Rocket Companies Announces Second Quarter 2024 Results
Rocket Companies (NYSE: RKT) announced its Q2 2024 results, reporting total revenue of $1.3 billion and adjusted revenue of $1.2 billion, exceeding guidance. GAAP net income reached $178 million, or $0.01 per diluted share, while adjusted net income was $121 million, or $0.06 per diluted share. Adjusted EBITDA rose to $225 million, marking a year-over-year increase for the fifth consecutive quarter.
The company experienced growth in loan origination volume to $24.7 billion, a 10.4% increase from Q2 2023. Gain on sale margin improved to 2.99%. Rocket's liquidity totaled $8.6 billion, including significant undrawn lines of credit.
Rocket highlighted several operational advancements, including increased use of AI-powered tools and expanded mortgage servicing capabilities. The company was also recognized for client satisfaction and saw a substantial rise in home equity loan volumes. For Q3 2024, Rocket projects adjusted revenue between $1.15 billion and $1.3 billion.
Rocket Companies (NYSE: RKT) ha annunciato i risultati per il secondo trimestre del 2024, riportando un fatturato totale di 1,3 miliardi di dollari e un fatturato rettificato di 1,2 miliardi di dollari, superando le previsioni. L'utile netto GAAP ha raggiunto 178 milioni di dollari, ovvero 0,01 dollari per azione diluita, mentre l'utile netto rettificato era di 121 milioni di dollari, pari a 0,06 dollari per azione diluita. L'EBITDA rettificato è salito a 225 milioni di dollari, segnando un aumento anno su anno per il quinto trimestre consecutivo.
L'azienda ha registrato una crescita nel volume di originazione dei prestiti a 24,7 miliardi di dollari, con un incremento del 10,4% rispetto al secondo trimestre del 2023. Il margine di guadagno sulla vendita è migliorato al 2,99%. La liquidità di Rocket ha totalizzato 8,6 miliardi di dollari, inclusi linee di credito significativamente non utilizzate.
Rocket ha evidenziato diversi progressi operativi, tra cui un maggiore utilizzo di strumenti alimentati dall'IA e l'espansione delle capacità di gestione dei mutui. L'azienda è stata inoltre riconosciuta per la soddisfazione del cliente e ha visto un notevole aumento nei volumi di prestiti per l'equità della casa. Per il terzo trimestre del 2024, Rocket prevede un fatturato rettificato compreso tra 1,15 miliardi e 1,3 miliardi di dollari.
Rocket Companies (NYSE: RKT) anunció sus resultados del segundo trimestre de 2024, reportando ingresos totales de 1.3 mil millones de dólares y ingresos ajustados de 1.2 mil millones de dólares, superando las expectativas. Las ganancias netas bajo GAAP alcanzaron 178 millones de dólares, o 0.01 dólares por acción diluida, mientras que las ganancias netas ajustadas fueron de 121 millones de dólares, o 0.06 dólares por acción diluida. El EBITDA ajustado aumentó a 225 millones de dólares, marcando un incremento interanual por quinto trimestre consecutivo.
La compañía experimentó un crecimiento en el volumen de originación de préstamos a 24.7 mil millones de dólares, un aumento del 10.4% respecto al segundo trimestre de 2023. El margen de ganancia por venta mejoró al 2.99%. La liquidez de Rocket totalizó 8.6 mil millones de dólares, incluyendo líneas de crédito significativamente no utilizadas.
Rocket destacó varios avances operativos, incluyendo un mayor uso de herramientas impulsadas por IA y una expansión en sus capacidades de servicio hipotecario. La compañía también fue reconocida por la satisfacción del cliente y vio un aumento sustancial en los volúmenes de préstamos sobre el patrimonio de la vivienda. Para el tercer trimestre de 2024, Rocket proyecta ingresos ajustados entre 1.15 mil millones y 1.3 mil millones de dólares.
로켓 컴퍼니즈 (NYSE: RKT)는 2024년 2분기 실적을 발표하며 총 수익 13억 달러와 조정된 수익 12억 달러를 보고하고, 이로써 가이던스를 초과했습니다. GAAP 기준 순이익은 1억 7,800만 달러, 희석 주당 0.01 달러에 달했으며, 조정된 순이익은 1억 2,100만 달러로 희석 주당 0.06 달러에 해당합니다. 조정된 EBITDA는 2억 2,500만 달러로, 연간 증가를 기록하며 다섯 번째 연속 분기 증가세를 보였습니다.
회사는 대출 원활화 거래량이 247억 달러로 증가하여 2023년 2분기 대비 10.4% 상승했다고 전했습니다. 매각 이익률은 2.99%로 개선되었습니다. 로켓의 유동성은 86억 달러에 달하며, 상당한 미사용 신용 한도를 포함합니다.
로켓은 AI 기반 도구의 사용 증가와 확장된 주택 담보 대출 관리 능력 등 여러 운영 측면의 개선을 강조했습니다. 회사는 고객 만족도에서도 인정받았으며, 홈 에쿼티 론 거래량이 크게 증가했습니다. 2024년 3분기에는 11억 5천만 달러에서 13억 달러 사이의 조정 수익을 예측하고 있습니다.
Rocket Companies (NYSE: RKT) a annoncé ses résultats pour le deuxième trimestre 2024, rapportant un revenu total de 1,3 milliard de dollars et un revenu ajusté de 1,2 milliard de dollars, dépassant les prévisions. Le résultat net selon les PCGR a atteint 178 millions de dollars, soit 0,01 dollar par action diluée, tandis que le résultat net ajusté était de 121 millions de dollars, ou 0,06 dollar par action diluée. L'EBITDA ajusté a augmenté pour atteindre 225 millions de dollars, marquant une augmentation d'une année sur l'autre pour le cinquième trimestre consécutif.
L'entreprise a connu une croissance du volume d'origine des prêts, atteignant 24,7 milliards de dollars, soit une augmentation de 10,4 % par rapport au deuxième trimestre 2023. La marge sur les ventes s'est améliorée pour atteindre 2,99 %. La liquidité de Rocket s'élevait à 8,6 milliards de dollars, incluant des lignes de crédit importantes non utilisées.
Rocket a mis en avant plusieurs avancées opérationnelles, notamment une utilisation accrue des outils alimentés par l'IA et une extension des capacités de service hypothécaire. L'entreprise a également été reconnue pour la satisfaction client et a constaté une importante augmentation des volumes de prêts sur valeur domiciliaire. Pour le troisième trimestre 2024, Rocket prévoit un revenu ajusté compris entre 1,15 milliard et 1,3 milliard de dollars.
Rocket Companies (NYSE: RKT) hat die Ergebnisse für das zweite Quartal 2024 bekannt gegeben und berichtet von Gesamtumsätzen in Höhe von 1,3 Milliarden Dollar sowie bereinigten Umsätzen von 1,2 Milliarden Dollar, was die Prognosen übertrifft. Der GAAP-Nettoertrag erreichte 178 Millionen Dollar bzw. 0,01 Dollar pro verwässerter Aktie, während der bereinigte Nettoertrag 121 Millionen Dollar oder 0,06 Dollar pro verwässerter Aktie betrug. Das bereinigte EBITDA stieg auf 225 Millionen Dollar und erzielte damit das fünfte aufeinanderfolgende Quartal mit einem Anstieg im Jahresvergleich.
Das Unternehmen verzeichnete ein Wachstum des Kreditvergabevolumens auf 24,7 Milliarden Dollar, ein Anstieg von 10,4 % im Vergleich zum zweiten Quartal 2023. Die Verkaufsgewinne verbesserten sich auf 2,99 %. Die Liquidität von Rocket belief sich auf insgesamt 8,6 Milliarden Dollar, einschließlich erheblicher nicht in Anspruch genommener Kreditlinien.
Rocket hob mehrere betriebliche Fortschritte hervor, darunter eine verstärkte Nutzung von KI-gestützten Werkzeugen und erweiterte Fähigkeiten im Hypothekendienst. Das Unternehmen wurde auch für die Kundenzufriedenheit anerkannt und verzeichnete einen erheblichen Anstieg des Volumens an Eigenheimkrediten. Für das dritte Quartal 2024 prognostiziert Rocket einen bereinigten Umsatz zwischen 1,15 Milliarden und 1,3 Milliarden Dollar.
- Adjusted revenue of $1.2 billion exceeded guidance.
- GAAP net income of $178 million, or $0.01 per diluted share.
- Adjusted net income of $121 million, or $0.06 per diluted share.
- Adjusted EBITDA increased to $225 million.
- Loan origination volume increased by 10.4% year-over-year.
- Gain on sale margin improved to 2.99%.
- Total liquidity of $8.6 billion.
- Substantial increase in home equity loan volume.
- Total expenses rose to $1.1 billion from $1.098 billion in Q2 2023.
- GAAP diluted earnings per share decreased to $0.01 from $0.05 in Q2 2023.
Insights
Rocket Companies' Q2 2024 results show solid performance amid a challenging mortgage market environment. The company reported total revenue of
Key highlights include:
- Closed loan origination volume rose 10.4% YoY to
$24.7 billion - Gain on sale margin improved 32 bps YoY to
2.99% - GAAP net income of
$178 million , or$0.01 per diluted share - Adjusted net income of
$121 million , or$0.06 per diluted share
The company's focus on purchase market share, technology improvements and expansion of products like home equity loans appears to be paying off. The acquisition of
However, investors should note that while results are improving, profitability remains below historical levels. The outlook for Q3 2024 suggests continued momentum, with adjusted revenue projected between
Rocket Companies' Q2 results demonstrate resilience in a tough mortgage market. The
The growth in home equity loans is noteworthy, as it allows Rocket to capitalize on high home values while offering homeowners an alternative to cash-out refinances in a high-rate environment. The implementation of Automated Valuation Models (AVM) for these loans should further enhance profitability and customer experience.
Rocket's continued investment in AI and technology, such as the Rocket Logic Assistant and MSR audit automation, positions the company well for future efficiency gains. These innovations could be key differentiators as the mortgage industry becomes increasingly tech-driven.
The acquisition of
While the company's performance is improving, it's important to note that the mortgage industry remains challenging. Rocket's ability to continue gaining market share and improving profitability in this environment will be important for long-term success.
- Generated Q2'24 total revenue, net of
$1.3 billion $1.2 billion - Reported Q2'24 GAAP net income of
$178 million $0.01 $121 million $0.06 - Delivered Q2'24 adjusted EBITDA of
$225 million
"Our team achieved impressive results in Q2. We, again, grew our purchase market share year-over-year by making continuous improvements across our processes, teams, marketing, and technology. We also delivered year-over-year top-line growth for the fourth straight quarter and expanded profitability for the fifth quarter in a row," said Varun Krishna, CEO and Director of Rocket Companies. "We consider ourselves the most optimistic company in America. Every day, Rocket makes 30-year bets on people who make 30-year bets on themselves. With our AI-fueled homeownership strategy, and by helping our clients overcome obstacles to achieve their dreams, we are making the homeownership experience easier and more accessible for all."
Second Quarter 2024 Financial Summary 1 | |||||||
ROCKET COMPANIES | |||||||
Q2-24 | Q2-23 | YTD 24 | YTD 23 | ||||
(Unaudited) | (Unaudited) | ||||||
Total revenue, net | $ 1,301 | $ 1,236 | $ 2,684 | $ 1,902 | |||
Total expenses | $ 1,109 | $ 1,098 | $ 2,194 | $ 2,180 | |||
GAAP Net income (loss) | $ 178 | $ 139 | $ 469 | $ (272) | |||
Adjusted revenue | $ 1,228 | $ 1,002 | $ 2,391 | $ 1,884 | |||
Adjusted net income (loss) | $ 121 | $ (33) | $ 205 | $ (144) | |||
Adjusted EBITDA | $ 225 | $ 18 | $ 399 | $ (61) | |||
GAAP diluted earnings (loss) per share | $ 0.01 | $ 0.05 | $ 0.13 | $ (0.11) | |||
Adjusted diluted earnings (loss) per share | $ 0.06 | $ (0.02) | $ 0.10 | $ (0.07) | |||
($ in millions) | ||||||||
Q2-24 | Q2-23 | YTD 24 | YTD 23 | |||||
Select Metrics | (Unaudited) | (Unaudited) | ||||||
Closed loan origination volume | $ 24,662 | $ 22,330 | $ 44,867 | $ 39,260 | ||||
Gain on sale margin | 2.99 % | 2.67 % | 3.05 % | 2.54 % | ||||
Net rate lock volume | $ 25,050 | $ 22,244 | $ 47,412 | $ 41,779 | ||||
1 | "GAAP" stands for Generally Accepted Accounting Principles in the |
Second Quarter 2024 Financial Highlights
- Generated total revenue, net of
$1.3 billion $178 million $0.01 $1.2 billion $121 million $0.06 - Rocket Mortgage generated
$24.7 billion 10.4% increase over the same period of the prior year. - Gain on sale margin was
2.99% , an increase of 32 bps over the same period of the prior year. - Total liquidity was
$8.6 billion $1.3 billion $1.9 billion $3.4 billion $2.0 billion - Servicing portfolio unpaid principal balance, which includes subserviced loans, was
$534.6 billion $1.4 billion $315 million $20.8 billion
Second Quarter 2024 Company Highlights
- We expanded purchase share year-over-year through numerous optimizations in our processes, teams, marketing, and technology capabilities.
- Rocket Mortgage was named #1 in the nation in J.D. Power's 2024 study for client satisfaction in mortgage servicing, the 10th year Rocket Mortgage has earned the accolade. J.D. Power surveyed more than 11,000 American homeowners to determine the rankings. J.D. Power has ranked Rocket Mortgage #1 in client satisfaction for primary mortgage origination and mortgage servicing a total of 22 times – the most of any mortgage lender.
- Our home equity loan product continues to resonate strongly with clients, offering a compelling solution to tap into home equity without impacting the lower rate on a client's first lien mortgage. In Q2 2024, home equity loan volume more than doubled compared to the same period last year, setting a new record. During the quarter, we enhanced the speed and efficiency of our home equity loan process through the launch of an Automated Valuation Model (AVM). AVM represents a major upgrade, providing a cost-efficient digital alternative to traditional in-person appraisals. This innovation allows us to deliver cash from home equity loans in as little as 7 business days, meeting our clients' needs with unprecedented speed and accuracy.
- We expanded our AI-powered live chat, the preferred asynchronous mode of communication for both new and older generations, across the client journey. With chat, we quickly and accurately gauge client intent upfront, and provide personalized solutions at scale. This has resulted in higher satisfaction for both clients and team members, as well as significantly higher conversion rates. Recent data shows that clients using chat have conversion rates three times higher compared to those who didn't leverage chat.
- We expanded the roll out of Rocket Logic Assistant, our AI-powered personal assistant, to our entire banking team. Rocket Logic Assistant transcribes client calls and automatically completes mortgage applications in real-time, super-charging our bankers' productivity and reducing fatigue. Rocket Logic Assistant seamlessly generates more than 300,000 detailed transcripts weekly from outbound calls.
- In June, we launched MSR audit automation, an upgraded workflow system that streamlines the loan onboarding process and drives efficiency at scale. With this new system, our capital markets team can now complete MSR audits in half the time. This enhancement allows us to onboard MSR portfolios more quickly, efficiently, and accurately, which is essential as we expand our portfolio.
- In May, Rocket Companies appointed Shawn Malhotra as its first Chief Technology Officer. In this role, Malhotra will oversee the development and implementation of technology across the entire Rocket Companies ecosystem, including AI development, Data Science, Product Engineering, Technology Operations and Information Security – among other areas. Previously, Malhotra held a variety of technology leadership roles at Thomson Reuters.
- We will hold our first Investor Day on September 10, 2024, in downtown
Detroit . The event will feature presentations and engagement opportunities with Rocket Companies' leadership, immersive demo experiences, and a tour of downtownDetroit and our Company. The event will be held in person, and a webcast will be available on our Investor Relations website.
Rocket Corporate Responsibility: For-More-Than-Profit
- In June, we published our 2023 ESG report, which highlights Rocket's commitment to being a For-More-Than-Profit organization and our commitment to our clients, communities and team members. The report can be found on the Social Impact tab of our Investor Relations website.
- Rocket Mortgage held its sixth annual Rocket Mortgage Classic event from June 25 to June 30, 2024 at the Detroit Golf Club. Since 2019, the Rocket Mortgage Classic has raised over
$8.4 million $4.3 million Detroit residents to high-speed internet, digital devices and digital literacy training. - Rocket Community Fund, a partner company, announced a
$320,000 Detroit . In June, Rocket Community Fund collaborated with Microsoft, Black Tech Saturdays and Sistah's Reachin' Out to host AI Explained, an event focused on raising awareness of generative AI and its benefits for nonprofits and small business owners. - Rocket Community Fund, National Black Empowerment Council (NBEC), and Goodwill of
North Georgia today announced the launch of the Homeownership Wealth Initiative, a pilot program offering comprehensive financial education and homeownership guidance forAtlanta residents.
Third Quarter 2024 Outlook2
In Q3 2024, we expect adjusted revenue between
2 Please see the section of this document titled "Non-GAAP Financial Measures" for more information.
Direct to Consumer
In the Direct to Consumer segment, clients have the ability to interact with the Rocket Mortgage app and/or with the Company's mortgage bankers. The Company markets to potential clients in this segment through various brand campaigns and performance marketing channels. The Direct to Consumer segment derives revenue from originating, closing, selling and servicing predominantly agency-conforming loans, which are pooled and sold to the secondary market. The segment also includes title insurance, appraisals and settlement services complementing the Company's end-to-end mortgage origination experience. Servicing activities are fully allocated to the Direct to Consumer segment and are viewed as an extension of the client experience. Servicing enables Rocket Mortgage to establish and maintain long term relationships with our clients, through multiple touchpoints at regular engagement intervals.
DIRECT TO CONSUMER3 | |||||||
Q2-24 | Q2-23 | YTD 24 | YTD 23 | ||||
(Unaudited) | (Unaudited) | ||||||
Sold loan volume | $ 13,032 | $ 12,446 | $ 22,081 | $ 21,257 | |||
Sold loan gain on sale margin | 4.14 % | 3.67 % | 4.19 % | 3.69 % | |||
Total revenue, net | $ 981 | $ 1,023 | $ 2,075 | $ 1,521 | |||
Adjusted revenue | $ 909 | $ 789 | $ 1,782 | $ 1,502 | |||
Contribution margin | $ 375 | $ 259 | $ 718 | $ 468 | |||
Partner Network
The Rocket Professional platform supports our Partner Network segment, where we leverage our superior client service and widely recognized brand to grow marketing and influencer relationships, and our mortgage broker partnerships through Rocket Pro TPO ("third party origination"). Our marketing partnerships consist of well-known consumer-focused companies that find value in our award-winning client experience and want to offer their clients mortgage solutions with our trusted, widely recognized brand. These organizations connect their clients directly to us through marketing channels and a referral process. Our influencer partnerships are typically with companies that employ licensed mortgage professionals that find value in our client experience, technology and efficient mortgage process, where mortgages may not be their primary offering. We also enable clients to start the mortgage process through the Rocket platform in the way that works best for them, including through a local mortgage broker.
PARTNER NETWORK3 | |||||||
Q2-24 | Q2-23 | YTD 24 | YTD 23 | ||||
(Unaudited) | (Unaudited) | ||||||
Sold loan volume | $ 11,296 | $ 9,571 | $ 19,064 | $ 16,155 | |||
Sold loan gain on sale margin | 1.59 % | 0.93 % | 1.57 % | 0.89 % | |||
Total revenue, net | $ 188 | $ 122 | $ 358 | $ 211 | |||
Adjusted revenue | $ 188 | $ 122 | $ 358 | $ 211 | |||
Contribution margin | $ 126 | $ 56 | $ 241 | $ 79 | |||
3 | We measure the performance of the Direct to Consumer and Partner Network segments primarily on a contribution margin basis. Contribution margin is intended to measure the direct profitability of each segment and is calculated as Adjusted revenue less directly attributable expenses. Directly attributable expenses include salaries, commissions and team member benefits, general and administrative expenses, and other expenses, such as direct servicing costs and origination costs. A loan is considered "sold" when it is sold to investors on the secondary market. See "Summary Segment Results" section later in this document and the footnote on "Segments" in the "Notes to Consolidated Financial Statements" in the Company's forthcoming filing on Form 10-Q for more information. |
Balance Sheet and Liquidity
Total available cash was
BALANCE SHEET HIGHLIGHTS | |||
June 30, 2024 | December 31, 2023 | ||
(Unaudited) | |||
Cash and cash equivalents | $ 1,309 | $ 1,108 | |
Mortgage servicing rights, at fair value | $ 7,163 | $ 6,440 | |
Funding facilities | $ 7,022 | $ 3,367 | |
Other financing facilities and debt | $ 4,171 | $ 4,237 | |
Total equity | $ 8,814 | $ 8,302 | |
Second Quarter Earnings Call
Rocket Companies will host a live conference call at 4:30 p.m. ET on August 1, 2024 to discuss its results for the quarter ended June 30, 2024. A live webcast of the event will be available online by clicking on the "Investor Info" section of our website. The webcast will also be available via rocketcompanies.com.
A replay of the webcast will be available on the Investor Relations site following the conclusion of the event.
Condensed Consolidated Statements of Income (Loss) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(Unaudited) | (Unaudited) | ||||||
Revenue | |||||||
Gain on sale of loans | |||||||
Gain on sale of loans excluding fair value of | $ 413,011 | $ 279,629 | $ 889,440 | $ 544,632 | |||
Fair value of originated MSRs | 345,545 | 314,840 | 568,342 | 519,400 | |||
Gain on sale of loans, net | 758,556 | 594,469 | 1,457,782 | 1,064,032 | |||
Loan servicing income | |||||||
Servicing fee income | 354,677 | 343,591 | 700,423 | 709,976 | |||
Change in fair value of MSRs | (112,941) | 42,377 | (56,433) | (355,902) | |||
Loan servicing income, net | 241,736 | 385,968 | 643,990 | 354,074 | |||
Interest income | |||||||
Interest income | 112,415 | 80,757 | 201,395 | 147,501 | |||
Interest expense on funding facilities | (81,293) | (59,512) | (132,736) | (94,624) | |||
Interest income, net | 31,122 | 21,245 | 68,659 | 52,877 | |||
Other income | 269,308 | 234,545 | 514,007 | 431,312 | |||
Total revenue, net | 1,300,722 | 1,236,227 | 2,684,438 | 1,902,295 | |||
Expenses | |||||||
Salaries, commissions and team member | 553,420 | 579,139 | 1,094,516 | 1,182,914 | |||
General and administrative expenses | 232,952 | 200,425 | 469,617 | 395,815 | |||
Marketing and advertising expenses | 210,937 | 218,843 | 417,233 | 400,447 | |||
Depreciation and amortization | 28,009 | 25,357 | 55,026 | 56,042 | |||
Interest and amortization expense on non- | 38,364 | 38,334 | 76,729 | 76,667 | |||
Other expenses | 44,998 | 35,759 | 80,905 | 68,027 | |||
Total expenses | 1,108,680 | 1,097,857 | 2,194,026 | 2,179,912 | |||
Income (loss) before income taxes | 192,042 | 138,370 | 490,412 | (277,617) | |||
(Provision for) benefit from income taxes | (14,117) | 782 | (21,773) | 5,286 | |||
Net income (loss) | 177,925 | 139,152 | 468,639 | (272,331) | |||
Net (income) loss attributable to non- | (176,630) | (131,714) | (451,129) | 261,246 | |||
Net income (loss) attributable to Rocket | $ 1,295 | $ 7,438 | $ 17,510 | $ (11,085) | |||
Earnings (loss) per share of Class A | |||||||
Basic | $ 0.01 | $ 0.06 | $ 0.13 | $ (0.09) | |||
Diluted | $ 0.01 | $ 0.05 | $ 0.13 | $ (0.11) | |||
Weighted average shares outstanding | |||||||
Basic | 139,647,845 | 126,740,748 | 138,319,794 | 125,742,282 | |||
Diluted | 139,647,845 | 1,979,450,651 | 138,319,794 | 1,977,148,197 | |||
Condensed Consolidated Balance Sheets | |||
June 30, | December 31, | ||
Assets | (Unaudited) | ||
Cash and cash equivalents | $ 1,309,494 | $ 1,108,466 | |
Restricted cash | 27,764 | 28,366 | |
Mortgage loans held for sale, at fair value | 9,486,922 | 6,542,232 | |
Interest rate lock commitments ("IRLCs"), at fair value | 170,381 | 132,870 | |
Mortgage servicing rights ("MSRs"), at fair value | 7,162,690 | 6,439,787 | |
Notes receivable and due from affiliates | 14,325 | 19,530 | |
Property and equipment, net | 233,257 | 250,856 | |
Deferred tax asset, net | 528,104 | 550,149 | |
Lease right of use assets | 314,683 | 347,696 | |
Forward commitments, at fair value | 13,025 | 26,614 | |
Loans subject to repurchase right from Ginnie Mae | 1,945,022 | 1,533,387 | |
Goodwill and intangible assets, net | 1,239,819 | 1,236,765 | |
Other assets | 1,203,228 | 1,015,022 | |
Total assets | $ 23,648,714 | $ 19,231,740 | |
Liabilities and equity | |||
Liabilities: | |||
Funding facilities | $ 7,022,439 | $ 3,367,383 | |
Other financing facilities and debt: | |||
Senior Notes, net | 4,036,187 | 4,033,448 | |
Early buy out facility | 134,615 | 203,208 | |
Accounts payable | 205,949 | 171,350 | |
Lease liabilities | 356,050 | 393,882 | |
Forward commitments, at fair value | 8,508 | 142,988 | |
Investor reserves | 94,362 | 92,389 | |
Notes payable and due to affiliates | 31,743 | 31,006 | |
Tax receivable agreement liability | 584,695 | 584,695 | |
Loans subject to repurchase right from Ginnie Mae | 1,945,022 | 1,533,387 | |
Other liabilities | 415,223 | 376,294 | |
Total liabilities | $ 14,834,793 | $ 10,930,030 | |
Equity | |||
Class A common stock | $ 1 | $ 1 | |
Class B common stock | — | — | |
Class C common stock | — | — | |
Class D common stock | 19 | 19 | |
Additional paid-in capital | 357,610 | 340,532 | |
Retained earnings | 300,958 | 284,296 | |
Accumulated other comprehensive income | 85 | 52 | |
Non-controlling interest | 8,155,248 | 7,676,810 | |
Total equity | 8,813,921 | 8,301,710 | |
Total liabilities and equity | $ 23,648,714 | $ 19,231,740 | |
Summary Segment Results for the Three and Six Months Ended June 30, 2024 and 2023 | |||||||||
Three Months Ended June 30, 2024 | Direct to Consumer | Partner Network | Segments Total | All Other | Total | ||||
Total U.S. GAAP Revenue, net | $ 981 | $ 188 | $ 1,169 | $ 132 | $ 1,301 | ||||
Change in fair value of MSRs due to valuation | (73) | — | (73) | — | (73) | ||||
Adjusted revenue | $ 909 | $ 188 | $ 1,097 | $ 132 | $ 1,228 | ||||
Less: Directly attributable expenses | 534 | 62 | 596 | 89 | 684 | ||||
Contribution margin (1) | $ 375 | $ 126 | $ 501 | $ 43 | $ 544 | ||||
Three Months Ended June 30, 2023 | Direct to | Partner Network | Segments Total | All Other | Total | ||||
Total U.S. GAAP Revenue, net | $ 1,023 | $ 122 | $ 1,146 | $ 90 | $ 1,236 | ||||
Change in fair value of MSRs due to valuation | (235) | — | (235) | — | (235) | ||||
Adjusted revenue | $ 789 | $ 122 | $ 911 | $ 90 | $ 1,002 | ||||
Less: Directly attributable expenses | 529 | 66 | 596 | 70 | 665 | ||||
Contribution margin (1) | $ 259 | $ 56 | $ 316 | $ 21 | $ 336 | ||||
Six Months Ended June 30, 2024 | Direct to | Partner Network | Segments Total | All Other | Total | ||||
Total | $ 2,075 | $ 358 | $ 2,433 | $ 251 | $ 2,684 | ||||
Change in fair value of MSRs due to valuation | (293) | — | (293) | — | (293) | ||||
Adjusted Revenue | $ 1,782 | $ 358 | $ 2,140 | $ 251 | $ 2,391 | ||||
Less: Directly attributable expenses | 1,064 | 117 | 1,181 | 178 | 1,359 | ||||
Contribution margin (1) | $ 718 | $ 241 | $ 959 | $ 73 | $ 1,032 | ||||
Six Months Ended June 30, 2023 | Direct to | Partner Network | Segments Total | All Other | Total | ||||
Total | $ 1,521 | $ 211 | $ 1,732 | $ 170 | $ 1,902 | ||||
Change in fair value of MSRs due to valuation | (18) | — | (18) | — | (18) | ||||
Adjusted Revenue | $ 1,502 | $ 211 | $ 1,713 | $ 170 | $ 1,884 | ||||
Less: Directly attributable expenses | 1,035 | 132 | 1,167 | 146 | 1,313 | ||||
Contribution margin (1) | $ 468 | $ 79 | $ 547 | $ 24 | $ 571 | ||||
(1) | We measure the performance of the segments primarily on a contribution margin basis. Contribution margin is intended to measure the direct profitability of each segment and is calculated as Adjusted revenue less directly attributable expenses. Adjusted revenue is a non-GAAP financial measure described below. Directly attributable expenses include salaries, commissions and team member benefits, general and administrative expenses, marketing and advertising expenses and other expenses, such as direct servicing costs and origination costs. |
GAAP to Non-GAAP Reconciliations | |||||||
Adjusted Revenue Reconciliation | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(Unaudited) | (Unaudited) | ||||||
Total revenue, net | $ 1,301 | $ 1,236 | $ 2,684 | $ 1,902 | |||
Change in fair value of MSRs due to valuation assumptions, net | (73) | (235) | (293) | (18) | |||
Adjusted revenue | $ 1,228 | $ 1,002 | $ 2,391 | $ 1,884 | |||
(1) | Reflects changes in market interest rates and assumptions, including discount rates and prepayment speeds, and the effects of contractual prepayment protection associated with sales or purchases of MSRs. |
Adjusted Net Income (Loss) Reconciliation | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(Unaudited) | (Unaudited) | ||||||
Net income (loss) attributable to Rocket Companies | $ 1 | $ 7 | $ 18 | $ (11) | |||
Net income (loss) impact from pro forma conversion of | 177 | 132 | 452 | (260) | |||
Adjustment to the (provision for) benefit from income tax | (33) | (35) | (98) | 62 | |||
Tax-effected net income (loss) (2) | 145 | 105 | 371 | (209) | |||
Share-based compensation expense | 39 | 51 | 70 | 103 | |||
Change in fair value of MSRs due to | (73) | (235) | (293) | (18) | |||
Tax impact of adjustments (4) | 8 | 45 | 54 | (20) | |||
Other tax adjustments (5) | 1 | 1 | 2 | 2 | |||
Adjusted net income (loss) | $ 121 | $ (33) | $ 205 | $ (144) | |||
(1) | Reflects net income (loss) to Class A common stock from pro forma exchange and conversion of corresponding shares of our Class D common shares held by non-controlling interest holders as of June 30, 2024 and 2023. |
(2) | Rocket Companies is subject to |
(3) | Reflects changes in market interest rates and assumptions, including discount rates and prepayment speeds, and the effects of contractual prepayment protection associated with sales or purchases of MSRs. |
(4) | Tax impact of adjustments gives effect to the income tax related to share-based compensation expense, and the change in fair value of MSRs due to valuation assumptions, at the effective tax rates for each quarter. |
(5) | Represents tax benefits due to the amortization of intangible assets and other tax attributes resulting from the purchase of Holdings units, net of payment obligations under Tax Receivable Agreement. |
Adjusted Diluted Weighted Average Shares Outstanding Reconciliation | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(Unaudited) | (Unaudited) | ||||||
Diluted weighted average Class A Common shares | 139,647,845 | 1,979,450,651 | 138,319,794 | 1,977,148,197 | |||
Assumed pro forma conversion of Class D shares (1) | 1,848,879,483 | — | 1,848,879,483 | — | |||
Adjusted diluted weighted average shares | 1,988,527,328 | 1,979,450,651 | 1,987,199,277 | 1,977,148,197 | |||
Adjusted net income (loss) | $ 121 | $ (33) | $ 205 | $ (144) | |||
Adjusted diluted earnings (loss) per share | $ 0.06 | $ (0.02) | $ 0.10 | $ (0.07) | |||
(1) | Reflects the pro forma exchange and conversion of anti-dilutive Class D common stock to Class A common stock for the three and six months ended June 30, 2024. For the three and six months ended June 30, 2023, Class D common shares were dilutive and are included in the Diluted weighted average Class A common shares outstanding in the table above. |
Adjusted EBITDA Reconciliation | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(Unaudited) | (Unaudited) | ||||||
Net income (loss) | $ 178 | $ 139 | $ 469 | $ (272) | |||
Interest and amortization expense on non-funding debt | 38 | 38 | 77 | 77 | |||
Provision for (benefit from) income taxes | 14 | (1) | 22 | (5) | |||
Depreciation and amortization | 28 | 25 | 55 | 56 | |||
Share-based compensation expense | 39 | 51 | 70 | 103 | |||
Change in fair value of MSRs due to valuation | (73) | (235) | (293) | (18) | |||
Adjusted EBITDA | $ 225 | $ 18 | $ 399 | $ (61) | |||
(1) | Reflects changes in market interest rates and assumptions, including discount rates and prepayment speeds, and the effects of contractual prepayment protection associated with sales or purchases of MSRs. |
Non-GAAP Financial Measures
To provide investors with information in addition to our results as determined by GAAP, we disclose Adjusted revenue, Adjusted net income (loss), Adjusted diluted earnings (loss) per share and Adjusted EBITDA (collectively "our non-GAAP financial measures") as non-GAAP measures. We believe that the presentation of our non-GAAP financial measures provides useful information to investors regarding our results of operations because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. Our non-GAAP financial measures are not calculated in accordance with GAAP and should not be considered as a substitute for revenue, net income (loss), or any other operating performance measure calculated in accordance with GAAP. Other companies may define non-GAAP financial measures differently, and as a result, our measures of our non-GAAP financial measures may not be directly comparable to those of other companies. Our non-GAAP financial measures provide indicators of performance that are not affected by fluctuations in certain costs or other items. Accordingly, management believes that these measurements are useful for comparing general operating performance from period to period, and management relies on these measures for planning and forecasting of future periods. Additionally, these measures allow management to compare our results with those of other companies that have different financing and capital structures.
We define "Adjusted revenue" as total revenues net of the change in fair value of mortgage servicing rights ("MSRs") due to valuation assumptions, net of hedges. We define "Adjusted net income (loss)" as tax-effected net income (loss) before share-based compensation expense, the change in fair value of MSRs due to valuation assumptions, net of hedges and the tax effects of those adjustments as applicable. We define "Adjusted diluted earnings (loss) per share" as Adjusted net income (loss) divided by the adjusted diluted weighted average shares outstanding which includes diluted weighted average Class A common stock and the assumed pro forma exchange and conversion of Class D common stock outstanding for the applicable period presented. We define "Adjusted EBITDA" as net income (loss) before interest and amortization expense on non-funding debt, income tax, depreciation and amortization, share-based compensation expense, and change in fair value of MSRs due to valuation assumptions, net of hedges.
We exclude from each of our non-GAAP financial measures the change in fair value of MSRs due to valuation assumptions, net of hedges, as this represents a non-cash non-realized adjustment to our total revenues, reflecting changes in assumptions including discount rates and prepayment speed assumptions, mostly due to changes in market interest rates, which is not indicative of our performance or results of operation. We also exclude effects of contractual prepayment protection associated with sales of MSRs. Adjusted EBITDA includes Interest expense on funding facilities, which are recorded as a component of Interest income, net, as these expenses are a direct cost driven by loan origination volume. By contrast, interest and amortization expense on non-funding debt is a function of our capital structure and is therefore excluded from Adjusted EBITDA.
Our definitions of each of our non-GAAP financial measures allow us to add back certain cash and non-cash charges, and deduct certain gains that are included in calculating Total revenue, net, Net income (loss) attributable to Rocket Companies or Net income (loss). However, these expenses and gains vary greatly, and are difficult to predict. From time to time in the future, we may include or exclude other items if we believe that doing so is consistent with the goal of providing useful information to investors.
Although we use our non-GAAP financial measures to assess the performance of our business, such use is limited because they do not include certain material costs necessary to operate our business. Our non-GAAP financial measures can represent the effect of long-term strategies as opposed to short-term results. Our presentation of our non-GAAP financial measures should not be construed as an indication that our future results will be unaffected by unusual or nonrecurring items. Our non-GAAP financial measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under
For financial outlook information, the Company is not providing a quantitative reconciliation of adjusted revenue to the most directly comparable GAAP measure because the GAAP measure cannot be reliably estimated and the reconciliation cannot be performed without unreasonable effort due to their dependence on future uncertainties and adjusting items that the Company cannot reasonably predict at this time but which may be material.
Forward Looking Statements
Some of the statements contained in this document are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are generally identified by the use of words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," "would" and, in each case, their negative or other various or comparable terminology. These forward-looking statements reflect our views with respect to future events as of the date of this document and are based on our management's current expectations, estimates, forecasts, projections, assumptions, beliefs and information. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. All such forward-looking statements are subject to risks and uncertainties, many of which are outside of our control, and could cause future events or results to be materially different from those stated or implied in this document. It is not possible to predict or identify all such risks. These risks include, but are not limited to, the risk factors that are described under the section titled "Risk Factors" in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings with the Securities and Exchange Commission ("SEC"). These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this document and in our SEC filings. We expressly disclaim any obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.
About Rocket Companies
Founded in 1985, Rocket Companies (NYSE: RKT) is a
With more than 65 million call logs each year, 10 petabytes of data and a mission to Help Everyone Home, Rocket Companies is well positioned to be the destination for AI-fueled homeownership. Known for providing exceptional client experiences, J.D. Power has ranked Rocket Mortgage #1 in client satisfaction for primary mortgage origination and mortgage servicing a total of 22 times – the most of any mortgage lender.
For more information, please visit our Corporate Website or Investor Relations Website.
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SOURCE Rocket Companies, Inc.
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