Detroit-based Rocket Cos. Wednesday reported its first earnings since becoming a public company on Aug. 6 with its results for the second quarter, which ended June 30.
The company, which includes Rocket Mortgage, Rocket Homes, Rocket Loans, Rocket Auto, and other enterprises, reported second-quarter profits of $3.5 billion on revenue of more than $5 billion. It also reported that it raised $1.8 billion in its initial public offering. In addition, the company says it has closed a record $72.3 billion in loans so far in 2020, up 126 percent year over year.
“Record low interest rates are driving demand for home loans, and the power of our platform is proving a key differentiator for Rocket Mortgage,” says Jay Farner, CEO of Rocket Cos. “This is exactly the kind of market environment we built our platform to perform in.”
Farner also recognized the work of his team, especially during the COVID-19 pandemic.
“Rocket Cos. had a very strong second quarter, thanks to our team members’ hard work and dedication to our clients,” says Jay Farner, CEO of Rocket Cos. “We were able to help more clients this quarter than any other in our 35-year history – all while more than 98 percent of our team members worked safely from their homes.
“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 percent market share by 2030,” Farner continues. “It is clear that our simple, client-focused, digital approach is continuously and fundamentally disrupting the way our industries do business.”
Other highlights from the Rocket Cos. report include:
During the second quarter, Rocket Companies:
- Generated record closed loan origination volume of $72.3 billion and net rate lock volume $92.0 billion, which represented year-over-year improvements of 126 percent and 170 percent, respectively.
- Increased gain on sale margin compared to historical levels as favorable market conditions boosted demand for mortgages and led to capacity constraints in the industry.
- Leveraged technology investments to manage surge in demand while maintaining industry-leading turn times.
- Grew total revenue, net, by 268 percent and adjusted revenue by 152 percent as compared to the first quarter of 2020; during this time expenses increased by 24 percent, primarily driven by higher variable compensation and an increase in team members in production roles to support growth.
- Increased other revenues as title insurance services, property valuation, and settlement services at Amrock grew as a result of the increase in origination volume.
- Completed its IPO on Aug. 10 100,372,565 of Class A shares outstanding and 1,883,279,483 of Class D shares outstanding. An additional 16,720,517 shares of Class A shares were reserved for restricted stock units.
