Rocket Cos. Inc., a Detroit-based fintech platform company consisting of tech-driven mortgage, real estate, and financial services businesses, including Rocket Mortgage, Rocket Homes, Rocket Loans, and Rocket Money, announced results for the quarter ending on March 31.
“Rocket delivered solid results in the first quarter in the backdrop of an uncertain macro environment. Adjusted revenue exceeded the top end of our guidance, driven by healthy client demand and strong execution,” says Jay Farner, CEO of Rocket Cos.
“Our purchase pipeline has been growing in the second quarter, but constrained housing inventory and affordability still present challenges. To help our clients in this market, we recently launched BUY+ and SELL+, a collaboration between Rocket Homes and Rocket Mortgage, and unveiled our new Rocket Visa Signature Credit Card, a loyalty program card.”
Rocket results for the first quarter showed generated total revenue, net of $666 million and net loss of $411 million, or a loss of $0.16 cents per diluted share. Generated total adjusted revenue of $882 million and adjusted net loss of $111 million, or an adjusted loss of $0.06 cents per diluted share.
Additionally, it was reported that Rocket Mortgage generated $17 billion in mortgage origination closed loan volume. Gain on sale margin was 2.39 percent. Total liquidity was approximately $8.1 billion, as of March 31, 2023, 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.
Servicing book unpaid principal balance was $524.8 billion at March 31. And as of March 31, Rocket’s servicing portfolio includes 2.5 million clients and generates approximately $1.5 billion of recurring servicing fee income on an annualized basis.
And Rocket Mortgage net client retention rate was 96 percent over the 12 months ended March 31. There is a strong correlation between this metric and client lifetime value, and Rocket officials believe its net client retention rate is unmatched among mortgage companies and on par with some of the best performing subscription business models in the world.
Rocket Cos. also reported some highlights for the year so far. In April, the company introduced BUY+ and SELL+, a collaboration between Rocket Mortgage and Rocket Homes, its proprietary home search platform and real estate agent referral network business.
With BUY+, purchase clients can save thousands of dollars in upfront costs if they work with a Rocket Homes partner real estate agent and obtain financing with Rocket Mortgage. With SELL+, sellers listing their home for sale with a Rocket Homes Verified Partner Agent will receive a rebate check for 1 percent of the sale price from Rocket Homes after closing. If a homeowner is buying and selling, they can use both BUY+ and SELL+ to increase their savings.
And in April, Rocket unveiled the Rocket Visa Signature Credit Card, the first credit card that is meant to make home buying more accessible and homeownership easier through everyday spending. With the Rocket Signature Card, clients can earn 5 percent back to lower closing costs and down payments by thousands of dollars, helping to address some of the most significant hurdles to purchasing a home.
The Rocket Signature Card is linked to the Rocket Rewards loyalty program and is designed to appeal to first time home buyers and existing homeowners who are in the market to buy, helping us reach them earlier in the purchase life cycle.
Also, Rocket Mortgage purchase net promoter scores (NPS) reached all-time highs of 75 for retail clients and 53 for real estate agents in the first quarter, meaning clients and agents recommend Rocket highly as a lender. This achievement is due to the company’s ongoing technology and data investments and process improvements. An NPS above 50 is generally considered excellent.
As of March 31, Rocket Accounts reached 27.6 million total accounts. Rocket Accounts is an important metric as it represents clients who have taken the action to create an account with Rocket and with whom Rocket may have visibility on credit worthiness, spending behavior, finances, home buying intent, and more. Through these deeper, data-driven insights, works to deliver more personalized experiences to Rocket Account holders and build ongoing relationships with them.
In March, Rocket Mortgage became the first national lender to offer Freddie Mac’s BorrowSmart Access program. The program offers a $3,000 credit for first time homebuyers to use toward their down payment, helping to lower a to homeownership, especially to underserved communities. First time homebuyers can use BorrowSmart Access if they are purchasing a home in several counties across 10 metro areas – Atlanta; Chicago; Detroit; El Paso; Houston; McAllen, Texas; Memphis; Miami; Philadelphia and St. Louis.
Finally, as previously announced on Feb. 13, Bill Emerson, board director of Rocket Cos. and vice chairman of Rock Holdings, has been appointed to serve as interim CEO effective June 1. The board of directors has commenced a search for a permanent CEO and has retained a leading firm to support its evaluation of internal and external candidates.
