Detroit-based Rocket Cos., a financial technology company of personal finance and consumer service brands including Rocket Mortgage, today announced preliminary and unaudited results for the second quarter that were in line with the estimated ranges provided in the company’s amended registration statement filed on July 28.
The company, which was listed on the New York Stock Exchange earlier this month, was known as Quicken Loans Inc. and was founded by Dan Gilbert.
Today’s announcement was made in connection with financial disclosures Rocket Cos. was required to provide to bondholders. The timing of the disclosure was unique to the second quarter given the timing of the company’s initial public offering in July. Rocket Cos. will issue a complete earnings release in connection with its second quarter earnings call on Sept. 2.
From today’s announcement, the company reported total net revenue of $5 billion, which was up by $3.7 billion compared to the first quarter of 2020 and $4.1 billion compared to the same period in 2019, due to elevated gain on sale margin and an increase in rate lock volume.
The gain on sale margin of 5.19 percent increased from 3.25 percent in the first quarter of 2020 and 3.22 percent in the prior year period as a result of generally favorable market conditions, which led to increased demand for mortgages and capacity constraints in the industry.
Rate lock volume of $92 billion rose $35.9 billion compared to the prior quarter and $57.9 billion compared to the second quarter 2019. Gain on sale of loans was $4.8 billion, an increase of $2.9 billion and $3.6 billion, respectively, compared to the first quarter of 2020 and the second quarter of 2019. Net income was $3.5 billion rose increased $3.4 billion compared to the first quarter of 2020 and $3.5 billion.
Adjusted revenue was $5.3 billion, an increase of $3.2 billion from the prior quarter and $4 billion compared to the same period of 2019, primarily driven by the expansion of gain on sale margin and an increase in rate lock volume.
Adjusted net income of $2.8 billion grew $2.2 billion compared to the first quarter and $2.6 billion compared to the second quarter 2019, as a result of revenue growth. Adjusted earnings before interest, taxes, depreciation, and amortization was $3.8 billion, up $2.9 billion compared to the previous quarter and $3.4 billion compared to a year ago, due to an increase in revenue.
Closed loan origination volume of $72.3 billion jumped 40 percent compared to the first quarter of 2020 and 126 percent compared to the second quarter of 2019.
“The long-term investments we have made in our people and our flexible, scalable technology platform have allowed us to increase our capacity, take advantage of favorable market conditions, and in turn position us to capture additional market share,” says Jay Farner, CEO of Rocket Cos.
Both Gilbert and Farner are listed in DBusiness magazine’s Detroit 500, which profiles the top business leaders in metro Detroit and Michigan. It can be found here.