Rocket Companies First Quarterly Earnings Report Shows Closed Loan Volume Up 126% At $72B

Rocket Companies Inc. RKT reported Wednesday afternoon its first quarterly earnings since going public at $18 a share in August.

What Happened: Rocket Companies reported second-quarter revenue of $5.04 billion, an increase of 437% year over year. This figure was also 268% higher than the first-quarter revenue of $1.37 billion. Net income for the second quarter was $3.5 billion, an increase of 3458% from the first quarter, and comes after posting a loss of $54 million in last year’s second quarter.

Rocket's adjusted earnings came in at $1.44 per share, well ahead of the 88-cent estimate.

Rocket reported record closed loan origination volume of $72.3 billion, an increase of 126% year over year and 40% quarter over quarter. Net rate lock volume was $92 billion in the quarter.

Rocket reported much stronger margins in the second quarter. The gain on sale margin was 5.19%, compared to 3.23% in last year’s second quarter and 3.25% in this year’s first quarter.

“We were able to help more clients this quarter than any other in our 35-year history,” CEO Jay Farner said.

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Why It’s Important: The parent company of Quicken Loans continued to show off its direct-to-consumer product through the Rocket App. The DTC segment saw funded loan volume of $46.78 billion, a year-over-year increase of 143%. DTC adjusted revenue grew 267% to $4.21 billion.

The partner network segment saw funded loan volume of $19.73 billion, a year over year gain of 76%. Gain on sale margins were 2.10% for the partner network.

“Clearly, the strategy of investing in long-term growth paid off this quarter, as we continue to strengthen and evolve the platform, will remain a significant advantage for our business well into the future,” Farner said.

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What’s Next: Rocket Companies guided for third-quarter net rate lock volume to come in at a range of $93 billion to $98 billion. This would be a year-over-year gain of 98% to 108%. The company is expecting closed loan volume to hit $82 billion to $85 billion in the third quarter, a year-over-year increase of 105% to 112%.

Third-quarter gain on sale margins are guided lower than the second quarter at a range of 4.05% to 4.30%. This is a 23% to 31% year-over-year increase.

“While I’m proud of our performance, I am even more encouraged by the significant opportunity that remains in front of us as we continue to execute on our plan of achieving 25% market share by 2030,” said Farner.

RKT Price Action: Shares of Rocket Companies were down 6% in after-hours trading. Shares ended Wednesday’s trading session up 2.2% at $31.18. Since its IPO, the stock has traded between $17.50 and $34.42.