Despite continued market challenges—high mortgage rates, low inventory and high home prices—Rocket Companies’ executives reported “solid results” for Q1 2023.
“We’re encouraged by the fact that consumer demand for homes is robust, and we’re seeing a healthy purchase pipeline as we enter the spring home-buying season,” said CEO Jay Farner. “We’re excited that the investments that we’ve made in technology and data, as well as our continuous process improvements, have led to these high marks and the positive trend that we’re experiencing.”
Here’s the breakdown of Rocket’s finances at the end of Q1 2023:
- Rocket earned a net revenue of $666 million, and adjusted revenue of $882 million. The adjusted revenue exceeded the high end of guidance range.
- The adjusted net loss came in at $111 million, or an adjusted loss of $0.06 cents per diluted share.
- The adjusted EBITDA came in at a loss of $79 million, which is an improvement compared to a $204 million loss in Q4 2022.
- The company generated $17 billion in mortgage origination closed loan volume, and the gain on sale margin was 2.39%.
- The total liquidity was about $8.1 billion, which includes $0.9 billion of cash on-hand, $2.4 billion of corporate cash used to self-fund loan originations, $3.1 billion of undrawn lines of credit and $1.7 billion of undrawn MSR lines.
- The servicing book unpaid principal balance was $524.8 billion. The servicing portfolio includes 2.5 million clients and generates approximately $1.5 billion of recurring servicing fee income on an annualized basis.
“We are taking a new, innovative approach to client acquisition, retention and lifetime value that we believe will be a gamechanger for the industry and drive our continued growth and purchase,” said Bill Emerson, director and incoming interim CEO. “Over time, we believe this will translate into substantial and sustainable growth in marketshare, revenue and profitability.”
The company recently rolled out many new features and ventures that executives report assisted in keeping financial results strong.
Rocket announced their Signature Visa Card in March, which gives those looking to purchase a home 5% back, up to $8,000, to use toward closing costs and down payments. In addition, they announced the new BUY+ program, a collaboration with Rocket Homes that provides a credit of 1.5% of the loan amount to be used on closing costs for clients who obtain financing from Rocket Mortgage and find a home with a Rocket Homes Partner Real Estate Agent. This announcement came in conjunction with the SELL+ program, where sellers listing their home for sale with a Rocket Homes Partner Agent will receive a rebate check for 1% of the sale price from Rocket Homes after closing.
“All these initiatives set Rocket up for a bright future,” said Farner.
Chief Financial Officer Brian Brown concluded by saying that, “Despite the continued uncertainty in the macro environment, we remain focused on serving our clients better, and we are leading the way in bringing innovative products and solutions to market. We are well positioned in the current environment and will continue to execute on our strategy to deliver results and drive long-term growth.”
