Loading...
•
Jun 30, 2020
Rocket Companies Q2 2020 Earnings Report
Rocket Companies reported a record closed origination volume and a substantial net income.
Key Takeaways
Rocket Companies announced strong second quarter results with record closed loan origination volume of $72.3 billion and net income of $3.5 billion. The company benefited from a scalable mortgage origination platform and favorable market conditions.
Generated record closed loan origination volume of $72.3 billion, a 126% year-over-year improvement.
Increased gain on sale margin due to favorable market conditions and capacity constraints.
Grew total revenue, net, by 268% compared to the first quarter of 2020.
Announced the “Changing the Course” initiative to provide Detroit residents with internet, technology, and digital literacy training.
Rocket Companies
Rocket Companies
Rocket Companies Revenue by Segment
Revenue by Segment
Direct to Consumer Revenue
CapyFin.comPartner Network Revenue
CapyFin.com Forward Guidance
The company provided outlook for the third quarter of 2020.
Positive Outlook
- Net rate lock volume of between $93 billion and $98 billion, representing an increase of 98% to 108% compared to Q3 2019.
- Closed loan volume of between $82 billion and $85 billion, representing an increase of 105% to 112% compared to Q3 2019.
- Gain on sale margins of 4.05% to 4.30%, an improvement of 23% to 31% compared to Q3 2019.
- Strong consumer demand for home loans is expected to continue into the third quarter of 2020.
- Company remains in a strong liquidity position following the IPO.
Challenges Ahead
- Approximately 4.7% of the total servicing portfolio were on a forbearance plan related to COVID-19 as of August 31, 2020.
- Expenses increased by 24%, primarily driven by higher variable compensation.
- Change in fair value of MSRs due to valuation assumptions can impact revenue.
- Non-cash stock compensation expense affects net income.
- Adjusted Revenue, Adjusted Net Income and Adjusted EBITDA are non-GAAP measures and may not be comparable to those of other companies.