature card credit card program to streamline operations and narrow strategic focus[11](index=11&type=chunk) - Rocket Companies issued **$2.0 billion of 6.125% senior notes due 2030** and **$2.0 billion of 6.375% senior notes due 2033**, with proceeds intended for the Mr. Cooper acquisition[11](index=11&type=chunk) - The Company completed the simplification of its capital and organizational structure through the 'Up-C Collapse' on June 30, providing **one vote per share** and reducing common stock classes from four to two[11](index=11&type=chunk) [Financial Outlook](index=5&type=section&id=Financial%20Outlook) [Q3 2025 Guidance](index=5&type=section&id=Q3%202025%20Guidance) For the third quarter of 2025, Rocket Companies expects adjusted revenue to be between $1.600 billion and $1.750 billion, incorporating a full quarter of consolidated financial results from Redfin Corporation | Metric | Q3 2025 Outlook | | :------------- | :-------------- | | Adjusted Revenue | $1.600B - $1.750B | - The Q3 2025 outlook incorporates a full quarter of consolidated financial results from Redfin Corporation[10](index=10&type=chunk) [Segment Performance](index=6&type=section&id=Segment%20Performance) [Direct to Consumer](index=6&type=section&id=Direct%20to%20Consumer) The Direct to Consumer segment, which includes Rocket Mortgage's digital and mortgage banker interactions, reported $1.03 billion in total revenue and $1.01 billion in adjusted revenue for Q2 2025. Sold loan volume increased to $14.12 billion, with a gain on sale margin of 4.40% - The Direct to Consumer segment derives revenue from originating, closing, selling, and servicing predominantly agency-conforming loans, and includes title, settlement, and appraisal management services[12](index=12&type=chunk) | Metric | Q2-25 | Q2-24 | YTD 25 | YTD 24 | | :------------------------ | :------ | :------ | :------- | :------- | | Sold loan volume | $14,118 | $13,032 | $25,420 | $22,081 | | Sold loan gain on sale margin | 4.40 % | 4.14 % | 4.51 % | 4.19 % | | Total revenue, net | $1,030 | $981 | $1,788 | $2,075 | | Adjusted revenue | $1,010 | $909 | $2,027 | $1,782 | | Contribution margin | $367 | $375 | $774 | $718 | [Partner Network](index=6&type=section&id=Partner%20Network) The Partner Network segment, leveraging the Rocket Professional platform for marketing, influencer, and mortgage broker partnerships, generated $148 million in total and adjusted revenue for Q2 2025. Sold loan volume increased to $13.41 billion, though the sold loan gain on sale margin decreased to 0.90% - The Partner Network segment leverages the Rocket Professional platform for marketing and influencer relationships and mortgage broker partnerships through Rocket Pro[14](index=14&type=chunk) | Metric | Q2-25 | Q2-24 | YTD 25 | YTD 24 | | :------------------------ | :------ | :------ | :------- | :------- | | Sold loan volume | $13,411 | $11,296 | $22,615 | $19,064 | | Sold loan gain on sale margin | 0.90 % | 1.59 % | 1.10 % | 1.57 % | | Total revenue, net | $148 | $188 | $262 | $358 | | Adjusted revenue | $148 | $188 | $262 | $358 | | Contribution margin | $83 | $126 | $140 | $241 | [Balance Sheet and Liquidity](index=7&type=section&id=Balance%20Sheet%20and%20Liquidity) [Liquidity Position](index=7&type=section&id=Liquidity%20Position) As of June 30, 2025, Rocket Companies maintained a strong total liquidity position of $9.1 billion. This includes $6.0 billion in available cash and $3.1 billion in undrawn credit facilities - Total available cash was **$6.0 billion** as of June 30, 2025, comprising **$5.1 billion in cash and cash equivalents** and **$0.9 billion in corporate cash** for loan originations[16](index=16&type=chunk) - The company had access to **$1.1 billion of undrawn lines of credit** and **$2.0 billion of undrawn MSR lines of credit**, contributing to a total liquidity position of **$9.1 billion**[16](index=16&type=chunk) [Balance Sheet Highlights](index=7&type=section&id=Balance%20Sheet%20Highlights) Key balance sheet figures as of June 30, 2025, show a significant increase in cash and cash equivalents to $5.09 billion from $1.27 billion at year-end 2024. Funding facilities and other financing facilities also increased, while total equity decreased to $7.45 billion from $9.04 billion | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $5,091 | $1,273 | | Mortgage servicing rights, at fair value | $7,567 | $7,633 | | Funding facilities | $9,482 | $6,708 | | Other financing facilities and debt | $8,068 | $4,132 | | Total equity | $7,449 | $9,043 | [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) [Condensed Consolidated Statements of Income (Loss)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) For Q2 2025, Rocket Companies reported total revenue, net of $1.36 billion, with a GAAP net income of $34 million. However, net loss attributable to Rocket Companies was $(1.785) million, resulting in a GAAP diluted loss per share of $(0.01). Total expenses increased to $1.34 billion | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 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 Companies | $(1,785) | $1,295 | $(12,168) | $17,510 | | Diluted (Loss) Earnings Per Share | $(0.01) | $0.01 | $(0.08) | $0.13 | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $30.36 billion from $24.51 billion at December 31, 2024, primarily driven by a significant rise in cash and cash equivalents and mortgage loans held for sale. Total liabilities also increased to $22.91 billion, while total equity decreased to $7.45 billion | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :-------------- | :---------------- | | Cash and cash equivalents | $5,090,631 | $1,272,853 | | Mortgage loans held for sale, at fair value | $11,168,691 | $9,020,176 | | Mortgage servicing rights ("MSRs"), at fair value | $7,566,632 | $7,633,371 | | Total assets | $30,360,222 | $24,510,063 | | Funding facilities | $9,481,780 | $6,708,186 | | Senior Notes, net | $8,000,225 | $4,038,926 | | Total liabilities | $22,911,294 | $15,466,683 | | Total equity | $7,448,928 | $9,043,380 | [Summary Segment Results](index=10&type=section&id=Summary%20Segment%20Results) [Q2 2025 Segment Performance](index=10&type=section&id=Q2%202025%20Segment%20Performance) For Q2 2025, the Direct to Consumer segment reported $1.01 billion in adjusted revenue and a contribution margin of $367 million. The Partner Network segment had $148 million in adjusted revenue and a contribution margin of $83 million. Overall, total segments achieved $1.16 billion in adjusted revenue and $451 million in contribution margin | Metric (in millions) | Direct to Consumer | Partner Network | Segments Total | All Other | Total | | :------------------------------------------ | :----------------- | :-------------- | :------------- | :-------- | :------ | | Total U.S. GAAP Revenue, net | $1,030 | $148 | $1,178 | $182 | $1,360 | | Adjusted revenue | $1,010 | $148 | $1,158 | $182 | $1,340 | | Contribution margin | $367 | $83 | $451 | $68 | $519 | [YTD 2025 Segment Performance](index=10&type=section&id=YTD%202025%20Segment%20Performance) Year-to-date Q2 2025, the Direct to Consumer segment generated $2.03 billion in adjusted revenue and $774 million in contribution margin. The Partner Network segment recorded $262 million in adjusted revenue and $140 million in contribution margin. Combined, total segments achieved $2.29 billion in adjusted revenue and $914 million in contribution margin | Metric (in millions) | Direct to Consumer | Partner Network | Segments Total | All Other | Total | | :------------------------------------------ | :----------------- | :-------------- | :------------- | :-------- | :------ | | Total U.S. GAAP Revenue, net | $1,788 | $262 | $2,050 | $347 | $2,398 | | Adjusted revenue | $2,027 | $262 | $2,289 | $347 | $2,637 | | Contribution margin | $774 | $140 | $914 | $108 | $1,023 | [Non-GAAP Financial Measures & Reconciliations](index=11&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) [Adjusted Revenue Reconciliation](index=11&type=section&id=Adjusted%20Revenue%20Reconciliation) Adjusted revenue is derived by excluding the non-cash change in fair value of MSRs due to valuation assumptions (net of hedges) from total revenue, net. For Q2 2025, this adjustment was $(20) million, leading to an adjusted revenue of $1.34 billion | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue, net | $1,360 | $1,301 | $2,398 | $2,684 | | Change in fair value of MSRs due to valuation assumptions (net of hedges) | $(20) | $(73) | $239 | $(293) | | Adjusted revenue | $1,340 | $1,228 | $2,637 | $2,391 | [Adjusted Net Income Reconciliation](index=11&type=section&id=Adjusted%20Net%20Income%20Reconciliation) Adjusted net income for Q2 2025 was $75 million, reconciled from a net loss attributable to Rocket Companies of $(2) million. Key adjustments include pro forma conversion of Class D shares, share-based compensation, MSR valuation changes, and acquisition-related expenses | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net (loss) income attributable to Rocket Companies | $(2) | $1 | $(12) | $18 | | Net income (loss) impact from pro forma conversion of Class D common shares to Class A common shares | $36 | $177 | $(166) | $452 | | Share-based compensation expense | $52 | $39 | $92 | $70 | | Change in fair value of MSRs due to valuation assumptions (net of hedges) | $(20) | $(73) | $239 | $(293) | | Acquisition-related expenses | $35 | — | $63 | — | | Adjusted net income | $75 | $121 | $155 | $205 | [Adjusted Diluted Weighted Average Shares Outstanding Reconciliation](index=12&type=section&id=Adjusted%20Diluted%20Weighted%20Average%20Shares%20Outstanding%20Reconciliation) The adjusted diluted weighted average shares outstanding for Q2 2025 was 2,000,000,231, calculated by adding the assumed pro forma conversion of anti-dilutive Class D shares to the diluted weighted average Participating Common Stock outstanding. This resulted in an adjusted diluted EPS of $0.04 | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Diluted weighted average Participating Common Stock outstanding | 171,438,105 | 139,647,845 | 159,643,228 | 138,319,794 | | Assumed pro forma conversion of Class D shares | 1,828,562,126 | 1,848,879,483 | 1,838,664,679 | 1,848,879,483 | | Adjusted diluted weighted average shares outstanding | 2,000,000,231 | 1,988,527,328 | 1,998,307,907 | 1,987,199,277 | | Adjusted diluted earnings per share | $0.04 | $0.06 | $0.08 | $0.10 | [Adjusted EBITDA Reconciliation](index=12&type=section&id=Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA for Q2 2025 was $172 million, reconciled from a net income of $34 million. Key adjustments include adding back interest and amortization expense on non-funding debt, income taxes, depreciation and amortization, share-based compensation, and acquisition-related expenses, while adjusting for MSR valuation changes | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $34 | $178 | $(178) | $469 | | Interest and amortization expense on non funding debt | $45 | $38 | $84 | $77 | | (Benefit from) provision for income taxes | $(10) | $14 | $(20) | $22 | | Depreciation and amortization | $28 | $28 | $54 | $55 | | Share-based compensation expense | $52 | $39 | $92 | $70 | | Change in fair value of MSRs due to valuation assumptions (net of hedges) | $(20) | $(73) | $239 | $(293) | | Acquisition-related expenses | $35 | — | $63 | — | | Adjusted EBITDA | $172 | $225 | $341 | $399 | [Non-GAAP Measures Explanation](index=14&type=section&id=Non-GAAP%20Measures%20Explanation) Rocket Companies uses non-GAAP financial measures like Adjusted revenue, Adjusted net income, Adjusted diluted earnings per share, and Adjusted EBITDA to provide investors with additional insights into its operating performance. These measures exclude certain non-cash or non-recurring items, such as changes in MSR fair value and acquisition-related expenses, to offer a clearer view of core business trends, though they should not replace GAAP measures - Non-GAAP financial measures (Adjusted revenue, Adjusted net income, Adjusted diluted EPS, Adjusted EBITDA) are used to provide useful information to investors for analyzing and benchmarking business performance[38](index=38&type=chunk) - Adjusted revenue excludes the change in fair value of MSRs due to valuation assumptions (net of hedges), as this is a non-cash, non-realized adjustment not indicative of operational performance[39](index=39&type=chunk)[40](index=40&type=chunk) - Adjusted net income adjusts for share-based compensation, MSR valuation changes, acquisition-related expenses, and tax impacts to reflect core profitability[39](index=39&type=chunk) - Adjusted EBITDA excludes non-funding debt interest, taxes, depreciation, amortization, share-based compensation, MSR valuation changes, and acquisition-related expenses to show operational profitability before capital structure and non-core items[39](index=39&type=chunk) - These non-GAAP measures have limitations and should not be considered in isolation or as a substitute for GAAP results, as they do not include all material costs necessary to operate the business[43](index=43&type=chunk) [Company Information](index=15&type=section&id=Company%20Information) [About Rocket Companies](index=15&type=section&id=About%20Rocket%20Companies) Founded in 1985, Rocket Companies (NYSE: RKT) is a Detroit-based fintech platform encompassing mortgage, real estate, and personal finance businesses, including Rocket Mortgage and Redfin. With extensive data and a mission to 'Help Everyone Home,' the company aims to be the destination for AI-fueled homeownership, consistently ranking 1 in client satisfaction for mortgage services by J.D. Power - Rocket Companies (NYSE: RKT) is a Detroit-based fintech platform founded in 1985, including mortgage, real estate, and personal finance businesses like Rocket Mortgage, Redfin, Rocket Homes, Rocket Close, Rocket Money, and Rocket Loans[47](index=47&type=chunk) - The company is positioned to be the destination for AI-fueled homeownership, leveraging insights from over **65 million client calls** and **14 petabytes of data**[48](index=48&type=chunk) - Rocket Mortgage has been ranked **1 in client satisfaction for mortgage servicing by J.D. Power** for the 11th time, and a total of 23 times for primary mortgage origination and servicing[8](index=8&type=chunk)[48](index=48&type=chunk) [Forward-Looking Statements](index=15&type=section&id=Forward-Looking%20Statements) This document contains forward-looking statements subject to risks and uncertainties, including those detailed in the company's Form 10-K and other SEC filings. Rocket Companies disclaims any obligation to publicly update or review these statements, except as required by law - Statements in this document that are not historical facts are forward-looking statements, reflecting views on future events as of the document date[46](index=46&type=chunk) - These statements are subject to risks and uncertainties, including those described in the 'Risk Factors' section of the Annual Report on Form 10-K and other SEC filings[46](index=46&type=chunk) - The company expressly disclaims any obligation to publicly update or review forward-looking statements, except as required by applicable law[46](index=46&type=chunk) [Investor Relations](index=16&type=section&id=Investor%20Relations) Contact information for investor and media inquiries is provided for Sharon Ng (Investor Relations) and Aaron Emerson (Media Contact) - Investor Relations Contact: Sharon Ng, ir@rocket.com, (313) 769-2058[50](index=50&type=chunk) - Media Contact: Aaron Emerson, aaronemerson@rocket.com, (313) 373-3035[50](index=50&type=chunk)