Rocket Companies stated that they are increasing their focus on technology and AI as they continue to thrive amidst mortgage and housing market challenges.
2023 had some ups and downs for the company, like many others. Despite the lawsuit filed against the company for an alleged violation of the Telephone Consumer Protection Act and a bad start to the year in Q1, the company turned the corner in Q2 and continued that growth through Q3.
In their recent Q4 2023 earnings report, released on Thurs., Feb. 22, Rocket saw a net revenue of $694 million and adjusted revenue of $885 million, coming in at the high end of the company’s guidance range and the second quarter of year-over-year growth. The company also generated $55 million of adjusted EBITDA, the third positive quarter and a year-over-year improvement of more than $250 million. Mortgage origination registered at $17 billion, and the servicing portfolio unpaid principal balance was at $509 billion.
For the full year, Rocket’s net and adjusted revenue came in at $3.8 billion, with an adjusted EBITDA of $67 million and $78.7 billion in mortgage origination. Looking ahead, executives stated they expect an adjusted revenue of between $925 million to $1,075 million for Q1 2024.
With this consistent trend of success in mind, Rocket executives stated that one of their main focuses with the company’s future is building out their use of AI and automation to new levels.
“We believe that AI is going to be absolutely transformative to this industry and to fintech and tech in general,” explained CEO Varun Krishna. “We’ve made quite a bit of progress, but we’re just still scratching the surface. And we’re in the earliest of innings, but our progress is only going to accelerate with generative AI. It’s a major area of investment across the board.”
The company is honing in their AI efforts on mortgage banking, underwriting and servicing. In Q4 they launched an AI virtual assistant to ease the jobs of their mortgage bankers. They also began to use automation and AI for income verification in the underwriting process, with nearly two-thirds of the process in December alone done through automation. In terms of servicing, the company stated that servicing calls and chats are “increasingly powered by AI,” reporting that about 70% of these interactions are fully AI run.
“The efficiency gains when deployed at full scale will be an absolute gamechanger for our organization as we will be able to serve many more clients without adding to our fixed cost structure,” added Krishna.
Other technological initiatives in 2023 include the launch of the Rocket Homes app on Apple CarPlay and Apple Vision Pro to vary and increase their usage.
“Technology is the answer to better client experiences and capacity management in our industry,” Krishna concluded. “We aim to redefine the home-buying experience through AI and deliver market share growth, scaled revenue growth and profitability.”
