As the mortgage industry continues to see signs—lowering mortgage rates and worsening applications—that point to the strong possibility of a Federal Reserve interest rate cut this fall, lenders continue to fight through challenges and work to profit.
Rocket Companies has continued to fight the changing tide of mortgage market challenges and see success, as their Q2 2024 earnings came in at the top of executive expectations.
The company reported Adjusted revenue of $1.2 billion and adjusted net income of $121 million in its Q2 2024 earnings call on Thursday, Aug. 1. Last quarter, executives estimated an adjusted revenue between $1.075 billion to $1.225 billion. This is also a year-over-year increase for the fourth consecutive quarter.
This success follows an outstanding Q1 with $1.2 billion in revenue, and a strong finish to 2024 with an adjusted revenue of $885 million in Q4 2023 and $3.8 billion for the full year of 2023.
Additionally, Rocket is feeling more confident in the near future regardless of the timing of rate cuts.
“I think the operative question is really not if the market will rebound. It’s really when and how,” said CEO Varun Krishna. “While we might not know exactly when, we do know that 2024 is better than 2023 and we believe that 2025 is going to be better than 2024.”
The company also reported $24.7 billion generated in closed loan origination volume, a 10.4% increase year-over-year. The company’s servicing portfolio unpaid principal balance came in at $534.6 billion, or 2.6 million loans serviced.
“Mortgage employment has decreased by 36% from its peak. Yet in the face of these challenges, optimism remains our mantra and higher calling,” said Krishna. “While others are faltering or retreating, we’re mobilizing our immense resources, capabilities, and talent to innovate and serve our clients like never before. It is our moment to show our unshakable resilience, to grow from strength and redefine our leadership role in the homeownership category as the most optimistic company in America.”
Rocket’s AI platform Rocket Logic—which they unveiled last April—continues to be a strong point of success for the company, according to executives.
“From a resource perspective, AI is our most strategic imperative, and we are resourcing this to win,” said Krishna. “There are real reasons that we’re so vested in this because we see tangible concrete metric-driven benefits of efficiency, velocity and, most importantly, a better experience. This AI thing is not hype, right? We see concrete tangible benefits. We see hours saved, we see faster call resolution, we see faster turn times. We see 100% accuracy on verification. And these are the earliest stages.”
Krishna continued, “Whether it’s existing product innovation like BUY Plus or the new AI-based Verified Approval Letter adjustments, we’re starting to see major traction because we’re meeting our clients where they are through the development of new purchase offerings that are more focused on our retained based better segmentation of our clients.”
To continue to grow their technological developments, Rocket appointed Shawn Malhotra as its first Chief Technology Officer. In this role, Malhotra will oversee the development and implementation of technology across the entire Rocket Companies ecosystem, including AI development, Data Science, Product Engineering, Technology Operations and Information Security.
For Q3 2024, Rocket executives stated they expect to see an adjusted revenue between $1.15 billion to $1.3 billion.
